Builders Ltd v Union Government (Minister of Finance)

• Jurisdiction: South Africa
• Judge: Solomon CJ, Wessels JA, Curlewis JA and Stratford JA
• Judgment Date: 21 October 1927
• Citation: 1928 AD 46
• Hearing Date: 10 October 1927
• Court: Appellate Division

Curlewis, J.A.:

This is an appeal against the judgment of the Natal Provincial Division upholding certain exceptions which had been taken by respondent to appellant's plea. Appellant was sued by respondent for £575 7s. for Customs Import Duty due by reason of the undervaluation by appellant, of goods imported into the Union between 8th February, 1923, and 14th April, 1924. The Declaration alleged (para. 2) that defendant (now appellant) was the agent or sole customer in South Africa of the Komo Chemical Company Incorporated of Philadelphia, United States of America, "who are the suppliers into the Union of the goods hereinafter referred to and the defendant is an importer within the meaning of sec. 119 of the Customs Management Act No. 9 of 1913."

Paragraph 3 alleged that between the dates abovementioned defendant imported from the United States of America into the Union certain goods (consisting of Komo Fly Liquid and Sprayers) supplied by the Komo Company in respect of which a 20 per cent. Customs ad valorem import duty was payable in terms of item 193 in the first schedule of the Customs Tariff Act of 1914, as amended by the Act of 1915. Paragraphs 4 and 5 are as follows: -

(4) To the intent that the commissioner of Customs might ascertain the value of such goods for the imposition of such duty in terms of sec. 47 of the Customs Management Act No.,9 of 1913, the defendant or its agents from time to time made, in the manner and form prescribed by the regulations, declarations as to the true current values of the said goods for. Home Consumption as defined in sec. 7 of the Customs Tariff Act of 1914, based such declarations upon the certificates of the Komo Company, and paid duty upon such declared values, which payment the commissioner of customs (erroneously believing the declarations to be in respect of true values) accepted and released the goods, but except for such belief, he would not have accepted such payment as sufficient and would not have released the goods.

Curlewis, J.A.

(5) Subsequent to the said payments the commissioner of customs had reason to suspect that the values set out in the declarations referred to in the foregoing paragraph 4 were not true values, and being doubtful as to the correctness of the said certificates of the Komo Company and the declaration of the defendant, obtained two written certificates dated the 26th June, 1925, signed by one James Moffatt in the U.S.A. (he being a person specially designated by the commissioner of customs under sec. 13 of Act No. 23 of 1923), which certificates certify the true current values for Home Consumption in the open market of goods in the principal markets of, the U.S.A similar to the said goods at the date of their respective importation into the Union, exclusive of carriage to port of shipment and cost of packing and packages. In terms of the said section those certificates are conclusive evidence of such values. Copies of the certificates are attached to the declaration.

In paragraph 6 it is alleged that the values so certified amount, together with the agreed amount of carriage to port of shipment and costs of packing and packages, to a total value which is in excess, by the sum of £2,876 15s., of the corresponding total value declared by the defendant, and paragraph 7 alleged that in respect of the said excess, duty was payable in the sum of £575 7s.

The plea of defendant admitted para. 3 but denied paras. 2, 4, 5, 6 and 7 of the Declaration, saving certain admissions which for the purposes of this appeal it is not necessary to set out. Para. 6 of the plea is: "Defendant denies that the commissioner was at any time entitled in this case to resort to the machinery provided by sec. 13 of Act 23 of 1923 as he purported to do."

To this paragraph exception was taken that it was bad in law, vague and embarrassing, and superfluous, for the reasons set out in the exception. Both the learned Judges in the court below upheld this exception on the ground that as para. 6 stated a mere conclusion of law without any allegation of facts in support thereof, it was bad pleading according to the rules and practice of the Natal Court. According to the judgment of TATHAM, J it would appear that, during the argument in the lower court, counsel for defendant informed the Court that by para, 6 it was intended to deny that it was necessary, within the meaning of

Curlewis, J.A.

sec. 13 of Act 23 of 1923, to determine the true current value of the goods at all, and that the commissioner did not in fact have any doubt as to the correctness of the valuation. But before us counsel intimated that that does not correctly reflect what he intended to convey. What he intended by para. 6 was that, assuming all the facts set out in the Declaration to be correct, the commissioner was not entitled to resort to the machinery provided by sec. 13 of the Act, because the Act contemplates the existence of two conditions precedent before that machinery can be invoked, the first condition being that it must be necessary in terms of sec. 7 of the Customs Tariff Act of 1914 to determine the true current value for Home Consumption at the moment when the commissioner resorts to the machinery of sec. 13, and the second condition being that the commissioner must have a doubt as to the correctness of the certificates; the second condition was alleged in the Declaration but not the first. And he claimed that by para. 6 the issue was raised that when once the value of the goods was accepted by the commissioner and the duty paid thereon, and the goods released, the commissioner cannot thereafter resort to the machinery of para. 13 in respect of those goods, because it cannot thereafter become necessary to determine the true current value thereof.

If that is what para. 6 was intended to convey, I am not surprised that counsel for plaintiff deemed it necessary to except to it. One would naturally expect that if defendant meant to raise that point of law on the facts set out in the Declaration and on the assumption that those facts are proved, he would do so by way of exception. It is true, a defence that may be raised by way of exception may also be raised by way of plea, but a plea is not the ordinary and usual way of raising such a defence. Para. 6 is, in my view, vague and embarrassing. The words "at any time" and "in this case" do not help to elucidate its meaning. Without having the information contained in the judgments of the lower court or counsel's explanation before us, the paragraph may be read either as meaning that on the facts stated in the Declaration or on those facts as denied by defendant the commissioner was not entitled to resort to para. 13 of the Act, or it may mean that defendant is not even confined to the facts set out in the Declaration or to his denial of facts, but that he may lead any evidence that he deems fit to show why the commissioner was not entitled

Curlewis, J.A.

to invoke the machinery of sec. 13. A plea should be clear and unequivocal, it should not leave one guessing as to what it means. Defendant could very easily have alleged the necessary facts on which he relied or would rely for the conclusion contained in para. 6. This exception was therefore well founded. As regards para. 7 of the plea this was dealt with in the argument together with para. 11. Para. 7 alleged: "In any event defendant denies that the said Moffatt was a fit and proper person to be appointed to give or make the said certificate or to make or give them," and the grounds for this are given, viz., because Moffatt is, or was, at all material times the representative in America of the Customs Department of the Union Government, and had prior to the "making" of the certificates expressed an opinion both orally and in writing upon the matter which he subsequently certified, and was not a disinterested or impartial person. Para. 11 alleged that in procuring and giving the certificates the commissioner of customs and Moffatt acted irregularly, arbitrarily and contrary to the contemplation of the Act, in that no opportunity was afforded to enable defendant to submit to Moffatt his contention or evidence as to the home consumption value of the goods. To these two paragraphs exception was taken that they were bad in law and disclosed no defence, and an alternative exception was taken to para. 7 that it was vague and embarrassing.

Counsel for appellant contended that the functions of Moffatt under sec. 13 of Act 23 of 1923 were of an administrative or quasiadministrative nature, that he had to exercise discretion in giving the certificates, that his position was somewhat similar to the position of the persons who were appointed under the latter part of sec. 47 (2) of Act 9 of 1913, that under sec. 13 of Act 23 of 1923 the commissioner must appoint someone with an open mind on the...