Chairman, Board on Tariffs and Trade, and Others v Teltron (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Eksteen JA, Corbett CJ, Van Heerden JA, Howie JA and Zulman JA
• Judgment Date: 28 November 1996
• Citation: 1997 (2) SA 25 (A)
• Docket Number: 168/95
• Hearing Date: 01 November 1996
• Counsel: E W Dunn (with him SP Le R De La Horpe) for the appellants W H Trengove (with him GJ Marcus) for the respondent
• Court: Appellate Division

Eksteen JA:

During 1988 the government became concerned at the worsening balance of payments in the country's international trade. In order to alleviate the position and to restore the balance to acceptable levels the then Minister of Economic Affairs and Technology requested the Board for Trade and Industry ('the Board') to investigate the possibility of introducing differentiated rates of surcharge to be imposed D on certain imported goods. The Board conducted the investigation and in its report to the Minister recommended the imposition of such surcharges. The government accepted these recommendations and immediately imposed the surcharges in terms of the provisions of the Customs and Excise Act 91 of 1964, by Government Notice E R1635 promulgated in Government Gazette 11464 of 15 August 1988.

These surcharges were imposed at such short notice that they had the effect of causing harm and inconvenience to importers who had already placed orders and were bound to accept the goods so ordered. In an attempt to deal with this situation the Minister of F Finance, by Government Notice 1862 of 9 September 1988, inserted Note 9 to Part 4 of Schedule 1 to the Customs and Excise Act ('Note 9') providing for certain exemptions to the payment of the surcharge. This Note read as follows:

'9. Any rate of surcharge specified in this part in respect of any goods shall not apply to any such goods entered for home consumption before 31 October 1988, in such quantities or of such values as the Director-General: Trade and Industry, on the recommendation of the Board of Trade and Industry, may allow by specific permit provided -

(a)

satisfactory evidence is submitted that the goods were irrevocably ordered before 15 August 1988;

(b)

the continued existence of the undertaking is, in the opinion of the Board, in jeopardy; and H

(c)

the application for a permit was in the possession of the Board before 30 September 1988.'

(The name of the Board for Trade and Industry was changed by s 1(a) of the Board of Trade and Industry Amendment Act 60 of 1992 to the Board on Tariffs and Trade, and its chairman is the first appellant in this matter.) I

The words 'entered for home consumption before 31 October 1988' in the Note were deleted by Government Notice R2239 of 28 October 1988, and they are of no consequence to the present appeal.

On 28 September 1988 the respondent applied for exemption under Note 9. On 9 November 1988 it was informed that its application had J

Eksteen JA

been refused. It is common cause that that refusal was improper and consequently A invalid. Respondent subsequently renewed its application and submitted further information in support of its case. After a considerable amount of discussion and correspondence respondent's application was finally refused. In a letter dated 7 October 1993 it was informed that: B

'The Board has duly reconsidered your application and the documentation filed in support thereof. . . . The Board has come to the conclusion that the continued existence of Teltron (Pty) Ltd was not in jeopardy due to the imposition of the differentiated rates of surcharge on 15 August 1988. . . . The Board, therefore, cannot accede to your request to recommend that exemption from the payment of surcharge C in terms of Note 9 be granted your company in respect of goods ordered by it prior to 15 August 1988'.

On 31 March 1994 respondent filed an application in the Transvaal Provincial Division for an order reviewing and setting aside the decision of the Board; for an order directing the Board to recommend to the Director-General: Trade and Industry ('second appellant') that the application be granted, and for an order directing the D second appellant to grant the application. In its founding affidavit respondent based its application on the submission that the Board had misdirected itself and had not properly applied its mind to the application, and that it had been unduly influenced by irrelevant considerations in coming to its decision. In the appellants' answering E affidavits it became apparent that the Board had in fact not dealt with the application itself but had purported to delegate its functions to a committee known as the Industrial Investigation Committee ('the IIC'). In consequence of this revelation the respondent reformulated its grounds for review, alleging that the refusal had been irregular and improper for the following reasons: F

(a)

the Board did not consider the application at all, but abdicated its responsibility to do so to the IIC;

(b)

the Board misconceived the nature of its discretion under para (b) of Note 9 which required only that the continued existence of the undertaking be in jeopardy and not that the surcharge should have been the cause of the jeopardy; and G

(c)

the application had been refused not on its merits but for ulterior considerations. It was conceded that this latter ground involved factual disputes on the papers, and that consequently, in the event of the respondent not succeeding on either of the first two grounds, it was bound to ask for the matter to be referred to oral evidence to resolve the H disputes.

The learned...