Merystake Investments (Private) Limited v Zimbabwe Revenue Authority

In September 2020, the plaintiff transported a fuel consignment for Wellsford International destined for Zambia. Before crossing into Zambia, the trucks made an about-turn and re-entered Zimbabwe still loaded with fuel without following prescribed customs procedures. ZIMRA seized two Freightliner Columbia truck horses and two tanker trailers for smuggling under Notices of Seizure on 19 September 2020. The drivers were subsequently tried and convicted of smuggling. The plaintiff made representations to ZIMRA's Regional Manager, who on 12 October 2020 set out release terms requiring payment of ZWL$72,000 fine. The plaintiff paid the fine on 12 October 2020. However, on 28 October 2020, the Commissioner of Customs and Excise overturned the Regional Manager's decision and forfeited the trucks and trailers. This forfeiture was communicated to the plaintiff by letter dated 6 November 2020, received on 9 November 2020. The plaintiff obtained an interim interdict on 13 January 2021 and issued summons on 12 April 2021 challenging the forfeiture.

• Whether the plaintiff's cause of action arose from seizure or from unlawful forfeiture
• Whether the plaintiff's claim had prescribed in terms of section 193(12) of the Customs and Excise Act (requiring proceedings within 3 months of seizure) or section 196(2) (requiring proceedings within 8 months of the cause of action arising)
• Whether the forfeiture of the plaintiff's trucks and trailers by ZIMRA was unlawful for failure to comply with principles of natural justice and constitutional requirements
• Whether ZIMRA was properly cited as a party to the proceedings

1. The defendant's point in limine on prescription was dismissed. 2. The forfeiture of the plaintiff's two truck horses (Freightliner Columbia chassis numbers IFUJAB033LK81155 and IFUJA6A33LK84802) and two tanker trailers (chassis numbers 3010 and TT409512) was declared unlawful. 3. The defendant was directed to release the vehicles and trailers to the plaintiff within 48 hours of service of the order. 4. The defendant was ordered to pay costs of suit on the ordinary scale.

1. A cause of action arises when the last of the facts required to prove the claim becomes known to the plaintiff - when all material facts converge to allow enforcement of rights. 2. Where an administrative authority has agreed to release terms for seized goods and those terms have been complied with, a subsequent decision to forfeit creates a fresh cause of action distinct from the original seizure. 3. Section 196(2) of the Customs and Excise Act, providing for an 8-month prescription period, applies to civil proceedings challenging administrative conduct such as forfeiture, whereas section 193(12) providing for a 3-month period applies specifically to recovery of seized items that have not been released. 4. Administrative decisions that adversely affect a person's rights, interests or legitimate expectations must comply with section 68 of the Constitution and section 3 of the Administrative Justice Act, requiring that the affected person be given adequate notice and a reasonable opportunity to make representations before the decision is made. 5. Failure to afford a hearing before making a forfeiture decision renders that decision unlawful and in breach of the audi alteram partem rule, the Constitution, and the Administrative Justice Act. 6. ZIMRA is the proper party to cite in proceedings challenging decisions of the Commissioner General, who acts as an employee of ZIMRA when performing statutory functions.

The court observed that the defendant had created a reasonable and legitimate expectation in the plaintiff's mind that there would be no future litigation after the release terms were set and complied with. The court noted it was not conceivable that after meeting the release terms, there would be a complete about-turn forfeiting the seized goods. The court also made observations on costs, stating that a party should not be penalized with punitive costs for holding a contrary legal position in good faith, as opposing arguments on the law enhance jurisprudence. The court cited with approval the principle from Netone Cellular (Pvt) Ltd v Reward Kangai that good faith litigation should not attract attorney-client costs even where unsuccessful.

This case is significant in Zimbabwean administrative law jurisprudence as it reinforces the constitutional right to procedurally fair administrative action enshrined in section 68 of the Constitution and the Administrative Justice Act. It establishes that administrative authorities like ZIMRA must afford persons whose rights or legitimate expectations are adversely affected an opportunity to be heard before making decisions, even where the administrative authority is exercising statutory powers. The case also clarifies the interaction between sections 193(12) and 196(2) of the Customs and Excise Act regarding prescription periods, holding that where the cause of action relates to unlawful administrative conduct (forfeiture) rather than mere recovery of seized goods, the longer 8-month prescription period under section 196(2) applies. The judgment emphasizes that the cause of action arises when all material facts giving rise to the claim are complete, not necessarily at the first adverse act (seizure). It also confirms that ZIMRA, as the statutory body employing the Commissioner General, is the proper party to cite in such proceedings.