Shantilal Brothers v Comptroller of Customers of Fiji [1977] FJSC 107; Action 148 of 1975 (29 September 1977)

IN THE SUPREME COURT OF FIJI
CIVIL JURISDICTION

ACTION NO.148 OF 1975

BETWEEN

SHANTILAL BROTHERS
Plaintiff

AND

THE COMPTROLLER OF CUSTOMS OF FIJI and
THE ATTORNEY GENERAL
Defendants

JUDGMENT

This action was commenced by writ dated and filed the 13th May, 1975. The action was brought against the Comptroller of Customs and not against the Attorney General as it should have been pursuant to section 12(2) of the Crown Proceedings Ordinance. However, by Order dated the 30th August, 1977 the Attorney General was added as a defendant.

The claim by the plaintiff, a firm of importers and exporters, is for payment of the sum of $3091.81 which the plaintiff claims is payable as drawback under the provisions of section 125 of the Customs Ordinance. This section provides for repayment of Customs duty paid by way of drawback on imported goods which are subsequently exported subject to compliance with the conditions specified in the section.

The sum of $3091.81 is alleged to be the total of three Applications for Payment of Drawback made on a Customs form numbered C.37. All of which were lodged with the Customs within six months from the dates of the entries for shipment.

The plaintiff alleges that three C.37 forms were lodged with the Customs for the amounts and on the dates as under:

1. $108.12 on the 14th February 1972 and subsequently lodged again on the 20^th October, 1972.

2. $1115.72 on the 1st March, 1972.

3. $1868.05 on the 29th March, 1972.

These three sums total $3091.89 and not the sum of $3091.81 claimed.

At the hearing counsel for the defence admitted the claim for the sum of $108.12 and I am now only concerned with the claims for the other two sums which the defence alleges were not received by the Customs Department.

Under section 125(1) (d) of the Customs Ordinance drawback may be payable if the claim is established at the time of the re-export and payment is demanded within one month from the date of the entry for shipment. Section 125(1) (d) was amended by the Customs (Amendment) Act, 1973 which came into operation on 1st January, 1974. Prior to the amendment the period within which a claim had to be made was six months. Six months is the period applicable in the instant case.

At the commencement of the hearing counsel for the defendants argued a preliminary issue raised in the Statement of Defence namely whether the plaintiff's claim was barred by the provisions of the Public Officers Protection Ordinance.

This action was commenced a little over three years after the cause of action arose and if the Public Officers Protection Ordinance has application the plaintiff is considerably out of time. I ruled that the Ordinance had no application to a claim in the nature of the plaintiff's claim which is for payment of a sum payable under the provisions of the Customs Ordinance. I stated at the time that I would deal more fully with the submissions in my judgment.

In support of his submission Mr. Rabuka referred to three authorities:

C.A. No.6 of 1975 Shiu Ram v. Attorney General

The Attorney General for Kenya v. Hater (1958) E.A. Reports 393 and

Mohammed v. Attorney General and Another (1971) E.A. Court of Appeal Reports 241.

In all these cases the claims were founded in tort and were for damages for negligence.

The plaintiff claim is to recover a sum of money alleged to be recoverable under section 125 of the Customs Ordinance. It is not an action arising from tort.

Under section 4(1) of the Limitation Act 1971 an action brought to recover any sum recoverable by virtue any Act, other than a penalty or forfeiture, can be brought within six years from the date on which the cause of action arises.

Section 27 of the Limitation Act applies the Act to proceedings by or against the Crown save where in that Act or any other Act otherwise provided.

Section 25 of the Crown Proceedings Ordinance provides that nothing in that Ordinance shall prejudice the right of the Crown to rely upon the law relating to limitation of time for bringing proceedings against public authorities. If the Public Officers Protection Ordinance has application in the instant case it is clear the plaintiffs claim would be barred.

In my view however, the Public Officers Protection Ordinance is concerned with actions arising in tort and that is clear from the wording of section 2 of the Ordinance. It has no application to a claim for payment of a sum payable under section 125 of the Custom Ordinance. I hold that section 4 of the Limitation Act applies and the plaintiffs are not barred from prosecuting their claim.

To succeed in this present action on the remaining two claims the plaintiffs must establish that they established their claim for drawback and demanded payment within six months from the date of entry for shipment of the imported goods.

By consent a bundle containing 40 documents was put in evidence.

Document No.18 is a copy C.37 containing a list of 12 entries showing a total of $1115.72 claimed as drawback. Documents 19 to 30 inclusive, include the relevant Export Drawback forms C.36. Each C.36 has an entry or warrant number which corresponds with the 12 numbers listed on the C.37 exhibit 18. Document No.31 is a copy C.37 containing a list of seven entries showing a total of $1868.05. Documents 32 to 40 include the relevant Export Drawback Forms C.36 each stamped with a warrant number which corresponds with the seven numbers listed in exhibit 31.

Attached to each of the C.36 documents is a landing certificate and copies of bills of lading.

When exhibits 1 to 40 were put in by consent by plaintiffs' counsel, counsel for the defendants did not advise the Court that there was any objection to any of the documents being admitted as evidence. During the evidence of Mr. Hargovind, Mr. Suttil objected to a landing certificate, exhibit 19(b) purportedly signed by the Comptroller of Customs at Apia Western Samoa, being referred to. The objection was upheld as it transpired that the arrangement between counsel was that documents were tendered subject to the right to object to admissibility. This reservation should have been made clear to the Court before the documents were put in by consent or, preferably, the documents which were not admitted should have been excluded from the documents put in by consent and formally proved. Since the landing certificates are documents which the Customs Department require an exporter to obtain before approving an application for drawback payment to establish that the goods were in fact exported the objection to production in Court of a certificate unless formally proved is somewhat difficult to understand. I have therefore ignored the landing certificates.

It is necessary to detail the procedure which is followed to establish a claim for drawback. There was no dispute as to what the procedure was in 1972.

An exporter seeking to re-export imported goods fills in a C.36 which lists the goods to be exported and the exporter signs a declaration on the form. Notice is given to the Customs stating the intention to export goods under drawback. This notice is on the reverse side of the C.36 form. The Collector nominates a Customs officer and the shed to which the goods are to be taken. That officer is approached and he gives a date and time when he will physically examine the goods. On the appointed day and time the goods with the C.36 forms are taken to this officer who takes the C.36 forms and checks them against the import documents relating to the goods. The officer then has the cases or packages opened and he physically checks the goods. After this check the goods are repacked in the officer's presence and the cases or packages sealed.

The checking officer then signs on the reverse side of the C.36 which indicates he has examined the goods with the original invoices and found them correct and that the origin, value, rates of duty and computations detailed on the C.36 are correct.

The checking officer -also endorses the bill of lading and the goods with the bill of lading are then taken to the shipping agent's clerk and left with him. Once the goods have been delivered to the shipping agent's clerk the exporter has no further control over the goods.

The checking officer retains the C.36 forms and returns them to the Long Room.

When the drawback entry has been approved by the Customs, and after the ship on which the goods are exported has sailed, a copy of the C.36 is put in the exporter's box in the Long Room. The exporter then pays certain Customs charges.

The C.36 is entered by the Customs in a C.36 Drawback Register and given a warrant number. Particulars of the warrant number are stamped on the C.36 forms with a date and indicating that export payment of fees has been received. A copy of the C.36 duly stamped is then placed in the exporter's box or on occasions handed direct to the exporter or his clerk.

The C.36 Drawback Register was put in evidence by the defendants (exhibit 42). All the relevant C.36 Export Drawback Applications which make up the claims by the plaintiff for the sum of $1868.05 and $1115.72 appear in the Register. In addition the plaintiff put in evidence his receipted copies of all the relevant C.36 forms with copies of documents relating to the applications.

Mr. Suttil in his closing address contended that the plaintiff had failed to establish that the goods said to have been exported had in fact been exported. As to this contention I would first state that the defence case was that the Customs had not received claims for the two sums claimed and the Statement of Defence made no mention that the plaintiff had not exported the goods.

Apart from the evidence of the plaintiff's witnesses that the goods were exported, which I accept, the documentary evidence satisfies me that the goods were in fact shipped. With copies of the relevant C.36 forms are copies of bills of lading stamped by the ship's agents relating to the goods shipped. The Customs procedure which I have referred to ensures that a copy of the C.36 is not given to the exporter until the Customs are satisfied that the application to export under drawback is in order and that the ship has sailed with the goods exported.

I hold on the evidence before me that the plaintiff has established that the relevant goods were all exported under drawback and the relevant applications on the C.36 forms were approved by Customs and were in order.

There remains the main issue as to whether the plaintiff demanded payment of the drawback within the period of six months from the date of entry for shipment. This issue necessitates consideration of the procedure to be followed after the exporter receives his receipted copy of the C.36 forms.

The next step is for the exporter to make application for payment of drawback on a C.37 form provided by the Customs. The C.37 form has provision for details of 15 exports under drawback. On exhibit 18 there are 12 entries showing the warrant numbers of 12 C.36 forms with individual sums totalling $61115.72. On exhibit 31 there are seven entries with sums totalling $1868.05.

The Customs require C.37 forms in triplicate. The exporter fills in these C.37 forms, completes a declaration endorsed on the form and places the three copies in a box in the Long Room marked "Refunds". The contents of this box which has a slot like a letter box are not accessible to the public.

It was admitted that Customs do not acknowledge receipt of the C.37 forms. The plaintiff after his experience in the instant case sent a C.37 by registered post seeking acknowledgement of receipt by the Customs. To his letter he received a curt reminder by letter dated 24th February, 1975 (exhibit 15) to adhere to the procedure laid down by the Customs.

The second paragraph of exhibit 15 states:

"I would like to inform you that in future please lodge your C37's and applications for refund in the normal manner that is placing in the relevant box in the Long Room. This obviates registering your letters and further delays. Please also be advised that under no circumstances will Customs give you any special dispensation that is not given to others in confirming receipt of each C37 lodged and giving the fourth copy a number."

The extract from exhibit 15 quoted above indicates that no acknowledgement is made by Customs of receipt of the C.37 forms and an exporter is put in a very difficult position in establishing that he duly made application for payment in time particularly in a case where, as in the instant case, the Customs alleges the two C.37 forms were never received from the plaintiff.

Having lodged the C.37 the exporter then waits for payment. The exporter can sometimes wait a long time for payment. Exhibit 43, the C.37 Register, indicates that an application No.96 made by the plaintiff for payment of drawback on the 7th April, 1972 was not approved for payment until 12th February, 1974. 1 will, be referring, later ` in this judgment to this application No. 96.

On receipt of the C.37 the Customs enters the application in the C.37 Register and it is given a serial number. If the application is approved and payment is to be made particulars are entered in the Register and the exporter receives payment. The C.37 serial number is then entered in a column in the C.36 Register against the relevant warrant number together with particulars of the amount paid and the date.

The C.36 Register is periodically checked and, at the time in question, if the C.37 was not received within six months a red ink entry against the relevant warrant number is made "No claim T/Barred". Or if the C.37 is disallowed or rejected that fact is recorded in red ink. The entries in red are not dated.

In the instant case the managing partner of the plaintiff firm, Mr. Hargovind testified that in respect of each application for drawback four copies of the C.37 were prepared. Three copies were lodged with the Customs and one copy was filed.

He produced the file copies. He also testified the C.37 forms were lodged in time.

The plaintiff also called J. B. Masters, a Customs clerk agent employed by the firm in 1972 who had prepared the applications for drawback and payments. He testified that he lodged the relevant C.37 forms on the dates when he prepared them. Exhibit 18 has a typed date 1st March, 1972 and exhibit 31 shows the date 29th March, 1972. These two dates are well within the period of six months allowed by law for demanding payment of drawback.

These two witnesses were not challenged on this evidence in cross-examination. To rebut the evidence that the relevant C.37 forms were lodged in time by the plaintiff the defence called J. Vijay Singh the Customs officer whose duty it was to maintain the C.36 and C.37 Registers at the relevant time. He produced the two Registers. He testified that he did not receive the relevant C.37 applications from the plaintiff. Under cross-examination he said he had not received the C.37 forms because they were not entered in his C.37 Register and that he had entered all C.37 forms received by the Customs.

I accept the C.37 Register as evidence of the C.37 forms received by the Customs but I do not accept it as evidence that the C.37 forms were not received because they are not entered in the Register. Nor do I accept the evidence of J. Vijay Singh that he did not receive the C.37 forms. He was not an impressive witness and was unnecessarily on the defensive leaving me with the impression that he knew more than he had told the Court.

Due to the procedure adopted by the Customs the plaintiff's only means of establishing that the C.37 applications were made and made in time was to call witnesses to testify to those facts on oath and to produce an unsigned copy of the C.37 forms lodged. He called witnesses to establish these facts and their testimony was not seriously challenged.

The system followed by the Customs leaves the Customs vulnerable to false claims. I have therefore closely scrutinized the evidence to satisfy myself whether I can accept the plaintiff's evidence.

The C.36 Register indicates that between 15th January 1972 and 10th May, 1972 which period covers the relevant claims the only claims which are recorded as "No claim T/Barred" are claims by the plaintiff. In the period there were over 750 applications for drawback. 25 claims by the plaintiff are recorded as being "No claim T/Barred". On the other hand 36 claims by the plaintiff were allowed in this period.

Mr. Shankar Ali, the Acting Collector of Customs, in examination in chief stated that the plaintiff had a Customs case in 1972 and the Collector of Customs compounded the offences and that might have been the reason why the only claims time barred in the period were the plaintiff's claims. He admitted that the Customs did not acknowledge receipt of the C.37 forms. He did not consider the forms would be misplaced but agreed it was possible. This witness's evidence indicates that the only exporter whose claims were time barred in the period in question were those of the plaintiff firm who some time in 1972 were in trouble with the Customs. The nature of the trouble was not fully disclosed. Entry No. 61 in the C.37 Register indicates that on 3.3.72 the plaintiff filed a C.37 form. The Register indicates that the application was not processed. There is however a pencilled notation "investigation branch".

Entry 96 in the C.37 Register, which I have already referred to, where payment to the plaintiff was delayed for close on two years indicates that the plaintiff's claims were being subjected to close scrutiny by the Customs.

The plaintiff did no retail business and the number of C.37 claims they made in the period which are recorded indicates a large part of their business is export business. In the course of that business where they have established the export it seems unusual that they should so negligently conduct their business as to fail within six months to apply for refund of Customs duty to which they were legally entitled if their applications were in order.

The C.36 Register indicates that on the 18th March, 1972 the plaintiff made seven applications on that day for export drawback. The warrants are numbered 4113 to 4119 inclusive.

Entries 4113 and 4114 indicate that C.37 forms in respect of these entries in the C.36 Register the column showing the amount of drawback is left blank. The remaining entries 4115 to 4119 together with entries 4347 and 4348 made on the 23rd March, 1972 and which total $1868.05, one of the sums claimed in this action, are marked in red ink indicating no claims and that they were time barred.

It is strange that of seven alleged claims made on the same day demand for payment of the first two are acknowledged to have been made but not the remainder. I find it difficult to credit that the plaintiff or their staff would have been so negligent as to make two claims for payment which were within time and to fail to claim drawback for the other five exports.

In respect of these entries no amounts are shown in the amount column in the C.36 Register, which is in keeping with the practice as disclosed by the Register except as to entries 4113 and 4114 where the amounts should have been shown.

On the 10th April, 1972 the plaintiff made a further seven applications for export drawback-warrant numbers 4925 to 4931 inclusive. Of these six entries were approved but 4931 is shown as "No claim T/Barred". This is also puzzling but as 4931 forms no part of the plaintiff's claim I do not have to consider this matter further.

The claim for $1115.72 in paragraph 2 of the Statement of Claim lists ten warrants. No.2004 is dated 12/2/72, 2071 14/2/72, 2420 18/2/72 and the remainder are all dated 23/2/72. Excluding numbers 2604 and 2605 the warrant numbers range from 2600 to 2608.

All the entries in red ink against these warrant numbers in the C.36 Register have the amounts of drawback entered which appears unusual. The Acting Collector of Customs Mr. Ali stated he made the red ink entries in 1972 when he was drawback officer and the entries, which are not dated, would have been made after six months had elapsed since the entry for export. The entries in his writing are 2004, 2071, 2420 and 2600 to 2608 inclusive. He gave no explanation as to where and when he obtained the particulars of the amounts he entered in red ink and why contrary to the practice then adopted they were entered at all. By contrast Deo Prasad Sharma, a Customs officer made the red ink entries "No claim T/Barred" against entries 4115 to 4119 and 4347 and 4348. Amounts of the claims were not entered.

On checking the statement of Claim it is obvious that paragraph 2 which purports to list ten warrants totalling $1115.72 contains several errors. The items do not total $1115.72 but $945.52. Warrants 2604 and 2605 totalling $146.30 have been omitted. Warrant 2603 is shown as $65.50 when exhibit 18 shows $69.40 and 2608 shows $113.40 where exhibit 18 shows $133.40. When these errors and omissions are corrected the total is the sum of $1115.72 claimed.

More care should have been taken in preparing the Statement of Claim and while on the matter of the Statement of Claim the full text of six letters should not have been included.

Evidence should not be pleaded.

Mr Ali entered $60.25 against warrant No. 2606 where exhibit 18 shows the figure to be $94.80. His other entries tally with the figure in exhibit 18. The Court was not told the source from which Mr. Ali obtained the amounts he entered. If he made the entries at the expiration of the six months period they would have been made about the end of September, 1972. It was not until 15 March, 1974 (exhibit 7) that the plaintiff supplied a list of outstanding drawback claims totalling $13450.28 which included the three claims in this action. However, it was not until 31st July 1974 (Exhibit 8) that the plaintiff supplied a detailed list showing warrant numbers and a break up of the figures making up the amounts claimed.

The entries made by Mr. Ali appear to have been made at the one time. If in fact he made the entries after receipt of the plaintiff's letter exhibit 8 dated 31st July 1974 he did not tell the Court so. He led the Court to believe he made the entries shortly after the six months period expired which as stated would have been September, 1972.

The inference raised by the documentary evidence as disclosed by the C.36 Register is that the Customs did have details of the claim for $1115.72 in September, 1972 and these details could only at that time, on the evidence before me, have been obtained from the C.37 forms the plaintiff's witnesses said were filed in time of which exhibit 18 is the quadruplicate copy.

I am left with a suspicion that the Court has been told the whole story.

My suspicions are strengthened by an admission in the Statement of Defence. On the 25th August 1973 the plaintiff wrote to the Comptroller of Customs enquiring why drawback payments totalling $23,261.33 had not been paid (exhibit 3). To this letter the Comptroller advised that a number of outstanding claims were in the course of being paid. The plaintiff wrote again on 2nd January, 1974 and was advised by letter dated 17th January 1974 that outstanding drawbacks were being processed for payment. The correspondence indicates that the figure of $23,261.33 was not queried.

In paragraph 6 of the Statement of Claim the plaintiff referred to this sum of $23,261.33 and alleged that the three claims in this action were included in that sum.

The Statement of Defence admitted paragraph 6. This admission can only be taken to mean that the Customs records indicated outstanding claims by the plaintiff amounting to $23,261.35 which sum included the three sums now claimed. This leads me to the belief that the three claims were in fact received.

I accept the evidence given by the plaintiff's witnesses and believe the plaintiff did lodge C.37 forms with the Customs demanding payment of the sums of $1868.05 and $1115.72 within six months from the date of entry of the goods for shipment.

The word "may" used in section 125(1) of the Customs Ordinance has the force of "shall" if the conditions listed are complied with. I am satisfied the plaintiff complied with all the conditions and their actions subsequent to filing the C.37 forms are entirely consistent with their having made the relevant claims.

As the sum of $108.12 was admitted and I find as a fact that the claims for $1868.05 and $1115.72 were made and made in time the plaintiff succeeds.

There will be judgment for the plaintiff against the Attorney General in the sum of $3091.81 with costs.

(SGD) R. G. KERMODE
JUDGE

Suva,
29th September, 1977.