Hilmax Engineering (Private) Limited v Zimbabwe Revenue Authority (832 of 2022) [2022] ZWHHC 832 (17 November 2022)

1 HH 832-22 HC 7367/22 HILMAX ENGINEERING (PRIVATE) LIMITED versus ZIMBABWE REVENUE AUTHORITY HIGH COURT OF ZIMBABWE MUCHAWA J HARARE, 3 & 17 November 2022 Urgent Chamber Application Mr F T Manyuchi and Mr T J Chivanga, for the applicant Mr T Marange and Ms V Ziyambi, for the respondent MUCHAWA J: This is an urgent chamber application in which the applicant seeks the following order: “IT IS ORDERED THAT: 1. Respondent shall return the laptops and all documents and files in (sic) unlawfully seized and removed from the applicant’s premises on the 28th of October 2022. 2. The respondent shall bear costs of this application.” The background to this matter is that on 28 October 2022, nine officers of the respondent presented themselves at the applicant’s premises, unannounced. They were attended to by the applicant’s Public Officer then searched the premises and took away five laptops and various documents belonging to the applicant. This was allegedly in pursuance of an investigation to understand the business operations of the applicant and assess compliance with the various tax Acts. The applicant insists that the case officers of the respondent were requested to produce authorization to act in the manner they did but they failed to do so. It is contended that the removal and seizure of the laptops and files was therefore unlawful hence the prayer for their return. Point In Limine The respondent filed a notice of opposition to the urgent chamber application. At the hearing of the matter, the applicant raised the point in limine that there is no proper opposition before the court as the deponent to the opposing affidavit has not produced a resolution which HH 832-22 HC 7367/22 authorizes him to defend this matter on behalf of the respondent. Reliance was placed on the case of Dube v Premier Service Medical Aid Society & Anor SC 73/19 for this contention. Mr Marange submitted that in terms of r 58 (4), a deponent to an affidavit should be a person who can swear positively to the facts. He distinguished the Dube supra case by saying it was one in which Dube had been a former CEO and deposing to the affidavit would require a board resolution due to disputes about control of the company. According to Mr Marange, it would be taking it too far to expect the ZIMRA board to sit every time there was litigation and pass a resolution authorizing individuals to act on its behalf. He sought to rely on the case of African Banking Corporation of Zimbabwe Limited t/a Banc ABC v PWC Motors (Pvt) Ltd & 3 Ors HH 123/13 to say that the lack of a resolution should not be fatal as there is no evidence that the deponent is on a frolic of his own. Other cases he relied on are those of Madzivire &Ors v Zvarivadza HH 74/06 and Newman Chiadzwa v Herbert Paulkner 1991 (2) ZLR 33 SC. In conclusion he stated that there is nothing precluding the deponent from deposing to the affidavit and that the point in limine should be dismissed. Mr Manyuchi argued that the cases relied on by Mr Marange had been overturned by the Supreme Court in the Dube supra case. Mr Chivanga contended that r 58(4) relied on by the respondent does not overturn common law and that the rule in fact applies to individuals not corporate bodies. The Revenue Authority Act, [Chapter 23:11] provides as follows in s 3 “Establishment of Zimbabwe Revenue Authority There is hereby established an authority, to be known as the Zimbabwe Revenue Authority, which shall be a body corporate capable of suing and being sued in its own name and, subject to this Act, of performing all acts that bodies corporate may by law perform.” It is clear that the respondent is a body corporate. When it is suing or being sued, it requires to act through some natural persons. Such persons would need to be properly authorised. It is clear that the Dube supra has put to rest this issue by setting aside the decisions in the line of those cases Mr Marange seeks to rely on. I can do no better than reproduce what the Supreme Court said; “The reality is that there have been conflicting decisions in the High Court on the question whether a deponent who purports to represent a legal entity is required, in all cases, to prove that he is duly authorised to represent the legal entity. On the one hand a number of cases have relied on the judgment of this Court in Madzivire (supra) in determining that proof of such authority is necessary HH 832-22 HC 7367/22 in all cases – see for example Deputy Sheriff, Chinhoyi v Appointed Enterprises & Ors HH 450/13; First Mutual Investment (Private) Limited v Roussaland Enterprises (Private) Limited T/A Third World Bazaars HH 301/17. On the other hand, a number of cases from the same court have held that proof of such authority was not necessary in all cases. The latter cases made no mention of the decision of this Court in Madzivire and appear to have been oblivious to its existence as authority on this topic – see for example African Banking Corporation of Zimbabwe Limited t/a Banc ABC v PWC Motors (Pvt) Ltd & 3 Ors HH 123/13; Tianze Tobacco Co (Pvt) Ltd v Muntuyadzwa HH 626/15; Mukomba v Unibox Investments t/a Arundel Village Spar HH 539/15; Trustees of The Makono E Chimanimani v Minister of Lands & Anor 2016 (2) ZLR 324 (H).” The Honourable GARWE JA, as he then was, went on to say: “In a decision reported as Madzivire & Ors v Zvarivadza & Ors (supra), at 515, this Court (per CHEDA JA) remarked as follows:- “A company, being a separate legal person from its directors, cannot be represented in a legal suit by a person who has not been authorised to do so. This is a well-established legal principle, which the courts cannot be ignored. It does not depend on the pleadings by either party. The fact that the person is the managing director of the company does not clothe him with the authority to sue on behalf of the company in the absence of any resolution authorising him to do so. The general rule is that directors of a company can only act validly when assembled at a board meeting. As exception to this rule is where a company has only one director who can perform all judicial acts without holding a full meeting.” [38] The above remarks are clear and unequivocal. A person who represents a legal entity, when challenged, must show that he is duly authorised to represent the entity. His mere claim that by virtue of the position he holds in such an entity he is duly authorised to represent the entity is not sufficient. He must produce a resolution of the board of that entity which confirms that the board is indeed aware of the proceedings and that it has given such a person the authority to act in the stead of the entity. I stress that the need to produce such proof is necessary only in those cases where the authority of the deponent is put in issue. This represents the current state of the law in this country.” (My emphasis) The law is clear and unequivocal. It is insufficient for the respondent’s deponent to simply say he is authorized to depose to the affidavit by virtue of his position as head of business investigations. R 58 (4) provides as follows; “(4) An affidavit filed with a written application— (a) shall be made by the applicant or respondent, as the case may be, or by a person who can swear to the facts or averments set out therein;” This rule in fact requires that the affidavit shall be made by the applicant or respondent or a person who can swear positively to the facts set out therein. This is just a general guideline which does not deal with the question of who would then depose to the affidavit where the applicant or HH 832-22 HC 7367/22 respondent is a corporate entity. This is what case law has dealt with, now, conclusively in the case of Dube supra. It is inadequate too for Mr Marange to point to the mere inconvenience of the respondent’s board sitting every time there is litigation. He needed to show me something more, say in legislation, which would exempt the respondent from the position of the law as it now stands. In today’s age of technology, there are many ways of securing a board resolution in order to comply with the legal requirements set out above. In the circumstances the point in limine taken must succeed. There is no proper notice of opposition before the court. The Merits of the Case I proceed to deal with the merits of the case as an unopposed matter. Mr Manyuchi submitted that this is a simple application for spoliation wherein the respondent removed the applicant’s laptops and documents without lawful cause without specifying the relevant revenue Act it was acting under nor producing the relevant Act they were acting under as prescribed by the law. The act of seizing the computers was alleged to be unlawful as set out in PIL (Pvt) Ltd v ZIMRA & Anor HH 213/17. Section 34F (9) of the Revenue Authority Act [Chapter 23:11] provides as follows: “(9) Any officer of the Authority engaged in carrying out the provisions of this section may, if he or she has reasonable grounds for believing that it is necessary to do so for the enforcement of any tax payable under a Scheduled Act or the Finance Act— (a) at any reasonable time during the day enter any business premises; (b) require any person to produce for its inspection any— (i) book, record, statement, account, trade list, stock list or other document; or (ii) file, schedule, working paper or calculation relating to the determination of a taxpayer’s income, expenses or liability for tax; (c) require any person to prepare and additionally, or alternatively, to produce for inspection a print- out or other reproduction of any information stored in a computer or other information retrieval system; (d) take possession of any document or other thing referred to in paragraph b) or (c) for so long as may be necessary for the purpose of any examination, investigation, trial or inquiry;” Section 61 (1) of the Value Added Tax Act [Chapter 23:12] gives the exact same powers as those given in the Revenue Authority Act to the respondent. Section 44 (8) of the Income Tax Act [Chapter 23:06] has similar provisions too, which I reproduce just to illustrate the point; HH 832-22 HC 7367/22 “Any officer engaged in carrying out the provisions of this Act may, if he has reasonable grounds for be-lieving that it is necessary to do so for the enforcement of any tax— (a) at any reasonable time during the day enter any business premises; (b) require any person to produce for its inspection any— (i) book, record, statement, account, trade list, stock list or other document; or (ii) file, schedule, working paper or calculation relating to the determination of a taxpayer’s income, expenses or liability for tax; (c) require any person to prepare and additionally, or alternatively, to produce for inspection a print- out or other reproduction of any information stored in a computer or other information retrieval system; (d) take possession of any document or other thing referred to in paragraph (b) or (c) for so long as may be necessary for the purpose of any examination, investigation, trial or inquiry; (e) require any person reasonably suspected of having committed an offence under this Act or any person who may be able to supply information in connection with a suspected offence to give his name and address.” The Customs and Excise Act [Chapter 23:02] has slightly different provisions. It provides as follows in section 9 (2): “Where there are reasonable grounds for believing that it is necessary to do so for the protection of the revenue and the proper administration of this Act, a proper officer appointed for the purposes of this subsection or an officer authorized by such a proper officer may— (a)without previous notice, at any time enter any office, business premises, store, shop, structure or enclosed area for the reception of goods, for the purpose of making such search, examination and enquiry as he considers necessary, and may seal, mark or otherwise secure any package there found, and may take possession of any document, record or other thing for as long as may be necessary for the purpose of any examination, investiga-tion, trial or inquiry; (b)while he is on such premises or at any other time, require from any person the production then and there, or at a time and place to be fixed by the officer, of any book, document, record, thing or printout or information stored in any information retrieval system which is required under the provisions of this Act to be kept or exhibited, or which is or has been on such premises or in the possession or custody or under the control of any such person or his employee; and (c)at any time and at any place require from any person who has the possession, custody or control of any such book, record, printout, document or thing as is mentioned in paragraph (b), the production thereof then and there, or at a time and place to be fixed by the officer; and (d) examine and make extracts from and copies of such books, records, printout or documents as are mentioned in paragraph (b) and may require from any person an explanation of any entry therein and may seize such books, records, printout, documents or things as in his opinion may afford evidence of an offence under this Act” In the Customs and Excise Act, there is mention of, “and may take possession of any document, record or other thing for as long as may be necessary for the purpose of any examination, investigation, trial or inquiry”. Could it be said that the use of other thing extends to the taking of computers? I think not, particularly because in paragraph (b) thereof, there is mention of, “ require from any person the production then and there, or at a time and place to be fixed by the officer, of any book, document, record, thing or printout or information stored in any information retrieval system which is required under the provisions of this Act to be kept or exhibited, or which is or has been on such premises or in the possession or custody or under the control of any such person or his employee.” HH 832-22 HC 7367/22 To my mind, the “other thing” should be construed in the context of the ejusdem generis rule. E. A Driedger in Construction of Statutes, second Edition p116 puts it thus; “Where general words are found, following an enumeration of persons or things all susceptible of being regarded as specimens of a single genus or category, but not exhaustive thereof, their construction should be restricted to things of that class or category unless it is reasonably clear from the context or the general purview of the Act that Parliament intended that they should be given a broader signification” The case of Quazi v Quazi [1980] ac 744 at 807 -8 in which LORD DIPLOCK clearly laid out the rule is instructive. He said, “The presumption then is that the draftsman’s mind was directed only to the genus indicated by the specific words and that he did not, by his addition of the word “other” to the list, intend to stray beyond its boundaries, but merely to bring within the ambit of the enacting words those species which complete the genus but have been omitted from the preceding list either inadvertently or in the interests of brevity.” I am convinced that my interpretation is correct because in paragraph (b) there is mention of thing or printout or information stored in any information retrieval system. It is just printouts or information from computers which the respondent can access and not the computers or information retrieval systems. If it was intended to include computers and information retrieval systems, then the draftsman would have said so. This should mean that what the respondent is authorized to seize or take are documents in the genus of books, documents, records, or printouts or information stored in any information retrieval system This position was settled in the case of PIL Pvt Ltd v ZIMRA & Anor HH 213/17 wherein it was held that: “Generally, in terms of s 61 of the Act, the Commissioner is authorised to seize documents including computer printouts for further examination, investigation, trial or enquiry. The section does not authorize seizure of computers or other information retrieval systems.” Even though this case was dealing with the Value Added Tax Act, it is my considered opinion that the same position holds for the rest of the Acts which I have discussed above. The taking of the laptops was therefore an illegal act as it was not authorized in terms of the law. It is however a different story in relation to the documents and files as the law spelt out above authorizes the respondent, through its officers to take such in the course of an investigation. This court cannot interdict a lawful act. ( See Mayor Logistics v Zimra CCZ 7/13. Had the applicant applied for a provisional order, I would have proceeded in terms of r 60 (9) of the High Court Rules 2021, to grant a provisional order. In this case however, the applicant’s draft order shows that what is sought is a spoliation order which is final in nature. The mandament HH 832-22 HC 7367/22 van spolie is a restitutory interdict that accrues to a possessor where another has deprived him of possession on the pretext that the later was entitled to do so, or where the possessor has otherwise been deprived of possession unlawfully. I am satisfied that the applicant has shown that it was deprived of its laptops unlawfully. The same cannot be said however of the documents and files. Consequently this application partly succeeds and I order as follows: IT IS ORDERED THAT: 1. The respondent shall return the five laptops it unlawfully seized from the applicant’s premises on 28 October 2022, within 24 hours of this order. 2. Each party to bear its own costs. Scanlen & Holderness, applicant’s legal practitioners