Gold Driven Investments (Private) Limited v David Tendayi Matipano N.O

### Preamble
1
HH 266-12
HC 1437/12
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GOLD DRIVEN INVESTMENTS (PRIVATE)

LIMITED

versus

DAVID TENDAYI MATIPANO N.O

HIGH COURT OF ZIMBABWE

KUDYA J

HARARE, 20 and 27 June 2012

Opposed Application

C Muchenga, for the applicant

Mrs J E Wood, for the respondent

KUDYA J:  On 9 February 2012, the applicant filed the present application seeking a declaratur and other consequential relief. The application was opposed by the respondent on 12 February 2012. In the opposition, the respondent raised two preliminary points.

The facts that gave rise to the application are these. On 9 March 2011, the Metropolitan bank, the judgment creditor, obtained provisional sentence against the applicant in the sum of US$2 322 089.52 in case No HC 1201/11. On 13 April 2011, the judgment creditor issued a warrant of execution against the applicant and on the following day, the respondent attached 634 600 tonnes of tobacco. On 29 April 2011, the respondent conducted a sale-in-execution. The proceeds were inadequate to clear the whole debt. The respondent attached more tobacco stocks on 3 May that were scheduled for sale by public auction on 20 May 2011. A day before the sale, the legal practitioners for the judgment creditor wrote to the respondent requesting him to cancel the sale. On 3 June, the judgment creditor’s legal practitioners notified the applicant’s legal practitioners of the outstanding amount due from the applicant amongst which were the respondent’s fees in the sum of US$226 297.25. The applicant was given until 7 June 2011 to pay up or risk the sale of its tobacco and other assets. The fees were not paid by the deadline as on 8 June the respondent instructed the auctioneer to dispose of the tobacco for the recovery of his fees. The sale was advertised for 17 June. The fees were paid and the auction was cancelled.

The respondent’s fees were calculated under the High Court (Fees and Allowances) Rules SI 35/2009 that was repealed by the High Court (Fees and Allowances) Rules SI 57/2011 on 13 May 2011. The application challenges the fees charged on the basis that they were charged under a repealed law instead of the new law. The further challenge that the respondent could not charge commission on a sale by private treaty was abandoned by Mr Muchenga, for the applicant, in his oral submissions.

The respondent’s first preliminary point was that the applicant did not aver a cause of action against the respondent. The second was that it did not exhaust its domestic remedies before coming to court.

The first preliminary issue raised by the respondent has no merit. In Murphy v Director of Customs and Excise 1992 (1) ZLR 28 (H) at 33D-E SMITH J cited with approval Abrahamse & Sons v SA Railways and Harbours 1933 CPD 626 that:

"The proper legal meaning of the expression 'cause of action' is the entire set of facts which gives rise to an enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a cause of action. Such cause of action does not 'arise' or 'accrue' until the occurrence of the last of such facts and consequently the last of such facts is sometimes loosely spoken of as the cause of action."

In the present application, the applicant averred that the respondent used the wrong piece of legislation to claim commission purportedly due to it. The cause of action was the unjust enrichment of the respondent by the payment of a claim that it was not legally entitled to receive.  In fact, para 10 of the respondent’s heads concisely summarises the applicant’s cause of action thus:

“The applicant contends that the fee charged was not wholly due.”

It is clear that the applicant raised a cause of action that the respondent properly understood in its founding affidavit.

The second preliminary point was that this court had no jurisdiction to determine the issue.  The respondent contended that the duty to determine the legality of charging commission under the repealed statutory instrument lay, in terms of r 457 (3) of the rules of court, with the Sheriff. In my view, the objection is not on the correctness of the sum charged under the tariff. Rather, the objection is on the choice of law under which the commission was charged.  The applicant raises a question of law rather than a question of fact. It does not appear to me that the sheriff is empowered to determine the question of law that is raised by the applicant. See Bailey NO v Deputy Sheriff Harare 2003 (1) ZLR 104 (H) at 106A-B.

Order 50 r 457 (3) states that:

“(3) Necessary charges and allowances for all work necessarily done for which no provision is contained in such tariff, and every question arising under and relative to the tariff, shall be determined by the Sheriff”.

I hold that it does not grant the Sheriff the right to determine the legal issue in the first instance or at all. It only empowers the Sheriff to fix charges and allowances for necessary work that is not covered in the tariff and determine the accuracy of the amounts charged by the deputy sheriff.

The second preliminary point fails.

The merits

As I understand it, the issue for determination is the law under which the Deputy Sheriff was entitled to charge his commission. The applicant contended that the applicable law was the High Court (Fees and Allowances) Rules SI 57/2011 that came into effect on 13 May 2011 while the respondent contended that it was the High Court (Fees and Allowances) Rules SI 35/2009. The basis for the applicant’s contention was that the date on which the commission accrued was the date of suspension of the attachment while the respondent contended that it was the date of attachment.

If the date on which commission accrued was the date of attachment, then the respondent levied the correct amount. However, if the commission accrued on the date of suspension, then he overcharged the applicant. SI 57/2011 repealed SI 35/2009 in its entirety. Section 8 (1) deals with the fees due to the Deputy Sheriff on execution. It states:

In respect of execution---------

When a writ is paid on presentation, three per centum of the amount of the writ with a minimum of US$ 10;

When a writ is withdrawn by the judgment creditor or judgment debtor’s  estate is placed under sequestration or liquidation before any movable property has been attached a fee of US10;

When the writ is withdrawn or suspended by the judgment creditor or judgment debtor’s estate is placed under sequestration or liquidation after movable property has been attached but before sale, three per centum of the value of the property attached, but such value shall not exceed the amount directed to be recovered.

When a writ is paid by the judgment debtor to the Deputy Sheriff after movable property has been attached but before sale, three per centum of the amount so paid.

After the sale in execution, three per centum, of the net amount recovered or, if the Deputy Sheriff acted as auctioneer, seven per centum of that amount.

Section 8 (1) (a) to (e) lists all the situations in which the Deputy Sheriff claims his commission. In my view his commission accrues on the date on which each event listed in (a) to (e) above takes place. It does not accrue before or after such happening. In the present matter the date on which the Deputy Sheriff was entitled to his commission was 19 May 2011, the date on which the judgment creditor requested him to withdraw the sale of the goods he had attached. The commission did not accrue to him on the date of attachment. The respondent’s contention that the commission accrued on attachment is not supported by r 327 (1) of the rules of court. That rule reads:

“(1) A writ of execution may, on payment of the fees incurred, be withdrawn or suspended at any time by notice to the sheriff or his deputy by the party who has sued out such writ”.

The phrase “on payment of the fees incurred” refers to all the fees due to the Deputy Sheriff on the date of withdrawal or suspension of the writ. The fees are listed in the High Court (Fees and Allowances) rules SI 57/2011. They include all necessary charges associated with the attachment and removal including those contemplated by s 8 (1) of the rules. Thus the commission incurred on withdrawal should be paid before the withdrawal on the date of withdrawal. In any event, the rules do not provide for payment of the commission due on withdrawal on the date of attachment.

I hold that the respondent levied fees under the wrong statutory instrument.

The issue that flows from this finding is whether the applicant is entitled to a refund. Mrs Wood, for the respondent, submitted under the authority of National Railways of Zimbabwe v Coghlan, Welsh and Guest 1984 (2) ZLR 229 (H) and Pymor Investment (Pvt) Ltd v Frank Pantony (Pvt) Ltd 1996 (2) ZLR 357 (H) that the applicant was not entitled to a refund.

The National Railways of Zimbabwe case involved an application for taxation of costs after the applicant had already made a direct payment to the respondent. KORSAH J held that the applicant had waived his right to taxation by paying without protest. In the Pymor Investment case, CHINHENGO J held that the applicant had protested before payment and granted it the relief sought. He, however, laid out the two bases such protest could take, at 368 E-F thus:

“In my view, the position in our law is that moneys paid under protest can be recovered under two conditions either:

(a)	if such payment is made involuntarily and under pressure brought to bear on the payer; and

(b)	even if no pressure is brought to bear on the payer, if the payer makes it clear that the money is paid on condition that if it is found not to be due the payer will claim it back.

and in either case the payer expressly protests or makes an unequivocal statement of objection.”

The above decisions contradict the view adopted by the Supreme Court in Ellis NO v

Commissioner of Taxes 1994 (1) ZLR 423 (SC) at 439B-H and especially at 439F-H where GUBBAY CJ stated:

“I strongly support the opinion of LORD GOFF supra at 760h that:

“In the end, logic appears to demand that the right of recovery should require neither mistake nor compulsion, and that the simple fact that the tax was exacted unlawfully should prima facie be enough to require its repayment.

‘Put differently, recovery is grounded on the unlawfulness and nullity of the demand and not on any mistaken belief of the payer.”

The respondent correctly contended that the applicant did not plead duress or mistake.

In fact in a letter accompanying payment it indicated that the payment was in full and final settlement.  Be that as it may, the respondent’s case is that the demand for payment under a repealed statute was unlawful. That view is buttressed by Ellis NO, (supra,) at 441 A where the learned CHIEF JUSTICE said:

“The Commissioner’s obligation to refund the capital gains tax so received arose from his action in making an unlawful and ultra vires demand under the notice of assessment”.

I am satisfied that the respondent made an unlawful demand for commission under repealed regulations. The payment cannot stand. The respondent is entitled to a refund of the excess amount.

It is unconscionable for the respondent to insist on keeping an amount that it wrongfully and unlawfully levied. Costs must follow the cause.

Accordingly,

It is declared that the commission levied by the respondent in case No HC 1201/11 in respect of goods attached on 3 May 2011 under the High Court (Fees and Allowances) Rules SI 35/2009 is unlawful.

The respondent is ordered to levy his commission on writ of execution against movable property dated 13 April 2011 in respect of goods attached on 3 May 2011 issued in case No HC 1201/11 in terms of clause 8 (1) (c) of the High Court (Fees and Allowances) Rules SI 57/2011.

It is ordered that the respondent shall refund the applicant all sums of money paid in excess of the amounts due to him under clause 8 (1) (c) of the High Court (Fees and Allowances) Rules SI 57/2011.

The respondent shall pay the applicant’s costs.

Musemburi and Muchenga, applicant’s legal practitioners

Dhlakama B Attorneys, respondent’s legal practitioners