The Commissioner General - Zimbabwe Revenue Authority v Benchman Investments (Private) Limited

### Preamble
Judgment No. SC88 /21
1
Civil Appeal No. SC 94/20
REPORTABLE: (85)
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REPORTABLE:	(85)

THE      COMMISSIONER      GENERAL     -     ZIMBABWE      REVENUE AUTHORITY

v

BENCHMAN      INVESTMENTS      (PRIVATE)      LIMITED

SUPREME COURT OF ZIMBABWE

GWAUNZA DCJ, BHUNU JA & MATHONSI JA

HARARE:  1 JUNE 2021 & 19 JULY 2021

G. Sithole, for the appellant

S.M. Hashiti, for the respondent

MATHONSI JA: 	On 12 February 2020, the High Court handed down judgment directing the appellant to refund to the respondent the sum of ZWL 545 058, 14 together with interest at the prescribed rate reckoned from September 2002.  It also ordered the appellant to pay the respondent’s costs of suit.  This appeal is against the whole of that judgment.

BACKGROUND

On 18 June 2002 the respondent, which is an incorporation registered in Zimbabwe, purchased 30 motor vehicles from Japan which were quickly shipped to Durban in South Africa on 29 July 2002. On 2 August 2002 the Minister of Finance published General Notice 359A of 2002 and Statutory Instrument 225 of 2002 designating the selling rate for certain imported goods including motor vehicles.  This was for purposes of s 115 of the Customs and Excise Act [Chapter 23: 02]. The rate is used to determine the value in local currency of goods purchased in foreign currency for import duty purposes.

The rate fixed by General Notice 359A of 2002 was used by the Zimbabwe Revenue Authority (ZIMRA) to calculate import duty payable by the respondent when it imported the 30 motor vehicles into Zimbabwe on 5 August 2002. As a result, the respondent was made to pay a sum of ZWD 36 500 000.00 as duty.  This was an overpayment of ZWD 30 000 000.00.

By urgent application filed in the High Court the respondent then challenged the validity of the increase in import duty introduced by the General Notice.  It contended that, the General Notice purporting to fix the selling rate was invalid by reason that it was not made by the Commissioner General after consultation with the Reserve Bank of Zimbabwe as required by s 115 of the Act.

The High Court upheld the respondent’s contention and by judgment delivered on 7 April 2004 in Benchman Investments (Private) Limited v Commissioner General Zimbabwe Revenue Authority 2004(1) ZLR 358(H), the court declared General Notice 359A of 2002 invalid.  The basis for the invalidity was that it was not made in accordance with s 115 of the Act.  The declaration of invalidity immediately entitled the respondent to a refund of the over payment of duty.

PROCEEDINGS IN THE COURT A QUO

It was not until 12 June 2019, that the respondent filed an application in the High Court seeking an order directing the appellant to refund the sum of US$658 844.76 plus interest and costs of suit.  That amount was perceived to be the equivalent of the excess duty of ZWD30 000 000.00 the respondent paid to ZIMRA in 2002.

The respondent’s contention was that the law did not require it to pay the additional ZWD30 000 000.00 to the appellant, which it was forced to pay for the importation of its motor vehicles. The respondent took the view that approaching the High Court the way it did was the only remedy available to it in the circumstances.

The application was opposed by the appellant who raised essentially 3 points in limine. The first point taken by the respondent related to her improper citation as respondent in the application.  It was stated that the Commissioner General of ZIMRA and ZIMRA are two different entities.  In any event, so it was contended, the cause of complaint was against the actions of the employees of ZIMRA.  As such, the proper respondent should have been ZIMRA as opposed to the Commissioner General.

The second point in limine was that given that the respondent’s cause of action arose from the declaration of invalidity viz-a-viz General Notice 359A of 2002 by the High Court, the respondent’s claim has been extinguished by prescription.  In the appellant’s view the respondent was not seeking to enforce the High Court judgment which declared the invalidity because it did not order anything.  To the extent that the respondent sought a positive remedy of a refund stemming from the declaration of invalidity, its claim prescribed 3 years from 7 April 2004 when the judgment was handed down.

The third point taken by the appellant was that there were material disputes of fact which could not be resolved by motion proceedings. According to the appellant, there was no convergence between the parties regarding when the judgment was handed down.  The respondent took the view that the judgment forming the basis of the suit was handed down on 26 September 2016.  That date was refuted by the appellant and in her view this should have informed the respondent to opt for trial action.

I mention in passing that the alleged dispute of fact is illusory because it cannot be disputed that the judgment was handed down on 7 April 2004. It bears that date and in fact it was reported in Volume One of the Zimbabwe Law Report of that year.  In that regard if the respondent’s claim prescribed after 3 years from the date of the judgment of invalidity, it had long prescribed by the time the respondent filed its application.

On the merits, the appellant denied owing the respondent any refund.  In her view, the duty that was levied was lawful at the time.  The invalidity only came after the event.

DECISION A QUO

The court a quo dismissed all the preliminary points raised by the appellant.  In dismissing the objection on the citation of the appellant as opposed to ZIMRA the learned judge a quo made reference to some judgments of the High Court which determined that the Commissioner General cannot be cited personally as a party in proceedings instituted as a result of the conduct of employees of ZIMRA.

The cases of Main Motors v Commissioner General HMA 17 -17 and Pacifique v Commissioner General, Department of Customs and Excise HH 123/18 concluded that it is not the Commissioner who should be cited in such proceedings but ZIMRA itself.  In terms of s 3 of the Revenue Authority Act [Chapter 23:11] ZIMRA is a body corporate capable of suing and being sued in its own name.

I should add that in arguments advanced before the court a quo, counsel for the appellant drew the attention of the court to a number of authorities on the issue including  authorities which had already been endorsed by the Supreme Court in Care International in Zimbabwe v Zimbabwe Revenue Authority & Ors SC76/17.  In that case this Court eminently pronounced that the Commissioner is merely an employee of ZIMRA who acts on the authority bestowed to him or her by ZIMRA. The latter was established with the power to sue and be sued in its own right and not through its Commissioner.

Unperturbed, the learned judge a quo sharply disagreed with those authorities.  He stated at pp 5 and 6 of the judgment:

“What is evident from the citation and the pleadings is that proceedings have been instituted against the Commissioner General nomine officio.  Needless to say, I do not agree with the conclusions reached in the judgments relied on by the respondent which take the view that the Commissioner General ‘cannot be cited personally.’ My view is that it is incorrect, in any event, to suggest that the Commissioner General was sued personally in those matters, because the use of the official title betrays that the respondent was cited nomine officio. Otherwise, the respondent’s personal name would have been used ----

The inevitable deduction from the above remarks is that, if a cause of action arises from an act or omission by the Commissioner General of his statutory responsibilities, he can be sued,  More generally, what emerges from the decided cases is  that the Commissioner General enjoys no insulation from being sued-----

The authorities cited proceed from the premise that it is only ZIMRA which must be sued for acts of the authority’s employees. This, as will shortly be demonstrated, is a flawed premise which is not supported by the law.”

On the question of prescription of the claim, the court a quo was confronted with two diametrically opposed arguments related to when the cause of action arose and when it prescribed.  The appellant argued that the cause of action arose on 7 April 2004 when the judgment of Hlatshwayo J (as he then was) declaring the invalidity of the General Notice was handed down.  The appellant asserted that the judgment gave the respondent cause to sue for a refund.  As such, it was subject to s 15 (d) of the Prescription Act and prescribed after 3 years from 7 April 2004.

According to the appellant, when the respondent filed and served the court application in June 2019, the claim had prescribed.  Per contra, the respondent submitted a two-pronged argument.  The first leg of the respondent’s argument was that its cause of action only arose when it uplifted the cyclostyled judgment on 26 September 2016 and not when the judgment was handed down on 7 April 2004.  Accordingly, the three year period had not expired when the application was filed and served in June 2019.

The second leg of the respondent’s argument was that Hlatshwayo J’s judgment was itself a judgment debt within the meaning of s 15(a)(11) of the Prescription Act.  It prescribed after 30 years as provided for in that section. Regrettably the court a quo does not appear to have resolved that issue.  It found that “a judgment which enables a party to exact performance is a judgment debt.”  The court however did not pronounce itself at all on whether the Hlatshwayo J judgment declaring the invalidity of the General Notice was a judgment debt.

Leaving that question open and unresolved the court a quo jumped to resolve the issue of when that judgment was handed down.  It found that the judgment, having been reported in the 2004 Zimbabwe Law Reports, was handed down then.  The court did not want “to dwell any further on this aspect” and certainly did not.  As to whether, after the judgment was handed down in 2004 the claim prescribed after 3 years as submitted by the appellant or after 30 years as argued by the respondent, the court a quo remained silent.

It is trite that a court is required to resolve all the issues placed before it for determination by the parties. Unless the issue, resolved by the court to the exclusion of the other issues raised is dispositive of the whole case.

On the alleged material disputes of fact, the court a quo found that no material disputes existed.  On the aspect of when the judgment was handed down, it took a robust and common sense approach and resolved it.  On the other dispute relating to the amount of the claim, the court a quo took the view that an amendment granted by consent in which the respondent altered its claim from US$658 844-76 to US$545 058.14 resolved that dispute.  In its view, by consenting to the amendment, the appellant was taken to have abandoned contestation of the quantum.

The court a quo went on to find that the respondent was entitled to a refund in the amended amount. It granted the relief sought.

PROCEEDINGS ON APPEAL

The appellant was aggrieved by the judgment of the court a quo.  An appeal was lodged to this Court on the following grounds:

The court a quo grossly erred and misdirected itself in law in finding that the appellant had been properly cited as a party to the application before the court

a quo.

The court a quo erred in law in finding, as it must be taken to have done, that the respondent had a valid cause of action.

In any case, the court a quo erred and misdirected itself in law in failing to find that the respondent’s claim had been extinguished by prescription.

The court a quo erred and misdirected itself in law in not dealing with the merits of the matter.

The court a quo erred and misdirected itself in law in finding, as it must be taken to have done, that a customs duty refund was due to the respondent from the appellant in the sum of ZWL 545,058.14.

ISSUE FOR DETERMINATION

The appeal itself raises quite a sizeable number of issues.  They are:-

Whether the appellant was properly cited in the proceedings.

Whether the respondent was properly before the court a quo in light of the provisions of s 125 of the Act.

Whether the respondent’s claim had prescribed, and

Whether the court a quo dealt with the merits of the matter.

While there are 4 issues arising from the appeal, it occurs to me that only one crisp issue is dispositive of the entire appeal.  It is: whether the appellant was properly cited in the proceedings.  I mention here in passing that even the twin issues of whether a proper application for a refund, as provided for in s 125, was made and whether such a claim was prescribed in terms of the Prescription Act, would also dispose of the entire matter.

However, the court can only relate to those other two issues if the proper parties to the dispute are before the court.  In my view, if the court finds that the appellant was improperly cited, that should be the end of the matter.  The application would have to be struck off the roll for that reason.

SUBMISSIONS ON APPEAL

On the crisp issue of the citation of the appellant, Mr Sithole submitted in his heads of argument that the court a quo erred in dismissing the preliminary objection on the improper citation of the appellant.  Reliance was placed on a chain of High Court judgments which were rejected by the court a quo. They all make the point that, by virtue of s 3 of the Revenue Authority Act [Chapter 23.11] which establishes ZIMRA, it is the authority which should be cited in any proceedings.

Counsel for the appellant submitted further that the High Court judgments departed from by the judge a quo received imprimatur by the Supreme Court in Care International in Zimbabwe v Zimbabwe Revenue Authority & Ors SC 76/17. It is a judgment delivered on 22 January 2018 more than 2 years before the learned judge a quo delivered the judgment forming the basis of the present appeal.

In that regard, it was submitted on behalf of the appellant that the court a quo was bound by the doctrine of stare decisis to follow the judgments relied upon.  It was not at liberty to overrule the Supreme Court judgment in Care International in Zimbabwe, Supra.

Mr Hashiti for the respondent was of a different view.  He cited s 2 of the State Liabilities Act and s 196 of the Customs and Excise Act in advancing the argument that the appellant can be cited in proceedings where it is his or her conduct that is complained of.  In his view, the fact that the Authority is a body capable of suing and being sued does not directly translate to the appellant’s exclusion from any suit.

ANALYSIS

ZIMRA is established by s 3 of the Revenue Authority Act in the following terms:

“There is hereby established an authority, to be known as the Zimbabwe Revenue Authority, which shall be a body corporate capable of suing and being sued in its own name and subject to this Act, of performing all acts that bodies corporate may by law perform” (The underlining is for my emphasis)

As already stated the authorities discarded by the learned judge a quo interpreted that provision to mean that it is ZIMRA as an entity which must be sued in proceedings involving the administration of any legislative instruments falling under its purview.  Those authorities are clear that the appellant cannot be cited personally in any action where the actions of the Authority’s employees are complained of.

In Care International in Zimbabwe, supra, Gowora JA (as she then was) dealt with the provisions of s 3 of the Revenue Authority Act, in relation to the functions of the appellant.  At p 8 the learned Judge remarked:

“The Commissioner General is undoubtedly an employee of the Zimbabwe Revenue Authority and when he performs the functions bestowed upon him by the various statutory provisions that govern the assessment and collections of revenue on behalf of the state he does so as such employee”

The court went on at p 11 to state:

“In terms of the Customs and Excise Act the responsibility for the assessment, collection and enforcement of duties is that of the Authority. It stands to reason therefore that it is the party upon whom the required notice should be served.  Any other construction would lead to an absurdity.  It is the party in terms of the Act with the power to sue and be sued.”

In arriving at the conclusion that it is the Authority that should sue and be sued the court cited with approval the remarks of GARWE JP (as he then was) in Tregers Industries v Zimbabwe Revenue Authority 2006(2) ZLR 62(H) at 66E-F:

“See also Maradze v Crmn PSC & Anor HH 223/98.  In the case, SMITH J remarked at pp7-8 that it was not appropriate to cite the Chairman of the Public Service Commission as a party unless the allegation is that he personally acted in a manner which necessitated recourse to the courts.

I agree with the sentiments expressed in the cases cited above. Ordinarily there is no basis for citing the Commissioner General as a party in a matter handled by employees of the authority.  I am fortified in this view by the provisions of the Value Added Tax Act [Chapter 23:12] as well as the Revenue Authority Act [Chapter 23:11]. The latter Act provides in s 54 that the operations of the Zimbabwe Revenue Authority (ZRA) shall, subject to the Act, be controlled and managed by a board which shall consist of the Secretary for Finance, the Commissioner General of ZRA and other members appointed by the Minister after consultation with the President.”

Clearly the Supreme Court interpreted s 3 of the Revenue Authority Act and related legislation to mean that in proceedings arising from revenue collection, the appellant is a mere employee of the Authority.  It is the Authority itself that should be cited.  Before the Supreme Court spoke on the subject other judges of the High Court had also taken that view.

As it is said the pull of the past is powerful and the comfort of doing what was done in the past the same way makes sound sense. Indeed public policy demands that the courts should be consistent and predictable unless there are valid grounds for change. Adjudication should not be left to the whims and personal idiosyncrasies of individual Judges as that breeds inconsistency and corruption.

The doctrine of precedent is expressed in the maxim stare decisis et non quieta movere which, loosely translated, means to stand by the decision and not to disturb what is settled.  Where a Judge enjoying the same level of jurisdiction with one who has made a pronouncement on the law desires to depart from the previous decision, he or she must show that the earlier decision is wrong or that the law has since evolved.

In such a situation, it must be shown that it is unconscionable to abide by the previous decision.  In my view it is not enough for the judge to merely declare that he or she does “not agree with the conclusion” previously made.  Neither is it sufficient to say that the decisions that have interpretated a statutory provision proceeded from “a flawed premise” without demonstrating how, and indeed why, the interpretation is wrong.  The court a quo clearly misdirected itself in rejecting the previous decisions of the High Court on the citation of the appellant without justification.

More importantly, the court a quo was bound by the judgment of this Court in Care International in Zimbabwe, supra.  It was not a question of “agreeing” with it.  It had to follow that decision given that it is a decision of a superior court.  The practice in this jurisdiction, which has withstood the test of time, is that inferior courts are bound by the decisions of courts superior to them.  It was therefore not open to the court a quo to overlook the pronouncement of this Court on the citation of the appellant in favour of its own fanciful one.

The court a quo fell into grave error in that regard. Its postulation that the appellant was cited “nomine officio” when she was not, is a red herring. In any event, that does not detract from the fact that it had long been decided that the appellant should not be cited personally in matters involving revenue collection.

The wrong citation of the appellant resolves the entire appeal.  There having been no proper respondent a quo, the application was improperly before the court.  It ought to have been struck off the roll.  In my view it matters not that the appellant was previously cited in the application which gave rise to the declaration of the invalidity of the General Notice.  The law proscribed the appellant’s citation. It could not be validated by an improper previous citation. Ground one of the appellant’s grounds of appeal is upheld. As already stated it is a conclusion which renders the consideration of the other grounds unnecessary.

Regarding costs, it is the policy of the courts in this jurisdiction, not to award costs in tax cases.  The exception is where the suit is frivolous. I see no reason for a departure from the norm.

In the result, it be and is hereby ordered as follows:

The appeal succeeds with each party to bear its own costs.

The judgment of the court a quo is set aside and substituted with the following:

“1. The application be and is hereby struck off the roll.

2. Each party shall bear its own costs.”

GWAUNZA DCJ		:		I agree

BHUNU JA			:		I agree

Messrs Kantor & Immermann, appellant’s legal practitioners

Venturas and Samkange, respondent’s legal practitioners