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[2016] ZAGPJHC 410
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Mawenzi Management Services (Pty) Ltd and Others v The Commissioner for the South African Revenue Services (18562/2015) [2016] ZAGPJHC 410 (18 March 2016)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 18562/2015
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
18/303/2016
In
the matter between:
MAWENZI
MANAGEMENT SERVICES (PTY) LTD
FIRST APPLICANT
MZILIKAZI
GODFREY KHUMALO N.O
on
SECOND
APPLICANT
behalf
of
MAWELA FAMILY TRUST
MAKHOSAZANA
KHUMALO N.O
on
THIRD
APPLICANT
behalf
of
MAWELA FAMILY TRUST
And
THE
COMMISSIONER FOR THE SOUTH AFRICAN
RESPONDENT
REVENUE
SERVICES
JUDGMENT
WINDELL
J:
Introduction.
[1]
This is an application for an order to compel the respondent (SARS)
to produce certain documents requested in terms of Rule
35 (12).
[2]
SARS opposes the application on the basis that it did comply with the
rule 35(12) notice as it made available for inspection
all the
documents referred to in the answering affidavit. SARS also contends
that the remainder of the documents referred to in
the rule 35(12)
notice are not documents referred to in the answering affidavit and
that the applicants are therefore not entitled
to it.
[3]
SARS also contended that despite making documentation available to
the applicants for inspection more than six months ago the
applicants
have not made use of the opportunity to inspect these documents. It
is submitted that this application constitutes an
abuse of Rule 30 A
and was brought merely to delay and frustrate the winding –up
of Mawela Properties (Pty) Ltd (in liquidation)
(hereinafter
referred to as “Mawela Properties”).
Background.
[4]
The applicants launched an application ( “the main
application”) for the removal of the liquidator ( “Mr
van den Heever”) in the winding up of Mawela Properties on 22
May 2015. The applicants also move for an order to interdict
Mr van
den Heever and his co-liquidators from selling, alienating or
disposing of any assets of Mawela Properties pending the finalisation
of the main application.
[5]
SARS was joined as a respondent in the main application as it is a
creditor in the winding up of Mawela Properties.
[6]
The main application is opposed by the liquidators and SARS and SARS
has filed its answering affidavit in the main application.
The
legal position
[7]
Rule 35(12) of the Uniform Rules of Court governs the production of
documents referred to in a party’s affidavit. The
rule provides
that “
any
party to an action or proceeding may at any
time before the hearing give notice to any other party in whose
pleadings or affidavits
reference is made to any document, to produce
that document for inspection and to permit him to take a copy of it.”
[8]
It is trite that the rule is intended to cover the situation where an
averment flows from or is related to something contained
in a
document, and not to an averment based on an inference drawn from the
absence of any reference in any document
[1]
.
The inspection cannot be demanded of documents not referred to but
the existence of which can be inferred from an affidavit or
pleading.
A document which has not been referred to in an affidavit, but is
referred to in a document annexed to it, may fall within
the ambit of
the rule.
[2]
The documents
[9] In the Rule 35 (12)
notice the applicants requested more than 18 separate documents. SARS
has accepted that the applicants are
entitled in terms of Rule 35
(12) to the following documents:
i.
The final draft version of the liquidators
answering affidavit referred to in paragraph 7 of SARS answering
affidavit
( Request 3.2)
;
ii.
The letter to Mr. Van den Heever dated 18
February 2015 referred to in paragraph 107 of SARS answering
affidavit
(Request 17.2)
;
[10] The applicants
conceded during the hearing of the application that they are not
entitled to the documents ( if any), or email
correspondence that
accompanied the final draft version of SARS answering affidavit.
(Request 3.3)
They also conceded that no reference was made to
a document in paragraph 108 of the answering affidavit and that they
are therefore
not entitled to “
a copy of the instruction to
Mr van den Heever”
(Request 18.2)
[11] The remainder of the
requests which are refused relate to the following averments in SARS
answering affidavit:
i.
Documents relating to the SARS deponent’s
authority.( paragraphs 2-4 of the answering affidavit)
ii.
The information and documentation which
SARS holds regarding Mawela and other entities. ( paragraphs 5 of the
answering affidavit)
iii.
Documents relating to SARS claims.(
paragraphs 37.1,37.2, 37.3, 37.4, 37.5 37.6 of the answering
affidavit)
iv.
SARS further claim against Mawela
properties.( Paragraph 38 of the answering affidavit)
Request 1: SARS
deponent’s authority
[12] In paragraphs 2,3
and 4 of SARS answering affidavit the deponent stated that she is a
SARS official as envisaged in section
6 of the Tax Administration Act
28 of 2011 (“the Act”). She further states that she is
duly authorized in terms of
sections 11(1) and (2) of the Act to
depose to the affidavit. She also states that she is exercising her
duties under the control,
direction and supervision of SARS as
contemplated in sections 3 to 6 of the Act.
[13] The applicants
requested SARS to produce a copy of the delegation by the
Commissioner.
[14] In the answering
affidavit no reference was made to a written delegation by the
Commissioner. The applicant relies on the deduction
that there must
be a written delegation because the Act makes provision for it.
[15]
In
Penta
Communication Services Pty Ltd v King and Another
[3]
the question arose whether the production of documents can be
compelled when they are alleged not to be functional to the
compelling
party's case and whether indirect allusions to documents
may trigger the provisions of the Rule 35 (12).
[16]
The respondent in
Penta
stated the following in its founding affidavit in the main
application: “
The
aforesaid funds were then systematically transferred to another Absa
account ( No [....])……”
The
applicant then requested any and all documents relating to the
specified bank account. It was argued on behalf of the
applicant that where upon analysis of a statement it can reasonably
be inferred that a document/s must exist relating to that fact
or
allegation, then the opposing party is entitled to it.
[4]
[17] After considering
the arguments the court held the following:
“
[17]
This was in effect the argument adopted by the second respondent in
the compelling application. ………………..
In my view this extends the provisions of Rule 35(12) too far in
that it gives the concept of a 'reference' to a document
so broad a
meaning as to make it almost superfluous. In my view this does not
fit within the purpose or scope of Rule 35(12). The
Rule provides a
mechanism for a party to obtain production and inspection of
documents prior to making out his case where these documents
have been referred to by another litigant but not annexed. To give
the Rule the wide meaning contended for by Mr
Vetten
would be to sanction immediate and full discovery as provided for by
Rule 35(1). This is not the purpose of Rule 35(12)”.
[18]
In par 18 Bazalek J concludes that:
“
[18]
Reverting to the particular documents sought, no doubt where a bank
account is utilised there must exist somewhere documents evidencing
its existence and its use. It does not follow, however, that a
reference to that bank account, without more, constitutes a
reference,
for the purposes of Rule 35(12), to documentation relating
to such bank account.”
As
stated in Penta
[5]
a litigant cannot use Rule 35(12) as a mechanism whereby a litigant
can go behind the words of an affidavit and “argue that
although no direct or even indirect reference is made to a document
that such document would in the ordinary course of events exist”
and must, if in the possession of the opposing party be produced.
[19]
I am not convinced that the written delegation is covered by Rule
35(12).
Request 2: The
information and documentation which SARS holds regarding Mawela and
other entities
[20] In paragraph 5 of
the answering affidavit the deponent states the following:
“
I
have been involved in this matter since the latter part of 2013 and
the information and documentation which SARS holds regarding
Mawela
Properties and the related entities referred to herein fall under my
direction and control”
[21] The applicant
requested SARS to produce the documentation that SARS holds regarding
Mawela Properties and the documentation
relating to “
the
related entities”.
[22] Paragraph 5 of the
answering affidavit must be seen in context. The reason for paragraph
5 is to convince the reader that the
deponent has the necessary
personal knowledge in regards to Mawela Properties and the other
related entities to enable her to depose
of the affidavit. The
reference to” information and documentation” clearly does
not refer to a specific document as
envisaged in Rule 35 (12).
[23] The documents
requested do not fall within the ambit of Rule 35 (12).
Requests 4 to 15:
Documents relating to SARS claims
[24] In paragraphs
37.1,37.2, 37.3, 37.4, 37.5 37.6 of the answering affidavit SARS
referred to the claims it has against certain
other entities where Mr
van den Heever has been appointed a liquidator and /or co-liquidator.
SARS attached several documents
in support of the claims
against these entities.
( SARS 2 to SARS 19)
[25] In Universal City
Studio v Movietime
1983 (4) SA 736
(D) it was held that where a
document is not referred to in an affidavit but in a document annexed
to it, the document referred
to will fall within the ambit of the
subrule.
[26]
In par 37.1 SARS makes reference to “
a
claim for unpaid taxes”
against
Lwami Investments (Pty) Ltd (in liquidation) in an amount of R 89 025
076.69. The applicants requested SARS to provide
proof of the debt
and how the assessment was arrived at. They also requested “
the
related documentation evidencing how the amount of R 89 025 076.69
was arrived at”.
Request
was also made for “
copies of the
claims submitted to the liquidator together with all the supporting
documentation that has been sent , including the
necessary
affidavits”
[27] SARS attached “SARS
2”, a Master’s certificate of appointment that relates to
Lwami Investments (Pty) Ltd
(in liquidation). It shows the
registration number and the winding up of Lwami Investments (Pty)
Ltd. “SARS 3” attached
to the affidavit is a copy of the
claim which SARS approved in the winding up, setting out the details.
A similar situation applies
to the other entities referred to in
paragraph 37.2 to 37.6.
[28] To the extent that
reference was made to claims relating to other entities, SARS annexed
the necessary documents setting out
the details of the claims. In my
view the applicants is not entitled to additional documentation
evidencing how the amounts were
arrived at.
SARS further claim
against Mawela properties
[29] In paragraph 38 of
the answering affidavit it is stated that SARS has further claims of
more than R 750 000 against Mawela
Properties. The claims are based
on returns submitted for the 2014 to 2015 VAT periods. It is also
stated that there are further
claims of more than R 250 000 for SDL
and UIF.
[30] The applicants
requested “
the documents in relation to the further claims
of more than R 750 000 to be produced”.
[31] In
Holdsworth and
Others v Reunert Ltd
2013 (6) SA 244
(GNP) reference was made in
the affidavit to a “proved claim”. No documents were
attached to the affidavit. The court
held that reference to a claim
refers to submission of an affidavit, which is a document within the
meaning of rule 35(12).
[32] No documents were
attached to the answering affidavit in support of the additional
claims against Mawela Properties. The applicants
are entitled to the
documents in relation to the further claims.
Costs
[33] The documents
referred to in paragraph 38 of the answering affidavit appear prima
facie, to be relevant. It will only be possible
to ascertain during
the hearing of the main application if it was indeed relevant and
necessary. For this reason costs in this
application is reserved.
Conclusion
[34] In the result the
following order is made:
1.
The respondents are ordered to produce for
inspection and allow the applicants to make copies of the documents
requested in paragraph
16 of the Rule 35 (12) notice.
2.
The documents referred to above must be
produced and made available to the applicants within seven days from
the date of this order.
3.
Costs reserved.
L.
Windell
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
Attorney for
applicants:
Shepstone & Wylie Attorneys
Counsel for
appellants:
Advocate Bava SC
Attorney for
respondent:
Gildenhuys
Malatji Attorneys
Counsel for
respondent:
Advocate
Snyman SC
Date matter heard
:
1 March 2016
Judgment date:
18 March 2016
[1]
Penta
Communication Services Pty Ltd v King and Another
2007
(3) SA 471
(C)
[2]
Universal
City Studio v Movietime 1983 (4) SA 736 (D)
[3]
2007
(3) SA 471 (C)
[4]
Penta
at [
17]
[5]
Penta
[21]