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[2022] ZAECMKHC 128
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Structured Mezzanine Investments (Pty) Ltd and Another v Commissioner for the South African Revenue Service (1824/2021) [2022] ZAECMKHC 128; 85 SATC 436 (12 April 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GRAHAMSTOWN)
CASE
NO: 1824/2021
Date
heard: 17 February 2022
Date
delivered: 12 April 2022
In
the matter between
STRUCTURED
MEZZANINE INVESTMENTS (PTY) LTD
First
Applicant
JEAN
PRIEUR OU PLESSIS
Second
Applicant
And
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICE
Respondent
JUDGMENT
LOWEJ:
INTRODUCTION
1.
The application before me in this matter is
interlocutory, I being required to consider only Part 2 of the
application brought under
Notice of Motion of 31 August 2021 which
has three parts to it, Part 1 relating to condonation for the late
delivery of Applicants'
answering affidavit, Part 2 that the matter
be heard in camera and that the court file be sealed to the public
and, Part 3 relating
to a striking out application.
2.
The
parties
were
in
agreement
that
only
Part
2,
(that
the
matter
be
heard
in
camera and the court
filed sealed from the public), was in issue before me.
3.
The issue is discrete, and is fundamentally
about the proper interpretation of the relevant legislation, though
in argument Applicants
sought to widen the argument as I shall set
out hereafter.
4.
For the above reason, it is important to
set out what is in the papers relevant to this particular issue
before doing anything else.
THE
PAPERS
5.
In the interlocutory application
Applicants, in the founding affidavit by Second Applicant, deal with
the in camera issue last.
Applicants
commence by referring to the "main application" being one
to compel Applicants to comply with a request issued
by Respondent on
6 February 2020 under the provisions of section 46 of the Tax
Administration Act 28 of 2011 ("the TAA").
6.
Applicants state that they are advised that
the main application arises from an "unlawful investigation and
for ulterior purpose"
and secondly that it does not comply with
the jurisdictional requirements under section 46 of the TAA.
Whilst I need not consider this at all, the
background was adverted to in argument by Applicants, accordingly I
mention this briefly.
7.
As to the so-called jurisdictional
requirements of section 46 of the TAA, it is alleged that Respondent
failed to prove that the
documents listed in the request constitute
"relevant material" as defined ln section 1 of the TAA,
this material being
57 loan agreements (listed in the request), in
the context of section 46 read with section 1 of the TAA.
8.
In my view the merits or demerits of this
argument are, in the context of this application, not relevant to a
consideration
of
the issues before me.
9.
The first 102 paragraphs, and 34 of 39
pages of the interlocutory application relate predominantly
to
the
two
questions
which
are
not before
me,
whilst
paragraphs
103 to 109, on pages 34 to 36 thereof, relate to the issue relevant
to the in camera proceedings and request to seal
the court file.
10.
In summary the allegations made are as
follows:
10.1
That the provisions of the TAA as to
confidential Tax Payer Information is implicated
(section
67(1)(b))
and
that
Respondent
has
breached
its statutory
duty
to
preserve
the
secrecy
of
same,
which
it
may
not disclose, in the context of section 67
and 69 of the TAA (this relates to the submission that the SARS
founding affidavit in
the main application is replete with
confidential tax payer information);
10.2
That there is little doubt that the proper
parties involved within SARS would most likely not have granted any
authorization to
bring this application or would have at least
undertaken
to
proactively
ensure
that the matter would be heard
in camera
and that the court papers would be kept
private and confidential;
10.3
That the main application is an abuse of
the court process;
10.4
That even if the issue of deposing to the
main application falls within the scope of section 69(2)(a)(ii)
of the TAA, (which is not conceded) the
making public of the information by refusing to agree to an
in
camera
hearing is not relevant to the
SARS
official's
duties under
a
Tax Act,
and
there is "nothing in a Tax Act, necessitating
the
public disclosure of confidential tax payer information",
it
being said that the "offhand" dismissal "of the
request to have the information kept confidential" is
"particularly
invidious and constitutes a reckless
disregard
for
the
constitutional
duties
that
SARS
undertakes
... ";
10.5
That the public confidence in SARS, which
is expected to exercise a bare minimum of respect for the right to
privacy, is eroded
by the public disclosure of tax payer information;
10.6
That the prevailing practice directive in
the Gauteng Tax Court is for all matters to be heard in camera so as
to comply with the
secrecy provisions;
10.7
That there is in any event, what is
referred to as, a disproportionate degree of disclosure to the public
of the relevant tax payer's
information.
11.
The
strong
terminology
used as to
the violation by SARS of its duties, that the main application is an
abuse of the court process and earlier that the
main application
constitutes an unlawful investigation, is repeated in the heads of
argument, and is in unfortunate terms, as was
pointed out by
Respondent in argument, and is an issue which may well bear to be
carefully dealt with further in the main application,
though I
refrain from doing so in this matter as it is not necessary and
perhaps premature to pronounce hereupon any further.
12.
The important issue, is, however, that the
main argument that the matter be heard in camera and the court file
sealed, emanates
from the submission that the information referred to
in that application in the main affidavit is confidential in terms of
the
TAA, and that for the reasons set out more fully above this.
warrants an in camera hearing, and even if that is incorrect that the
Respondent has abused or overlooked its constitutional duties,
failing to show respect for the right to privacy and is also against
the practice directives in the Gauteng Tax Court that all matters be
heard in camera due to the secrecy provisions, the Tax Court
being a
specialized
organ
dealing with "precisely the same confidential tax payer
information."
13.
What is notably absent is any reference to,
or suggestion that, this matter is to be dealt with specially and
differently,
in
terms of the provisions of
section 32
of the
Superior Courts Act 10
of 2013
which reads as follows:
"Save
as
is
otherwise
provided
for
in
this
Act
or
any
other
law,
ail
proceedings
in any Superior Court must, except insofar as any
such Court may in special cases otherwise direct, be carried on in
open court."
14.
Indeed, in the Applicants' heads of
argument there is not a single reference to section 32 of the
Superior Court's Act, and no argument
set up that failing the success
of, or in any event whatever the result of
the TAA argument, there was, or is,
a
"special case"
to
be made
out for a
hearing
other
than in open court in terms of section 32.
15.
This
was
also
not
referred
to
in
Applicants'
main
argument,
but
resorted
to
in
reply, but without foundation in the papers let
alone the heads of argument, to this specific issue.
16.
In
answer
to
the
allegations in
the
founding
papers
in
this
regard
Respondent dealt with the case put up in the
founding papers, contending that Applicants' case was inconsistent
with the principle
of open justice.
In
reply Applicants took the matter no further simply contenting
themselves with the allegation that SARS was not pursuing its lawful
duties but was abusing the Court process, arguing that the reasons
given in the main application could and should have been furnished
in
the normal course in the section 42 TM
audit process.
17.
In my view, accordingly, it is simply not
open to Applicants to now change their argument mid-stream,
contending for a special case
in terms of section 32 of the Superior
Court
Act,
an issue
not
raised by
Applicants
at
all on the papers.
18.
Even
were I incorrect in this, there are, in my view, no facts put up
whatsoever
that
support an argument that this is a "special case"
as
envisaged
in
that section.
The
subsection
confers
a discretion
on
the court to be exercised in special cases, what a special case may
be
depending
on
the circumstances
of
each particular
case
[1]
.
THE
INTERPREATION OF STATUTES
19.
The
approach to statutory interpretation is formulated in
Cool
Ideas 1186
CC
v
Hubbard
[2]
where the following is stated:
"[28] A fundamental
tenet of statutory interpretation is that the words in a statute must
be given their ordinary grammatical
meaning, unless to do so would
result in an absurdity. There are three important interrelated riders
to this general principle,
namely:
(a)
that statutory provisions should always be
interpreted purposively;
(b)
the relevant statutory provision must be
properly contextualised; and
(c)
all
statutes must be construed consistently with the Constitution, that
is, where reasonably possible, legislative provisions ought
to be
interpreted to preserve their constitutional validity.
This
proviso to the general principle is closely related to the purposive
approach referred to in (a)."
[3]
20.
"Purposive"
interpretation means
promoting
the
spirit,
purport
and
objects
of
the
Bill
of Rights when interpreting legislation.
That
is whether particular legislation is capable of an interpretation
which conforms to the fundamental values and principles of
the
Constitution
[4]
.
It
is aimed at testing the core values which underlie the fundamental
rights in a democratic society based on human dignity, equality
and
freedom and supports an interpretation best supporting and protecting
those values.
21.
Context
is
essential,
it
requires
attention
to
political
history
[5]
and
a
ringing
and
decisive break from the past
[6]
,
22.
Constitutional
validity
must be
achieved.
THE
RELEVANT
FACTS
AND
THE
TAA
23.
As
already pointed out above, the main application was such as to compel
First Applicant (as First Respondent therein) to comply
with its
obligation to respond to requests directed to it by SARS in terms of
section 46 of the TAA.
[7]
In
bringing this application the deponent and Respondent were clearly
acting in performance of their duties under the Tax Act.
24.
Applicants
had refused to provide the relevant information sought in terms of
section 46 of the TAA which precipitated the launching
of the main
application
[8]
.
25.
It is not contended in the main application
that this matter is other than properly before this Court (though
said to be an abuse
of process), and for the purposes of these
proceedings and the in camera application, the matter must proceed on
that basis.
26.
Chapter
6 of the
TAA deals with the confidentiality aspects of tax payer information
and tax administration, section 67 -
69
as appears below:
"67 General
prohibition of disclosure
(1)
This Chapter applies to-
(a)
SARS confidential information as
referred to in section 68 (1); and
(b)
"taxpayer information",
which means any information provided by
a taxpayer or obtained by SARS in respect of the taxpayer, including
biometric information.
(2)
An oath or solemn declaration undertaking
to comply with the requirements of this Chapter in the prescribed
form, must be taken
before a magistrate, justice of the peace or
commissioner of oaths by-
(a)
a SARS official and the Tax
Ombud, before commencing duties or exercising any powers under a tax
Act; and
(b)
a person referred to in section
70 who performs any function referred to in that section, before the
disclosure described in that
section may be made.
(3)
In the event of the disclosure of SARS
confidential information or taxpayer information contrary to this
Chapter, the person to
whom it
was
so disclosed may not in any manner disclose, publish or make it known
to any other person who is not a SARS official.
(4)
A person who receives information under
section 68, 69, 70 or 71, must preserve the secrecy of the
information and may only disclose
the information to another person
if the disclosure is necessary to perform the functions specified in
those sections.
(5)
The Commissioner may, for purposes of
protecting the integrity and reputation of SARS as an organisation
and after giving the
taxpayer
at least 24 hours' notice, disclose taxpayer information to the
extent necessary to counter or rebut false allegations
or information
disclosed by the taxpayer, the taxpayer's duly authorised
representative or other person acting under the instructions
of the
taxpayer and published in the media or in any other manner.
68 SARS confidential
information and disclosure
(1)
SARS confidential information means
information relevant to the administration of a tax Act that is-
(a)
personal information about a current or
former SARS official, whether deceased or not;
(b)
information subject to legal
professional privilege vested in SARS;
(c)
information that was supplied in
confidence by a third party to SARS the disclosure of which could
reasonably be expected to prejudice
the future supply of similar
information, or information from the same source;
(d)
information related to investigations
and prosecutions described in section 39 of the Promotion of Access
to Information Act;
(e)
information related to the operations
of SARS, including an opinion, advice, report, recommendation or an
account of a consultation,
discussion or deliberation that has
occurred, if-
(i)
the information was given, obtained
or prepared by or for SARS for the purpose of assisting to formulate
a policy or take a decision
in the exercise of a power or performance
of a duty conferred or imposed by law; and
(ii)
the disclosure of the information
could reasonably be expected to frustrate the deliberative process in
SARS or between SARS and
other organs of state by-
(aa)
inhibiting the candid communication of
an opinion, advice, report or recommendation or conduct
of
a consultation, discussion or
deliberation; or
(bb)
frustrating the success of a policy or
contemplated policy by the premature disclosure thereof;
(f)
information about research being or to
be carried out by or on behalf of SARS, the
disclosure of which would be likely to prejudice the outcome of the
research;
(g)
information, the disclosure of which
could reasonably be expected to prejudice the economic interests or
financial welfare of the
Republic or the ability of the government to
manage the economy of the Republic effectively in the best interests
of the Republic,
including a contemplated change or decision to
change a tax or a duty, levy, penalty, interest and similar moneys
imposed under
a tax Act or the Customs and Excise Act;
[NB:
Para.
(g)
has been substituted by s. 46 (1) of
the Tax
Administration Laws Amendment Act
23 of 2015, a provision which will be put into operation immediately
after the Customs Control
Act 31 of 2014 has taken effect. See
PENDLEX.]
(h)
information supplied in confidence by
or on behalf of another state or an international organisation to
SARS;
(i)
a computer program, as defined in
section 1 (1) of the Copyright Act, 1978 (Act 98 of 1978), owned by
SARS;
(j)
information relating to the security of
SARS buildings, property, structures or systems; and
(k)
information relating to the
verification or audit selection procedure or method used
by SARS, the disclosure of which·could
reasonably be expected to jeopardise the effectiveness thereof.
[Para.
(k)
added
by s. 40
(c)
of Act 39 of 2013 (wef 1 October 2012).]
(2)
A person who is a current or former SARS
official-
(a)
may not disclose SARS confidential
information to a person who is not a SARS official;
(b)
may not disclose SARS confidential
information to a SARS official who is not authorised to have access
to the information;
and
(c)
must take the precautions that may be
required by the Commissioner to prevent a person referred to in
paragraph
(a)
or
(b)
from
obtaining access to the information.
(3)
A person who is a SARS official or former
SARS official may disclose SARS confidential information if-
(a)
the information is public information;
(b)
authorised by the Commissioner;
(c)
disclosure is authorised under any
other Act which expressly provides for the disclosure of the
information despite the provisions
in this Chapter;
(d)
access has been granted for the
disclosure of the information in terms of the Promotion of Access to
Information Act; or
(e)
required by order of a High Court.
69 Secrecy of taxpayer
information and general disclosure
(1)
A person who is a current or former
SARS official must preserve the secrecy of taxpayer information and
may not disclose taxpayer
information to a person who is not a SARS
official.
(2)
Subsection (1) does not prohibit the
disclosure of taxpayer information
by
a person who is a current or former SARS official-
(a)
in the course of performance of duties under a tax
Act or customs and excise legislation, such as-
(i)
to the South African Police Service
or the National Prosecuting Authority,
if
the information relates to, and
constitutes material information for the proving of, a tax offence;
(ii)
as a witness in civil or criminal
proceedings under a tax Act; or
(iii)
the taxpayer information necessary
to enable a person to provide such information as may be required by
SARS from that person;
(b)
under any other Act which
expressly provides for the disclosure of the information despite the
provisions in this Chapter;
(c)
by order of a High Court; or
(d)
if the information is public
information.
[Para.
(a)
amended
by s. 47 of Act 23 of 2015 (wef 8 January 2016).]
(3)
An application to the High Court for
the order referred to in
subsection
(2)
(c)
requires
prior notice to SARS of at least 15 business days unless the court,
based on urgency, allows a shorter period.
(4)
SARS may oppose the application on
the basis that the disclosure may seriously prejudice the taxpayer
concerned or impair a civil
or criminal tax investigation by SARS.
(5)
The court may not grant the order
unless satisfied that the following circumstances apply:
(a)
the information cannot be
obtained elsewhere;
(b)
the
primary
mechanisms for
procuring
evidence
under
an
Act
or
rule
of court will yield or yielded no or disappointing results;
(c)
the information is central to
the case; and
(d)
the information does not
constitute biometric information.
(6)
Subsection (1) does not prohibit the
disclosure of information-
(a)
to the taxpayer; or
(b)
with the written consent of the
taxpayer, to another person.
(7)
Biometric information of a taxpayer
may not be disclosed by SARS except under the circumstances described
in subsection (2)
(a)
(i).
(8)
The Commissioner may, despite the
provisions of this section, disclose-
(a)
the name and taxpayer reference
number of a taxpayer;
(b)
a list of-
(i)
pension funds, pension preservation
funds, provident funds, provident preservation funds and retirement
annuity funds as defined
in section 1 (1) of the Income Tax Act; and
(ii)
public benefit organisations
approved for the purposes of sections 18A and 30 of the Income Tax
Act;
[Para.
(b)
substituted
by s. 53 of Act 16 of 2016 (wef 19 January 2017).]
(c)
the name and tax practitioner
registration number of a registered tax practitioner; and
(d)
taxpayer information in an
anonymised form.
[Sub-s.
(8)
amended
by
s.
41
(c)
of
Act
39
of
2013
(wef
1
October
2012)
and
substituted by s. 48
of Act 44 of 2014 (wef 1 October 2012).]"
27.
It flows from the above that in summary
chapter 6 applies,
inter alia,
to
tax payer information (defined and described in section 67(1)) and
"which means any information provided by a tax payer
or obtained
by SARS in respect of the tax payer, including biometric
information".
Section
67(4) requires a person who receives information under, amongst
others,
section
68 and 69 to preserve the secrecy
of
that information.
That
information may only be disclosed to another person if the disclosure
is necessary
to
perform the functions
specified
in those
sections.
28.
It is important to pause at this stage and
comment that the relief in the main application is to compel
Applicants to comply with
their obligation to respond to the request
directed to them by SARS in terms of section 46 of the TAA "...by
furnishing to
SARS all the information requested in the section 46
request, free of redaction or alteration."
29.
If
the
Court
hearing
the
main
application orders
the
tax
payer
to
comply
with
SARS' section 46 request and to produce to SARS
all the information requested therein, those documents when produced
will be covered
by the secrecy provisions in chapter 6.
The result is that this application is not
aimed at the disclosure of the documents sought by SARS but is aimed
at the disclosure
of the material utilised in the main application,
to justify or provide the foundation for such application.
30.
Section 68 is, in my view, properly
interpreted in context, not directly relevant to this application
going to SARS confidential
information and not that of the tax payer.
31.
Section
69
of the TAA,
which
must be read
with
section 67,
relates
to the secrecy of tax payer information.
Section 69(1) provides that a SARS official
must preserve the
secrecy
of tax payer
information
and
may not disclose
this
to a person
who
is not
a
SARS
official.
There
are,
in section 69(2),
a
series
of exceptions
to
the above.
32.
Section 69(2)(a)
inter
alia
provides that a disclosure of tax
payer information by a person who is a current or former SARS
official in the course of performance
of duties under a Tax Act is
not prohibited in the respects set out thereafter, the examples being
given in section 69(2)(a) not
being the only circumstances envisaged
having regard to the use of the words "such as" in section
69(2)(a).
33.
I emphasise that a distinction is drawn
between "SARS confidential information" and "Tax payer
information".
There
is thus a clear differentiation between tax payer information in
respect of which the right to privacy applies and in respect
of which
stricter disclosure rules apply and SARS information which is
confidential but with less strict disclosure rules.
34.
Thus tax payer information is that referred
to in section 67(1)(b) in short for this matter any information
provided by the tax
payer or obtained by SARS.
That is clearly in my view an indication
that most, if not all information that relates to a tax payer and a
tax payer's affairs
is tax payer information.
35.
Further, and as already set out above, a
SARS official must preserve the secrecy of tax payer information and
may not disclose this
to a person who is not a SARS official unless
in the course of performance of duties under a Tax Act, such as,
inter alia,
section
69(2)(a)(iii) or the information is public information (s 69(1) and
69(2)(d)).
36.
In this context chapter 5 of the TAA
relates to the gathering of information in relation to a tax payer
and is directly relevant
to this matter having regard to section 46,
SARS clearly acting in the course of performance of duties under a
Tax Act.
37.
Pausing
for a moment to deal with a Tax Court, this is a court established by
the TAA for the purposes of chapter 9 of the TAA,
and has
jurisdiction only
over
tax
appeals lodged under section 107 of the TAA
[9]
.
Section
107 applies to appeals against assessments or decisions as referred
to in the TAA.
38.
The Tax Court sitting for the purposes of
hearing a tax appeal, lodged under section 107, is by virtue of
section 124(1) not a public
hearing, as stipulated in that
subsection.
39.
It must be accepted that tax appeals of
such nature are not public hearings inasmuch as it was intended in
the TAA to protect the
confidentiality and right to privacy of the
tax payer in such proceedings.
This
being so, the constitutional imperative in section 34 that everyone
has the right to have any dispute that can be resolved
by the
application of the law decided in a fair public hearing is not
violated but only having regard to the specific provisions
of section
124(1) of the TAA.
40.
On
a
proper
interpretation
of
section
124(1)
of
the
TAA
this
provision
applies
strictly and
only to a Tax Court established in terms of section 116 of the TAA ,
which in turn must be read with section 117(1)
having jurisdiction
only over tax appeals as referred to in section 107 and as set out
above.
41.
The
Law of South Africa (Joubert) 2
nd
Ed,
replacement volume 22, Part 3: Tax Administration
[10]
having stated the above, goes on to say "If the tax payer
appealed to a higher court such appeal would be open to the public."
42.
Whilst section 124(1) is such as to protect
confidentiality and the tax payer's right to privacy, to cast this
wider and to apply
this to High Court proceedings to enforce the
provisions of section 46 of the Act, is certainly not justified or
sustainable.
43.
If follows that the TAA has no provision
which in any way expressly conveys or confers confidentiality or
privacy in respect of
tax payer information in respect of High Court
proceedings such as in this matter.
44.
From the main application, it is abundantly
clear that the said application relates to, and seeks only, the
furnishing to SARS of
the information requested in the section 46
request.
45.
The in camera application states at
paragraph 103 that:
"The
Founding
Affidavit
is
replete
with
references
to
confidential
tax
payer information."
46.
It continues at paragraph 106 to suggest
that the deponent in the main application founding affidavit "has
made public information
which falls within the ambit of section
67(1)(b) of the TAA and is such a violation of his duties under
section 69."
47.
The confidential tax payer information
implicated is not referred to in any further detail in the founding
affidavit, nor in the
heads of argument for Applicants.
48.
The founding affidavit refers to evidence
described as an affidavit deposed to by Mr. Naidoo and an article
that appeared in the
Mail & Guardian on 27 July 2012.
49.
The Mr. Naidoo affidavit was deposed to and
filed in liquidation proceedings under case no 69839/2014, already in
the public domain,
and the M&G article was published in a
national newspaper on 27 July 2012.
50.
This information is thus already in the
public domain.
The
heads of argument referred to "tax audits and information"
and "business information", but
this takes it no further if reference is
made back to the founding affidavit.
51.
The replying affidavit takes the matter
little further beyond very general statements, which appear to rely
on the allegation
that
SARS is not pursuing
its
lawful duties and is abusing the Court process, "in ventilating
some of its reasons for the request when it should have
done so in
the normal course of the section 42 audit process" these resort
to the
argument
that tax
payer
information
itself,
whatever
its nature, requires
an in camera hearing nothing more being
identified.
52.
This,
however, perhaps begs the question, the argument for Applicants being
essentially that all proceedings to enforce the production
of section
46 documents, are such as to be proceedings to be held in camera,
notwithstanding that they fall outside the provisions
of section 124
of the TAA
[11]
.
53.
This, insofar as I can see, has no
statutory basis in the TAA at all, notwithstanding my acceptance of
the concept of tax payer
information as being any information
provided by a tax payer or obtained by SARS in respect of the tax
payer (whether confidential
or not).
54.
Having
regard to section 69(1) of the TAA the secrecy of that information,
whether confidential or not, is an obligation falling
on a person who
is a current or former SARS official.
This
does not however, apply to that official who discloses tax payer
information in the course of performance of the duties of
that
official under a Tax Act
[12]
,
or
that which is in the public domain.
55.
It is herein that lies Applicants' main
difficulty, it being accepted that it was open to SARS to seek the
enforcement of a section
46 demand for documents and information in
the High Court, nor is the contrary argued.
56.
This must be seen against what was referred
to in argument as the "principle of open justice" being
that all court proceedings
and records by default are open to public
scrutiny at all times. Whilst this may be departed from in special
cases there must be
a proper basis and justification therefor.
57.
In
City
of Cape Town v South African National Roads Authority Ltd and
Others
[13]
the
Supreme Court of Appeal referring to the principle of open justice,
that is that courts must be open to the public, pointed
out that this
was venerable and constitutionally entrenched.
The
Court went on to hold that openness and not secrecy was the default
position under the Constitution this involving a cluster
of related
constitutional rights including those of freedom of expression and
the right to a public trial with the foundation of
constitutional
values of accountability, responsiveness and openness applying to the
judiciary as much as to other branches of
government.
The
court held that deviations from the norm had to be justified.
58.
The court found that the principle of open
justice was one of the most pervasive axioms of the administration of
common-law systems.
This
included the hearing of a case in public even if painful, humiliating
or deterrent both to parties and witnesses.
The court found that this was now
constitutionally protected in terms of section 34 of the
Constitution.
59.
Referring to
section 32
of the
Superior
Courts Act the
following
was
said:
"[18] As a general
rule, litigants are prejudiced when their proceedings are not held in
public. That is not to say that litigants
may not sometimes wish to
keep their litigation private or that there may not be situations
where a court may justifiably depart
from the default rule that court
proceedings are public. But it will be a dangerous thing for all
litigants in both civil and criminal
matters, for court documents, as
a general rule, to be inaccessible and unpublishable. For, it may be
said that the right to public
courts, which is one of long standing,
does not belong only to the litigants in any given matter, but to the
public at large. Open
justice is, moreover, required by
s 32
of the
Superior Courts Act 10 of 2013
, which provides:
'Save
as is otherwise provided for in this Act or any other law, all
proceedings in any Superior Court must, except insofar as any
such
court may in special cases otherwise direct, be carried on in open
court."'
[14]
60.
In argument,
Respondent
submitted
that
the crux
of the
matter
was that
a tax payer had to satisfy a Court that the
main application, in this matter, is an exception to the principle of
open justice and
justifies a departure from the norms of High Court
litigation.
61.
This
Court, of course, in terms of section 173 of the Constitution has the
inherent power to regulate its own process but this is
a power which
is to be exercised with caution and sparingly taking into account the
interest of justice in a manner consistent
with the
Constitution
as
set out in SANRAL (supra)
[15]
.
62,
Read with section 32 of the Superior Court's Act
which stipulates that all matters be heard in open court, and as I
have already
said that only in special cases and after
a
court
so
directs
may
be
held
in
camera,
those
special
cases
must
be
justified on the facts and on application before the Court.
63.
As
I
have
already
adverted
to
above, it
does
not
seem
to
me,
that
this
case
is
made
out in any way in the application, which rather relies on the alleged
application of the provisions of chapter 6 of the TAA
read in context
64.
Applicants' difficulty in this matter is
simply that unless they are able to point to specific statutory
authority entitling the
Court to order that the matter be held in
camera, and in that regard there is none to which I have been
directed, the only alternative
is to seek to have recourse to a
special case having special circumstances as referred to in section
32 of the Superior Court's
Act -
patently
not a basis for this application nor the issue raised therein.
65.
As
pointed out in argument by Respondent the default position is one of
openness.
[16]
66.
In this matter what is placed before me in
the application seems to be limited to mostly unspecified tax payer
information beyond
that to which I have already referred above.
67.
Applicants' reference to Currie and de
Waal: The Bill of Rights Handbook 6
th
Ed
at page 742 in support of the submission that the principle of open
justice is subject to two prominent exceptions involving
children and
tax hearings, is misplaced in respect of the paragraph referred to.
The reference is to "taxation
hearings" and is patently a reference to section 124 of the TAA
no more.
68.
As already pointed out above with reference
to LAWSA the Tax Court is not the same as the High Court, the Tax
Court deriving
its
powers from the statute and operating within the confines of the TAA,
further appeal from the Tax Court to the High Court losing
the
protection conferred by section 124.
CONCLUSION
69.
In the result, the Applicants
have, in my view, failed to establish any
statutory basis in general terms for hearings in the High Court, in
matters such as these,
to be held in camera; nor did they establish a
case in terms of the TAA for this specific matter on its own facts to
be held in
camera; nor did they establish a case or basis, on the
papers, for an application on consideration of the provisions of
section
32 of the Superior Court's Act, being dispensed with as a
special case -
such
a case not being advanced in the first instance.
70.
Even if I am incorrect in the latter
aspect, on the papers, and on the facts adverted to, and as referred
to above, I consider Applicants
to have failed to make out any basis
for my finding this to be a special case justifying a hearing in
camera in terms of section
32.
71.
In the result the relief sought in Part 2
of the interlocutory application, that the proceedings be held in
camera and the court
file sealed, must fail, the application to be
dismissed.
72.
As to costs, in my view, Respondent has
been substantially successful, and there is no reason as to why costs
should not follow
the result.
73.
Further, the appointment of two counsel by
Respondent cannot be said to be other than a wise and reasonable
precaution, inasmuch
as the relief sought by Applicants has extremely
important and far reaching consequences for litigation between SARS
and others
in the future, in the High Court, and warranted careful
attention from two counsel.
ORDER
74.
The following order will issue:
It is ordered that Part 2
of the interlocutory application under case no 1824/2021, that the
mater be heard in camera and that the
court file be sealed to the
public, is dismissed with costs including the costs of two counsel.
M.J.
LOWE
JUDGE
OF THE HIGH COURT
Appearing
on behalf of the Applicants: Mr. Erasmus, Adv. H. Bakker
Instructed
by: De Jager Lordan Attorneys
Appearing
on behalf of the Respondent: Adv. Sholto-Douglas
Instructed
by: Huxtable Attorneys, Owen Huxtable
[1]
Cerebos
Food Corporation Limited vs Diverse Foods SA (Pty) Ltd
1984 (4) SA
149
(T) at 158H.
[2]
2014
(4) SA 474
(CC) at para 28.
[3]
Footnotes
omitted.
See
also
Kwa-Zulu
Natal
Bookmakers'
Society
v
Phumelela
Gaming
and
Leisure Ltd
(889/2018)
[2019) ZASCA 116 (19 September 2019);
Natal
Joint Municipal Pension Fund
v
Endumeni Municipality
2012
(4) SA 593
(SCA) (18].
[4]
Section
39 of the Constitution.
[5]
Executive
Council, Western Cape v Minister of Provincial Affairs and
Constitutional Development and Another,·Executive
Council,
Kwazulu-Natal
v
President of The Republic of South Africa and Others
[1999] ZACC 13
;
2000
(1) SA 661
(CC) [44]
[6]
S
v
Makwanyane and Another
[1995] ZACC 3
;
1995
(3) SA 391
(CC) [8]
[7]
Second
Applicant is Second Respondent therein in his capacity of First
Applicant's representative tax Payer.
[8]
Applicants
rebuffed the request for information relevant to an ongoing
investigation by SARS
[9]
See
section 117 of the TM
[10]
Paragraph
144
[11]
Applicants
reference
to
Commissioner:
South
African
Revenue
Service
v
Public
Protector
2020
(4)
SA
133
(GP)
takes
the
matter
no
further
as
lt
does
not
deal
with
in
camera
hearings
-
it
deals
with
the Public Protector's allegation
that
she
was entitled lo
access
to
Mr. Zurna s
tax
record in breach of chapter
6
of
the TM.
In
my
view
this
being
a
different
question
the
judgment
refusing
the
demand
for
access
does
not detract from the principal of open justice.
[12]
Section
69(2)(a)
and
in
this
matter
section
67(2)(a)(iii)
the
duty
of
the
official
in
a
section
46
application
requiring the disclosure of such Tax Payer information as is
necessary to lay the foundation for such application,
alternatively,
simply in the course of performance of the official's duties to
obtain such information.
[13]
2015(3)
SA 386 (SCA) at paragraph [12] and [22] (SANRAL)
[14]
The
reference
by
Applicants
to
Commissioner,
South
African
Revenue
Services
v
Public
Protector
2020
(4)
SA
133
(GP)
does
not
deal
with
hearings
in
camera.
The
case
turned
around
the
Public
Protector's
assertion
that
she
was
entitled
to
access
to
certain
tax
records
in
breach
of
chapter
6
of
the TM.
[15]
Paragraph
[22] with reference to the authorities therein.
[16]
Independent
Newspaper (Pty) Ltd v Minister for Intelligent Services
2008 (5) SA
31
(CC) at [45] and [55].