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[2017] ZAGPJHC 473
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Calitz v Commissioner for the South African Revenue Service and Others (10927/2017) [2017] ZAGPJHC 473 (21 June 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL
DIVISION,
JOHANNESBURG
CASE
NO: 10927/2017
In
the matter between:
FREDERIK
MATTHYS
CALITZ
Applicant
and
THE
COMMISSIONER
FOR THE SOUTH AFRICAN
REVENUE
SERVICE First
Respondent
TRANSNET
PENSION
FUND
Second
Respondent
TRANS
50 Third
Respondent
MOMENTUM
HOLDINGS
LTD
Fourth
Respondent
SANLAM
LIFE
INSURANCE LIMITED
Fifth Respondent
PROFESSIONAL
PROVIDENT
SOCIETY
OF
SOUTH
AFRICA
Sixth
Respondent
Summary
-
Practice
of
state
attorney
not
to
comply
with
the
rules
of
court
in
respect
of
the
time
periods
for
filing
of answering affidavits
to
be
discouraged
-
practice
directive 9.9.4
does
not entitle a
litigant, as of right, to a hearing in the opposed motion court upon
appearing in
the
unopposed
motion court
and announcing that the matter is now opposed -
failure
to
paginate
application,
prior
to
serv
of
the
application,
does
not
suspend
the
dies
for
filing
of
answering
affidavits
REASONS
IN
TERMS OF RULE
49
(1)
(C)
OPPERMANJ
[1]
On 31 May 2017 this court, having heard counsel for the applicant and
the firs respondent
('SARS'),
granted the following order:
'1.
the third part agency appointments of the fourth, fifth and sixth
respondents are set aside;
2.
the first respondent is directed to pay the applicant the sums of:
2.1
R470 790.86, being the monies incorrectly collected by SARS from the
fourth respondent in terms of the agency appointment, together
with
interest at the prescribed applicable rate in terms of the Income Tax
Act 58 of 1962 as amended, from 16 May 2016 to date
of payment;
2.2
R107 705.19 incorrectly collected from the third respondent in terms
of an agency appointment together with interest at the
prescribed
applicable rate in terms of the Income Tax Act 58 of 1962 as amended
from 31 July 2013 to date of payment;
2.3
R67 941.22 incorrectly collected by SARS from the fifth respondent by
virtue of an agency appointment of the fifth respondent
together with
interest at the prescribed legal rate applicable in terms of the
provisions of the Income Tax Act 58 of 1962 as amended
from 11 May
2016 to date of payment;
2.4
R 77 251 .81 incorrectly collected by SARS from the sixth respondent
in terms of an agency appointment together with the interest
at the
prescribed applicable rate in terms of the provision of the income
Tax Act 58 of 1962 as amended from 16 May 2016 to date
of payment;
3.
The first respondent is directed to pay the applicants costs
occasioned by the application;
4.
The costs for the hearing on 31 May 2017 are to be limited to
unopened costs;
5.
The operation of the order granted in terms of paragraph 2 is
suspended for a period of 21 days from the date of the granting
of
this order.'
[2] On 7 June 2017 this
court received a request for reasons in terms of rule 49 (1)(c).
[3]
On 28 March 2017 the
applicant,
aggrieved by
incorrect tax
assessments
by
SARS and having had no say
in the amounts allegedly due in terms of these flawed
assessments having
been
paid
over
to
SARS
by
SARS 'agents',
Trans
50,
Momentum,
Sanlam
and
PPS
(the
third, fourth,
fifth
and
sixth
respondents
respectively), whose
third
party
agency
appointments
to
make
such
payments
to
SARS
at
the taxpayer's expense
is
established by
statute,
launched an
application
against SARS seeking the
following relief:
1.
Rescinding the
judgment granted by this Honourable
Court on 13 January
2015;
2.
Setting
aside
the
third
party
agency
appointments
of
the
third,
fourth,
fifth
and
sixth
respondents;
3.
Directing
that
SARS
pay
to
the
applicant the
sum
of:
3.1
R470
790.86, being the monies incorrectly collected
by SARS from the
fourth respondent in terms of
the agency appointment, together with
interest
at
the
prescribed
applicable
rate
in
terms
of
the
Income
Tax
Act
58
of
1962
as
amended,
from
16
May
2016
to
date
of
payment;
3.2
R106
705.19 incorrectly collected from the third
respondent
in terms of
an
agency
appointment together
with
interest
at the
prescribed
applicable
rate
in
terms
of
the
Income
Tax
Act
58
of
1962
as
amended
from
31
July
2013
to
date
of
payment;
3.3
R67
941.22 incorrectly collect by
SARS
from
the
fifth
respondent by
virtue of
an
agency
appointment
of
the
fifth
respondent
together
with
interest
at
the
prescribed
legal
rate
applicable
in
terms
of
the provisions
of
the
Income
Tax
Act
58
of
1962
as
amended
from
11
May
2016
to
date
of
payment;
3.4
R77
251.81
incorrectly collected by SARS from the sixth
respondent in
terms
of
an
agency appointment
together
with
interest
at
the
prescribed
applicable
rate
in
terms
of
the
provisions
of
the
Income
Tax
Act
58
of
1962
as
amended
from
16
May
2016
to
date
of
payment;
4.
Directing that
the
first
respondent
issues
the
applicant
with
a reduced
assessment for the 2009 year of
assessment after
taking
into account the
payment of R592 729.75
paid in March 2008, with accrued interest improperly
raised;
5.
Directing
that
the
respondent
pays
the
applicant's
costs
occasioned
by
the
application
on
a
scale
as
between
attorney and
client;
6.
Further and/or
alternate relief.'
[4]
At
the
hearing
of
the
matt
it
was
common
cause
that
prayers
1
and
4
had
become
academic
in
that
SARS
had
reduced
the
2009 assessment
in terms
of
section
93 of the Tax Administration Act 28 of
2011 ('TAA'),
being satisfied that there
was
an
error
in the
assessment
and
as
a
result
of
the reduced assessment,
SARS
had
withdrawn
the
'debt
management
certified
statement
under section 172' which
has been loosely
referred to in the applicant's prayers as a 'j
udgment’.
[5]
On 26 April 2017 SARS filed a notice of intention to oppose. SARS'
affidavit was due fifth days from filing of the notice of
opposition
ie 15 days calculated from 26 April 2017. It was not filed within
such period or at all. The matt was accordingly enrolled
for hearing
on 31 May 2017
[6]
Mr Pierre Retief, applicant's attorney of record, deposed to an
affidavit in which he recorded the following:
6.1
On 24 April 2017 his office received an email from Maureen Maponya of
SARS
"Legal
council
Delivery
Support and
Dispute
Resolution,
Gauteng
Central,
Megawatt
Park SARS".
She requested a meeting to endeavour to discuss the matter and to
go through the issues with a view to settle the matter out of Court.
6.2
He attended a meeting with Ms Maponya on 3 May 2017. He was requested
to apply, in terms of Section 93 of the TAA, for a reduced
assessment
on behalf of the Applicant in order to rectify the Applicant's income
tax statement of account. He requested that the
matter be concluded
by 18 May 2017
6.3
On 3 May 2017, the aforesaid request in terms of Section 93 of the
TAA was sent to SARS.
6.4
On 4 May 2017, his off received a letter from the State
Attorney's office requesting that the Applicant
"must
paginate
the Notice
of
Motion,
founding
affidavit and
annexu
r
es
thereto,
prior to
serving the
documents on the other
party’.
6.5
On 8 May 2017, his off responded. An Index was sent to the State
Attorney's office recording that SARS was not prejudiced by
the
omission to index the notice of motion. He also advised the State
Attorney of the meeting which had taken place the previous
week on 3
May 2017.
6.6
By the morning of 19 May 2017, his off had had no response from
either the State Attorney or SARS. A letter was addressed to
the
State Attorney and SARS was copied indicating that his instructions
were to proceed with the matter on the unopposed roll.
6.7
On 19 May 2017 he received a mail from SARS, recording that
correspondence dated 15 May 2017 had been sent from SARS to
the
Applicant's postal address, advising the Applicant that the 2009 year
of assessment had been revised and the necessary adjustments
had been
made.
6.8
He immediately contacted the Applicant who denied that he had
received the aforesaid notice. He urged the Applicant to
look on
his e-filing profile to see whether the adjustments had been
made on his Income Tax account. The Applicant later confirmed
that
the necessary adjustments had been made. SARS further recorded in its
correspondence of 19 May 2017, that it would consider
the rescission
of the judgment.
6.9
He replied to the correspondence from SARS in a letter dated 24 May
2014. He advised that no notice of a reduction of the account,
no
rescission of the judgment, no setting aside of the third party
appointments had occurred and no costs had been tendered.
[7]
The matter was accordingly set down on Thursday, 25 May 2017 for
hearing on 31 May 2017
[8]
On Friday, 26 May 2017 the first respondent withdrew the
judgment. On the same day the applicant was made aware that the
third
party appointment of the third respondent had been withdrawn on
Tuesday, 23 May 2017
[9]
By 31 May 2017, SARS had thus complied with prayers 1 and 4. The
applicant persisted with the relief in prayer 2 (only
in respect
of the 4th, 5th and 6th respondents), the payments in
prayer 3 and costs.
[10]
On 31 May 2017, Mr Mahlatsi, representing SARS, appeared and argued
that the matter should be struck off the roll with costs
as between
attorney and client contending that the applicant set down a
partially settled opposed matter on an unopposed roll
despite the
dies
for filing an answering affidavit by SARS not
having expired. He argued that the
dies
for filing an
answering affidavit only start to run when properly paginated papers
were filed and serv and that this had
only occurred
on 25 May 2017.
[11]
No authority for this proposition was quoted and I know of none. The
notice of motion, quite clearly, and in accordance with
rule 6,
required SARS to file its answering affidavit within fifteen days of
filing its notice of opposition. It did not do so
SARS did not comply
with the rules of this court
[12]
At the hearing of the matter it was common cause that prayers 1 and 4
had become academic in that SARS had reduced the 2009
assessment
being satisfied that there was an error in the assessment in terms of
section 93 of the TAA and as a result of the reduced
assessment, SARS
had withdrawn the judgment.
[13]
The applicant had been advised that a refund, in his
favour, was being processed and should be paid to him in
due
course but subject to the finalization of internal processes. SARS
filed a practice note in which Mr Mahlatsi
defined the
issues for determination as follows:
'5.
The real issue that falls for
determination in these proceedings is
whether
the applicant is entitled to set down an opposed
part settled matter on an unopposed Roll where prayer
1 and 4 in his
notice of motion have become moot.
6.
Whether the applicant ought to have set down the matter for hearing
on an unopposed Roll where the dies for filing an answering
affidavit
by the first respondent had not expired, given the fa that properly
paginated papers were only served on the first respondent
on 25 May
2017, the very same day when the matter was enrolled.
7.
Whether as a result of the aforesaid the applicant should not be
mulcted by the above Honourable Court with costs on an attorney
and
own client scale of the opposed motion roll.'
[15]
Practice directive 9.9.4 provides:
9.9.4
Enrolment
of
applications after notice of intention to
oppose
1.
Where the respondent has failed to deliver an answering affidavit and
has not given notice of an intention only to raise a question
of law
(Rule 6(5)(d)(iii) or a point
in
limine,
the
application must not be enrolled for hearing on the opposed roll.
Such an application must be enrolled on the unopposed roll.
2.
In the event of such an application thereafter becoming opposed, the
judge hearing the matter will give the necessary directions
for the
future conduct of the matter.
[16]
At the hearing Mr Mahlatsi submitted that paragraph 2 of chapter
9.9.4 entitles a litigant, upon appearing and announcing that
the
matter is opposed, to a hearing in the opposed court. Once there is
opposition, so the argument ran, the court is obliged to
refer the
matter to the opposed court He accordingly submitted that his client
was, as of right, entitled to have the matt referred
to the opposed
motion court to argue costs. This demand was boldly made despite the
concession that the applicant was entitled
to the limited relief it
sought and that SARS had no defence to it. The applicant being
substantially (in fact, completely)
successful, it is difficult to
fathom how another court would have come to another conclusion in
respect of costs. As to the proper
approach to issues of costs once
the relief has been conceded see
Jenkins
v
S.A.
Boiler
Makers Iron
&
Steel
Workers
&
Ship
Builders
Society
1946 (WLD) 15.
[17]
As to the practice of
'last-minute-opposition'
by the State
Attorn and its counsel, see the following dictum by Van Costen J in
Minister
of
Safe
&
Security
v
G4S
International
UK
Ltd:
In
re
G4S
International
UK
Ltd
v
SA
Airw
(Pty Ltd
&
others
(Pro
Aviation
(Pty)
Ltd
as
third
party)
[2012]
JCL 28815 (GSJ) at [15] and [16], which would tend to
suggest that in the space of five years the State Attorney
in this
Division has learned nothing about the undesirability of sending in
counsel at the last minute to oppose matters that have
properly been
placed on the unopposed role and expecting to obtain postponements as
of right. This is what Van Costen J. said in
2012:
[15]
... I
consider
it
necessary
to
digress and
to
address
the
alarming
neglect
of
duty
by the State Attorney that appears
to have become the order
of the day in this
Division.
I
will
confine
the
comments
I
am
about
to
make
to
cases
involving
the
State
Attorney
that have
serv before me
in the last
few weeks. A
number of
applications
for default
judgment
against the Minister appeared on the unopposed motion court
roll. In
those matters
the summons
had been
properly
serv on the State
Attorney,
on behalf of the Minister. Those cases all
involved claims for an alleged wrongful
arrest and
detentions by the SAPS.
In the absence of a notice of
appearance to
defend
by
the
State
Attorney,
they
were
enrolled
on
the
unopposed
motion
court
roll,
for
default
judgment.
At the last moment when the
matters we called
in
court, an appearance from or on behalf of
the State Attorney's off was made
resulting
in
a
postponement
and,
of
course,
unnecessary
wasted
costs. No
explanation was tendered for the State
Attorney's non-entry of an appearance to
defend, the
plaintiffs always content with a suitable costs order in their
favour. This
kind of neglect, regrett permeated into a
large number of unopposed matters
appearing
on
another
section
of
the
motion
court
roll:
applications
against
the
Minister
to
compel
discovery
of
documents
or
compliance
with
some
other
notice
delivered
in
terms
of the rules. Again, the notices requesting discovery
were
duly served on the
State Attorney, but the lack of
compliance, despite despatch of a "court
letter"
again demanding compliance, caused them to be launched. Jn one
week 12 such
matters serv
before me.
At
the hearing there was an appearance
by
or on behalf of the
State Attorney.
I was informed that all those matters had become
settled
in
respect
of
which
draft
orders
were
handed
up
for
confirmation
albeit
without
any
explanation
for
the
reason
for
the
non-compliance.
The
draft
orders
all
provided
for
payment
of
the
costs
of
the
applications
by
the
Minister.
In
the
present
matter,
as
I
will
deal
with
later, a
further
costs
order
against
the Minister
is
about
to
follow.
These
all provide examples of the unnecessary
waste of public funds due to deteriorating
standards of
service and the absence of diligence.
[16]
The instances of neglect and the general decline in the standards of
service
rendered by the
State Attorney's
office, is a
matter of
grave
concern
which needs
to
be
addressed.
It
cannot
be
allowed
to
endure
any
longer.
An
urgent
in-depth
investigation by the authorities concerned, in my view, is
necessary. In order to set
the
process
in
motion
I
have
decided
to
cause
a
copy
of
this judgment
to
be
forw to the Minister of Police, as well as
the Minister of Justice & Constitutional
Development.
It
is
hoped
that
the
flashing
red
warning
lights
which
are
apparent
from
what I have set out above, will encourage
an investigation and correction where
necessary, in
order to rectify
a state of affairs that is not
conducive to the delivery of
justice by a
well-established legal service provider in the public sector."
(emphasis
provided)
[18]
By virtue of the concession made in the practice note filed by SARS
i.e. that a refund in the applicant's favour was being
processed and
would be paid in due course
'subject
to
the
finalisation of internal processes',
the court
enquired from Mr Mahlatsi what a reasonable time would be for SARS to
make payment to the
applicant.
The court was advised that a period of 21 days would constitute a
reasonable time. It was because of this communication
that the
operation of my order in respect of the payment by SARS to the
applicant, was suspended for a period of 21 days.
[19]
Because the application had been set down on the unopposed roll, the
court limited the applicant's costs to unopposed costs
for the
hearing on 31 May 2017, this, despite the fact that the matter was
heard for a couple of hours and that the entire court
staff sat
through lunch time to affidavit SARS an opportunity to argue its
pagination point.
[20]
It is unfort that scarce judicial resources have to be utilised to
address issues which, have largely, become academic.
It is also
disappointing and unfortunate that tax payers' money is being spent
on taking pagination points where no prejudice at
all was suffered by
SARS in respect of such alleged non-compliance.
[21]
Although settlement is to be encouraged and SARS is to be commended
for finally doing the right thing in this matter, the applicant
in
this matter had, by the time the matter came before court on 31 May
2017, in respect of some amounts, been out of pocket since
July 2013,
had sent the required notices prior to the launching of the
application in respect of all amounts and had made considerable
effort to resolve the matter.
[22]
SARS had not filed answering affdavit timeously or at all, requested
(or rather demanded) that the matter be referred to the
opposed
motion court under circumstances where there were no triable issues
(SARS had conceded that the applicant was entitled
to the limited
relief he was seeking) and there was no reason why another court had
to read the papers and consider the costs issues
afresh. In any
event, allowing parties to file aff to deal with costs issues only,
should only be allowed in exceptional circumstances,
if at all, see
Jenkins
(supra).
[23] Having
the inherent jurisdiction to regulate its procedures, I consider the
approach adopted by this court in this matter
to have serv the
interests of justice in that the incurring of furt unnecessary costs
was avoided. Having a wide discretion
in respect of costs and
having considered all the facts and circumstances of the case,
I
consider the costs awards made, to have been appropriate. Having said
that, the decision not to grant a punitive costs order,
does, upon
reflection, appear to have been merciful and I trust that the state
attorney takes cognisance of this.
I
OPPERMAN
Judge
of
the
High
Court
Gauteng
Local
Division,
Johannesburg
Heard:
31
May
2017
Reasons
requested:
7
June
2017
Reasons
provided:
21 June
2017
Appearances:
For
Applicant:
Adv
CJ
Dreyer
Instructed
by:
Pierre
Retief
Attorneys
For
First
Respondent:
Adv
PM
Mahlatsi
Instructed
by:
The
State
Attorney
For
second
to
Sixth
Respondents:
No
appearances