DISTRIBUTABLE (85)

Judgment No. SC 98/02

Civil Appeal No. 27/01

CHRIS JOHN MAZARURA v

THE DIRECTOR OF CUSTOMS AND EXCISE

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, ZIYAMBI JA & MALABA JA

HARARE, SEPTEMBER 9 & NOVEMBER 14, 2002

R M Fitches, for the appellant

A Chinake, for the respondent

CHIDYAUSIKU CJ: The facts of this case are by and large common cause. They are set out in some detail by the learned judge in the court a quo. There is no need to relate them again in this judgment. I will only briefly summarise them as follows.

The appellant went to the United States to study. He remained there for four years before he returned to Zimbabwe. He returned to Zimbabwe on 21 September 1999. In terms of s 92 of the Customs and Excise (General) Regulations, SI 106 of 1977 (hereinafter referred to as “the Regulations”), he was entitled to a rebate of duty on certain goods he might wish to import on his return. To this end, he decided to purchase a motor vehicle, a Mercedes Benz ML 430-190, which he intended to import into Zimbabwe duty free in terms of the Regulations.

He placed an order for the motor vehicle with Mercedes Benz (United Kingdom) Limited, of 78 Picadilly, London. The latter confirmed the availability of the motor vehicle. On 10 September 1999 the appellant paid ?16 000.00, leaving a balance of the purchase price of about US$30 000.00. It is the date of the payment of the balance of the purchase price which has given rise to this dispute.

It is common cause that on 13 September 1999 the appellant initiated the transmission of the balance of the purchase price to the bank of the seller. It is also common cause that, through some confusion not satisfactorily explained by the various banks that handled this money, the balance of the purchase price was not received by the seller until 7 October 1999, some twenty-four or so days after the initial instruction to transmit the money to the seller. In the meantime, the appellant returned to Zimbabwe on 21 September 1999.

Annexure ‘C’ attempts to set out the sequence of events from the time of the initial instruction to the date of receipt of the purchase price by the seller. Annexure ‘C’ provides as follows:

“Thank you for your fax dated 14 July 2000 addressed to my colleague, Mr D Holden, in which you asked for a résumé of the events surrounding our payment IP4BM99091300162.

I was sorry to learn of the difficulties you have encountered in connection to this payment. Please find below a breakdown of NatWest’s involvement in this particular SWIFT transfer.

13 September 1999:

NatWest Bank London received a SWIFT payment order from Bank of America New York, instructing us to issue the following payment:-

Payment amount: USD 31.500.00 LESS OUR CHARGES

Value date: 13 SEPTEMBER 1999

By order: CHARLES MAZARURA

Instructing bank: /000300201183

CENTRAL CAROLINA BANK AND TRUST

ADJUSTMENT OC 25

PO BOX 931

DURHAM NC USA 27702

Beneficiary: /0485527427

CHRIS JOHN MAZARURA

Details: /RFB/SE990913005747

Bank to bank instructions: /INS/NATIONSBANK NACHARLOTTE

//NORTH CAROLINA

//ACC/TLX ADVSORT CODE 720000

In response to this payment order, due to the bank to bank instructions ‘SORT CODE 720000’ NatWest issued a similar US 31,480.43 payment on 13 September 1999 to Citibank London. (Sort Code 720000 belongs to Girobank Bootle, who, I believe at the time this payment was processed, maintained their US Dollar settlement through Citibank London).

15 September 1999:

Citibank London returned the payment that we had made on 13 September 1999, as they advised us that the beneficiary institution were unable to apply the payment.

16 September 1999:

Our Investigations Team opened a file upon the payment, and started to research the matter.

21 September 1999:

NatWest received a response from Bank of America New York, requesting cancellation of the payment on behalf of Nationsbank NA. The reason for cancellation was stated to be ‘funds sent in error’. A cancellation of the payment was initiated via our agent Chase Manhattan Bank New York.

23 September 1999:

NatWest received a further message from Bank of America New York, revoking their cancellation request and requesting an amendment to their original payment instructions:-

Beneficiary: MERCEDES BENZ – REF: PICADILLY

Beneficiary bankers: BRANCH MILTON KEYNES

SORT CODE 601455.

Specifically they requested that we now re-effect payment per these amended instructions avoiding any duplication. As we had already sent the funds back through Chase Manhattan Bank, we contacted them to recall the funds.

6 October 1999:

After numerous messages had been exchanged between all the banks involved in this payment, the funds were returned to NatWest. [Due to (the) time difference between (the) USA and (the) UK, NatWest was unaware of the return until 7 October 1999.]

7 October 1999:

NatWest issued a payment in accordance with the revised payment instructions.

Although this transaction was first instructed to NatWest for value 13 September 1999, NatWest was not in receipt of both full and correct payment instructions and covering funds until 7 October 1999. With this in mind, I do not consider the apparent delay involved in this transaction, 24 days [18 working days], to be the responsibility of NatWest.”

The appellant also enquired of the seller’s bank through the seller what had transpired. The seller responded to that enquiry as follows:

“Further to our recent telephone conversation (I) have read through the file pertaining to your car, and have found a copy of a document, which may help you.

Our bank (was) unable to assist in respect of answering the question of ‘where the money went’. But the dates shown on the document are clear that a ‘value date’ of 13/9/99 was given! …” (the underlining is mine)

It is apparent from the above letter that the seller’s bank and indeed the seller itself gave the payment of the purchase price a value date of 13 September 1999.

On these facts the learned judge in the court a quo concluded that the date of full payment in terms of the Regulations was 7 October 1999, which is the date the seller received full payment.

The appellant had returned to Zimbabwe by that date and consequently the court a quo concluded that the appellant was not entitled to a rebate in terms of s 92(2) of the Regulations. Section 92(2) of the Regulations provides as follows:

“For the purposes of this section, goods shall be treated as being owned by an immigrant only if such goods were in physical existence and fully paid for by the immigrant before the time of his arrival.” (the underlining is mine)

The requirements of s 92 are clear. In order for one to qualify for an immigrant’s rebate of duty, he or she ought to satisfy the following –

(i) that the effects/goods were in physical existence prior to his/her return; and

(ii) that such effects/goods were fully paid for by the immigrant before arrival in Zimbabwe.

In the case of Mahomed v Director of Customs and Excise 1998 (1) ZLR 60H, ADAM J expressed the view that “fully paid for” meant no payments were outstanding at the time of arrival in Zimbabwe. In that case the issue was whether the words “paid for by the immigrant” in the above section meant paid for personally by the immigrant, as contended for by the Director of Customs and Excise (the Director), or included a gift of a motor vehicle paid for, using the relative’s funds, by a relative of the immigrant. The court rejected the literal interpretation of the Director and accepted the more liberal interpretation contended for by the immigrant. In doing so the court relied on the intention of Parliament and the mischief intended to be dealt with, as opposed to the literal meaning of the words of the Regulations.

In concluding that payment was made after the return of the appellant to Zimbabwe, the learned judge in the court a quo contended that he was giving effect to the primary or literal meaning of the words of the statute, in particular the words “fully paid for by the immigrant before the time of his arrival”.

I have no problem in accepting the proposition that the court should accord words of a statute their ordinary meaning, save in cases where that would lead to an absurdity so glaring that no reasonable person, using those words, could have intended such an interpretation. See S v Nottingham Estates 1995 (1) ZLR 253; and S v Kachipore 1998 (2) ZLR 371.

I am unable, however, to agree with the learned judge in the court a quo that ascribing the literal meaning of the words of the Regulations in this case leads to the conclusion that full payment by the immigrant occurred on 7 October 1999. The facts of this case clearly show that what occurred on 7 October 1999 was the receipt by the seller of the full payment of the purchase price which had been made by the buyer, the immigrant, several days previously. The learned judge ascribed to the words of the statute “fully paid for by the immigrant” the meaning “receipt of full payment by the seller”. I do not accept that the words “fully paid for by the immigrant” literally mean, or are synonymous with, “receipt of full payment by the seller”. The latter words are not the words of the Regulations.

Mr Chinake, has argued that we should follow the case of Lardner-Burke v Director of Customs and Excise S-54-02, which concluded on very similar facts that full payment only occurred upon receipt of the full purchase price by the bank of the seller. I agree with Mr Chinake that the facts of Lardner-Burke v Director of Customs and Excise supra are strikingly similar to the facts of this case, but there is one very important factor that distinguishes the two cases. I shall revert to that shortly.

A careful reading of Lardner-Burke’s case supra reveals that it did not seek to lay down a general proposition that full payment occurs only upon receipt of the full purchase price by the seller, but that on the facts of that case full payment was effected on receipt of the purchase price by the seller.

In my view, what constitutes full payment by the immigrant depends on the facts of each case and no doubt to some extent the intention of the parties. For example, where the parties agree that payment was to be by cash sent to the seller by registered post and any loss through vis major thereafter was to fall on the seller, full payment no doubt would be complete upon the posting of the registered mail. In short, I hold the view that although full payment by the immigrant could occur upon receipt of the full purchase price by the seller it does not necessarily have to be the case and the facts of each case have to be examined in order to make a determination as to when full payment occurred.

In terms of Annexure ‘E’, the seller and its bank value dated full payment by the immigrant at 13 September 1999, the date when the SWIFT transfer was made. At the time the agreement was concluded, the buyer was located in the United States, while the seller was in the United Kingdom. Given this situation, it must have been within the contemplation of the parties that payment would or could be made by SWIFT transfer, which was in fact done on 13 September 1999. The appellant contends that that is the date on which full payment was made. The seller concurred with that view by value dating the payment to that date. That concurrence no doubt is based on the fact that on 13 September 1999 the appellant did everything that could reasonably be expected of him, but for reasons beyond his control the money did not reach the seller until 7 October 1999.

This case is therefore distinguishable from Lardner-Burke’s case supra on the basis that the parties in casu are agreed that the date of full payment was the date on which the purchaser sent the money to the seller by SWIFT transfer and not the date when such money was received by the seller.

Mr Chinake also argued that the appellant did not own the motor vehicle upon his arrival in Zimbabwe. I am not persuaded by this submission. A proper reading of s 92(2) of the Regulations reveals that once it is shown that the goods were in existence and fully paid for by the immigrant at the time of his arrival “the goods shall be treated as being owned by the immigrant”.

Mr Chinake also argued that the payment was made by the appellant’s brother and not the appellant. Mohamed’s case supra is authority for the proposition that the words “full payment by the immigrant” do not mean the goods necessarily have to be paid for by the immigrant. It is interesting to note that the court in that case applied a liberal interpretation to the words of the statute. The words “fully paid by the immigrant” were interpreted to include goods paid for by the immigrant’s relative and given to the immigrant as a wedding gift.

For the foregoing reasons, the appeal must succeed. The court a quo erred in rejecting 13 September 1999 as the date when full payment was made by the appellant.

In the result, the appeal succeeds. The order of the court a quo is set aside and the following order is substituted –

It is ordered as follows –

(1) It is declared that the respondent’s determination that the appellant had not fully paid for the motor vehicle on his arrival in Zimbabwe is invalid.

(2) That the respondent bears the costs of this application.

ZIYAMBI JA: I agree.

MALABA JA: I agree.

Manase & Manase, appellant's legal practitioners

Kantor & Immerman, respondent's legal practitioners