Leaholm Enterprises (Pvt) Ltd v Zimbabwe Revenue Authority

On or about 15 July 2011, the applicant was awarded a tender to purchase 400 tonnes of monoblock wheels by the National Railways of Zimbabwe. The applicant purchased the wheels and sold them to a South African company called Hariot Exports (Pty) Limited. The applicant obtained an export licence from the Ministry of Industry and Commerce dated 20 July 2011 and a Release Order from the respondent dated 27 July 2011. Based on these documents, on 27 July 2011, the applicant successfully exported 32 tonnes of monoblock wheels. However, when the applicant sought to export 160 tonnes of the same monoblock wheels using the same documentation on or about 14 August 2011, the consignment was detained by the respondent at Beitbridge border post on instructions from the Minerals Marketing Corporation of Zimbabwe (MMCZ). The detention was based on the grounds that the applicant had not sought the requisite authority from MMCZ to export the consignment, as used railway wagon wheels constituted scrap metal falling within the definition of a mineral, and the consignment was a banned product requiring special exemption from the Ministry of Mines and Mining Development.

• Whether the interim relief sought was competent at law given that it sought to override statutory provisions of the Minerals Marketing Corporation of Zimbabwe Act and the Customs and Excise Act
• Whether the respondent's decision to detain the applicant's consignment was unreasonable and unfair in breach of section 3 of the Administrative Justice Act
• Whether used wagon monoblock wheels constituted minerals requiring MMCZ authorization for export
• Whether the applicant could rely on legitimate expectation based on the earlier clearance of 32 tonnes on 27 July 2011

The application was dismissed with costs.

It is not competent to seek a court order that overrides statutory provisions under the guise of a provisional order or certificate of urgency. Where goods are classified as minerals under the Minerals Marketing Corporation of Zimbabwe Act, they cannot be exported without proper authorization from MMCZ as required by section 42 of the Act, regardless of other export documentation obtained. The respondent, as the enforcer of export and import controls under the Customs and Excise Act, cannot be compelled to allow the exportation of banned or restricted goods. No legitimate expectation can arise from an ultra vires or erroneous relaxation of a relevant statute by the body responsible for enforcing it, and it would be null and void ab initio for a revenue authority to bind itself to accept as valid a clearance based upon an error of law.

The court observed that irreparable harm would be suffered by the fiscus if the application were granted, and such harm had already been suffered in respect of the first erroneous clearance of four trucks on 27 July 2011. The court noted that the applicant appeared to be relying on the earlier clearance to imply that it legitimately expected the current consignment to be cleared, but found that the facts revealed unfairness to the fiscus rather than to the applicant. The court also noted that it was unnecessary to consider the other two points in limine raised by the respondent given the finding on the first point.

This case is significant in establishing that courts will not grant provisional orders that override statutory provisions, particularly in matters relating to customs and excise control and mineral exports. It reinforces the principle that administrative bodies responsible for enforcing export and import controls cannot be compelled by courts to act contrary to statutory requirements. The case also establishes that no legitimate expectation can arise from an ultra vires or erroneous administrative act, and that an error of law by a revenue authority does not create a binding precedent for future similar transactions. This protects the fiscus from being bound by administrative errors and ensures compliance with statutory export control regimes.