The Chairman of the Board on Tariffs and Trade v Volkswagen of South Africa (Pty) Ltd

VW was a South African manufacturer and exporter of motor vehicles subject to excise duty but entitled to rebates under the Export Incentive Scheme for the Motor Industry (Phase VI). VW could claim rebates up to a ceiling based on foreign currency earnings from exports. Note 5(vi)(a)(ii) to rebate item 609.17 of Schedule 6 to the Customs and Excise Act 91 of 1964 allowed manufacturers to cede excess foreign currency earnings to other warehouses, subject to a recommendation by the Board on Tariffs and Trade and a certificate from the Director-General: Trade and Industry. This note was repealed on 1 September 1995. Prior to repeal, VW had applied for and obtained rebates and cession certificates. However, there was a dispute with the Commissioner of Customs and Excise about whether all royalties and licence fees should be included in calculating foreign currency usage. VW initially followed the Commissioner's directive to include all royalties, which reduced its foreign currency earnings available for cession. On 12 June 1996, after the repeal, the Commissioner conceded VW's position. On 3 April 1997, the Commissioner granted VW permission to cede excess foreign currency earnings retrospectively to May 1991. VW then approached the Board on 15 April 1997 for a recommendation to enable the cession, but the Board refused on 30 July 1997, stating it could not exercise powers under legislation no longer applicable. VW launched review proceedings in the Transvaal Provincial Division.

• Whether the repeal of note 5(vi)(a)(ii) to rebate item 609.17 precluded the Board on Tariffs and Trade from making a recommendation to the Director-General in respect of applications relating to pre-repeal periods
• Whether VW had an 'accrued' or 'acquired' right within the meaning of section 12(2)(c) of the Interpretation Act 33 of 1957 to approach the Board for a recommendation after the repeal
• The interpretation and application of section 12(2)(c) of the Interpretation Act 33 of 1957 in the context of repealed legislation
• Whether VW's right to cede foreign currency earnings survived the repeal of the enabling provision

The appeal was dismissed by majority decision (3-2). The order of Van Dijkhorst J setting aside the Board's decision was upheld. VW did not insist on costs on appeal.

Where legislation conferring a right to cede foreign currency earnings subject to administrative recommendations is repealed, but a party had prior to repeal fulfilled all factual and legal requirements to approach the relevant statutory body for such recommendation and was prevented from doing so only by erroneous administrative directives, the ancillary right to approach that body for a recommendation in respect of pre-repeal entitlements accrues prior to repeal and survives the repeal by virtue of section 12(2)(c) of the Interpretation Act 33 of 1957. An accrued right arises when all conditions for its existence in relation to the particular beneficiary are met, even if formal administrative steps remain to be completed. The repeal of enabling legislation does not affect rights that had accrued under the repealed law, and pre-repeal business must be dealt with as if no repeal had occurred unless contrary legislative intention appears.

Nienaber JA observed that there was much to be said for the approach that once VW had fulfilled the factual preconditions (establishing a foreign currency earnings excess) and applied to the Board, it had 'acquired' for purposes of s 12(2)(c) a right, albeit conditional, which had to be considered on its merits. This conditional right survived repeal even though final approval remained subject to Board policy considerations and Director-General certification. The judgment noted that not having sued the Commissioner for a declarator before repeal would have been 'to impose a counsel of perfection' given that repeal supervened during ongoing discussions. Harms JA in dissent observed that the Commissioner's views on interpretation were legally irrelevant as he lacked competence over the calculation of foreign currency usage, which was the responsibility of the Director-General. The dissent also noted that conditional rights ought to be disqualified from being regarded as acquired rights, and criticized the majority's characterization of the facts as 'unique' or 'unparalleled'. Harms JA further observed that the right to approach the Board amounts to a right to an investigation leading to a recommendation, which under Gunn v Barclays Bank is preserved only as ancillary to substantive rights under s 12(2)(e), not as an independent right under s 12(2)(c). The dissent also commented that if the result appears inequitable, it is because only acquired or accrued rights are protected upon repeal, not lesser expectations and hopes.

This case is significant for its interpretation of section 12(2)(c) of the Interpretation Act 33 of 1957 regarding the preservation of rights upon repeal of legislation. It establishes that in unique circumstances where a party has fulfilled all factual and legal requirements to approach a statutory body for a recommendation prior to repeal, but was constrained by administrative directives from doing so, the right to approach that body may be considered to have accrued before repeal and survives the repeal. The case illustrates the principle that repeal legislation is generally directed at future rather than past matters, and pre-repeal business must be dealt with as if no repeal had occurred unless contrary legislative intention appears. The case also demonstrates the distinction between 'accrued' and 'acquired' rights, with accrued rights arising when all conditions for existence are met, while acquired rights require additional individual action by the beneficiary. The dissent provides important analysis of the limits of s 12(2)(c), emphasizing that conditional rights and mere expectations do not constitute acquired or accrued rights, and that the right to approach a body for investigation or recommendation falls under s 12(2)(e) as ancillary to substantive rights rather than being an independent right under s 12(2)(c).