Chairman of the Board on Tariffs and Trade v Volkswagen South Africa (Pty) Ltd and Another (118/99) [2000] ZASCA 83; 2001 (2) SA 372 (SCA); [2001] 1 All SA 519 (A) (30 November 2000)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2000
>>
[2000] ZASCA 83
|

|

Chairman of the Board on Tariffs and Trade v Volkswagen South Africa (Pty) Ltd and Another (118/99) [2000] ZASCA 83; 2001 (2) SA 372 (SCA); [2001] 1 All SA 519 (A) (30 November 2000)

IN
THE SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
REPORTABLE:
YES
Case
number : 118/99
In the
matter between :
THE
CHAIRMAN OF THE BOARD
ON
TARIFFS AND TRADE Appellant
and
VOLKSWAGEN
OF SOUTH AFRICA
(PTY)
LTD First Respondent
DIRECTOR-GENERAL
: TRADE AND
INDUSTRY Second
Respondent
CORAM : Smalberger, Nienaber, Harms JJA, Mpati
and Mthiyane AJJA
HEARD : 10 November 2000
DELIVERED
: 30 November 2000
Summary:
Customs and Excise Act 91 of 1964 - repeal of note 5(vi)(a)(ii) to
rebate item 609.17 of Schedule 6 - effect thereof -
whether right to
approach the Board on Tariffs and Trade for a recommendation in terms
thereof survived the repeal - s 12(2)(c)
of the Interpretation Act 33
of 1957
JUDGMENT
NIENABER
JA/
NIENABER JA
:
[1] To the uninitiated the Customs and Excise Act 91 of
1964 (“the Act”) is a labyrinthine piece of legislation.
This
case is concerned with one of its many provisions, note
5(vi)(a)(ii) to rebate item 609.17 of Schedule 6 to the Act (quoted
below)
and more particularly with the aftermath of its repeal.
[2] The first respondent (henceforth referred to simply
as “VW”) is a South African manufacturer and exporter of
motor
vehicles. In terms of Part 2 of Schedule 1 to the Act excise
duty is leviable on motor vehicles manufactured in the Republic of

South Africa. Section 75(1)(d) of the Act, however, allowed for a
rebate or a refund (depending on the circumstances) on such
excise
duty for the purpose of the Export Incentive Scheme for the Motor
Industry (Phase VI). The calculation of the amount of
the rebate (up
to a specified maximum) depends on the extent of the manufacturer’s
foreign currency earnings which would
in turn depend on the volume of
its exports of locally manufactured vehicles and component parts. VW
as a manufacturer was liable
for excise duty but as an exporter it
qualified for the rebate. But because the permitted rebate was
subject to a ceiling any
surplus to which it would otherwise have
been entitled would have been of no value to it. To cater for that
situation note 5(vi)(a)(ii)
to rebate item 609.17 was enacted. It
read:
“
ii) A customs and excise manufacturing warehouse
may cede any specific amount of foreign currency earnings in respect
of motor vehicles
exported by such warehouse, as specified in a
certificate issued by the Director-General: Trade and Industry, on
recommendation
of the Board on Tariffs and Trade, to other customs
and excise manufacturing warehouses ...”
(For the purpose of the Act VW is defined as a customs
and excise manufacturing warehouse. The Director-General referred to
is
the second respondent and the Board is the appellant, represented
by its chairman. I shall refer to the appellant simply as “the

Board”.) A cession effected in terms of the note would
entitle the cedent warehouse to whatever consideration it was able
to
negotiate for the cession and would entitle the cessionary warehouse
to claim a corresponding rebate on the excise duty otherwise
payable
by it.
[3] This note was deleted in its entirety with effect
from 1 September 1995 when the Phase VI Scheme was replaced by the
new Motor
Industry Development Program.
[4] Prior to the repeal VW had applied for and was
granted a rebate in respect of vehicles manufactured and exported by
it. Likewise
it applied for and was granted certificates permitting
cessions of excess earnings.
[5] VW did not, however, enjoy the
full extent of the rebates to which it was in fact entitled. This
came about as follows. In
order to calculate the amount of the
rebates to which a manufacturer was entitled not only the foreign
currency
earnings
from
exports
were taken into account but also the foreign currency
usage
i e the value of goods
imported
by the manufacturer. The latter was set off against the former.
During May 1991 rebate item 609.17 was amended. There was a

long-standing issue between certain of the manufacturers, of which VW
was one, and the Department of Finance, represented by the

Commissioner of Customs and Excise (“the Commissioner”)
about its effect. It was whether
all
royalties and licence fees paid by a local manufacturer to its main
licence holder overseas in respect of vehicles manufactured
in South
Africa under licence should be included in the amount of foreign
currency usage or only such royalties as had “a
value for
customs duty purposes”. The less the amount of royalties and
licence fees to be included in the foreign currency
usage, the
greater the amount of foreign currency earnings available for the
purpose of rebate and cession. VW took all reasonable
steps at the
time to ascertain the correct legal position regarding the payment of
royalties and the consequent assessment of foreign
currency earnings.
Until 12 June 1996 the Commissioner continued to insist,
notwithstanding the amendment, that
all
royalty payments be included in the calculation of foreign exchange
usage, regardless of the dutiability thereof. It was put thus
(and
not denied) in a letter from VW to the Commissioner, dated 12 March
1997:
“
2. As you are aware an amendment was made to the
notes of Item 609.17 in May 1991, which effectively implied that only
royalties
with a value for customs purposes should be included in the
foreign currency usage for the calculation of the Phase VI rebate.
However, this amendment was not brought to the
attention of affected manufacturers and Customs erroneously
collected duty where
royalty payments had been included in the
accounts, irrespective of whether such royalties were properly
dutiable in terms of
s 67 of the Customs and Excise Act.”
In the result VW made its initial assessments for the
purpose of processing its applications for submission to the Board,
preparatory
to the issue of the requisite certificates by the
Director-General, as if the amendment had not been effected. Indeed,
as late
as 31 August 1995 (the very date of repeal) the Commissioner
wrote
“
You are informed that the full excise duty
payable for the quarter 1 June 1995 to 31 August 1995 must be brought
to account in the
normal manner.”
This meant in effect that VW’s foreign currency
earnings were reduced, resulting in less excess foreign currency
earnings
being available to it for cession to other warehouses.
[6] In order to regularise matters in accordance with
its own understanding of the true legal position in the light of the
1991
amendment VW on 12 March 1997, after the repeal of the note,
wrote to the Commissioner requesting
“
permission to extract exports previously included
in the quarterly Phase VI accounts of VW and to cede these to
Mercedes Benz SA
(Pty) Ltd (“MB”) for inclusion in its
accounts for the same quarters.”
The letter proceeds:
“
6. In order to achieve the maximum rebate in the
quarters for which royalties were declared, VW was required to
include excessive
exports, which would have been ceded to other
manufacturers, if the royalty payments were correctly omitted.
7. We therefore propose that, in order to level the
playing fields and place VW on the same basis as the other two
manufacturers
in this regard, the Commissioner grants permission for
the relevant accounts to be historically amended in so far as:
7.1 permitting cessions to MB of excess exports which
were included in accounts in order to compensate for the royalty
payments
included therein,
7.2 granting a refund of duty with regard to accounts
in which the maximum rebate was not achieved, and
7.3 granting time extension in order to amend these
accounts from the date the mistake was made in May 1991, as was
permitted
for the other manufacturers.”
What VW sought was permission to cede, notwithstanding
the repeal of the provision allowing such cession, that part of its
foreign
currency earnings which, because of the erroneous view held
by the Commissioner, it was previously obliged to commit to its own

account in order to earn the maximum permissible rebate instead of
having a greater surplus available for cession.
[7] The Commissioner responded on 3 April 1997 as
follows:
“
Permission is granted for the cession of excess
foreign currency earnings included in the excise accounts of
Volkswagen of S.A.
(Pty.) Ltd. to Mercedes-Benz of S.A. (Pty.) Ltd.
retrospective to May 1991 provided the conditions stipulated in Note
5 (vi)(a)
to rebate item 609.17 of Schedule No. 6 to the Customs and
Excise Act are complied with and proof is produced that the so-called

royalties are in fact not dutiable in terms of the said Act.”
The Commissioner accordingly conceded
the correctness of VW’s standpoint, thereby releasing for
ex
post facto
cession
so much of VW’s foreign currency earnings as had previously
been consigned in the calculation of the excise duty
payable. The
amount thus made available for cession was in the order of some R20
million. Proof that royalties were in fact not
dutiable in terms of
the Act, as stipulated in the letter, was in due course produced.
[8] In terms of repealed note 5(vi)(a)(ii) such a
cession could, however, only be effected after the issue of a
certificate by the
Director-General upon the recommendation of the
Board. On 15 April 1997 VW accordingly approached the Board but on
30 July 1997
the Board resolved not to make a recommendation “as
the BTT [the Board] would be required to execute powers in terms of
legislation
which is no longer applicable”. In its letter to
VW, dated 25 August 1997, it was stated that the Board had
“
come to the conclusion that there is no legal
premise upon which the Board could perform the actions/powers that
they are requested
to perform with regard to the permit. The Board
would in effect be required to execute powers in terms of
‘legislation’
which is no longer applicable.”
[9] Despite further representations made by VW to the
Board broaching both the correctness and the inconsistency of its
approach,
the Board at its meeting of 10 September 1997 refused to
deviate from its previous stance and reiterated its refusal to
support
VW’s application. This decision was conveyed to VW on
25 September 1997.
[10] VW thereupon launched the current proceedings in
the Transvaal Provincial Division of the High Court against the Board
as first
and the Director-General as second respondent, to review the
Board’s refusal to consider VW’s application on the
merits.
No specific relief was sought against the Director-General
who abided the decision of the court and took no further part in
either
the proceedings in the court below or in this court.
[11] The matter came before Van Dijkhorst J who granted
an order in the following terms:
“
1. The decision of the Board on Tariffs and Trade
that it was no longer empowered to make recommendations to the
Director-General
of Trade and Industry in terms of repealed note
5(vi)(a)(ii) to rebate item 609.17 of Schedule 6 to the Customs and
Excise Act
91 of 1964 upon the applicant’s application, is set
aside.
Each party is to pay its own costs.”
The appeal comes to this court with leave granted by it.
[12] The critical issue before this court is whether the
repeal of note 5(vi)(a)(ii) disempowered and thereby precluded the
Board
from thereafter considering a recommendation to the
Director-General which, as stated earlier, was a prerequisite for the
issue
of a certificate by the latter. The argument before this court
turned in the main on the thrust of s 12(2)(c) of the Interpretation

Act 33 of 1957 (“the Interpretation Act”) which provides
as follows:
“
Where any law repeals any other law, then unless
the contrary intention appears, repeal shall not -
(a) ...
(b) ...
(c) affect any right, privilege, obligation or liability
acquired, accrued or incurred under any law so repealed.
(d) ...
(e) ...”
This provision, like many others in
the Interpretation Act, is in conformity with the common law (cf
Bartman v Dempers
1952 (2) SA 577
(A) at 582B-C). Repeal legislation is for the most
part directed at matters future rather than matters past. Pre-repeal
business
must generally speaking be dealt with, unless a contrary
legislative intention is apparent, as if no repeal had been enacted
(cf
National Iranian
Tanker Co v MV Pericles GC
1995
(1) SA 475
(A) at 483I-J;
Minister
of Safety and Security v Molutsi and Another
1996 (4) SA 72
(A) at 88D; 97G-98B;
Unitrans
Passenger (Pty) Ltd t/a Greyhound Coach Lines v Chairman, National
Transport Commission, and Others
1999 (4) SA 1
(SCA) at 7A-E). This, incidentally, was also the
Commissioner’s own approach. On the day before the repeal took
effect,
31 August 1995, he issued, in response to prior
representations made to him on behalf of VW, an instruction to the
effect that
all royalties had to be taken into account, thereby
reducing the amount of foreign currency earnings accessible for
cession during
the preceding period.
[13] The Interpretation Act speaks of
“accrue” and of “acquire”. Different words
in a statute when juxtaposed
would normally connote different
concepts. “Accrue” has been held to bear a narrower
meaning than “acquire”
(
Mahomed
NO v Union Government (Minister of Interior)
1911
AD 1
at 11). A right “accrues” when all the conditions
for its existence in relation to the particular beneficiary are met

(cf
Transnet Ltd
v Ngcezula
[1994] ZASCA 192
;
1995 (3) SA 538
(A) at 551E-F; 552E-G); a right is “acquired”
when all the conditions for its existence are met and the particular
beneficiary in addition avails himself of the statutory provision
concerned by some individual action or effort on his part (
Mahomed
NO v Union Government, supra
,
at 9-11;
Rustenburg
Platinum Mines Ltd v Motletlegi NO and Another
1954 (2) SA 597
(T) at 603C-H;
Dys
v Dys
1979 (3) SA
1170
(O) at 1173H-1175A);
Minister
of Public Works v Haffejee NO
[1996] ZASCA 17
;
1996 (3) SA 745
(A) at 754D-G). The section envisages a prior
entitlement which was specific and not general, actual and not
abstract, live and
not hypothetical.
[14] What VW sought to implement was
the right to cede its foreign exchange currency earnings to another
warehouse. That right
was implicit in note 5(vi)(a)(ii). Also
implicit was the ancillary right to approach the Board for its
recommendation upon which
the implementation of the right to cede
depended. The Board’s recommendation was as such not a “purely
procedural
provision” (cf
Minister
of Public Works v Haffejee NO, supra,
at
752A-753C;
Minister
of Safety and Security v Molutsi and Another, supra,
at 90G-H). It was at the level of this ancillary right to have the
matter considered by the Board that VW’s quest for permission

to cede its surplus foreign exchange earnings was impeded; and it is
with that right and the Board’s refusal to give effect
to it
that this case is primarily concerned.
[15] The initial question, then, is whether that right,
in the unique circumstances of this case, accrued to VW prior to the
repeal
of the note. The circumstances are unique for the following
reasons:
Factually and legally VW qualified to approach the
Board, prior to the repeal of the note, for its recommendation in
respect of
the full complement of its excess foreign currency
earnings, not only in respect of that portion for which permission to
cede was
duly granted in the past but also in respect of the surplus
above that figure for which permission to cede was now sought - what

for the sake of brevity I shall call “the super-surplus”.
The reason why VW did not initially ask for the Board’s

recommendation in respect of the super-surplus was the view then
taken by the Commissioner that VW did not qualify for it. As
was
stated by the Board itself in its papers the assessment of the
figures submitted by manufacturers for permission to cede any
excess
was based on what was described as “the honour system”.
In those circumstances VW was honour-bound to comply
with the
Commissioner’s directives on what, after all, was his area of
concern. At the same time VW, in common with other
manufacturers,
pursued all efforts to persuade the Commissioner that his view as to
the basis of calculation was wrong. Not to
have deferred to the
Commissioner while negotiations were pending would have been
foolhardy on VW’s part. The result was
that VW was constrained
to over-value and hence over-assess its foreign exchange usage,
thereby reducing its foreign currency earnings
figures which in turn
reduced the excess (above the level required for the calculation of
the maximum rebate) which would otherwise
have been available to VW
for cession to other warehouses. It was suggested in argument that
VW should have sued the Commissioner
before the repeal for a
declarator rather than to follow his instructions as to the method of
processing its request for permission
to effect the cession. That,
in my opinion, is to impose a counsel of perfection. The repeal
after all supervened while the
matter was still under discussion with
the Commissioner. Those discussions culminated in the Commissioner
thereafter conceding
the point and in stating that he was satisfied
that for his part VW qualified for permission to cede the
super-surplus in the amounts
quantified by VW and approved by the
Commissioner. It is, I think, fair to conclude that had it not been
for the Commissioner’s
special insistence on how the surplus
was to be calculated VW would have approached the Board prior to the
repeal for its recommendation
in respect of the entire amount for
which, properly calculated, it qualified at the time; and that had
it not been for the repeal
the Board would have given the shortfall
its full consideration after the Commissioner had changed his mind.
[16] What VW now sought to do after the Commissioner
acknowledged that not all royalties had to be taken into account in
calculating
the surplus it sought permission to cede, was to rectify
the pre-repeal position by seeking supplementary permission to cede
what
had now been determined to be the correct amount. As such the
permission sought went to the amount rather than to the entitlement.

This is not, therefore, a situation where VW, never having applied
for permission to cede its excess foreign currency earnings
prior to
the repeal, now seeks to do so for the first time after the event.
[17] Prior to the repeal VW had fulfilled all the
requirements which in fact and in law entitled it to approach the
Board for permission
to make its recommendation in respect of the
super-surplus; and from its side VW had taken all the steps
realistically open to
it to advance its request for permission to
effect such a cession. After the repeal it remained, as it would
have been before
the repeal, a matter for consideration by the Board
and the Director-General.
[18] Seen in this light the right to approach the Board
for a recommendation in respect of the super-surplus in order that
“the
relevant accounts be historically amended” (see
paragraph 6 above) accrued to VW prior to the repeal of the relevant
note.
[19] There has been some suggestion
that this conclusion might not be in conformity with the authorities.
I do not think so. The
facts of this case are unparalleled in any
of the cases cited or that I have consulted. The conclusion is in
line with the principles
stated and developed in the decisions of
this court commencing with
Mahomed
NO v Union Government, supra.
There is one decision, not of this court, that I should perhaps
mention as an exception to the rule. It is the Privy Council

decision in
Director
of Public Works and Another v Ho Po Sang and Others
[1961] AC 901
(PC);
[1961] 2 All ER 721
(PC), a judgment that has
been referred to twice in this court but never analysed or followed
(cf
Gunn and Another
NNO v Barclays Bank DCO
1962 (3) SA 678
(A) at 684D-F;
Transnet
Ltd v Ngcezula
,
supra
,
at 552B-C). A building owner in Kowloon, Hong Kong, wished to develop
a site. In order to do so he would have had to demolish
an existing
building in which there were tenants. That required, in terms of a
certain statute, a rebuilding certificate from
the Director of Public
Works. As soon as the Director gave notice of his intention to grant
such a certificate tenants who would
be affected by it could appeal
to the Governor who had the final say in the matter. The building
owner duly applied for a rebuilding
certificate, the Director duly
gave notice of his intention to grant it and the tenants duly
appealed to the Governor. But before
the Governor could give a
decision the statutory provision governing the matter was repealed.
In terms of the applicable Interpretation
Ordinance the repeal of an
enactment would not affect “any right ... acquired ... under
any enactment so repealed”.
After the repeal the Governor gave
his consent and the Director issued his certificates. The tenants
sought a declarator that
the Director after the repeal had no
authority to do so. The Privy Council eventually found in favour of
the tenants that the
building owner, prior to the repeal, had no more
than a hope that a certificate would be granted to him and hence that
he did not
acquire a right thereto. In my respectful opinion many of
the
dicta
in the judgment are less than persuasive, the result is inequitable
and, I would venture to suggest, contrary to the approach of
this
court in
Mahomed NO
v Union Government, supra,
and the decisions following it. Furthermore, the statutory
provisions and facts under consideration in that matter differ
materially
from the present. In short, I disagree that the approach
outlined in paragraph 18 hereof is in any way in conflict with our
own
authorities. In my opinion the repeal of the note accordingly
did not disempower and preclude the Board from considering and
deliberating
about VW’s application for permission to cede its
super-surplus.
[20] That conclusion effectively disposes of the appeal.
I propose nevertheless to add a word about VW’s ultimate
right
to cede. That right was conditional. The conditions (the
recommendation of the Board and the certification by the
Director-General)
were extraneous to and independent of the efforts
of VW. At the outset VW had to establish the factual foundation for
a right
to cede i e a foreign currency earnings excess. That was the
area of concern of the Commissioner. Thereafter VW had to approach

the Board. The Board’s area of concern was doubtless the
policy considerations it was enjoined to apply in terms of the
Board
on Tariffs and Trade Act 107 of 1986. Finally VW had to obtain a
certification from the Director-General. There is in my
opinion, in
the peculiar circumstances of this case, much to be said for the
approach that once VW had fulfilled the factual preconditions
for its
claim (a foreign currency earnings excess) and had applied to the
Board for its appraisal, as VW had in fact done, it had
“acquired”,
for the purpose of s 12(2)(c) of the Interpretation Act, a right,
albeit a conditional one, which had to
be considered on its merits by
the Board. As has been stated earlier VW’s current offensive,
properly analysed, is to correct,
with retrospective effect, the
calculation in respect of the amount (in line with the adjustments
approved thereto by the Commissioner)
it now wishes additionally to
cede. It is to the difference in the amounts recommended earlier and
the amounts for which a recommendation
is now sought, that the Board
will be called upon to apply its own policy judgment in accordance
with the behests of the Act which
governs its functions. The fact
that a repeal of the enabling section had in the meantime intervened
should not, in my opinion,
debar VW from advancing its claim to the
Board.
[21] In my opinion the court
a
quo
was accordingly
right in its conclusion that the decision of the Board (that it was
no longer empowered to make a recommendation
to the Director-General)
should be set aside. VW, so we have been informed from the Bar, does
not insist on costs being awarded
to it on appeal.
[22] The following order is made:
“
The appeal is dismissed.”
...........................
P
M NIENABER
JUDGE
OF APPEAL
Concur
:
Smalberger
JA
Mthiyane
AJA
HARMS
JA/
HARMS
JA:
[1] The
appeal should in my judgment succeed and the reasons that follow
should be read against the backdrop of Nienaber JA's judgment.
Some
repetition is unfortunately unavoidable.
[2] A
useful starting point is the object of the applicant (“VW”):
it wishes to cede certain foreign currency earnings
to Mercedes Benz
SA (Pty) Ltd (“MB”) for consideration; MB can apply the
ceded earnings in reducing its own foreign
currency usage; a
reduction in foreign currency usage leads to an increase in foreign
currency earnings; the larger the foreign
currency earnings, the
greater the excise duty rebate.
[3] The
right to cede was contained in note 5 (vi)(a)(ii) of rebate item
609.17 in Schedule 6 of the Customs and Excise Act 91
of 1964 which
was in these terms:
“
a
customs and excise manufacturing warehouse [VW] may cede any specific
amount of foreign currency earnings in respect of motor
vehicles
exported by such warehouse, as specified in a certificate issued by
the Director-General: Trade and Industries, on recommendation
of the
Board on Tariffs and Trade, to other customs and excise manufacturing
warehouses [MB].”
[4] The
application to the Board on Tariffs and Trade (“the Board”)
for a recommendation was made by VW after the repeal
of the note.
[5] The
Commissioner of Customs and Excise is the functionary charged with
the administration of the Act and is in that regard
subject to the
control of the Minister of Finance (s 2(1)). The Act imposes
further duties and confers obligations upon the Director-General:

Trade and Industry (“the Director-General”) and these are
to be performed by him personally or under his delegation,
control or
direction (s 3A(1)). An independent body, the appellant Board,
established under Act 107 of 1986, not only advises
the Minister of
Trade and Industry under that Act but also has certain assigned
duties in terms of, at least, Schedule 6. Further
advisory functions
in terms thereof have been entrusted to another board, that of Trade
and Industry. Since export incentive schemes
and industrial
development programs are primarily the concern of the Department of
Trade and Industry, it is understandable - as
is apparent from a
reading of Schedule 6 - that its functionaries and advisory bodies
should have an important role to play in
relation to rebates and
refunds connected with these programs.
[6] The
Commissioner does not (or, at least, did not in this case) assess
customs duty. According to the evidence, the payment
of duty was
based upon an honour system and motor manufacturers such as VW paid
duty on the basis of their own assessment of their
liability. The
views of the Commissioner relating to the interpretation of the
Schedule and, more particularly, in relation to
foreign currency
usage (where the problem arose in this case) and the right to cede
them, are legally irrelevant. Notes 4 (iii)
and 5 (vi), for
instance, make it clear that the responsibility relating to the
method and basis of calculation and verification
of foreign currency
usage is that of the Director-General. When the Commissioner
purported to grant conditional “permission”
to VW to cede
the foreign currency earnings in contention, he was acting beyond his
competence.
[7] In
order to cede, VW required three things: (a) the necessary foreign
currency earnings, (b) a recommendation of the Board
and (c) a
certificate issued by the Director-General. During the period May
1991 to 31 August 1995 VW was from time to time possessed
of
“surplus” foreign currency earnings. On three occasions
it applied for the necessary Board recommendation in respect
of
specified amounts and specific cessionaries, and these applications
were successful. On 15 April 1997, nearly eighteen months
after the
repeal of the cession provision, VW applied to the Board for its
recommendation in relation to the amounts and periods
in contention.
Because of the repeal, the Board held the view that it did not have
the necessary competence to deal with the matter.
[8] VW,
well aware of the Board's view, launched the present proceedings. In
order to succeed, it had to make out a case that,
in the terms of s
12 (2)(c) of the Interpretation Act 33 of 1957, it had at the time of
repeal an “accrued” or “acquired”
right.
The founding affidavit is devoid of any attempt to allege or prove
the existence of such a right and the judgment of
Van Dijkhorst J
(whose reasoning VW's counsel did not adopt) also does not deal with
the issue. The reason for the failure on
behalf of VW is to be found
in its approach to the matter namely that “legislation can only
be applied as it existed at the
time of payment of the account”,
presumably for excise duty. In argument before us the submission was
different, namely
that VW had taken steps to avail itself of the
right to cede by earning foreign currency or alternatively that the
relevant provision
of the Interpretation Act does not apply to tax
matters (something the present case is not).
[9] Turning to the cause of its
failure, VW stated that
it
“erroneously” included certain excluded royalty payments
in its returns of foreign currency usage. In the application
to the
Board it had already stated that the amendment had not been brought
to the attention of motor manufacturers and that the
Commissioner
erroneously collected duty where royalty payments had been included
(by VW) in the accounts. Had they been correctly
omitted, VW would
have ceded the excess. In the answering affidavit the Chairman of
the Board stated that he did not know whether
the inclusion had been
in error; the response thereto does not take the matter further.
[10] What makes the case unique or
unparalleled in the judgment of Nienaber JA, is the erroneous view
held by the Commissioner
about the calculation of royalties in
determining the foreign currency usage. I have already come to the
conclusion that it is
an irrelevant consideration, but in any event,
my assessment of the facts differs from his. Admittedly, in the
founding affidavit
the deponent did state that the Commissioner
specifically notified manufacturers that all their royalty payments
had to be included
in their accounts. This was, however, done on the
last day of the life of the provision by letter of 31 August 1995 and
then only
in relation to the last quarter (1 June to 31 August 1995).
It needs to be mentioned that the excise returns and payments are

done on a quarterly basis and that the amount VW wishes to cede in
respect of this quarter is but R312 934,00. In reply, VW pertinently

stated that it acted on
this
specific
letter in the calculation of the net foreign currency usage. There
is no evidence of any previous ruling by the Commissioner
and, since
the manufacturers were unaware of the provision until an unknown
date, there could not have been any ruling before such
a date. It
was in this context that the Board alleged that VW had paid duty on
its own assessment of its own liability, an allegation
that has to be
accepted for purposes of the case. Further, in reply, VW repeated
the allegation baldly made in the founding affidavit
that it had
taken all reasonable steps to ascertain the correct legal position.
In response to a specific allegation in the answering
affidavit that
VW did not state what steps it took at the time and whether they were
reasonable, VW vaguely referred to discussions
which culminated in a
letter of 12 June 1996 and representations as evidenced in the letter
of 31 August 1995 which has already
been dealt with. No dates or
particulars are given. Having failed to respond to a direct
invitation to provide the facts, VW
can hardly rely on a benevolent
interpretation of its affidavits. Furthermore, since it is not
alleged that an application to
the Board was dependent upon a ruling
or certificate from the Commissioner, there is no reason why WV upon
becoming aware of the
1991 amendment, was prevented from applying.
Litigation was not required. The Commissioner, faced with a cession
based upon a
certificate from the Director-General, has to grant the
rebate.
[11] In
my judgment, these facts are not unique. Even if unique, that fact
could at best be relevant in the context of a determination
of
whether the provisions of the Interpretation Act do not apply because
an intention contrary to s 12 (2)(c) appears from the
repealing law.
That is not VW's case.
[12] It
is next necessary to determine on which “right” VW
relies. During argument counsel for VW expressly disavowed
any
reliance upon the right to cede. In other words, he accepted that
the right to cede in terms of the note was not acquired
and did not
accrue to VW before the repeal. The concession was rightly made if
regard is had to the tests formulated by Nienaber
JA in par 13.
Since the whole object of the present exercise is to cede the foreign
earnings, this disavowal ought to be the end
of VW's case.
[13] Another
conceivable accrued right is the “ancillary right to approach
the Board for its recommendation” to the
Director-General, a
right not persisted in during argument but the cornerstone of the
judgment of Nienaber JA. In this context
regard should be had to par
(e) of s 12 (2) of the Interpretation Act, a provision complementary
to par (c). For the sake of convenience,
both are quoted:
“(2)
Where a law repeals any other law, then unless the contrary intention
appears, the repeal shall not
(a)
. . .
(b)
. . .
(c) affect
any right, privilege, obligation or liability acquired, accrued or
incurred under any law so repealed; or
(d)
. . .
(e) affect
any investigation, legal proceeding or remedy in respect of any such
right, privilege, obligation, liability, forfeiture
or punishment as
is in this subsection mentioned,
and
any such investigation, legal proceeding or remedy may be instituted,
continued or enforced . . . as if the repealing law
had not been
passed.”
Steyn
CJ, in dealing with the relationship between the two paragraphs,
said:
“It
is apparent that sec. 12 (2) does not purport to preserve any claim
to an investigation, legal proceeding or remedy as
an independent
right or privilege, but only in relation to another right or
privilege acquired or accrued, or to an obligation
or liability
incurred under the law repealed, and merely as ancillary to and as a
means of establishing and enforcing such a right,
privilege,
obligation or liability. The primary enquiry in the present case is
not, therefore, as to the accrual of a right of
action or other legal
remedy, but as to the accrual of a right which the creditors became
entitled to pursue, through the liquidators,
by the institution of
legal proceedings.”
(
Gunn
and Another NNO v Barclays Bank DCO
1962 (3) SA 678
(A) 684B-D.) To my mind the right to approach the
Board amounts to a “right” to an investigation leading to
a recommendation.
It does not differ in kind from the right to
institute proceedings in a particular forum, the subject of
Minister
of Public Works v Haffejee NO
[1996] ZASCA 17
;
1996 (3) SA 745
(A).
[14] From another angle, the right
to approach the Board may be regarded as “the power to take
advantage of an enactment”,
something which, according to the
classical exposition in
Abbott
v The Minister for Lands
[1895] AC 425
(PC) 431 adopted in
Mahomed
v Union Government
1911 AD 5
at 10
in
fine
, cannot
properly be deemed a “right accrued”.
[15] In conclusion, it is necessary
to consider whether VW had “acquired” a conditional
right, a matter dealt with
in par 20 of Nienaber JA's judgment. In
this regard my evaluation of the factual premise of the judgment is
different. I have
already dealt with the supposition that “VW
had to establish the factual foundation for a right to cede i e a
foreign currency
earnings excess”, that it “was the area
of concern of the Commissioner” and that the certification from
the Director-General
“would presumably follow as a matter of
course”. The finding, perhaps tentative, that VW “had
applied to the
Board for its appraisal” before the repeal
overstates the evidence as I understand it. VW, in the present
instance, made
its application in respect of seven out of sixteen
excise quarters over the period 1 September 1991 to 31 August 1995.
There
is documentation which indicates that in relation to three of
the seven quarters VW had made applications to the Board, but nothing

further. One of these did not concern MB and the other two included
proposed cessions to other motor manufacturers. VW's application
can
therefore in a very limited respect be regarded as an application to
correct or adjust a calculation. In any event, I find
it difficult
to envisage how conditional rights can be regarded as vested rights.
The mere fact that they are conditional ought
to disqualify them from
having been acquired. In
Rustenburg Platinum Mines Ltd v Motletlegi NO and Another
1954
(2) SA 597
(T) the mine had an option to purchase certain mineral
rights which it had not exercised when the repealing provision became
effective.
As a result of the repeal, the mine was prohibited from
purchasing these rights. The option, which in a sense gave rise to a
conditional right, was not enough. Cf
Browne
v Incorporated Law Society of Natal
1968 (3) SA 535
(N) 540D-H. The judgment in
Director
of Public Works and Another v Ho Po Sang and Others
[1961] AC 901
(PC) is to a similar effect and, on my reading, in
conformity with the test laid down by Nienaber JA in par 13. See
also Wiechers
Administratiefreg
2
nd
ed p 65-68. If the result appears to be inequitable, it is because
only acquired or accrued rights are protected upon repeal of
a
statute and not lesser expectations and hopes.
___________________
L
T C HARMS
JUDGE
OF APPEAL
AGREE:
MPATI AJA