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[2007] ZASCA 105
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Commissioner for the South African Revenue Service v Trend Finance (Pty) Ltd. and Another (162/06) [2007] ZASCA 105; [2007] SCA 105 (RSA) (19 September 2007)
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case number: 162/06
Reportable
In the matter between :
THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
.......................
APPELLANT
and
TREND FINANCE (PTY) LIMITED
.......................
FIRST RESPONDENT
TREND GEAR ENTERPRISES (PTY) LIMITED
.......................
SECOND
RESPONDENT
CORAM : HOWIE P, CLOETE, HEHER, VAN HEERDEN
et
COMBRINCK JJA
HEARD : 7 MAY 2007
DELIVERED : 19 SEPTEMBER 2007
Summary: Costs; provisional order; distinct ground of
appeal.
Neutral citation: This judgment may be referred to as
Commissioner, SARS v Trend Finance
(Pty) Ltd
[2007] SCA 105 (RSA).
_________________________________________________________
JUDGMENT
CLOETE JA
[1] A provisional order was made in this matter in
respect of the costs of the appeal: Trend was ordered to pay half of
the Commissioner’s
costs. Trend’s cross-appeal was
dismissed with costs. We have now had the advantage of written
argument from counsel on both
sides.
[2] Paragraph 32 of the judgment contains an error. The
cross-appeal concerned the first consignment and not the second and
third
consignments. Counsel for Trend concedes that as Trend was
unsuccessful in respect of the cross-appeal, those costs were
correctly
awarded to the Commissioner. But counsel argued for a more
favourable costs order in respect of the appeal. Counsel for the
Commissioner
urged that the provisional order should be made final.
[3] The Commissioner’s appeal was against the
order directing him to repay the amounts paid by Trend in respect of
the second
and third consignments, and against the order directing
him to pay all of Trend’s costs in the court
a
quo
. The Commissioner failed on the first
issue but was predominantly, although not entirely, successful on the
second. Counsel representing
Trend has correctly pointed out that the
two issues were severable in that the Commissioner did not succeed in
one of two arguments
advanced in support of the same relief; he
succeeded on one issue (trial costs) but lost on the other (refund of
the amounts paid
in respect of the second and third consignments). In
such a case, whilst an appellant’s success should be recognised
in respect
of the issue in respect of which it was successful, it
must be borne in mind that the respondent succeeded on the other
issue.
[4] Where the balance of success on severable issues
favours one party, an appeal court can, instead of cross-orders, make
a partial
costs order in favour of the more successful party. In
Protea Assurance Co Ltd v Matinise
1
this court said the following:
2
‘
The
defendant raised four distinct issues on appeal. These have been set
out and have been dealt
with above. The
defendant has succeeded on only one of the issues and, in my view,
only part of the costs of appeal should be awarded
to the defendant.
See, in this respect,
Union Share Agency &
Investment Ltd v Green
1926 CPD 129
at p 141;
Gentiruco A.G. v Firestone SA (Pty) Ltd
1972 (1) SA 589
(AD) at pp 668
et
seq
;
Cine Films (Pty)
Ltd and Others v Commissioner of Police and Others
1972
(2) SA 254
(AD) at pp 268-269;
Minister van
die Suid-Afrikaanse Polisie en ‘n Ander v Kraatz en ‘n
Ander
1973 (3) SA 490
(AD) at pp 513-514. An
apportionment of the costs of appeal is, in the instant case, beset
with difficulties, but I do think that
it would be just to order that
the defendant pay two-thirds of the plaintiff’s costs of
appeal.
The appeal succeeds to the
limited extent aforestated and it is ordered that defendant
(appellant) pay two-thirds of the plaintiff’s
(respondent’s)
costs of appeal.’
3
The appeal court may even order a predominantly
unsuccessful appellant to pay all of the respondent’s appeal
costs:
Stiff v Q Data Distribution (Pty) Ltd
.
4
[5] On the other hand, where two issues carry equal
weight for costs purposes, an appeal court could make an order that
each party
pay half of the other party’s costs on appeal; but
the usual practice, to simplify matters, is to make no order as to
costs
so that each party bears its own costs of appeal.
[6] On reconsideration and taking into account the
submissions made by counsel on both sides, I do not believe that the
order provisionally
made directing Trend to pay one half of the
Commissioner’s costs of appeal sufficiently recognises Trend’s
success in
resisting that part of the appeal on which the
Commissioner was not successful. The amount involved was substantial
─ R900 000,
together with mora interest from 2001. The
amount of time taken up in respect of this issue (both in respect of
the heads of argument
and oral argument) was considerably more than
the time taken up in respect of the costs issue. It is true that the
costs issue was
only conceded in Trend’s heads of argument, and
then only on the conditional basis that the cross-appeal did not
succeed, so
that the Commissioner had to come to this court; but in
this court the Commissioner had only to oppose the cross-appeal
successfully,
which he has done, to succeed also in respect of the
costs issue in the appeal. Trend has been ordered to pay the
Commissioner’s
costs in the cross-appeal.
[7] Bearing all these facts in mind, and the fact that
the Commissioner was not entirely successful in his appeal on the
costs issue,
I consider that it would be fair if the Commissioner
were to be ordered to pay three-quarters of Trend’s costs of
the appeal.
The Commissioner should also be ordered to pay the costs
of Trend’s application for the variation of the provisional
order
made on 23 May 2007.
5
[8] The following order is made:
1. The provisional order in respect of the costs of the
appeal contained in paragraph 3(1) of the order made on 23 May 2007
is replaced
with the following order:
‘
The Commissioner is ordered to
pay three-quarters of Trend’s costs of the appeal.’
2. The Commissioner is ordered to pay Trend’s
costs of the application to vary the provisional costs order.
______________
T D CLOETE
JUDGE OF APPEAL
Concur: Howie P
Heher JA
Van Heerden JA
Combrinck JA
1
1978
(1) SA 963
(A).
2
At
978A-C.
3
See
also
Community Development Board v Mohamed
1987
(2) SA 899
(A) at 919F-920G; the provisional costs order in that
matter was subsequently confirmed:
Hollywood
Curl (Pty) Ltd v Twins Products (Pty) Ltd (1)
1999
(1) SA 236
(A) at 253I-254G. The court made a similar order in the
latter case as well.
4
2003
(2) SA 336
(SCA) para 20.
5
Gentiruco
A.G. v Firestone SA (Pty) Ltd
1972 (2)
SA 773
(A) at 775F-
in fine
.