Zambia Revenue Authority v Preston Transport Ltd (Appeal 118 of 2007) [2009] ZMSC 156 (20 November 2009)

IN THE SUPREME COURT OF ZAMBIA HOLDEN AT KABWE (Civil Jurisdiction) Appeal No. 118/2007 BETWEEN^ ZAMBIA REVENUE AUTHORITY APPELLANT AND PRESTON TRANSPORT LIMITED RESPONDENT Coram: Chirwa, Silomba and Mushabati,. JJS 8th April 2008 and 20th November 2009 For the Appellant : Mr G. Locha, Legal Counsel, ZRA For the Respondent : Mr R. Mainza, Mainza & Co. JUDGMENT Chirwa, JS., delivered the Judgment of the court. Authorities referred to:- 1. Royal Trading Limited V Zambia Revenue Authority, Appeal No. 32/1999 2. Admark Limited V Zambia Revenue Authority, (2006) Z. R. 3. Odgers’ Principles of Pleadings and Practice, 22nd Edition. 4. William David Wise v Hervey Limited (1985) Z. R. 179 5. Order 11 rule 11 of the Rules of the Supreme Court of England, 1999 Edition. -J2- The delay in rendering judgment in this case is deeply regretted and we sincerely apologize to the parties. Wheil we heard this appeal, Mushabati, J. S sat on the panel that heard the appeal but he has since retired from the bench. This, therefore, is a Judgment by majority. The appeal arises from the decision of the High Court which upheld the respondents claim for a declaration that the seizure and intended forfeiture of the respondent’s truck and trailer registration number 680-290V/517-6919 to the State is wrongful and inconsistent with the law, an injunction restraining the appellant whether by itself or its servants or agents from forfeiting the said truck and trailer to the State and damages for loss of business and loss of use of the said truck and trailer. The facts of this case are simple. The respondent is owner of the truck and trailer in issue and employed a driver by the name of Selas Manjonjo. Manjonjo was lawfully assigned to deliver fertilizer in Zambia and he, on his own frolic, in addition to carrying fertilizer, loaded on the truck some alcoholic drinks and -J3- cigarettes and on entering Zambia failed to declare the alcoholic drinks and cigarettes. The appellants’ officers seized the truck and the smuggled goods and the respondents were duly notified of the seizure. The appellant admits seizing the truck and trailer and said the same were seized under Section 159 of the Customs and Excise Act as they were used to smuggle into Zambia alcoholic drinks and cigarettes and denied any liability as to damages for loss of business and use of the truck and trailer. In his very short Judgment, the learned trial Judge after hearing the evidence from the respondent believed the evidence of the respondent’s witnesses that driver Manjonjo was not involved in smuggling of the alcoholic drinks and cigarettes and that the respondent did not allow any illegal cargo on the truck. The learned trial Judge found no reason to disbelieve the evidence of the respondent and held that the seizure and intended forfeiture of the truck and trailer wrongful and that if still seized should be released. He referred the matter to the Deputy Registrar for assessment of damages. It is against these findings and orders that the appellant has now appealed. -J4- There were two grounds of appeal according to the Memorandum of appeal and these were:- 1. That the trial Judge misdirected himself in law when he failed to consider the defence raised by the appellant that the cause of action was statute barred as it was brought outside the period given under Section 164(3) of the Customs and Excise Act, Cap 322 of the Laws of Zambia. 2. That the trial Judge misdirected himself in fact and law when he found that the truck driver in question Selas Manjonjo was not involved in smuggling of goods like alcohol, spirits and cigarettes when there was evidence on record to show that the said goods were found on the truck and the driver admitted having concealed the said goods. The said misapprehension of facts made the honourable trial Judge fail to consider the provision of Section 159(3) of the Customs and Excise Act, Cap 322. -J5- Both parties filed detailed heads of argument in which a number of authorities were referred. The gist of the appellants first argument is that as the seizure notice was issued on 16th August 2002, the cause of action arose then and in accordance with Section 164(3) of the Customs and Excise Act the action should have commenced within three months of 16th August 2002 after due one month notice and any action after three months became statute barred and that there was no need for the appellant to plead this defence. It was submitted that it was sufficient when the appellant drew this defence to the court in its submissions and cases of ROYAL TRADING LIMITED V ZAMBIA REVENUE AUTHORITY1 and ADMARK LIMITED V ZAMBIA REVENUE AUTHORITY2 were relied on where basically it is stated that defence being Statutory need not be pleaded. Also Order 18 rule 11 of the Supreme Court Rules 1999 Edition was referred to. It was submitted that failure by the learned trial Judge to consider this Statutory defence was a misdirection and the court should therefore declare the respondent’s action statute barred. -J6- In answer to submissions on ground 1, Counsel for the respondent submitted that the learned trial Judge did not err in not considering the defence that the action was statute barred because such defence was not pleaded. It was argued that in civil cases, pleadings are very important and serve a useful purpose of defining the issues of fact and of law to be decided as they give each party distinct notice of the case to be faced and to prop up this argument, Counsel referred to ODGERS’ PRINCIPLES OF PLEADINGS AND PRACTICE3: WILLIAM DAVID WISE V HERVEY LIMITED4 and ORDER 11 RULE 11 OF THE RULES OF THE SUPREME COURT OF ENGLAND5. It was further argued that the appellant did not avail itself to the provisions of Section 165 of the Customs and Excise Act where it is provided that if an officer of the appellant failed to tender any defence should do so to the party complaining. In the alternative, it was argued that the action was not statute barred as the action only arose when the appellant wrote the respondent on 5th June 2003 that it had forfeited the truck and trailer and not on 16th August 2002 when it issued the seizure notice. It was argued that on receipt of the -J7- letter of forfeiture, the respondent gave notice of its intension to sue within one month as provided in Section 164(1) of the Customs and Excise Act. This was done on 27th June 2003 within the time limit, it was submitted. We have considered the submissions on this first ground of appeal. It is a fact that the defence of statute bar was not pleaded and considered by the learned trial Judge. This is a defence provided by law under the statute in question. The issue here is when the cause of action arose. According to the appellants, the action arose on 16th August 2002 when the Seizure Notice was issued. But the respondent counter this by saying the action arose when they were notified of the forfeiture of the truck and trailer on 6th June 2003 and therefore the action was commenced r within the stipulated time. The Seizure Notice was issued under Section 159(1) of the Customs and Excise Act. The relevant part of Section 159(1) reads:- “159(1). Subject to the provisions of subsection (2), any ship, aircraft, vehicle or other thing used for the removal of goods which -J8- (a) are liable to forfeiture; or (b) are being exported or have been imported or otherwise dealt with contrary to or not in accordance with (i) the provisions of any law, including this Act relating to customs and excise; or (ii) any law prohibiting, restricting or controlling the importation or exportation of such goods; Shall itself be liable to forfeiture” (emphasis our own) There is no dispute that the truck and trailer were used to bring into Zambia alcohol and cigarettes in contravention of the Customs and Excise Act and from the provisions of Section 159, the truck and trailer became liable to forfeiture then. The respondents were informed of the consequences of the use of their truck and trailer in the letter from the appellant dated 30th August 2002 where the letter stated: “Note also that the provisions of Section 159 state that any vehicle that is used for the transportation of goods liable to forfeiture is itself liable to forfeiture. Consequently we will still detain your truck until we -J9- conclusively investigate the circumstances under which your truck was found with concealed goods.” It is clear to us that as the truck and trailer were used to bring into Zambia goods in contravention of the Customs and Excise Act they became liable to forfeiture when they were seized. The appellants were investigating the circumstances under which the truck and trailer were found with concealed goods. This may be to find out if any of its officers connived with the driver or otherwise. It is our view that the action arose when the Seizure Notice was issued on 6th August 2002, therefore by giving notice in June 2003, the action had long been statute barred. The defence of statute bar is a “legal” defence in the sense that it is provided in the law itself. It need not be pleaded and as we stated in the case of ADMARK LIMITED V ZAMBIA REVENUE AUTHORITY2 and following the guidance in Order 18 rule 11, a party relying on a defence of statute need not plead it. The facts should be clear for the court to take judicial notice of the defence. In the present case, the appellant drew attention of the court to -J10- the defence of statute bar, but the learned trial Judge never mentioned it in his Judgment. On this first ground the appeal is allowed. X. We need not consider the second ground of appeal in the premises. Appeal is allowed with costs both in this court and in the High Court; the same to be agreed, in default to be taxed. D. K. CHIRWA SUPREME COURT JUDGE S. S. SILOMBA SUPREME COURT JUDGE C. S. MUSHABATI SUPREME COURT JUDGE