DENTON v DIRECTOR OF CUSTOMS & EXCISE 1989 (3) ZLR 41 (H)

Flynote

Agency — knowledge acquired by an agent — when can be imputed to principal — legal practitioners receiving information important to client — whether D client can be said to have knowledge thereof.

Legal practitioners — duties to clients — duty to communicate information received which is of importance to client.

Revenue and public finance — Customs and Excise Act [Chapter 177] — s 178 — prescription of actions — when prescription starts to run knowledge of cause of action — summons against Director in respect of "anything done under the Act" — whether applies to seizure of vehicle without specific authority from Act.

Headnote

Section 178 of the Customs and Excise Act [Chapter 177] provides that any action against the Director of Customs and Excise "for anything done under [the] Act or any other law relating to customs and excise" must be brought within three months after the cause thereof arose.

The Director of Customs and Excise had seized a car belonging to the plaintiff and held it "pending investigations". The Act provided no specific authority for the Director to seize goods for this purpose and it was apparent, from a letter written by the Director to the plaintiff's legal practitioners, that the Director was, by holding the vehicle, hoping to coerce the plaintiff into coming from South Africa to Zimbabwe in order to interview him in connection with alleged irregularities in relation tothe clearance of other goods into Zimbabwe.

The letter from the Director was received by the plaintiff's legal practitioners on 5 November 1988, but summons was not issued until 10 February 1989. The Director entered a special plea that by virtue of s 178 of the Act the plaintiff's action was prescribed. The plaintiff argued that, since the Director was not acting in terms of the Act in holding his car, he was not doing "anything ...under [the] Act" and that s 178 did not apply. He argued that in any event the action had been brought timeously.

Held, that assuming that the Director was in technical breach of the Act and had no lawful power to hold the plaintiff's vehicle, this did not mean that his action did not constitute "anything done by him under [the] Act". The fact that he may be acting unlawfully did not jettison the provisions of the section, since the Director's intention was to prosecute the aims and objects of the Act. Indeed, if the Director's actions had been lawful, no cause of action would arise at all.

Held, further, that under s 15 of the Prescription Act 1975 prescription begins to run as soon as a debt is due, which is when the creditor becomes aware of the identity of the debtor and of the facts from which the debt arises. The word "debt" here meant the same thing as "cause of action" in s 178(4) of the Customs and Excise Act.

Held, further, that for the special plea to succeed, the Director had to show that at a date more than three months before the institution of the action the plaintiff was possessed of knowledge of every fact which he needed to prove in order to sustain a claim or cause of action. In this case, the plaintiff had to prove (a) detention of his vehicle and (b) the unlawfulness of the detention. The plaintiff was aware of the detention early in October and his legal practitioners received a letter from the Director on 5 November in which the unlawful nature of the detention became apparent.

Held, further, in regard to the plaintiff's knowledge of the unlawfulness of the detention, that the plaintiff's legal practitioners were his agents in the matter of receiving and furnishing information. Knowledge acquired by an agent can be imputed to the principal where the knowledge was acquired in the course of the agent's employment and there was a duty to communicate the information. The existence of the duty will depend on the scope of the agent's authority and the importance or materiality of such knowledge to his principal. In the case of legal practitioners, the agent's duty is to act in the best interests of his clients at all times; and in this case, the information was important and the necessity to act promptly was vital. Their knowledge could therefore be imputed to him, and accordingly prescription commenced to run on 5 November, more than three months before summons was issued.