Lonrho Logistics (Private) Limited v Ram Petroleum (Private) Limited

The appellant (Lonrho Logistics) and respondent (Ram Petroleum) had a long-standing business relationship whereby the respondent supplied fuel to the appellant. On 1 November 2018, they entered into a sale agreement for 150,000 litres of diesel. On 2 November 2018, the appellant paid the full purchase price of $201,000 but did not immediately take delivery. On 28 November 2018, the respondent delivered 30,000 litres, leaving a balance of 120,000 litres. In January 2019, three significant events occurred: (1) Statutory Instrument 9 of 2019 was gazetted increasing customs duty, effective 13 January 2019; (2) the Petroleum (Petroleum Products Pricing) Regulations S.I 10 of 2019 were introduced; and (3) ZERA issued a directive requiring oil companies to declare fuel stocks as of midnight 12 January 2019 and pay the difference in duty on old stock. On 24 January 2019, the appellant demanded delivery of the balance of 120,000 litres. The respondent refused unless the appellant paid additional duty arising from the new regulations. The appellant sued for specific performance, seeking delivery of the outstanding diesel.

• Whether the consignment of diesel sold before the introduction of S.I 9 and S.I 10 of 2019 was subject to additional duty imposed by those statutory instruments
• Whether the statutory instruments had retrospective effect on a completed sale
• Whether section 230(1) of the Customs and Excise Act imposed liability on the appellant to pay additional duty
• Whether there were agreed timelines for delivery of fuel under the contract
• Whether the court a quo erred in granting positive relief to the respondent based solely on its plea without a counterclaim

The appeal was allowed with costs. The judgment of the court a quo was set aside and substituted with an order that: (i) Judgment is entered for the plaintiff (appellant) for the delivery by the defendant (respondent) of 120,000 litres of diesel within 7 days of the order; (ii) The defendant shall bear the costs of suit.

The binding legal principles established are: (1) In the absence of express provision to the contrary, statutes (including statutory instruments) should not be construed retrospectively and should be regarded as affecting future matters only, particularly where they would take away rights actually vested at the time of their promulgation (applying section 20(1) of the Interpretation Act and Curtis v Johannesburg Municipality 1906 T.S 308); (2) Section 230(1) of the Customs and Excise Act requires proof of actual payment of additional duty by the seller before the seller can recover such duty from the purchaser; the mere imposition of additional duty is insufficient; (3) Courts may not rewrite contracts for parties or read implied or tacit terms that conflict with express terms or the parties' conduct (applying Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S)); (4) A plea is a defensive mechanism (a shield) and cannot ground positive relief (a sword) in the absence of a counterclaim (applying Indium Investments (Pvt) Ltd v Kingshaven (Pvt) Ltd & Anor 2015 (2) ZLR 40 (S)).

The Court made non-binding observations regarding whether the Petroleum (Petroleum Pricing) Regulations, 2018 constitute "a law relating to customs and excise" within the meaning of the definition of "duty" in section 2 of the Customs and Excise Act. The Court noted that the regulations incorporate the component of duty in the pricing formula but merely ensure just prices of petroleum products and do not themselves levy a duty, whereas the Customs and Excise (Tariff) (Amendment) Notice is a law relating to customs and excise. However, as this issue was not canvassed with counsel in argument, the Court declined to engage with it further in resolving the appeal.

This case is significant in Zimbabwean jurisprudence for establishing important principles regarding: (1) the non-retrospective application of statutory instruments affecting contractual rights that vested before the legislation came into effect; (2) the requirements for section 230(1) of the Customs and Excise Act to be engaged, particularly the need for proof of actual payment of additional duty by the seller; (3) the impermissibility of courts reading non-existent terms into contracts; and (4) the fundamental principle that a plea is defensive in nature and cannot ground positive relief without a counterclaim. The case reinforces the sanctity of contract and protection of vested property rights against subsequent legislative changes.