Commissioner for Inland Revenue v First National Industrial Bank Ltd

• Jurisdiction: South Africa
• Citation: 1990 (3) SA 641 (A)

Commissioner for Inland Revenue v First National Industrial Bank Ltd
1990 (3) SA 641 (A)

1990 (3) SA p641

Citation	1990 (3) SA 641 (A)
Court	Appellate Division
Judge	Corbett CJ, Botha JA, Kumleben JA, Nicholas AJA and Nienaber AJA
Heard	March 15, 1990
Judgment	May 18, 1990

Flynote : Sleutelwoorde B

Revenue — Stamp duty — Refund of — Section 3 of Stamp Duties Act 77 of 1968 read with Schedule 1 of the Act — Payment by bank of stamp duties 'under protest' to avoid penalties under the Act — Duties C subsequently held by Court not to be due — Claim by bank for refund could not be brought under s 32(1)(a) of the Act — Neither could claim for refund be made under condictio indebiti as payments had been made voluntarily and without duress — Neither could claim be made by way of D unjustified enrichment as payment made with intention of discharging debt (albeit disputed) and not without due cause — Tacit agreement could be inferred however that sum paid would be refunded if money not owing.

Interest — A tempore morae — Claim for repayment of interest on stamp duties paid 'under protest' which were subsequently held not to be due E — Fiscus not in mora from time of receipt of money but only from time when it was decided that a duty to repay existed.

Interest — By whom payable — Fiscus liable to pay mora interest.

Interest — When payable — No principle of law which entitles one party to demand from another interest at the legal rate simply because former F deprived of benefits and fruits of money which he had paid the latter.

Headnote : Kopnota

A disagreement had arisen between the appellant and the respondent as to whether a certain autocard scheme administered by the respondent between 1984 and 1986 constituted a 'credit card scheme' (as it was then defined in s 1 of the Limitation and Disclosure of Finance Charges Act 73 of G 1968, later named the Usury Act by s 9 of

1990 (3) SA p642

A Act 42 of 1986) and as such attracted stamp duty in terms of s 3 read with Schedule 1 of the Stamp Duties Act 77 of 1968. (At the time the appeal was heard the issue was no longer a live one, the Usury Act having been amended to cater for it.) The respondent contended throughout that the scheme did not attract stamp duty, but when the appellant insisted that it did, respondent paid the duty, amounting to R488 353,80, stipulating that the payments were made 'under protest' and to avoid any penalty in terms of s 19 of Act 77 of 1968. Having made B such payment during the period August 1984 to May 1986, the respondent formally claimed repayment of all the amounts thus paid. When this was refused, the respondent launched an application for such repayment, with interest a tempore morae, in a Local Division. The two issues before the Court, viz whether stamp duty was properly chargeable and accordingly whether the Commissioner was obliged to repay the capital sums paid to his office and, if so, whether the appellant was bound, in addition, to C pay interest on the capital sums that had to be repaid, from the respective dates on which each payment was made by the respondent to the appellant, were both decided in favour of the respondent. In an appeal against the Court a quo's decision on the second issue only, it was contended by the appellant that s 32(1)(a) of the Stamp Duties Act 77 of 1968 was the only possible legal and factual basis for a refund and that, since the section did not expressly provide for interest, no interest was recoverable.

Held, that s 32(1)(a) of Act 77 of 1968, which provided for a refund by the appellant of an overpayment on duty 'properly chargeable', did not apply in D the instant case where there should not have been any payment of duty at all.

Held, further, that s 32(1)(a) of Act 77 of 1968 was not the sole and exclusive vehicle for claiming repayment in a case such as the present and that it did not preclude an aggrieved party from advancing a claim E for repayment on a different basis, nor did it preclude a claim for mora interest where the overpayment was legally recoverable at common law.

Held, further, that as it could not be said in the instant case that improper pressure had been exerted on the respondent to effect the payment timeously and in terms of the statute, the payments had been voluntarily made and that the claim for a refund could not be accommodated under either the classical condictio indebiti, based on F error, or on its extended form, based on duress. (Nicholas AJA dissenting.)

Held, further, that because all the payments had been made with the fixed intention of discharging existing (albeit disputed) debts in order to deflect the possible imposition of penalties, it could not be said that the payments, qua payments, had been made without due cause and that undue enrichment could therefore also not constitute a proper basis for awarding the refund in question.

Held, further, that the appellant was not, in principle, immune to a G condictio indebiti- if payment had been made to him and all the other requirements for a condictio had been satisfied, he was the obvious party from whom payment had to be recovered, whatever the ultimate administrative destination of the payments might be.

Held, further, that in our law the fiscus could be held liable for mora interest.

Held, further, assuming in favour of the respondent that the parties had, by stipulating that the payments were made 'under protest' and by the acceptance of payment so stipulated, concluded a tacit agreement H that the appellant assumed the contractual duty to effect repayment of the duties if it should be decided that the duties were not due, that this did not mean that the appellant was in mora, and hence liable to pay mora interest, from the moment each payment was accepted by him - the appellant could not be in mora as regards repayment until such time as it was decided that a duty to repay existed.

Held, accordingly, that the appellant had not been in mora and was not I liable for interest a tempore morae.

Held, further, as to the approach of the Court a quo, viz that the appellant, by accepting payment, had deprived the respondent of the benefit and fruits of the money as from the date of payment, and that the respondent was therefore entitled to interest at the legal rate from the moment such payment had been received by the appellant, that there was no principle of law which entitled one party to demand interest at the legal rate from another simply because the former had been deprived J of the benefits and fruits of the money which he had paid to the latter.

1990 (3) SA p643

Held, therefore (Nicholas AJA dissenting), that no A interest was recoverable by the respondent from the appellant prior to the decision of the Court a quo that no stamp duties were payable. Appeal upheld.

The decision in the Witwatersrand Local Division in First National Industrial Bank Ltd v Commissioner for Inland Revenue confirmed in part and overruled in part.

Case Information

Appeal against a decision in the Witwatersrand Local Division B (Spoelstra J). The facts appear from the judgment of Nienaber AJA.

J R Gautschi SC (with him B W Burman SC) for the appellant referred to the following authorities: As to whether the payments were made voluntarily or not, see Port Elizabeth Municipality v Uitenhage Municipality 1971 (1) SA 724 (A) at 741D - E; Union Government (Minister of Finance) v Gowar 1915 AD 426. As to whether interest runs against the C Treasury, see Voet 49.14.2. As to the fact that tax is a creature of statute, see Commissioner for Inland Revenue v NCR Corporation of SA (Pty) Ltd 1988 (2) SA 765 (A) at 775G - H. As to the question of whether respondent is entitled to claim interest, the judgment in Amalgamated Society of Woodworkers of SA and Another v Die 1963 Ambagsaalvereniging D 1968 (1) SA 283 (T) does not provide any foundation for such a claim.

R S Welsh QC (with him W H Trengove SC) for the respondent referred to the following authorities: As to whether the payments were voluntarily made or not, see Union Government (Minister of Finance) v Gowar 1915 AD 426; Port Elizabeth Municipality v Uitenhage Municipality 1971 (1) SA 724 (A) E at 741 - 2; Benning v Union Government 1914 AD 420. As to whether the appellant was in mora, see West Rand Estates v New Zealand Insurance CO 1926 AD 173 at 183 and 196 - 7; Johnston v Harrison 1946 NPD 239 at 245 and 247; Amalgamated Society of Woodworkers of SA v Die 1963 Ambagsaalvereniging 1968 (1) SA 283 (T) at 287B - C; Wessels The Law of Contract in SA 2nd ed vol II at 952 para 3710; De Vos 1968 THRHR 111 at F 113 - 14; De Vos Verrykingsaanspreeklikheid in die SA Reg 3rd ed at 201. As to the appellant's liability to pay interest a temporae morae, see Voet 22.1.1 and 28; De Vos 1968 THRHR 111 at 113 - 14 and 117; De Vos (op cit at 199 - 200 and 330); West Rand Estates v New Zealand Insurance Co (supra at 176, 183, 196 - 7); Linton v Corser 1952 (3) SA 685 (A) at 659H; Union Government v Jackson 1956 (2) SA 398 (A) at 411H; G Amalgamated Society of Woodworkers of SA Ltd v Die 1963 Ambagsaalvereniging (supra at 285D - 287B); Geyser v Pont 1968 (4) SA 67 (W) at 79H - 80C; Barclays Bank International v African Diamond Exporters 1977 (1) SA 298 (W) at 312H - 313A; Bellairs v Hodnett 1978 (1) SA 1109 (A) at 1145D - G and 1146H; Paterson NO v Trust Bank of Africa 1979 (4) SA 992 (A) at 1003G - H; Herrigel NO v Bon Roads Construction 1980 (4) SA 669 (SWA) H at 682D - 686B; C & T Products v M H Goldschmidt 1981 (3) SA 619 (C) at 631G - 633A; International Tobacco Co (SA) v United Tobacco Co (South) (1) 1955 (2) SA 1 (W) at 28. As to whether the treasury is liable for interest, see Digest 22.1.17.5 and Code 10.8.2; Groenewegen 22.1.17.5 (Beinart vol 2 at 153); Van Zyl Steyn Mora Debitoris at 72; I Gane Translator's note in preamble to Voet 49...