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[2020] ZAWCHC 29
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Toneleria Nacional RSA (Pty) Ltd v Commissioner, South African Revenue Service (1042/2018) [2020] ZAWCHC 29; [2020] 3 All SA 281 (WCC); 2021 (2) SA 297 (WCC); 82 SATC 420 (30 April 2020)
Republic
of South Africa
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case
number: 1042/2018
Before: The Hon. Mr
Justice Binns-Ward
Hearing: 18 March
2020
Judgment:
30 April 2020
In
the matter between:
TONELERIA
NACIONAL RSA (PTY)
LTD
Applicant
and
THE COMMISSIONER,
SOUTH AFRICAN
REVENUE
SERVICE
Respondent
JUDGMENT
(Transmitted by
email to the parties’ legal representatives and posted on
SAFLII. The judgment shall be deemed to have
been handed down
at 10h00 on Thursday, 30 April 2020.)
BINNS-WARD J:
Introduction
[1]
The
applicant, Toneleria Nacional RSA (Pty) Ltd, appeals in these
proceedings against the classification for customs duty purposes
by
the Commissioner of the South African Revenue Service (‘SARS’)
of certain wooden products imported by the applicant.
The
appeal is brought in terms of s 47(9)(e) of the Customs and
Excise Act 91 of 1964 (‘the Act’). The goods
were
produced by the applicant’s parent company, Toneleria Nacional
LTDA, which is incorporated in Chile. As its name
suggests,
Toneleria Chile is a cooperage.
[1]
Amongst other things, it makes oak barrels for use by
winemakers in the storage and maturation of wines.
[2]
The goods in issue, samples of which were
made available for inspection by the court at the hearing, consist of
flat-planed planks
of oak that have been measured in various sizes
and carpentered especially so that they can be suspended in
containers of wine
(usually steel containers) during the maturation
process. The wood is specially selected and treated so as to
mimic, if suspended
in a certain way in wine contained in a steel
container, the maturating effect of an oak barrel. The
mimicking effect is
achieved by using the same type of specially
selected oak as would have been used to make staves for the assembly
of barrels and
subjecting it to a closely comparable process of
seasoning and ‘toasting’. The planks are designed
to be suspended
from frames that are specially made to ensure that
the planks are fully immersed in the wine but held so that they do
not come
into contact with the lees at the bottom of the container.
They provide a cheaper alternative for winemakers to achieve certain
flavouring and character effects than the ever more expensive oak
barrels traditionally used for such purposes.
[3]
The Commissioner initially determined, in
terms of s 47(9)(a) of the Act, that the imported goods should
be classified under
tariff heading (‘TH’) 4421.90.90,
which applies to goods designated as ‘
other
articles of wood
’. After
the applicant objected, he then amended the classification to
TH 4409.29.90, which refers to ‘
Wood
(including strips and friezes for parquet flooring, not assembled)
continuously shaped (tongued, grooved, rebated, chamfered,
V-jointed,
beaded, moulded, rounded or the like) along any of its edges, ends or
faces, whether or not planed, sanded or end-jointed:
other –
other
’. Just before the
institution of the current proceedings the Commissioner indicated
that he intended to revert to his
original classification, but he has
not yet formally done so. According to the first mentioned
classification the goods would
bear duty at 20 percent of their
dutiable value in terms of Chapter IX of the Act, and according to
the second mentioned classification
at 10 percent. The
applicant contends that the goods fall to be classified under TH
4416.00. TH 4416.00 relates
to ‘
Casks,
barrels, vats, tubs and other coopers’ products and parts
thereof, of wood, including staves
’.
If the goods are indeed properly classified under TH 4416.00, they
are duty free.
[4]
The
appeal turns on statutory interpretation; more especially, of the
relevant tariff headings as they appear in Schedule 1 to the
Act.
This falls to be undertaken in accordance with certain precepts laid
down in the Act and explained in the pertinent
jurisprudence.
If the classification contended for by the applicant is not upheld,
the Commissioner’s determination
prevails.
[2]
[5]
Part I of the Schedule to the Act consists
of a comprehensive list of commodity groups. The list is
compiled and maintained
in accordance with the World Customs
Organisation’s Harmonized Commodity Description and Coding
System, which is a nomenclatural
system commonly referred to as the
‘Harmonized System’. It comprises 22 sections made
up of 99 chapters,
some of which have sub-chapters. As
Trollip JA described in
Secretary for
Customs & Excise v Thomas Barlow and Sons Ltd
1970 (2) SA 660
(A) at 675D-E, ‘
Within
each chapter and sub-chapter the specific type of goods within the
particular class is itemised by a description of the goods
printed in
bold type. That description is defined in the Schedule as a “heading”
[viz. what I have referred to as
‘tariff headings’]
. Under
the heading appear sub-headings of the species of the goods in
respect of which the duty payable is expressed. The Schedule
itself
and each section and chapter are headed by “notes”, that
is, rules for interpreting their provisions
’.
Part I of the Schedule is preceded by an introductory section
entitled ‘General Notes’, which include
(as Item A) the
‘General Rules for the Interpretation of this Schedule’.
They are part of the ‘notes’
mentioned by Trollip JA as
heading the Schedule itself. I shall use the acronym ‘GRI’
when referring to the General
Rules.
[6]
Section
47(8)(a)(i) of the Act provides, insofar as relevant, that the
interpretation of any tariff heading or tariff subheading
in Part 1
of Schedule 1 ‘
shall
be subject to the International Convention on the Harmonized
Commodity Description and Coding System done in Brussels on 14
June
1983 and to the Explanatory Notes to the Harmonised System issued by
the Customs Co-operation Council, Brussels (now known
as the World
Customs Organisation) from time to time
’.
The section and chapter notes are, as mentioned, part of the
Schedule; the Explanatory Notes are not. GRI 1
[3]
provides
that ‘
the
titles of Section, Chapters and sub-Chapters are provided for ease of
reference only; for legal purposes, classification shall
be
determined according to the terms of the headings and any relative
Section or Chapter Notes and, provided such headings or Notes
do not
otherwise require, according to the … provisions
’
of GRI 2-6.
[7]
The character and role of the Explanatory
Notes (commonly called ‘the Brussels Notes’) in the
interpretation of Part
I of the Schedule were described in
Thomas
Barlow and Sons
supra, at 675F –
676D, as follows:
It is clear that the
… grouping and even the wording of the notes and the headings
in Schedule I are very largely taken
from the Nomenclature
compiled and issued by the Customs Co-operation Council of Brussels.
That is why the Legislature in sec.
47(8)
(a)
has given
statutory recognition to the Council's Explanatory Notes to that
Nomenclature. These Notes are issued from time to time
by the Council
obviously, as their name indicates, to explain the meaning and effect
of the wording of the Nomenclature. By virtue
of sec. 47(8)
(a)
they can be used for the same purpose in respect of the wording in
Schedule I. It is of importance, however, to determine
at the
outset the correct approach to adopt in interpreting the provisions
of the Schedule and in applying the explanations in
the Brussels
Notes.
Note VIII to
Schedule I sets out the ‘Rules for the Interpretation of this
Schedule’. Para. 1 says:
‘
The
titles of sections, chapters and sub-chapters are provided for ease
of reference only; for legal purposes, classification (as
between
headings) shall be determined according to the terms of the headings
and any relative section or chapter notes and, provided
such headings
or notes do not otherwise indicate, according to paras. (2) to (5)
below.’ [
[4]
]
That, I think,
renders the relevant headings and section and chapter notes not only
the first but the paramount consideration in
determining which
classification, as between headings, should apply in any particular
case. Indeed, right at the beginning of the
Brussels Notes, with
reference to a similarly worded paragraph in the Nomenclature, that
is made abundantly clear. It is there
said:
‘
In
the second provision, the expression “provided such headings or
Notes do not otherwise require” (that is the corresponding
wording of the Nomenclature) is necessary to make it quite clear that
the terms of the headings and any relative section or chapter
notes
are paramount, i.e., they are the first consideration in determining
classification.’
It can be gathered
from all the aforegoing that the primary task in classifying
particular goods is to ascertain the meaning of
the relevant headings
and section and chapter notes, but, in performing that task, one
should also use the Brussels Notes for guidance
especially in
difficult and doubtful cases. But in using them one must bear in mind
that they are merely intended to explain or
perhaps supplement those
headings and notes and not to override or contradict them. They are
manifestly not designed for the latter
purpose, for they are not
worded with the linguistic precision usually characteristic of
statutory precepts; on the contrary they
consist mainly of discursive
comment and illustrations. And, in any event, it is hardly likely
that the Brussels Council intended
that its Explanatory Notes should
override or contradict its own Nomenclature. Consequently, I think
that in using the Brussels
Notes one must construe them so as to
conform with and not to override or contradict the plain meaning of
the headings and notes.
[8]
In
International
Business Machines SA (Pty) Ltd v Commissioner for Customs and Excise
1985 (4) SA 852
(A), at 863G, the proper process of classification of
goods in terms of Part I of Schedule I was expounded by Nicholas AJA,
in
a passage that has been applied consistently in the subsequent
jurisprudence, as follows:
Classification
as between headings is a three-stage process: first, interpretation -
the ascertainment of the meaning of the words
used in the headings
(and relative section and chapter notes) which may be relevant to the
classification of the goods concerned;
second, consideration of the
nature and characteristics of those goods; and third, the selection
of the heading which is most appropriate
to such goods.
[5]
[9]
There are no pertinent section notes, and
the chapter notes contain nothing of assistance to determine the
current matter.
The Explanatory Notes pertinent to TH44.16
provide as follows:
This heading is
restricted to containers which are the product of the coopers’
trade, that is those of which the bodies are
composed of staves with
grooves into which the heads and bottoms are fitted, the shape being
maintained by hoops of wood or metal.
Coopers’
products include casks of various kinds (tuns, barrels, hogsheads
etc.) whether tight (for wet goods) or slack (for
dry goods), as well
as vats, tubs etc.
These goods may be
disassembled or partly assembled, and are sometimes lined or coated
inside.
The heading also
covers staves and all other wooden products, finished or not,
recognisable as parts of coopers’ products
(e.g. barrelheads,
hoopwood cut to length and notched at the ends for assembly).
The heading also
includes unfinished staves (stavewood), that is, the strips of wood
used for forming the sides, heads or bottoms
of barrels or other
coopers’ products. Such stavewood may be in the form of:
(1)
Strips cleft from sectors of tree trunks
along the direction of the medullary rays. Such cleft staves
may also be further
flat sawn on one of the principal faces, the
other face being merely trued by axe or knife.
(2)
Sawn staves
provided
that at least one of the two principal
faces is concave or convex, such curved surfaces being produced by
sawing with a cylindrical
saw.
The heading
excludes:
(a)
Wood which is sawn flat on both principal
faces (
heading 44.07
[i.e.
‘Wood sawn or chipped lengthwise, sliced or peeled, whether or
not planed, sanded or end-jointed, of a thickness exceeding
6 mm’]
or 44.08
[i.e. Sheets for veneering (including those obtained by slicing
laminated wood), for plywood or for similar laminated wood and
other
wood, sawn lengthwise, sliced or peeled, whether or not planed,
sanded, spliced or end-jointed, of a thickness not exceeding
6 mm’]).
(b)
Containers made of staves fixed to the
heads and bottoms by nailing (
heading
44.15
[i.e. ‘Packing cases,
boxes, crates, drums and similar packings, of wood; cable-drums of
wood; pallets, box pallets and other
load boards, of wood; pallet
collars of wood’).
(c)
Casks etc. cut to shape for use as
furniture (e.g. tables and chairs) (
Chapter
94
).
Were the goods
‘staves’ within the meaning of that word in the tariff
heading?
[10]
The
products that were imported by the applicant are categorised by the
producer as ‘staves’. They are marketed
under the
descriptors ‘InserStaves’, ‘ShortStaves’ and
‘MiniStaves’, and distinguished from
each other according
to size. A cursory search on the internet confirms the
uncontested averments in the applicant’s
founding affidavit
that articles of this nature are widely advertised by cooperages as
‘barrel alternatives’ for the
maturation of wine.
It is also apparent that their appellation as ‘staves’ is
commercially common practice.
[6]
I have, however, not been able to find any dictionary definition that
recognises that nomenclature.
[11]
It
is clear from the context that the word ‘staves’ in
TH44.16 bears its ordinary meaning, denoting an item of wood
cut in
lengths from which the sides of barrels and similar containers are
made.
[7]
The items in
issue in the current case were not produced for that purpose and,
being flat planed on both their principal
faces,
[8]
do not have that character. There is accordingly no merit in
the argument advanced, albeit faintly, by the applicant’s
counsel that they fall to be categorised as ‘staves’
within the meaning of that word in the tariff heading.
Were the goods
‘other coopers’ products’ within the meaning of the
term in the tariff heading?
[12]
The principal contention by Mr
van
Rooyen
SC, who (together with Mr
Cilliers
)
appeared for the applicant, was that the goods in question fell to be
classified in terms of TH44.16 under the rubric ‘
other
coopers’ products
’.
Mr
van Rooyen
supported his contention by stressing that the evidence demonstrated
that there is what the deponent to the founding affidavit
called ‘
a
fundamental and very important distinction between cooperage and mere
carpentry
’. And the
products in issue, he submitted, bear the hallmarks of cooperage.
[13]
In this regard it was highlighted that the
exercise of choosing the timber suitable for use in wine maturation
is the same regardless
of whether the wood is used for making barrels
or ‘staves’. It is sourced from oak varieties that
grow in France
(
Quercus Petraea
or
Quercus Robur
)
or the United States of America (
Quercus
Alba
)). The variety is selected
individually for barrels or ‘staves’ that impart
distinguishable characteristics to
the wine with which it is used.
The American oak, for example, gives an ‘aromatic
contribution’ that is too powerful
for wooded wines requiring
‘only subtle hints of oak’. The age of the oak is
also important. In the case
of French oak, for example, a
minimum of 180 years’ tree-growth is required to give the tight
grain that is sought after
for wine-making. The process of
selection is peculiar to cooperage, as distinct from, say, the
selection of oak for making
furniture.
[14]
Once acquired, the oak - whether it be
intended for ultimate use in the manufacture of wine barrels or
‘staves’ for
the maturation for wine - undergoes a very
similar process of seasoning, consisting of stacking, watering and
drying processes
that are peculiar to the preparation of timber for
use by coopers. The products, whether barrels or staves, are
then ‘toasted’
to order. The applicant illustrated
the extent of the correlation of the respective production processes
by way of the following
graphic comparison:
[See
PDF for graphic]
[15]
Mr
van
Rooyen
also stressed what he termed ‘the functional equivalence’
of the finished items. The ‘staves’ serve
the same
purpose as barrels; just at a much lower cost. The evidence is
that the combined effect of an increased global demand
for wooded
wines, the premium on the availability of suitable timber, as well as
increasing environmental sensibilities, has made
the use of
traditional wooden barrel products economically unfeasible, except
for the ‘so-called super-premium wines i.e.
wines at the
absolute pinnacle of the quality hierarchy’.
[9]
[16]
The evidence also established that the
items are not amenable for use for anything other than wine
maturation. The toasting
process to which the planks are
subjected renders them fragile and easily broken. So fragile
are they that there is a significant
rate of breakage when they are
freighted. They also have to be specially packaged,
individually piece by piece, in a way
that allows for the optimal
preservation of the character imparted by their treatment in the
cooperage process. Not only
does the selection and production
process result in a uniquely distinguishable item in the sense that
the finished product is not
a plank of oak that might be used for any
of the multiple purposes to which an ordinary plank of oak might be
put, it also results
in a product that is significantly more
expensive than an ordinary plank of oak.
[17]
Now, when considering what might be denoted
by the term ‘
other coopers’
products
’ in TH 44.16, the
point of departure must be from what a cooper is, for ‘coopers’
products’ is a generic
term covering all of the things that
coopers produce. The
Oxford
Dictionary of the English Language
defines
a ‘
cooper
’
as ‘
a maker or repairer of casks
and barrels
’ and gives the origin
of the word as being the Middle Low German ‘
küper
’
from ‘
küpe
’
meaning ‘tub or barrel’. The other well-known
English language dictionaries give essentially identical
definitions. Traditionally, everything that coopers made would
be some form of container like a cask, barrel, vat or tub.
From
that perspective, one can readily understand the sense in the
statement in the relevant explanatory note that TH 44.16
‘
is
restricted to containers which are the product of the coopers’
trade
’. But is a barrel
substitute or alternative that is now commonly produced by coopers,
using many of their traditional
skills and methods, not also a modern
day ‘coopers’ product’? And do the
Explanatory Notes have the effect
of precluding such a
determination? Those are the critical questions that have to be
answered in resolving the issue of tariff
classification in the
current case.
[18]
In
answering these questions it is important to be mindful of the
considerations noted, for example, in
Commissioner,
South African Revenue Service v Komatsu Southern Africa (Pty) Ltd
[2006] ZASCA 156
(26 September
2006); 2007 (2) SA 157
(SCA);
[2007] 4
All SA 1094
, that ‘[i]
t
is clear from the authorities that the decisive criterion for the
customs classification of goods is the objective characteristics
and
properties of the goods as determined at the time of their
presentation for customs clearance. This is an internationally
recognised principle of tariff classification. The subjective
intention of the designer or what the importer does with the goods
after importation are, generally, irrelevant considerations. But they
need not be because they may, in a given situation be relevant
in
determining the nature, characteristics and properties of the
goods
’.
[10]
Ms
Kilmartin
,
who (together with Ms
Mayosi
)
appeared for the Commissioner, stressed the first mentioned
consideration in seeking to discount the relevance of the evidence
adduced by the applicant concerning the method of production and
intended use of the imported ‘staves’. Ms
Kilmartin
argued that it is only in matters such as that exemplified by the
circumstances in
Smith
Mining Equipment (Pty) Ltd v The Commissioner South African Revenue
Service
[2013] ZASCA 145
(1 October 2013); 2013 JDR 2224 (SCA) that such
evidence could be relevant.
[19]
In
Smith
Mining Equipment
the question was whether an imported vehicle known as a Kubota RTV
Utility Vehicle fell to be classified under TH 87.09 as
contended by the importer, viz. ‘
Works
trucks, self-propelled, not fitted with lifting or handling
equipment, of the type used in factories, warehouses, dock areas
or
airports for short distance transport of goods; tractors or the type
used on railway station platforms; parts of the foregoing
vehicles
’.
The appeal court held that ‘The central characteristic of
vehicles falling under tariff heading 87.09 is not
merely that they
are used for the short transport of goods, but that they are “of
the type used in factories, warehouses,
dock areas or airports”
for that purpose. The starting point for the enquiry must then be to
establish what vehicles are
of that type, which is a factual
question, to be established by evidence. No doubt there is a range of
vehicles used for that purpose
in those locations, and it might be a
matter of some difficulty determining what makes them ‘typical’,
in which case
the explanatory notes might be helpful, but a court is
not in a position even to commence the enquiry without evidence of
what
those vehicles are.’
[11]
[20]
Whereas
in
Smith
Mining Equipment
it was the typical use of the goods in question that fell to be
established by evidence on the facts, in the current case it is
the
matter of the range of products that coopers currently make. In
the current matter, consideration of the appropriateness
of
classifying the ‘staves’ under TH 4416.00 turns
critically on whether or not they might be considered as falling
within the category of goods described as ‘other coopers’
products’. Leaving aside the effect of the Explanatory
Notes, to which I shall come presently, I consider that whether a
particular product is characteristically made by coopers or not
is a
question of fact that is amenable to proof by evidence. One
cannot commence the enquiry without an answer to the question.
The answer would have to include an indication that the means of
manufacture is germane to, or closely bound up with the application
of the skills of trade of, cooperage in the ordinary course.
These are all matters of fact.
[12]
I have therefore concluded that the evidence adduced by the applicant
as to the method of production and, and contextually
with the latter,
the purpose of the goods in question, is relevant to the enquiry as
to their amenability to classification for
import duty purposes under
TH 44.16.
[21]
The
evidence establishes that the goods in question are produced by
coopers using the skills and methods traditionally associated
with
the trade. There is no suggestion that goods of this sort are
produced outside the cooperage artisanal trade.
They are
produced for use in the wine industry, with which cooperage is
traditionally closely associated, for application for the
same
purpose as the barrels traditionally supplied to that industry by
coopers. Their production is very evidently a manifestation
of
the cooperage trade’s adaptation to changing market
conditions. It does not matter that some wineries, like Maison
Louis Latour, that operate their own inhouse cooperages produce only
barrels, by reason that the winery concerned - presumably
because it
makes only premium wines - does not use the barrel substitute
products made by other cooperages.
[13]
The fact that the ‘staves’ made by many cooperages as
barrel substitutes differ in critical respects from the
goods
traditionally made by coopers does not mean that they are not
coopers’ products in today’s world. Indeed,
one
might justifiably ask ‘if they are not coopers’ products,
whose products are they?’
[22]
The
use in legislation of a generic term like ‘coopers’
products’ makes the expression especially susceptible
to
construction in accordance with the ‘always speaking’
doctrine of interpretation.
[14]
As Lord Bingham of Cornhill observed in
Regina
v. G & Anor
[2003] UKHL 50 (16 October 2003); [2003] 4 All ER 765
(HL),
[15]
whilst the meaning
cannot change, since a statute is ‘
always
speaking
’,
‘
the
context or application of a statutory expression
[in
this case, ‘coopers’ products’]
may
change over time
’.
In another decision of the House given a few months earlier, Lord
Bingham expressed the position as follows: ‘
There
is, I think, no inconsistency between the rule that statutory
language retains the meaning it had when Parliament used it
and the
rule that a statute is always speaking. If Parliament, however long
ago, passed an Act applicable to dogs, it could not
properly be
interpreted to apply to cats; but it could properly be held to apply
to animals which were not regarded as dogs when
the Act was passed
but are so regarded now
’.
[16]
[23]
A
practical illustration of the application of the doctrine is provided
in the House of Lords’ decision in
Fitzpatrick
v. Sterling Housing Association Ltd
[1999] UKHL 42
(28 October 1999)
[1999] UKHL 42
; ;
[1999] 4 All ER 705
(HL) in
which, in the 1990’s, the question was whether a same sex
couple constituted a ‘family’ within the meaning
of that
word in the Increase of Rent and Mortgage Interest (Restrictions)
Act, 1920. The majority answered the question affirmatively.
In the course of his Opinion, Lord Slynn of Hadley said ‘
It
is not an answer to the problem to assume . . . that if in 1920
people had been asked whether one person was a member of another
same-sex person’s family the answer would have been ‘No’.
That is not the right question. The first question
is what were the
characteristics of a family in the 1920 Act and the second whether
two same-sex partners can satisfy those characteristics
so as today
to fall within the word ‘family’. An alternative question
is whether the word ‘family’ in the
1920 Act has to be
updated so as to be capable of including persons who today would be
regarded as being of each other’s
family, whatever might have
been said in 1920
’.
[17]
In
Yemshaw
v London Borough of Hounslow
[2011] UKSC 3
(26 January 2011);
[2011] 1 All ER 912
(SC), Lady Hale,
echoing what Lord Steyn had acknowledged previously in
R
v Ireland
supra,
[18]
pointed out that
there are statutes that fall to be to be construed ‘as if one
were interpreting it the day after it was
passed’ and explained
that in determining the scope for the application of the ‘always
speaking’ interpretative
approach ‘[t]
he
essential question, as it was in
Fitzpatrick
,
is whether an updated meaning is consistent with the statutory
purpose
’.
[19]
[24]
The
‘always speaking’ principle of statutory interpretation
is also applied in Australia. It was expressly endorsed
in a
4-1 majority judgment by the High Court of Australia in
Aubrey
v The Queen
[2017] HCA 18
(10 May 2017);
(2017) 260 CLR 305.
At para. 29,
the majority held ‘
The
approach in this country allows that, if things not known or
understood at the time an Act came into force fall, on a fair
construction, within its words, those things should be held to be
included. Thus in
Lake
Macquarie Shire Council v Aberdare County Council
,
Barwick CJ considered whether the word “gas” in
English legislation was confined to coal gas or whether it extended
to liquefied petroleum gas. The only form of gas which was in common
use for lighting and heating at the time the statutes were
enacted
was coal gas. Barwick CJ held that although the connotation of the
word “gas” was fixed, its denotation could
change with
changing technology
’.
[20]
[25]
The
earliest reference by name to the doctrine that I have been able to
find in our case law was in
Fourie
and Another v Minister of Home Affairs and Another
[2004] ZASCA 132
(30 November 2004);
[2005] 1 All SA 273
(SCA),
in which it was held, in the peculiar context of that case, which
concerned the interpretation of the Marriage Act, that
it did not
find a basis for application. In
Malcolm
v Premier, Western Cape Government NO
[2014] ZASCA 9
(14 March
2014); 2014 (3) SA 177
(SCA);
[2014] 2 All
SA 251
, however, Wallis JA, referring to the principle, remarked
‘
There
is obvious sense in this approach when a court is confronted with a
novel situation that could not have been in the contemplation
of the
legislature at the time the legislation was enacted. Courts can then,
in the light of the broad purpose of the legislation,
current social
conditions and technological development, determine whether the new
situation can properly, as a matter of interpretation,
be encompassed
by the language. But, … they cannot use the principle to
extend legislation relating to dogs to cats, however
desirable such
an extension may seem. In other words the principle has limits, but
subject to that qualification and the case by
case working out of
those limits, I see no reason why, in appropriate cases, South
African courts should not invoke it, particularly
in the light of our
present constitutional order in terms of which statutes are to be
construed in the light of constitutional
values
’.
[21]
[26]
Mr
van
Rooyen
relied on the judgment of Rogers J in
Van
Deventer and Another v Nedbank Ltd
[2016] ZAWCHC 31
(30 March
2016); 2016 (3) SA 622
(WCC) in support of
his contention that the ‘always speaking’ principle
should be applied in the construction of the
expression ‘other
coopers’ products’ in this case. In
Van
Deventer
,
the court was willing to allow, as one of two alternative lines of
reasoning that led to the same result, that the word ‘company’
in
s 13(1)(g)
of the
Prescription Act 68 of 1969
might be
construed to include a close corporation, being a closely comparable
form of corporate entity of a sort that had not existed
when the
statute was enacted.
[22]
[27]
That
the market for coopers’ products has changed, and in recent
times become almost entirely related to the wine and spirit
industry,
is related in the extracts from
The
Oxford Companion to Wine
[23]
that the Commissioner’s counsel put in with their supplementary
heads of argument. Some of the passages bear quoting
to
illustrate the point, and also because they bear out the appositeness
of evidence being adduced as to what coopers currently
produce in a
changed environment. It has to be borne in mind, however, that
the reference book was published in 1994, and
is therefore already
some quarter of a century behind the times:
Cooperage
…
History
Until relatively
recently coopers played an important role not only in the wine
business but in myriad aspects of daily life. Almost
all containers –
buckets, barrels, tanks - were made by coopers from various woods ….
Barrels were made to hold
salted fish, flour, gunpowder, oil,
turpentine, salt, sugar, butter, and many other household commodities
since they retain liquids
safely, keep the elements out, and are easy
to manoeuvre.
…
During the 19th
century coopering remained an important craft, but the advent of
metal (and later plastic) containers ultimately
reduced coopering to
an adjunct of the drinks business. More than 1 million
barrels were made for salted herring in
Britain in 1913, for example,
but by 1953 the number had dropped to around one-tenth of this figure
and now this business is virtually
extinct.
American PROHIBITION
had a dramatic impact on the sale of fine wines and spirits, and in
turn on the cooperage business - particularly
in the United States
and also in the British Isles, where only those coopers working on
beer barrels were unaffected. Before the
Second World War, most beer
barrels were made of wood and many breweries had their own
cooperages, but by the early 1960s wooden
barrels had been replaced
by metal ones. In much of the wine industry too, wood was replaced by
concrete, stainless steel, and
other neutral materials particularly
for larger tanks (see CONTAINERS).
Cooperage today
As wooden barrels
are expensive to buy, use, and maintain, they tend to be used only
for products whose sale price can justify such
a major investment or,
in the case of older containers, by those who have inherited them
Cooperages are found
wherever there is a wine or spirits business that needs barrels,
notably in America, Scotland and France, but
also in Italy, Spain,
Portugal, Ireland, eastern Europe, Germany, Australia, and South
Africa. They make new vats and barrels
(see BARREL MAKING)
and/or repair or maintain older barrels and vats (see BARREL
MAINTENANCE and BARREL RENEWAL).
There are no serious
industry analysts of contemporary cooperage business, such as there
are in the automotive or electronics industry,
since it is
effectively just a small part of the timber industry. Nor is there
any official regulatory or inspection body as there
is in the wine
trade. Because of this, facts are few and rumour is rife.
[28]
The
Commissioner’s counsel submitted that to hold that the goods
were ‘coopers’ products’ would not only
go against
the dictionary definition of a cooper’s trade, but also fly in
the face of the relevant Explanatory Notes.
I have already held
that what coopers make is a question of fact, and not a matter
exclusively determined by dictionary definitions
narrowly predicated
on their traditional functions.
[24]
There is nothing in the statutory purpose of the wording used in the
tariff heading that warrants restricting the import
of the expression
‘other coopers’ products’ to a particular period in
time. All things considered, I also
cannot conceive why the
legislature would wish to distinguish for duty purposes the goods in
issue here from oak barrels made for
wine maturation purposes.
They are made from the same material, by the same category of
artisan, using methods that are in
material part equivalent, and the
end product serves the same purpose in an important respect.
Do the
Explanatory Notes preclude the finding that the goods are ‘other
coopers’ products’?
[29]
The matter of the effect of the Explanatory
Notes on the interpretation of the tariff heading raises more
difficult questions.
The Commissioner contends that to hold
that the goods in issue are coopers’ products would be
incompatible with the indication
in the Explanatory Notes that the
tariff heading ‘
is restricted to
containers
which are the product of the coopers’ trade
’.
In this connection, Ms
Kilmartin
emphasised the dictum of Trollip JA in
Thomas
Barlow and Sons
that the Notes should
be construed in a manner that makes them read compatibly with, and
not contradictory of, the text of the tariff
heading.
[30]
Ms
Kilmartin
has construed the Notes to connote that only containers, and not any
other products, made by coopers are covered by the tariff
heading.
If one were to apply that construction, it would indeed result in a
contradiction between the tariff heading and
the Notes if the goods
in issue, which are indisputably not containers, were to be
classified as ‘coopers’ products’.
[31]
Whilst the construction of the Notes
contended for by the Commissioner’s counsel is certainly
tenable, it is, in my view,
not the only feasible one. The
Notes are also susceptible to being construed to convey that only
wooden containers made in
the ordinary course
by
coopers
are covered by the heading and,
by implication therefore, not other wooden containers such as boxes,
trunks or coffins that are
not ordinarily made by coopers in the
course of their trade (and in fact are goods classified separately in
other parts of the
Schedule). Applying the dictum in
Thomas
Barlow and Sons
, the latter
construction should be preferred, for it would promote consistency
and avoid any basis for contradiction. It
would also give
effect to the ordinary unrestricted connotation of the term ‘other
coopers’ products’ in the
tariff heading. The
construction pressed by Ms
Kilmartin
would require the term to be read as ‘other
similar
coopers’ products’, whereas the words actually employed
do not, by themselves, imply any such qualification.
On the
contrary, as the applicant’s counsel pointed out, the adjective
‘
other
’
has a primarily distinguishing connotation. Its primarily
defined meaning in the
Oxford Dictionary
of the English Language
is: ‘
denoting
a person or thing that is different or distinct from one already
mentioned or known about
’.
[32]
But if I were wrong, and a situation of
contradiction between the tariff heading and the Explanatory Notes
were accordingly unavoidable,
it would place the case in a context
that the court in
Thomas Barlow and Sons
acknowledged might arise, but found it unnecessary
on the facts of that matter to anticipate. At p. 676E-F of the
judgment,
Trollip JA stated in this regard: ‘
If
an irreconcilable conflict between
[the
Explanatory Notes and the tariff heading]
should
arise, … then possibly the meaning of the headings and
[chapter]
notes
should prevail, because, although sec 47(8)(a) of the Act says that
the interpretation of the Schedule “shall be subject
to”
the Brussels Notes, the latter themselves say in effect that the
headings and notes are paramount, that is they must
prevail.
But it is not necessary to express a firm or final view on that
aspect.
’
Miller AJA, in
turn, also treated of the question by way of an
obiter
dictum
in the following contrasting
terms at p. 679H-680B: ‘
The
very form of those Notes suggests that they were intended to serve as
a guide, pointing the way to the desired or intended classification.
Yet, by resorting to specific inclusions and exclusions, they
sometimes appear to assume the form of peremptory injunctions.
It seems to be important, when a classification is being made
“subject to” the Brussels Notes, to distinguish between
such of the Notes as include under or exclude from a particular
heading,
clearly identifiable
objects
, whether they are
identified by name or description, and Notes which are explanatory
and broadly indicative of the desired or intended
classification. In
the former class,
where the
exclusion or inclusion relates to clearly identified objects
,
difficulty might arise in the event of a direct and irreconcilable
conflict between the inclusion or exclusion enjoined by the
Notes,
and the terms of the relevant headings. In such a case, despite
the paramountcy of the headings and the section and
chapter Notes, it
might be that an express inclusion or exclusion in the Brussels Notes
would prevail, on the ground that failure
to obey it would be to
disregard the statutory injunction to interpret the headings “subject
to” the Brussels Notes.
It is not necessary to express a
definite opinion on that question … . It is sufficient to say
that, generally speaking,
in all but those cases, the Brussels Notes
appear to serve as guides and aids to the classification properly to
be made in accordance
with the terms of the headings read with the
relevant section and chapter Notes
’
.
(Emphasis in the original.)
[33]
Counsel
did not direct my attention to any subsequent authority in which the
question left unanswered in
Thomas
Barlow and Sons
had
been definitively determined. The appeal court has, however,
repeatedly reiterated the
paramountcy
of
the tariff headings in the interpretative exercise undertaken when
classifying imported goods for customs duty purposes.
[25]
In
Commissioner
of the South African Revenue Services v Daikin Air Conditioning South
Africa (Pty) Limited
[2018]
ZASCA 66
(25 May 2018), the minority (Majiedt JA and Davis AJA) went
so far as to hold that if the import of a tariff heading were clear
and unambiguous, one would not even consider the Explanatory
Notes.
[26]
It seems to
me, with respect, however, that that proposition is inconsistent with
the authority cited in support of it, and
does not take sufficiently
into account the effect of the injunction ‘
subject
to
’
in
s 49(8)(a) that somewhat troubled Trollip JA and Miller AJA in
the passages from their judgments in
Thomas
Barlow and Sons
quoted in the preceding paragraph.
[34]
In
my view it is significant that, although there would appear to have
been a difference of emphasis in the
obiter
dicta
of Trollip JA and Miller AJA, both judges used the adjective
‘paramount’ to describe the import of the tariff headings
in relation to the other interpretative injunctions provided in the
Schedule and the Explanatory Notes.
[27]
(It will be recalled that the word was quoted from the introduction
to the Brussels Notes themselves.) ‘Paramount’
conveys, unambiguously, the notion of something being more important
than anything else. Its use in the given context impels
the
understanding that where there is a conflict between the tariff
heading and the Notes, the import of the tariff heading prevails.
Such conclusion is also supported, I think, by the terms of GRI
1.
[28]
[35]
In
their peculiar context in s 47(8)(a), the words ‘
subject
to
’
appear to me to denote that the Schedule falls to be interpreted as
subject to the Harmonised System and the Explanatory
Notes that
relate thereto in the manner that the HS and the Explanatory Notes
are generally intended to work together. Interpreting
the
provision in any other way would be irreconcilable with the apparent
scheme of Schedule 1, including the GRI, and the established
jurisprudence. It would not give a ‘sensible’
meaning in the sense referred to in the oft-cited
Endumeni
case.
[29]
Section
47(8)(a) cannot be sensibly understood to give the Explanatory Notes
a standing equivalent to that of the tariff
headings for the purposes
of construction. It is in situations in which it is impossible
to construe the Explanatory Notes
consistently with the tariff
headings that the function of ‘paramountcy’ necessarily
comes to the fore.
Determination
of the proper classification of the goods
[36]
It is averred in the Commissioner’s
answering affidavit that the goods in issue do not qualify for
classification under any
of the tariff headings in chapter 44 of the
Schedule between TH 44.01 and TH 44.20. It was for
that reason that,
upon reconsideration, he contended that they fall
to be classified under TH 44.21. (A convincing explanation was
given for
the Commissioner’s abandonment of the classification
under TH 44.09.)
[37]
As
mentioned,
[30]
TH 44.21
applies to goods falling to be classified as ‘
other
articles of wood
’.
The pertinent Explanatory Notes state in relevant part:
4421.90 Other
This heading covers
all articles of wood manufactured by turning or any other method, or
of wood marquetry or inlaid wood,
other than
those specified
or included in the preceding headings and
other than
articles
of a kind classified elsewhere irrespective of their constituent
material (see, for example, Chapter Note 1).
It also covers
wooden parts of the articles specified or included in the preceding
headings,
other than
those of
heading 44.16
.
The articles of this
heading may be of ordinary wood or of particle board or similar
board, fibreboard, laminated wood or densified
wood (see Note 3 to
this Chapter).
The heading
includes: … .
There follows a long
list of examples, including items as diverse as sewing thread reels,
rabbit hutches, theatrical scenery, and
wooden pins or pegs for
footwear.
[38]
Heading 44.21 cannot apply if the goods are
‘other coopers’ products’ within the meaning of
TH 44.16, as
has been found. That much is confirmed by the
first paragraph from the Explanatory Notes to TH 44.21, quoted
above.
[39]
For these reasons, I have concluded that
the applicant’s appeal should be upheld, and an order made
substituting the Commissioner’s
classification of the goods
with a determination that they be classified under TH44.16.
The ambit of
the appeal
[40]
The applicant has sought an order that
customs duty tariff heading 4416.00 be declared to be applicable to
the goods imported by
it in container no. HLXU8500679 on 3
December 2015 and in container no.s HLBU1561490, HLXU8154806,
GATU8747579 and HLBU1673926
on various dates between January and June
2016. The Commissioner has contended, however, that the appeal
can be considered
only in respect of the goods in the first mentioned
container because the contents of the other containers were not
described with
any particularity in the founding affidavit.
[41]
In my judgment, there is not much substance
in the point. The appeal did not come out of the blue. It
had a long history.
The applicant’s dispute with the
Commissioner over the proper classification of the ‘staves’
commenced when the
first mentioned container was stopped in December
2015. The applicant thereafter made provisional payments of the
duty assessed
by the Commissioner pending the resolution of the
dispute. A process of alternative dispute resolution and
internal appeal
in terms of Chapter XA of the Act was engaged in over
the following two years.
[42]
It is clear from the correspondence
exchanged between the parties during this period that it was
understood that the determination
of the dispute in respect of the
first container would also be dispositive, at least insofar as their
contents included ‘staves’,
of the issue of the duty
payable in respect of the other four containers identified in the
applicant’s notice of motion.
It is also clear that the
duty paid on the ‘staves’ in those containers was
understood by both parties to have been
paid provisionally pending
the determination of the question raised in respect of the
characterisation of the goods in the first
container. The
Commissioner did not demur when this was expressly recorded in a
letter from the applicant’s attorneys,
dated 15 March
2017, in which a request was made for the deferment of the payment of
duty claimed by SARS in respect of other
imports of like goods.
[43]
Furthermore, the notice given by the
applicant to the Commissioner in terms of s 96(1)(a), as a
prescribed precursor to the
current proceedings, made it clear that
the intended court proceedings were directed at the resolution not
only of the dispute
that had arisen in respect of the ‘staves’
in container HLXU850065679, but also in respect of those in four
other containers
identified as HLBU1561490, HLXU8154806, HLXU8154806,
GATU8747579 and HLBU1673936. In the annexure to its notice in
terms
of s 96(1)(a) of the Act, in which the applicant set out
its intended ‘cause of action’, a description of the
dispute that had arisen in respect of the first container was
followed by the following statement (in paragraphs 12-14):
12.
The matter then proceeded to the
alternative dispute resolution stage. However, that process did not
yield a concrete outcome either
way since it was terminated under
Rule 7(g)(iv) of the rules promulgated under s 77I of the Act.
(Toneleria was informed of
this fact on 26 September 2016, which, in
the light of s 96(1)(b), means that it has until 25 September
2017 to institute
court proceedings.)
13. The overall
dispute also came to cover further goods (staves) imported by
Toneleria in the period from about 19 January 2016
to about 21 June
2016 (a second, third, fourth, and fifth container, respectively
numbered HLBU1561490 HLXU8154806, GATU8747579
and HLBU1673926).
14 In respect of
these further four containers, Toneleria made the relevant
provisional payments but did not pursue an internal
administrative
appeal since the relevant provisional payments were made subject to
the final outcome of the already existing overall
tariff
classification dispute (as was made clear in various paragraphs of
the document ‘
Grounds for Alternative Dispute Resolution
’
which Toneleria submitted on or about 7 July 2016 in the course
of pursuing the latter procedure).
[44]
Section 96(1)(a) of the Act provides:
(i)
No process by which any legal proceedings are instituted against the
State, the Minister, the Commissioner or an officer for
anything done
in pursuance of this Act may be served before the expiry of a period
of one month after delivery of a notice in writing
setting forth
clearly and explicitly the cause of action, the name and place of
abode of the person who is to institute such
proceedings (in
this section referred to as the “litigant”) and the name
and address of his or her attorney or agent,
if any.
(ii)
Such notice shall be in such form and shall be delivered in such
manner and at such places as may
be
prescribed by rule.
(iii)
No such notice shall be valid unless it complies with the
requirements prescribed in this section and
such
rules
The evident purpose
of the notice required in terms of the provision is to afford the
defendant or respondent parties in the contemplated
proceedings
notice of the nature of and basis for the claim(s) that it is
intended to bring against them. The provision is
not dissimilar
from that found in other legislation concerning legal proceedings
against other organs of state. The rationale
is that the party
against whom the contemplated proceedings are to be instituted should
be provided with the opportunity to investigate
and equip itself with
the information that could enable it, as best advised, to pre-empt,
concede or defend the claim. In
my judgment, the notice in
terms of s 96(1)(a) of the Act served by the applicant on the
Commissioner adequately satisfied
the objects of the provision.
It made it clear enough, by explicit reference, that the relief to be
sought in the contemplated
proceedings, by way of an appeal in terms
of s 47(9)(e) against the Commissioner’s tariff
determination, would pertain
to the ‘staves’ in all five
identified containers.
[45]
However, inasmuch as the relief sought in
terms of paragraphs 1 - 3 of the notice of motion refers
indiscriminately to ‘the
goods’ imported in the
containers instead of to just the ‘staves’ imported in
them, the orders sought are cast
too widely. The evidence shows
that the ‘staves’ were not the only items in the first
container. The relief
to be granted will therefore be
formulated in a way that makes it clear that it pertains only to the
‘staves’ in the
five containers.
Liquidation of
the provisional payments made by the applicant
[46]
The
applicant has prayed for an order directing the Commissioner to repay
to it the amount totalling R1 419 382,94 that
it had paid
provisionally as duty on the imported goods. Provisional
payments constitute the furnishing by the importer of
a form of
security
[31]
to allow for the
goods to be released pending the determination of a dispute
concerning the classification of the goods to be cleared.
It
would seem that the payments concerned are held in suspense for the
time being. In the event of the dispute being determined
in a
way that negatives the importer’s initially alleged liability,
the provisional payment is ‘liquidated’ by
way of the
release of the funds. The terms under which the provisional
payments system is administered are regulated by SARS’s
Provisional Payment Policy, a copy of which was attached to the
answering affidavit put in by the Commissioner.
[47]
The Commissioner contends that any
liquidation of the provisional payments made by the applicant is
required to take place consistently
with the Policy, which, amongst
other matters, contemplates an application to the Controller by the
party claiming the liquidation.
As the payments were made in
terms of the Policy, it seems to me that the Commissioner is correct
in his contention that any liquidation
of them should also take place
in accordance with the Policy, and not pursuant to a judgment
sounding in money against the Commissioner
ancillary to the
determination of an appeal. It was for this reason, as I
understood her argument, that Ms
Kilmartin
submitted that the application for an order sounding in money against
the Commissioner was ‘premature’ at this stage.
The
position is analogous to that which applies in respect of the payment
of refunds regulated by ss 76 and 76B of the Act.
In the
case of a refund, the applicant would be obliged to make application
for a refund to the Controller as contemplated by those
provisions in
the event of the determination by the Commissioner being amended by
the court’s decision; it would not be entitled
to a judgment
sounding in money against the Commissioner as an ancillary order to
the order upholding its appeal.
[48]
The Commissioner has raised an argument
that the conditions for a liquidation of the provisional payments
have not been satisfied.
In view of my conclusion that the
applicant is not entitled to a judgment against the Commissioner
sounding in money – at
least not in these proceedings –
it is unnecessary to determine the Commissioner’s contentions
concerning compliance
with the conditions. Suffice it to say
that none of the difficulties concerning the liquidation of the
provisional payments
raised by the Commissioner appear to me to
present insurmountable obstacles to their liquidation consequent upon
the determination
of the applicant’s appeal. For example,
I consider that the applicant’s failure to apply for a
liquidation of
part of the provisional payments using ‘vouchers
of correction’ after the Commissioner had amended his initial
tariff
determination from one carrying 20% duty to one attracting
duty at 10% of dutiable value to be an irrelevant consideration in
the
context of the applicant’s contention that neither of the
Commissioner’s determinations was correct, and its intention
to
seek a determination from the court that the goods fell to be
classified under TH44.16. Without making any finding on
the
point, it seems to me in any event, that should the provisional
payments for any reason no longer be amenable to liquidation,
the
consequently appropriated duty payments would, in such event, be
susceptible to being refunded in terms of ss 76 and 76B
of the
Act.
[49]
The relief sought in terms of paragraph 4
of the notice of motion for an order directing the Commissioner to
pay to the applicant
the sum of R1 419 382,94 will
therefore be refused, there being no implication thereby that the
applicant is not entitled
to obtain the release by the Commissioner
of the provisional payments.
Application to
strike out
[50]
The applicant applied to strike out
paragraphs 4.8 and 5 of the affidavit of Bruno Pepin that was filed
by the Commissioner as part
of the further sets of affidavits
exchanged between the parties that were specially admitted by
agreement between them. The
application was brought on the
basis that the impugned averments were inadmissible as evidence.
The nub of their content
was the deponent’s opinion that the
goods in issue did not constitute ‘other coopers’
products’ ‘as
they cannot be used at all in the
manufacturing of barrels or the repair of barrels’, and that
they were not staves within
the meaning of that word in TH44.16.
I agree that the opinion evidence is inadmissible in that it is
irrelevant and in fact
purports to presume on the preserve of the
court to make its own determination on the import of a statutory
provision. The
Commissioner’s counsel did not press any
argument to the contrary with any enthusiasm. The application
to strike out
will therefore be granted. It played such a minor
and incidental role in the proceedings that I do not intend to make
it
the subject of a separate costs order; the costs thereof shall
therefore be treated as costs in the cause.
Costs
[51]
The applicant has achieved substantial
success in these proceedings. Nevertheless, the Commissioner
has succeeded in resisting
the claim for an order against him
sounding in money. In the circumstances, I consider that it
would be just and fair were
the applicant to be awarded 80% of its
costs of suit, including the fees of two counsel.
Order
[52]
The following order is made:
1.
The applicant’s appeal in terms of
s 47(9)(e) of the Customs and Excise Act 91 of 1964 (‘the
Act’) is upheld.
2.
It is declared that customs duty tariff
heading 4416.00 contemplated in section 47(1) of the Act, read with
Schedule 1 thereto,
is applicable to the ‘InserStaves’,
‘ShortStaves’ and ‘MiniStaves’ produced by
Toneleria Nacional
LTDA (Chile) (hereinafter referred to as ‘the
goods’) imported by the applicant in container no. HLXU8500679
on
3 December 2015 and in container no.s HLBU1561490,
HLXU8154806, GATU8747579 and HLBU1673926, respectively, between
January
and June 2016.
3.
The respondent’s amended
determination that tariff heading 4409.29.90 applies to the goods is
set aside and substituted with
a determination that tariff heading
4416.00 applies to them.
4.
The respondent shall accordingly deal with
the customs clearance of the imported goods on the basis that they
are importable free
of import duty.
5.
Paragraphs 4.8 and 5 of the affidavit of
Bruno Pepin, jurat 19 June 2019, are struck out.
6.
The relief sought in paragraph 4 of the
notice of motion, as amended, is refused.
7.
The respondent shall pay 80% of the
applicant’s costs of suit, including the fees of two counsel.
A.G. BINNS-WARD
Judge
of the High Court
APPEARANCES
Applicant’s
counsel: R.F. van Rooyen SC
C.
Cilliers
Applicant’s
attorneys: Duvenhage & De Villiers
Wellington
Respondent’s
counsel: L.G. Kilmartin
N.
Mayosi
Respondent’s
attorney: State Attorney
Pretoria
and Cape Town
[1]
The
Commissioner’s counsel pointed out, with reference to a
passage in
The
Oxford
Companion to Wine
,
3ed (OUP, 1994) s.v. ‘
cooperage
’
(page number not supplied), the French for ‘cooperage’
is ‘
la
tonnellarie
’.
In Spanish, the word is ‘
toneleria
’;
see Collins, Online Spanish - English Dictionary.
[2]
See
s 47(9)(b) of the Act, and cf.
The
Heritage Collection (Pty) Ltd v Commissioner, South African Revenue
Service
2002 (6) SA 15
(SCA) at para. 9.
[3]
See
Item A of the ‘General Notes’ to Schedule I. It
essentially replicates the General Rules for the Interpretation
of
the Harmonised System.
[4]
Now
Item A of the ‘General Notes’ to Schedule I (see note 3,
above). GRI 1 now reads in relevant part as set
out in
para [6], above.
[5]
In
Distell
Ltd and Another v Commissioner of South African Revenue Service
[2010] ZASCA 103
(13 September 2010);
[2011] 1 All SA 225
(SCA), at para. 22, it was held that there was ‘
no
reason to regard the order of the first two stages as immutable
’.
[6]
See
e.g.
https://www.boutes.com/en/produits/gamme/staves/
(accessed
on 4 April 2020) and
http://www.garonnaise.com/en/our-range/
(accessed
on 4 April 2020). In my view it is as permissible in the
modern age for a court to use the internet to independently
investigate the usage of words as it was traditionally for it to
consult a dictionary. For recent examples of judges referring
in their judgments to their internet searches in various contexts
see
Polokwane
Local Municipality v Granor Passi (Pty) Ltd and Another
[2019] ZASCA 5
(1 March 2019);
[2019] 2 All SA 307
(SCA) at para.
34;
Bergrivier
Municipality v Beck
[2019] ZASCA 38
(29 March
2019); 2019 (4) SA 127
(SCA) at para. 46
and
Prince
v President of the Law Society of the Cape of Good Hope
[2002] ZACC 1
(25 January
[2002] ZACC 1
;
2002); 2002 (2) SA 794
(CC);
2002 (3) BCLR
231
at para. 58 (note 7).
[7]
‘
Stave’:
‘
any
of the lengths of wood fixed side by side to make a barrel, bucket,
or other container’
(Oxford
Dictionary of the English Language); ‘
any
of the narrow strips of wood or narrow iron plates placed edge to
edge to form the sides, covering, or lining of a vessel
(such as a
barrel) or structure
’
(Merriam-Webster Online Dictionary).
[8]
There
was no contention in the current case that the goods were of the
character covered by TH44.07, so I have left out of consideration
that their plank like appearance might trigger exclusion (a) in the
Explanatory Notes to TH4416.00. Exclusion (a), according
to
its tenor, pertains to goods susceptible to classification under
TH44.07. As mentioned, the Commissioner has veered
between
classifying them under TH 4421.90.90 and TH 4409.29.90.
It is evident from the documentation attached
to the applicant’s
founding affidavit (and confirmed in the answering affidavit) that
the Commissioner considered classification
under TH44.07, but
decided that only the ‘Viniblocks’ imported by the
applicant fell under that classification.
Goods under 44.07
are duty free.
[9]
This
is borne out by a passage in an extract from
The
Oxford Companion to Wine
,
supra, s.v. ‘
Cooperage
today
’
(page number not supplied) attached to the Commissioner’s
supplementary heads of argument.
[10]
At
para. 8 (footnotes omitted).
[11]
In
para. 8.
[12]
As
it is, exceptions (b) and (c) in the Explanatory Notes (see
paragraph [9]) above appear to make matters concerning the mode
of
manufacture and adaptation for use of goods that might come into
consideration under the heading issues of potential relevance.
[13]
The
respondent adduced evidence of one Bruno Pepin, the commercial
director of Maison Louis Latour, in support of its contention
that
coopers’ products were restricted to certain types of wooden
container traditionally made by coopers. A Latour
brochure was
attached to Mr Pepin’s affidavit. The brochure confirms
that Latour’s small cooperage employing
‘
only
six highly skilled coopers
’
uses ‘
only
traditional manufacturing techniques … as opposed to
production-line practices often found in larger cooperages
’.
The brochure also claims that the barrels made in its cooperage that
it does not use itself are ‘
exported
to some of the finest wineries in the world
’,
which I understand to mean wineries making some of the finest wines
in the world.
[14]
The
origin of the term ‘always speaking’ was described Lord
Steyn in
Burstow
R v. Ireland, R v.
[1997] UKHL 34
(24 July 1997)
[1997] UKHL 34
; ;
[1997] 4 All ER 225
(HL), at p.233
(All ER): ‘
It
is undoubtedly true that there are statutes where the correct
approach is to construe the legislation “as if one were
interpreting it the day after it was passed:”
The
Longford
(1889) 14 P.D. 34.
Thus in
The
Longford
the word “action” in a statute was held not to be apt to
cover an Admiralty action in rem since when it was passed
the
Admiralty Court “was not one of His Majesty's Courts of Law:”
(see pp. 37, 38.) Bearing in mind that statutes
are usually intended
to operate for many years it would be most inconvenient if courts
could never rely in difficult cases on
the current meaning of
statutes.
Recognising
the problem Lord Thring, the great Victorian draftsman of the second
half of the last century, exhorted draftsmen
to draft so that “An
Act of Parliament should be deemed to be always speaking”:
Practical
Legislation
(1902), p. 83; see also Cross, Statutory Interpretation, 3rd ed.
(1995), p. 51; Pearce and Geddes,
Statutory
Interpretation in Australia
,
4th ed. (1996), pp. 90-93. In cases where the problem arises it is a
matter of interpretation whether a court must search for
the
historical or original meaning of a statute or whether it is free to
apply the current meaning of the statute to present
day conditions.
Statutes dealing with a particular grievance or problem may
sometimes require to be historically interpreted.
But the drafting
technique of Lord Thring and his successors have brought about the
situation that statutes will generally be
found to be of the “always
speaking” variety: see
Royal
College of Nursing of the United Kingdom v. Department of Health and
Social Security
[1980] UKHL 10
;
[1981] AC 800
for an example of an “always speaking”
construction in the House of Lords
’.
[15]
In
para. 29.
[16]
Quintavalle,
R (on the application of) v Secretary of State for Health
[2003] UKHL 13
(13 March 2003);
[2003] 2 All ER 113
(HL), in
para. 9.
[17]
Compare
also the illustration given by Lord Hoffmann in
Birmingham
City Council v. Oakley
[2000] UKHL 59
(29 November 2000)
[2000] UKHL 59
; ;
[2001] 1 All ER 385
(HL), at p.
396 (All ER): ‘
I
quite agree that when a statute employs a concept which may change
in content with advancing knowledge, technology or social
standards,
it should be interpreted as it would be currently understood. The
content may change but the concept remains the same.
The meaning of
the statutory language remains unaltered. So the concept of a
vehicle has the same meaning today as it did in
1800, even though it
includes methods of conveyance which would not have been imagined by
a legislator of those days. The same
is true of social standards.
The concept of cruelty is the same today as it was when the Bill of
Rights 1688 forbade the infliction
of "cruell punishments".
But changes in social standards mean that punishments which would
not have been regarded as
cruel in 1688 will be so regarded today
’.
[18]
Note
14
above.
[19]
In
paras. 25-27.
[20]
Footnotes
omitted. In
Lake
Macquarie Shire Council
[1970] HCA 32
;
(1970) 123 CLR 327
, dealing with the import of the
word ‘gas’ in the Local Government Act, 1919-1969
(N.S.W.), Barwick CJ (Menzies J
concurring, Windeyer J
dubitante
)
said, at paras. 13-14, ‘…
no
doubt in 1906, gas denoted coal gas, because no other form of gas
for lighting and heating was in common use. Nonetheless the
connotation of the word “gas” may not be so described.
The Act here speaks of “gas”, not of coal gas.
In my
opinion, it thus selects the genus, and not any particular species
of gas.
14.
I can see no reason why, whilst the connotation of the word “gas”
will be fixed, its denotation cannot change
with changing
technologies.
’
[21]
In
para. 11. Of course, the proper approach to the
interpretation of a statutory provision applies indistinguishably
irrespective of whether it is a court or an administrator, like the
Commissioner, that has to undertake the exercise. It
is also
important, I think, not to conflate the ‘always speaking’
principle with the enjoinder in s 39(2) of
the Constitution.
The concepts are quite distinct, even though their application
might, depending on the context, discretely
lead to the same
statutory construction.
[22]
The
relevant provisions of s 13(1) for the purposes of that case
read as follows:
‘
(1)
If
…
(g) the debt is
the object of a claim filed against the estate of a debtor who is
deceased or against the insolvent estate of
the debtor or against a
company in liquidation or against an applicant under the
Agricultural Credit Act, 1966;
…
(i) the relevant
period of prescription would, but for the provisions of this
subsection, be completed before or on, or within
one year after, the
date on which the relevant impediment referred to in paragraph (a),
(b), (c), (d), (e), (f), (g) or (h) has
ceased to exist,
the period of
prescription shall not be completed before a year has elapsed after
the date referred to in paragraph (i).’
[23]
Note
1
above.
[24]
Cf.
Commissioner
for the South African Revenue Service
v
Terreplas South Africa (Pty) Ltd
[2014] ZASCA 69
(23 May 2014);
[2014] 3 All SA 11
(SCA) at para. 19,
with reference to
Seven
Eleven Corporation of SA (Pty) Ltd v Cancun Trading No 150 CC
[2005] ZASCA 17
(24 March 2005);
[2005] 2 All SA 256
(SCA); 2005 (5)
SA 186, and the other authority cited in the latter case at para.
24.
[25]
Cf.
e.g.
C:SARS
v
Terreplas South Africa
supra,
at para. 15, and
Distell
v C:SARS
supra,
at para. 22.
[26]
In
para. 27.
[27]
The
appeal court has appeared to lean in favour of preferring the
analysis of Trollip JA over that of Miller AJA in
this
regard; see
Commissioner
for the South African Revenue Service v South African Breweries
(Pty) Ltd
[2018] ZASCA 101
(27 June 2018) at para. 25.
[28]
Quoted
in paragraph [6]
above.
[29]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13
(16 March 2012);
[2012] 2 All SA 262
(SCA);
2012 (4)
SA 593
, at para.18.
[30]
In
paragraph [3]
above.
[31]
Presumably
in terms of s 107(2)(a)(i) of the Act.