Civil
Appeal C of A/27/99

CIV/APN/151/99

IN THE
COURT OF APPEAL OF LESOTHO

HELD AT
MASERU

In the
matter between:

LESOTHO
MARKETING ENTERPRISES

(PTY)
LIMITED Appellant

and

THE
MINISTER OF COMMERCE, TRADE

AND
INDUSTRY First Respondent

THE
ATTORNEY-GENERAL Second Respondent

JUDGEMENT

6,13
April 2000

Coram:
Friedman, JA

Gauntlett, JA

Ramodibedi, JA

Gauntlett, JA:

In 1998,
the appellant (the applicant a quo) imported into Lesotho goods
dutiable in terms of section 48 of the Customs and Excise
Act, 10 of
1982 ("the Act"). The goods were stored in a warehouse and
the duty (in a total amount of M129 921,30) was
paid by the
appellant. Before however the goods could be

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released,
the warehouse was ransacked in the large-scale civil unrest which
took place in Maseru. 1998, and the goods were lost.

The
appellant claims from the respondents repayment of the duty thus paid
on the lost goods.

In their
opposing affidavit, the respondents sought to meet the claim with
discursive contentions regarding ownership and control
of the
warehouse, and negligence in relation to the custody of the goods.
The appellant itself was drawn into this irrelevant debate
in reply.
It nevertheless ended its replying affidavit with the emphatic
contention that its case had nothing to do with the loss
of the
goods, but only with the refund of the duty which it had paid.

The court
a quo (Mofolo J) however approached the matter on the basis that the
appellant had a good claim in delict for damages
for the loss of the
goods (which was not its case), but none for a statutory refund of
the duty (which was its case). The judgment
concludes by referring to
section 77 of the Act, and states:

"No refund of any duty or other charge in respect of imported or
exercisable (sic) goods or sale duty goods, other than a
refund
provided for under section 76 or 78, shall be paid or granted except
in accordance with the provisions of this section and
the
regulations. Sub-section (2) is to the effect that the Director may
consider any application for refund or that he is entitled
to payment
by reason of:

1. an
   error in determining an assessment or calculating the amount
   thereof;

   
   

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2. the
   duty having been assessed on a value higher than the value for duty
   purposes.

   
   

3. a
   determination under section 48(9) or incorrect tariff
   classification;

   
   

4. the
   goods concerned having been damaged, destroyed or irrecoverably lost
   by circumstances beyond his control prior to the release
   thereof for
   home consumption, provided he satisfies the Director that any
   compensation received in respect of such damage destruction
   or loss
   does not include the duty on the goods (my underlining).

   
   

It is common cause that the applicant did not approach the
Commissioner of Customs and Excise for the refund of duty. Even
should
have [sic] the applicant so approached the Commissioner, in
view of the decisive and countervailing import of sub-section (d)
above
against the refund of duty paid on goods, it does not appear
that the Commissioner while he would be duty bound to allow damages

for loss, would allow refund of duty paid on the goods.

But there is also another consideration, for one would have thought
that the applicant would claim restitution namely, to fie in
a
position he should have been after paying government duty by saying:
I have paid government duty which enables me to call upon
you to
release my goods or pay damages. Without payment of duty, can
applicant's goods be released to him ? If this court should
order
government to refund duty paid would this not be to defeat
applicant's legitimate claim for loss of his goods or damages
thereof
?

In this court's view, since applicant is entitled to refund or
compensation of goods lost for which duty was paid, this application

is dismissed with costs to the first respondent".

In my
respectful view, the court erred in this approach, and in the order
it made. This is so for several reasons.

In the
first place, the appellant's only claim was for a refund of the duty.
This its founding affidavit and replying affidavit
{at least in
conclusion) made clear. Regrettably neither makes explicit reference
as they should, and so simply could have done,
to the particular
statutory provision on which the claim rests. An

4

explicit
statutory reference may have eased the court's task, and perhaps even
dissuaded the respondents from their factual foray
in answer
(followed by the court in its judgment) into irrelevancies concerning
the goods, their warehousing, the mechanism of
payment, and the issue
of negligence relating to control of the goods. But the basis of the
statutory claim is sufficiently laid,
at least by way of broad
paraphrase of the statutory provisions (cf. Yannakou v Apollo Club
1974 (1) SA 614 (A) at 623-4): it is
one in terms of section 77 of
the Act, to which the court itself refers in the concluding passage
set out above.

In the
second place, it was apparent that the first respondent's officials
had considered the appellant's claim for a refund, and
had rejected
it. Quite when that may have happened is not entirely clear on the
papers, but it took place at least by the time
litis contestatio
occurred (upon the filing of the opposing affidavits). The finding by
the court specifically to the effect that
this had not happened (in
the same passage quoted above) is again quite against the evidence.

Thirdly,
the evidence shows no proper basis on which the first respondent's
officials could have rejected the claim. The interpretation
by the
court a quo of the effect of the relevant statutory provisions rests
on a misreading. It is accordingly necessary to set
out the material
provisions in full.

The
section provides:

5

"77. (1) No refund of any duty or other charge in respect of
imported or excisabie goods or sales duty goods, other than a
refund
provided for under section 76 or 78, shall be paid or granted except
in accordance with the provisions of this section and
the
regulations.

2. The
   Director shall, subject to the provisions of sub-section (4),
   consider any application for a refund or payment from any applicant

   who contends that he has paid any duty or other charge for which he
   was not liable or that he is entitled to any payment under
   this Act
   by reason of -

   
   

1. an
   error in determining an assessment or calculating the amount
   thereof;

   
   

2. the
   duty having been assessed on a value higher than the value for duty
   purposes;

   
   

3. a
   determination under section 48(9) or incorrect tariff
   classification;

   
   

4. the
   goods concerned having been damaged, destroyed or irrecoverably
   lost by circumstances beyond his control prior to the release

   thereof for home consumption, provided he satisfied the Director
   that any compensation received in respect of such damage,

   destruction or loss does not include the duty paid on the goods;

   
   

5. all
   or part of such goods having been shortlanded, shortshipped or
   shortpacked; or

   
   

6. the
   adjustment of any bill of entry in terms of section 41(3).

   
   

2. Except
   with the permission of the Director, any application for a refund
   under this section shall not relate to more than one
   bill of entry
   or other document in respect of which the alleged overpayment was
   made.

   
   

2. No
   application for a refund or payment in terms of this section shall
   be considered by the Director unless it is received by him,
   duly
   completed and supported by the necessary documents and other
   evidence to prove that such refund or payment is due under
   this
   section, within a period of two years from the date on which the
   duty or charge to which the application relates was paid:

   
   

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Provided that the Director may, in such circumstances as he may
consider exceptional consider any such application after expiration

of such period.

5. If,
   after considering any application for a refund or payment in terms
   of this section, the Director is satisfied that the applicant
   is
   entitled to any such refund or payment, the Director may to the
   applicant the amount due to him (sic):

   
   

Provided that no refund shall be made under this section if, in the
case of goods imported by post, the amount thereof is less
than 50
lisente or, in the case of goods imported in any other manner less
than five maloti or, in the case of excisable goods
or sales duty
goods manufactured in Lesotho, less than two maloti, unless the
Director is satisfied that exceptional circumstances
exist which
warrant such refund.

5. Any
   duty refunded or rebated under the provisions of this Act shall,
   subject to the provisions of section 45(1), forthwith be
   repaid to
   the Director by the person to whom such refund has been paid or such
   rebate has been allowed if such person is compensated
   in respect of
   such duty by any other person".

   
   

(It is
evident that the word "pay" has been omitted after the
words "the Director may"

in
sub-section (5)).

The
statutory scheme created by these provisions is a simple one. Read
with section 48, it is plain that the Act only intends to
levy duty
"for home consumption of such goods". Section 77
contemplates various situations in which a duty levied should
be
repaid, one of which (section 77(2)(d)) is loss of the goods
concerned in circumstances beyond the control of the applicant
for a
refund. The logic is clear: no home consumption having taken place,
through no fault of the applicant, no

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duty
should lie. The proviso in that regard is the satisfaction of the
Director that any compensation {for instance, an insurance
pay-out or
successful action for damages) relating to the loss "does not
include the duty paid on the goods".

The
effect of this proviso is not, as the court below appears to have
considered, that it has "[a] countervailing import....against

the refund of duty paid on goods", such that "the
Commissioner while he would be duty bound to allow damages for loss,

would [not] allow refund of duty paid on the goods",The position
is exactly the converse.

If, for
these reasons, the approach of the court a quo stands to be rejected,
the question is whether the appellant has established
a statutory
entitlement to the refund it seeks.

It would
seem on the evidence before us that the jurisdictional facts for a
refund to be found in sub-sections 77{2)(d), (4) and
(5) appear to
have been met, and this was conceded in argument on behalf of the
respondents.

The
appellant has not proceeded by way of review of the Director's
decision, as might have been the more appropriate course. Its
claim
is essentially one of statutory restitution in the light of section
77, given the failure by the Director to effect the refund
in
circumstances in which he was obliged to do so. The

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formulation
is a familiar one in statutes. As Lord Wilberforce said in Secretary
of State for Education and Science v Tameside Metropolitan
Borough
Council [1977] AC 1014 (HL) at 1047C-F:

The section is framed in a 'subjective form' - if the Secretary of
State 'is satisfied'. This form of section is quite well known,
and
at first sight might seem to exclude judicial review. Sections in
this form may, no doubt, exclude judicial review on what
is or has
become a matter of pure judgment. But I do not think that they go
further than that. If a judgment requires, before it
can be made, the
existence of some facts, then, a/though the evaluation of those facts
is for the Secretary of State alone, the
court must inquire whether
those facts exist, and have been taken into account whether the
judgment has been made on a proper self-direction
as to those facts,
whether the judgment has not been made on other facts which ought not
to have been taken into account. If these
requirements are not met,
then the exercise of judgment, however bona fide it may be, becomes
capable of challenge... ".

It is
plain that the Director has exhibited in relation to the facts of
this matter no understanding of the correct application
of section
77. The facts were such as to require him, duly entering his
statutory jurisdiction, to reach the conclusion that the
appellant
was entitled to the refund. As already indicated, this has nothing to
do with the distracting contentions regarding ownership
of
warehouses, the control of the goods, and issues of fault, all of
which have taken up so much time in the papers and in the
judgment
itself.

For these
reasons I consider that the appeal must succeed. A residual question
relates to interest. This was claimed at the rate
of 1 8 per cent per
annum from 1

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June 1998
to the date of payment. The evidence does not establish this as the
date on which demand was first made, and from which
mora interest
should run. It was conceded in argument on behalf of the appellant
that an entitlement to interest would only accrue
from the date of
institution of proceedings, and then at the legal rate of interest.
The respondents' submission that interest
should only run from the
date of judgment is not correct: the claim for a refund of the duty
paid was a fully liquidated one (cf.
Victoria Falls and Transvaal
Power Co. Ltd v. Consolidated Lanqlaagte Mines Ltd 1915 A.D. 1 at 32;
(see generally Visser and Potgieter
Law of Damages (1993) 165, and
further authorities there cited).

The
appeal is upheld with costs. The judgment and orders of the court a
quo are set aside, and substituted with the orders which
follow:

"1. The first respondent is ordered to refund to the applicant
the sum of M129 921,30.

2. The
   first respondent is directed to pay interest on the said sum at the
   legal rate of interest from 15 April 1999 to the date
   of payment.

   
   

2. The
   first respondent is directed to pay the applicant's costs ".

   
   

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GAUNTLETT
JA

Friedman
JA:

I agree

FRIEDMAN
JA

Ramodibedi
JA:

I agree.

RAMODIBEDI
JA

For the
appellant: Mr K. Sello

(Mohaleroe,
Sello & Company)

For the
first and second

respondents:
Mr T. S. Putsoane