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[2016] ZAGPPHC 117
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Commissioner of the South Africa Revenue Service v Badenhorst t/a SA Global Trading and/or Global Trading and Others; Commissioner of the South African Revenue Services v Vermaak and Others (51232/2013; 56971/2013) [2016] ZAGPPHC 117 (1 April 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
Case number:
51232/2013
56971/2013
Date: 1 April 2016
Not reportable
Not of interest to
other judges
Revised
In the matter between:
THE COMMISSIONER OF
THE SOUTH AFRICA
REVENUE
SERVICE APPLICANT
And
PETRUS JOHANNES UYS
BADENHORST t/a SA GLOBAL
TRADING and/or GLOBAL
TRADING FIRST
REPSONDENT
JACQUES
SASSIN SECOND
RESPONDENT
TROJIN FEEDS (PTY)
LTD THIRD
RESPONDENT
MINISTER OF
FINANCE FOURTH
RESPONDENT
AND
THE COMMISSIONER OF
THE SOUTH AFRICAN
REVENUE
SERVICES APPLICANT
And
HERMANUS JOACHIM BOTHA
VERMAAK FIRST
RESPONDENT
HANLIE JANSE VAN
RENSBURG SECOND
RESPONDENT
PIERRE
CILLIERS THIRD
RESPONDENT
THE TRUSTEES OF THE
TIME BEING OF THE
PJU BADENHORST TRUST
(IT2247/13), being
MR PJU BADENHORST
Senior
MR PJU BADENHORST
Junior FOURTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE SJ
TRANSPORT TRUST
(IT2248/13), being
MR PJU BADENHORST
Senior
MR PJU BADENHORST
Junior
MR S JANSE VAN
RENSBURG
HANLIE JANSE VAN
RENSBURG FIFTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
GLOBAL TRUST
(IT1049/2012), being
MR J SASSIN
MR JA DELGADO as
nominee of Iprotect Trustees
(Pty)
Ltd SIXTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
FIRST TRUST
(IT2761/2009) SEVENTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
THIRD TRUST
(IT2180/2008), being
FRANCOISE JANE SASSIN;
JACQUES SASSIN
AND JOSE ALBERTO
DELGADO EIGHTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
HOME TRUST, being FJ
SASSIN; J SASSIN and
GE
SASSIN NINTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
DUAL
TRUST TENTH
RESPONDENT
THE TRUSTEES FOR THE
TIME BEING OF THE
SECOND
TRUST ELEVENTH
RESPONDENT
JUDGMENT (APPLICATION
FOR LEAVE TO APPEAL)
PRETORIUS J,
(1)
This is an application for
leave to appeal to the Supreme Court of Appeal against the whole
judgment and order of this court delivered
on 13 October 2015.
The second and third respondents in the application under case number
51232/2013 and the sixth to eleventh
respondents in the second
application are cited as applicants in the application for leave to
appeal.
(2)
The application for leave
to appeal is only heard now, five months after the order had been
granted due to the court and counsel’s
unavailability.
The parties will be referred to as in the original application for
the sake of convenience.
(3)
The respondents are
relying on
section 17(1)
of the
Superior
Courts Act, 10 of 2013
on both grounds as set out in
section 17(1)(a):
“
(1) Leave to
appeal may only be given where the judge or judges concerned are of
the opinion that-
(a) (i) the appeal
would have a reasonable prospect of success; or
(ii) there is some
other compelling reason why the appeal should be heard, including
conflicting judgments on the matter under consideration;”
(4)
The fourth respondent’s
counsel argued that the respondents’ application for leave to
appeal fails to meet the threshold
as set out in
Himunchol
v Moharom
1947 (4) SA 778
(N)
at
780 where the court held:
“
What
the rule contemplates is that, in framing his grounds of appeal, an
appellant shall specify the findings of fact he appeals
against, and
the rulings of law, and the object is that his opponent shall be made
aware of points taken by the appellant and the
court of appeal shall
be apprised of the issues which it is asked to decide…
it
is essential that the grounds of appeal should be framed in such a
way that the issues to be decided by the court of appeal are
clear
.”
(Court’s emphasis)
(5)
The main reason for the
application for leave to appeal is that, according to the
respondents, there are conflicting judgments on
the legal issues
arising in this matter. The court was referred to the judgment
of Seegobin J in the KwaZulu Natal Division
of the High Court. It is
clear from the reading of the judgment of Seegobin J that the court
was not dealing with a preservation
application in that matter as is
the case in the present matter. Seegobin J referred the application
to trial.
(6)
The respondents rely on
the admissibility of the
section 50
enquiry in the leave to appeal
application, although it had not been argued before this court.
The KwaZulu Natal application
by SARS was against Trojin Feeds (Pty)
Ltd and Mr Sassin for judgment in an amount of R41 253 533.50
as well as a larger
claim based on fraud, not for a preservation
order.
(7)
I was referred to and I
have read paragraph 69 of Seegobin J’s judgment carefully and
cannot agree that it is a finding in
respect of
section 50.
In
any event, as stated above, the
section 50
enquiry’s
admissibility was never argued before this court and was not an issue
at any stage.
(8)
Section 56(4)
of the
Tax
Administration Act, 28 of 2011
(“the TA Act”) provides:
“
(4) Subject to
section 57 (2), SARS may use evidence given by a person under oath or
solemn declaration at an inquiry in a subsequent
proceeding involving
the person or another person.”
(9)
In the Seegobin J judgment
Mr Sassin stated:
“
My evidence (if
found to be admissible in these proceedings) is before this Court.
It is contained at “SARS1”/108
– 213 and
“SARS2”/214 – 250. That evidence is true. It
is, moreover, uncontradicted. I did not know
that Badenhorst did not
intend to pay VAT to SARS (see for example “SARS1”/197 –
199; 206 and 208 – 212;
“SARS3”/249).”
(10)
Therefor it is clear that
Mr Sassin had relied on the evidence he had given at the enquiry in
the KwaZulu Natal case. Had
the issue been argued in this
court, the applicant and the court would have dealt with it, but it
was never part of the respondents’
case.
(11)
In the present case Mr
Sassin and the other respondents admitted the facts alleged by SARS
in the founding affidavit to such an
extent that a strong
prima
facie
case was made,
which resulted in Ledwaba DJP granting a provisional preservation
order. The case was strengthened by the
evidence Mr Sassin had
given at the enquiry. The enquiry only took place after the
founding affidavits in the present matter
was attested to.
(12)
The fourth respondent
opposed the application for leave to appeal as well, dealing with the
counter application. The respondents
state in paragraph 5 of
the application for leave to appeal that the court “
fail[ed]
to properly deal with the argument relating to the fact that
Section
163
of the
Tax Administration Act must
be read in conjunction with
Section 179
to
183
of the
Tax Administration Act.”
There
is no indication by the respondents as to how and where and in what
way the court was incorrect in its finding. This contention
by the
respondents is defective due to the lack of particularity in setting
out the reason for this submission as a ground of appeal.
(13)
I have dealt with the
interpretation of
section 163
in detail in the judgment and am not
going to regurgitate my findings in that respect.
(14)
Counsel for the
respondents’ argument that my interpretation of “any
other person” will lead to absurd results
cannot be entertained
as a preservation order is granted under judicial supervision. A
court of law will deal with applications
and will not allow an absurd
end result.
(15)
In
Mpumalanga
Department of Education v Hoërskool Ermelo 2010(2) SA 415 CC
at
paragraph 72 the Constitutional Court held:
“
The
possibility that a statutory power may be abused - which is an
ever-attendant risk - cannot determine the construction of the
ambit
of the power, especially since the law affords adequate remedies for
official abuse of power
.
Moreover, in this instance, the statute requires the exercise of the
power to be reasonable.
The
remedy is thus to correct the abuse, and not to attenuate the power
through strained construction
.”
(Court’s emphasis)
(16)
I have carefully
considered the grounds set out in the application for leave to
appeal. The fact that the section refers to
“the assets
of the taxpayer or other person” makes it clear that it is
applicable on other parties as well and not
only on the taxpayer.
(17)
This court did not rely on
section 190(5) of the TA Act when holding Sassin responsible for
payment. The respondents once again
fail to properly set out in what
way the court was incorrect and setting out how the court’s
reliance on section 190(5) came
about, as the court’s
conclusion was not based on the provisions of section 190(5)..
(18)
The same can be said, as
set out by the fourth respondent, that the respondents failed to
state how, why or in what way section
163 of the TA Act is ambiguous,
what the impact in law may be and the nature and extent of the
ambiguity. Having regard to the
Himunchol
case
(
supra
)
the respondents once more fail to meet the required threshold to set
out the reason for declaring the finding to be wrong.
(19)
The further contention
that the provisions of section 163 violates section 25 of the
Constitution is set out as follows:
“
In finding that
a broad interpretation of Section 163 does not lead to an arbitrary
and unjustifiable infringement of the fundamental
property rights of
the affected respondents and is by implication not an infringement of
the Constitution.”
There is no indication as
to why it is alleged that section 163(1) of the Tax Act falls outside
of the provisions of the Constitution.
No reasons are set out as to
the manner in which section 163(1) of the Tax Act violates section 25
of the Constitution. This ground
of appeal has to be dismissed.
(20)
There can be no procedural
unfairness as the court grants a preservation order after considering
all the facts placed before it.
(21)
Once more it must be
emphasised that at no stage was there any indication by Mr Sassin as
to why the payment of R65 million was
justified and why R24 million
was repaid to Mr Badenhorst to pay tax.
(22)
I have considered all the
oral and written arguments, carefully to decide whether leave to
appeal should be granted. I have also
considered the authorities to
which counsel had referred me in relation to the facts in the present
matter.
(23)
I find that in the present
matter there is no prospect that another court may come to a
different conclusion having regard to the
facts and circumstances of
the present matter. I have dealt with the reasons fully in my
judgment and do not intend repeating
the reasons, but it must be
incorporated into this judgment.
(24)
Accordingly I make the
following order:
1.
The application for leave
to appeal is dismissed including the leave to appeal against the
counterclaim.
2.
The respondents to pay the
costs of the applicant, including the cost of two counsel.
3.
The respondents to pay the
costs of the fourth respondent in the application for leave to appeal
against the counterclaim, including
the costs of two counsel.
_____________________
Judge C Pretorius
Case number: 51232/2013 &
56971/2013
Matter heard on: 30 March
2016
For the Applicant: Adv JL
Van der Merwe SC
Adv LG Kilmartin
Instructed by: Ledwaba
Mazwai Attorneys
For the Second and Third
Respondents: Adv MM Rip SC
Instructed by: Cuzen
Randeree Attorneys
For the Fourth
Respondent: Adv G Marcus SC
Adv M Stubbs
Instructed by: State
Attorney
Date
of Judgment: 1 April 2016