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[2014] ZAWCHC 59
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Commissioner for the South African Revenue Service v Van Der Merwe; In Re: Commissioner for the South African Revenue Service v Van Der Merwe and Others (13048/13) [2014] ZAWCHC 59; 76 SATC 138 (28 February 2014)
REPUBLIC
OF SOUTH AFRICA
in
the high court of south africa
(western cape division, cape town)
case
no: 13048/13
DATE:
28 FEBRUARY 2014
In the
matter between:
The Commissioner
for
the
............................................................................................
Applicant
South African Revenue
Service
And
Candice-Jean Van
Der
Merwe
..............................................................................
2
nd
Respondent
In re:
In the ex parte
application of:
The Commissioner
for
the
..............................................................................................
Applicant
South African Revenue
Service
And
Gary Walter Van
Der
Merwe
....................................................................................
1
st
Respondent
THE INDIVIDUALS, TRUSTS, CLOSE
CORPORATIONS AND
COMPANIES LISTED
IN SCHEDULE A
HERETO
................................................................
2
nd
to 21
st
Respondents
Heard:
19 November 2013
JUDGMENT
Delivered:
28 FEBRUARY 2014
Savage
AJ:
Introduction
[1]
On 30 August 2013 a provisional
preservation order was granted
ex parte
by Rogers J on application by the Commissioner for the South African
Revenue Service (’SARS’) under the provisions
of s 163 of
the Tax Administration Act 28 of 2011 (“the Act”) against
the 1
st
,
2
nd
,
7
th
,
11
th
,
14
th
and 22
nd
respondents. In terms of the order all respondents were called to
show cause why final preservation orders should not be granted,
including the 3
rd
to 6
th
,
8
th
,
13
th
and 21
st
respondents, against whom no provisional preservation order was made,
with. While the 1
st
,
2
nd
,
7
th
,
11
th
,
14
th
and 22
nd
respondents have opposed confirmation of the provisional order, only
the second respondent, Candice-Jean van der Merwe, anticipated
the
return date of the provisional order. It is the application for
confirmation of the provisional order made against the second
respondent that is currently before this Court for determination.
[2]
In terms of the provisional order made
against her, the second respondent was -
(a)
…interdicted from dealing with, disposing of encumbering or
removing from the Republic any of the following assets:
(i)
Audi A8 Spyder (CA 481415, engine
BUJ 008480)
(ii)
Land Rover Evoque
(iii)
any monies standing to the credit of
any bank accounts in her name or in respect of which she has signing
powers to the extent that
such monies represent any residue of the
sum of US$
15.3 million
(converted into the rand amount of R142 901 673) received
by her on or about 16 May 2013, such accounts to
include (without
derogating from the generality of the foregoing) any amounts held in
any of the following bank accounts: FirstRand
Bank account
62403543756 (Rosebank branch, Gauteng) in the name of Lucra Movables
(Pty) Ltd; Standard Bank third party administration
account 271783230
(Kromboom branch); and Standard Bank Marketlink account 374170991
(Milnerton branch);
(iv)
any monies held on trust by Perold &
Associates and/or Bill Tolken Hendrickse in the name of or for the
benefit of Candice van
der Merwe or in the name of any other person
or entity on whose behalf Candice van der Merwe is accustomed to give
instructions
in respect of such monies;
(v)
any other assets acquired by Candice
van der Merwe from the proceeds of the amount of R142 901 673.
[3]
The provisional order made against the
second respondent preserved assets, in respect of which -
(b)
….
there is prima facie evidence indicating:
(i)
that the assets in question in truth belong to Mr Van der Merwe and
are thus
realisable in respect of his alleged tax debts;
(ii)
alternatively, that they will be realisable to satisfy any claim
which Mr Van der
Merwe may have against Candice van der Merwe in
respect of funds made available to her at his instance;
(iii)
alternatively, that Candice van der Merwe may, in terms of s182 or
s183 of the Act, be
held jointly and severally liable for the tax
debts of Gary van der Merwe by virtue of her participation in the
receipt and further
handling of the sum of R142 901 673
previously mentioned.
[4]
A similar provisional order was made
against the 1
st
respondent, Gary Walter van der Merwe, who is the father of the
second respondent, as well as against the 7
th
respondent (‘Aeronastic’),
the 11
th
respondent (‘Pearl Island’), the 14
th
respondent (‘Executive Helicopters’) and 22
nd
respondent (‘Zonnekus’).
[5]
Prior to the anticipated return date, by
agreement between SARS and the second respondent, R1 million was
released from the operation
of the provisional order.
Relevant statutory
provisions
[6]
Section 163 of the Act provides that:
(1)
A senior SARS official may,
in order to prevent any realisable assets from being disposed of or
removed which may frustrate the
collection of the full amount of tax
that is due or payable or the official on reasonable grounds is
satisfied may be due or payable,
authorise an ex parte application to
the High Court for an order for the preservation of any assets of a
taxpayer or other person
prohibiting any person, subject to the
conditions and exceptions as may be specified in the preservation
order, from dealing in
any manner with the assets to which the order
relates.
…
(3)
A
preservation order may be made if required to secure the collection
of the tax referred to in subsection (1) and in respect of—
(a)
realisable assets seized by SARS under subsection (2);
(b)
the realisable assets as may be specified in the order and
which are held by the person against whom the preservation order is
being
made;
(c)
all realisable assets held by the person, whether it is
specified in the order or not; or
(d)
all assets which, if transferred to the person after the
making of the preservation order, would be realisable assets.
[7]
The court granting a preservation order may under
s 163(7) make
ancillary orders regarding how the assets must be dealt with,
including authorising the seizure of all movable assets,
appointing a
curator bonis
in whom the assets vest, realising the assets in
satisfaction of the tax debt and any other order that it considers
appropriate
for the proper, fair and effective execution of the
preservation order.
[8]
In terms of s 163(8) –
‘(8)
T
he court making a preservation order may also make such further
order in respect of the discovery of any facts including facts
relating
to any asset over which the taxpayer or other person may
have effective control and the location of the assets as the court
may
consider necessary or expedient with a view to achieving the
objects of the preservation order’.
Section 163(10)
provides that a preservation order remains in force in terms of)
pending any appeal against it and ‘
until the assets subject
to the preservation order are no longer required for purposes of the
satisfaction of the tax debt’
.
The applicant’s
case
[9]
The first respondent has been engaged in numerous
disputes over a number of years with SARS. In summary, SARS contends
that he has
been linked to several companies that SARS states have
fraudulently claimed VAT refunds, resulting in substantial amounts
being
incorrectly paid out with the result that the first respondent
and various other entities are currently liable to SARS for payment
of the total sum of R291,000,000 in respect of tax, additional tax,
penalties and interest. In addition, criminal charges have
been
instituted against him.
[10]
SARS details in its founding papers the
modus
operandi
followed by the first
respondent, with the assistance of other parties, involving the
intentional manipulation and inflation of
certain assets in non-VAT
entities, the selling of second hand goods (particularly aircraft,
vessels and spare-parts) by non-vendors
to vendors, all in order to
enable the vendors to claim notional input tax in terms of s
16(3)(a)(ii) of the Value Added Tax Act
89 of 1991. In the process,
the selling non-vendors have not been liable for the payment of any
output tax as they have not been
registered for VAT purposes, whilst
the purchasing vendors claimed input taxes from SARS. Payment in
terms of the agreements has
largely been made by transferring shares,
the values of which have been manipulated according to SARS. Income
tax returns have
been withheld in order to avoid income tax and
capital gains tax liabilities based on the inflated sale value of the
assets, or
when submitted have been manipulated artificially to
create losses. The selling has ostensibly occurred between arm’s
length
parties, but SARS states that in reality the parties have been
linked to each other and controlled by the first respondent and the
transactions have primarily, if not exclusively, been entered into
for the purpose of creating VAT refunds. These transactions
have been
regarded by SARS as falling within the meaning of a scheme as
envisaged by s 73 of the VAT Act.
[11]
By way of example of such a scheme, SARS details
transactions during 2005 involving the first respondent and the
companies Executive
Helicopters, SA Administration Services, Two
Oceans Aviation and Helibase. SARS states that the first respondent
was a director
of SA Administration Services, the general manager of
Two Oceans Aviation, a director (with his mother), as well as general
manager
and public officer of Helibase. He acquired 50% of Executive
Helicopters and subsequently represented the company in interactions
with SARS. SARS raised assessments against Executive Helicopters in
respect of the VAT period 09/2005 to the value of R44.1 million
in
terms of s 190(5) of the Act, which provides that if SARS pays to a
person by way of refund of any amount which is not properly
payable
to the person under a tax act, the amount is regarded as tax payable
by the person to SARS from the date on which it is
paid to the
person. The company did not appear at the tax appeal raised by it, as
a result of which the sum of R72,608,119.66 is
currently due and
payable to SARS.
[12]
SARS also provides in its founding papers by way
of background the history of the arrest of the first respondent on 13
July 2004
at Cape Town International Airport with foreign currency in
the approximate rand value of R1.2 million. The currency was seized
and ultimately, following litigation, returned to the first
respondent on the basis that is constituted the total allowance
permissible
for a group of eight adults and four children who, apart
from himself, had already left for Las Palmas two days earlier. The
monies
were stated to have been sourced from the sale of immovable
property owned by Zonnekus, gambling winnings, redemption at a
casino,
his children’s savings account and the available amount
on his credit card, with the US dollars belonging to a friend.
Lengthy
litigation ensued regarding the return of the funds.
[13]
SARS contends that the second respondent, either
in her own right owes SARS taxes or holds assets on behalf of her
father, or some
of the other respondents, against which assets SARS
may execute in the collection of taxes. During May 2013 the Financial
Intelligence
Centre (‘FIC’) made SARS aware of certain
transactions relating to the first and second respondents. On 16 May
2013
Standard Bank of South Africa received the amount of
US$15,300,000.00 for the benefit of the second respondent. The
remitter of
the funds was identified as Muhamad Muhamad Nazih Rawas
(‘Rawas’) and the funds were transferred from the Bank
Med
Sal in Lebanon. The second respondent, in her application to sell
this foreign currency, gave her contact details as those of her
father and stated that the funds were a gift from Rawas. The SWIFT
transaction recorded the transfer to be for ‘South Africa
Purchase of Property in Cape Town’. On 21 May 2013 the amount
of R142,901,673.10, less bank charges, was transferred to a
Marketlink account number 374170991 held by the second respondent, on
which account she has signing powers.
[14]
From the papers is it apparent that thereafter R15
million was transferred to the First National Bank savings account of
Lucra Movables
with account number 62403543756 as an investment for
the second respondent. R110 million was transferred to the trust
account of
Perold & Associates Attorneys on 27 May 2013 and R7.9
million to the Standard Bank account of Zonnekus Mansions. On 27 May
2013, R100 million was transferred to a ‘third party fund
administration account’ held at Kromboom with account number
271783230 under the name of Ms Candice van der Merwe and R10 million
on 28 May 2013 to Ocean View Trust.
[15]
On 29 May 2013 R10 million was received into the
attorney’s trust account from the Kromboom account and the next
day payment
of R10 million was paid to Lucra Movables. Most of the
funds were transferred back to the attorney’s trust account
when a
transfer of R87.5 million was received on 4 June 2013 and on
the same date the same amount was transferred to Tolken Hendriksen,
a
firm of attorneys.
[16]
From December 2012 to May 2013 amounts in excess
of R2 million were received by Zonnekus Mansions from ‘Perolds’
and/or
‘Perold and Associates’. Nedbank had enrolled an
application for the winding-up of Zonnekus in this Court on 7 August
2013, which application was withdrawn following Zonnekus settling its
indebtedness to Nedbank. SARS contends that the funds transferred
from the second respondent’s account to Zonnekus Mansions’
account ‘in all probabilities’ were used to
settle such
indebtedness to Nedbank, strengthening SARS’ belief that the
funds received by the second respondent may not
be her own but
received on behalf of her father or some of the other respondents,
alternatively that she allows her accounts to
be used by them. SARS
considers these transactions to have tax implications and require
investigation. Furthermore, the account
of Lipsotex (Pty) Ltd, held
at First National Bank under account number 62379325337 shows
references to Zonnekus and Van der Merwe.
SARS contends that all of
these transfers support its reasonable belief that the first
respondent uses the respondents, other persons
and entities to hide
his assets.
[17]
The second respondent is currently working as a
model. She declared taxable income in 2009 of R20,023.00, in 2010 of
R20,912.00,
in 2011 of R24,995.00 and in 2012 of R45,366.00.
[18]
In May 2013 she acquired an Audi R8 and during
June 2013 a Land Rover SD4 Coupe Auto. Both vehicles were not
financed.
[19]
SARS believes that the US$15.3 million received by
the second respondent was received by her on behalf of any one or
more of the
respondents, alternatively that she allows her accounts
to be used by them. A final preservation order is sought against her
to
secure assets that may be executed against in respect of existing
indebtedness to SARS, as well as indebtedness still to be
established.
SARS contends that the second respondent may be held
personally liable for the indebtedness of her father or the other
respondents
owing taxes to SARS in accordance with chapter 11, part D
of the Act, alternatively s 424 of the Companies Act 61 of 1973 and
the
corresponding provisions of the new Companies Act. SARS seeks
that the order remain in force for as long as it is required to
secure
the collection of tax and until the tax debts of Van der Merwe
and the respondents owing or found to be owing taxes have been
settled
in full, and pending finalisation of steps to be instituted
to declare the assets of the other respondents executable for the tax
debts or hold them personally liable.
[20]
To this end, a
curator
bonis
as envisaged in s163(7)(b) of the
Act, was appointed by terms of the provisional preservation order to
take charge of the assets
of respondents and to identify assets which
can be executed against for the collection of taxes due to SARS. SARS
persists that
it is undesirable for the first respondent to be left
in control of the respondents, as it is reasonable to believe that if
allowed
to do so, the assets of the respondents will be dissipated or
their value diminished and the effective realisation of the assets
to
the benefit of both the respondents and SARS may be ‘extremely
difficult and even impossible’. This is given that
the SARS
believes that the corporate entities are used to hide assets to the
detriment of SARS and the realisation of shareholding,
members’
interest and loan accounts cannot effectively be dealt with in terms
of the normal execution steps prescribed by
the Rules of Court. In
addition, SARS persists that the appointment of a mediator is
required, with the costs of both the
curator
bonis
and the mediator to be borne by
the respondents jointly and severally insofar as such costs are
incurred in the effective execution
of the order.
Basis of opposition
[21]
The second respondent
seeks
that the provisional order made against her be set aside and takes
issue with the fact that SARS, without notice to her, interdicted
her
from dealing with her assets and now seeks a ‘most draconian’
final order against her on the basis of a bald allegation
that the
funds ‘may’ not be her own but with no facts to support
this.
[22]
She states that SARS knew in May 2013 that
the funds were received by her on 21 May 2013 as a gift remitted by
Rawas from an account
in Lebanon for the purchase of property in Cape
Town and no facts have been uncovered since transfer to show that the
transactions
were not genuine ‘
or
that the funds paid by Rawas were anyone else’s, let alone [her
father’s]
’. The vast
majority of the funds have been invested in immovable property which
‘plainly is not going anywhere’
and SARS is not entitled
to divest her of her assets.
[23]
When she was 15 years old the second
respondent met Ryan Hignett (‘Hignett’) who books models
to travel to the Seychelles
to attend at resorts. Given that she was
too young to travel and work abroad on her own when she was first
contacted by Hignett,
he contacted her again when she was 19 years
old and asked her if she was interested in travelling to the
Seychelles. She was contracted
through Ice Model Management (‘Ice
Models’) to travel to the Plantation Club on Mah
é
Island, in the Seychelles, a private resort she states is owned and
frequented by some of the richest private individuals in the
world
‘
for whom money is no object
’
and to whom privacy and security are paramount with ‘
(m)odels
from only the trusted agencies … routinely flown in from all
over the world to lend a sense of glamour and exclusivity
’
to events at the resort. On arrival she states that their passports
are taken from them, only returned on their departure
and they are
prohibited from taking photographs or disclosing the identity of any
person met at the resort, failing which their
contract may be
terminated.
[24]
On her first trip to the resort from 13 to
17 October 2012, the second respondent states that she ‘
got
on very well
’ with the people she
met there. Although she indicates that she is not certain as to the
reasons for this, she suspects it
was the result of her healthy
lifestyle, strict exercise regime and what she has been told is her
‘
very engaging personality
’.
She was booked through Ice Models (Ice Genetics section) to return to
the Seychelles resort, which she did from 26 to 28
January 2013, 9 to
17 March 2013, 15 to 19 May 2013 and 20 to 22 May 2013. It was during
her visit from 9 to 23 March 2013 that
‘
one
of the topics of conversation which came up
’
was cars that she liked. She indicated that her dream car was an Audi
R8. Shortly after her return to South Africa her car
was written off
in an accident and her cellphone damaged. She discussed the incident
with numerous people ‘
including
persons with whom I have become friendly while I have been in the
Seychelles
’. A few days later,
she received two new cellphones by courier and was contacted by the
V&A Waterfront Audi dealership
and presented with an Audi R8
Spyder which she was informed by the dealership was registered in her
name and had been purchased
for her. Documents put up indicate that
the amount of R2,090,000.00 was paid in cash for the vehicle. In June
2013 a Land Rover
Evoque was presented to her in similar
circumstances having been purchased in cash for R660,683.09 and
registered in her name.
Jacques Taljaard, a sales executive at Audi
Waterfront stated on oath that he had received an enquiry for an Audi
R8 Spyder from
one Georges Moussalli (‘Moussalli’) with
whom he was in email contact thereafter and from whom he asked a R500
000
deposit, although the full purchase price of the vehicle was then
paid to the dealership. Niel Burger of Land Rover in Cape Town
deposed to a similar affidavit in which he confirmed that he too had
been in email contact with Moussalli relating to payment and
thereafter transfer of the Land Rover to the second respondent.
[25]
The second respondent states that in 2013 a
number of the friends she had met in the Seychelles came on a trip to
Cape Town. They
spoke about different areas in Cape Town and it was
suggested to her that she look for a house in one of the areas that
she liked
as she ‘
would receive
funds to pay for it’
. She viewed
50 Ave St Bartholomew in Fresnaye and states that she loved the
property which comprises of erf 1990 Fresnaye, erf
1991 Fresnaye and
erf 1917 Fresnaye. The asking price was R110 million which she
communicated to her friends. Subsequently, the
amount of US$15.3
million was remitted to her by Rawas.
[26]
Candice requested her father, who is an
experienced businessman, to assist and represent her in dealing with
the funds and the negotiations
for the purchase of the property. The
shareholding in K2013087647 (South Africa) (Pty) Ltd, the company
which purchased erf 1991
Fresnaye from Ocean View Trust for R4
million, is held and owned by her and she is sole director of the
company. The shareholding
in K2013087073 (South Africa) (Pty) Ltd,
the company which purchased erf 1990 Fresnaye from Ocean View Trust
for R7 million, is
held and owned by the Moondance Trust. The second
respondent is the sole director of K2013087073. The trustees of the
Moondance
Trust are Candice, her sister (Christin Monique Ahrens) and
her father. The second respondent and her descendants are the sole
income and capital beneficiaries of the Moondance Trust.
[27]
The Moondance Trust purchased from the Hyde
Park Trust the shareholding in and all claims on loan account of this
Trust against
Promotrade (Pty) Ltd for R86.5 million. The
shareholding in Promotrade is held and owned by the Moondance Trust.
The second respondent
is the sole director of Promotrade and the
Moondance Trust is Promotrade’s sole shareholder. Bill Tolken
Hendrikse are the
conveyancers to whom SARS wrote on 3 September 2013
and who indicated to SARS that no funds were held in trust by the
firm on behalf
of any of the respondents.
[28]
The second respondent put up a letter
signed by Rawas in which he stated that –
‘…
the
funds remitted to Miss. Candice Jean Van der Merwe was a gift and
that she may deal with them in her discretion as they are
hers, she
may purchase a property or what ever she wishes to do with the
funds
.’
[29]
The rand amount paid to her was
R142,901,028.10, after costs, of which R98,578,030.82 was used to
purchase the three immovable properties,
R25 million was loaned in
terms of an acknowledgment of debt and loan agreement signed with
Bret Lang to Lucra Movables, now known
as Bank On Assets Holdings
(Pty) Ltd, a company which buys distressed assets and on-sells them,
being an investment with an annual
return of 10% per year over 36
months with the option of purchasing shares in Lucra Movables.
[30]
In addition, the debts of Zonnekus, the
shareholding of which is held by the Eagles Trust of which she and
her two siblings are
sole beneficiaries, were paid in order to
discharge an order placing the company in provisional liquidation.
Given her good relationship
with her siblings, the second respondent
states that she was ‘happy to assist’ and by agreement,
Lucra Movables purchased
Zonnekus Mansion, one of five properties
held by Zonnekus, for R10 million of which R6,187,260.00 was used to
settle debts outstanding
and cancel the bond with Nedbank, with the
result that the order of provisional liquidation against the company
was discharged.
[31]
A total amount of R12.9 million was paid to
Zonnekus in various deposits on 27 May 2013 and 19 August 2013.
Zonnekus carries out
building projects and will be used to improve
the properties bought by her and the second respondent states that
she uses its account
for other expenditure in relation to the
properties as she does not have a current account. In addition,
Zonnekus has paid transfer
costs for the properties and bought R2.3
million in gym equipment. The approximate balance of R5 million of
the funds remitted
by Rawas remains in her account.
[32]
She states that all of these transactions
were concluded openly and have been investigated by the authorities,
with no further investigation
required. The effect of the provisional
order is that building work at the properties ‘
is
about to grind to a halt
’ and
expenses must be paid.
[33]
The second respondent states that she has
no interest in any of the business affairs of her father, not ever
has; her father has
no interest in her assets or funds; and that she
knows nothing of the 7
th
to 21
st
respondents. It is wrong, she says, to suggest that the funds
received ‘
may not
’
be her own, a speculation without foundation.
[34]
The first respondent confirmed that he is a
trustee of the Eagles Trust and general manager of Zonnekus. He
denied that he was involved
in providing his daughter with US$15.3
million, or any portion thereof, nor the expensive vehicles she
received, given that he
has no assets and has judgments against him
in excess of R100 million.
Reply
[35]
In reply SARS claims that the second
respondent’s opposition to the preservation order lacks merit
and persuasion, that she
has not raised any
bona
fide
dispute of fact, that piecemeal
adjudication of the application should be avoided and the her ‘
vague
and unsubstantiated version
’ is
not capable of being resolved on affidavit. She has not explained
‘
who or what Mr Rawas is
’,
has failed to detail who her friends are, as well as when, where and
how they indicated that they would forward funds to
her or how the
precise amount of $15.3 million was transferred. Furthermore, there
has been no explanation as to why she stated
in an affidavit on 24
May 2013 that the funds ‘
were
received as a gift from my companion
’
or why no details of her employment at the Plantation Club has been
provided. Issue is taken with the fact that on 3 June
2013 at a
meeting held with members of the Financial Surveillance Department of
the employees of the South African Reserve Bank
(‘SARB’),
the second respondent stated that upon receipt of the funds she had
‘
not identified a specified
property to purchase’
. Following
the interview, which was also attended by her father, he confirmed
that the contents of a letter dated 8 July 2013 to
the second
respondent were correct. This letter recorded that –
‘…
2.
you were requested to provide us with further
details in respect of
the foreign currency amount of USD 15 299 965-00, converted to Rand
142 901 673-10, at The Standard
Bank of South Africa on 2013-05-17.
3.
You informed us that:
3.1 The said
foreign currency in question was gifted to you for your personal use
by a Mr [redacted]
after having advised him of your intention to
purchase a house. The funds in question were, however, remitted to
you without prior
notice of the amount authority was to be applied;
3.2 at the date
of receipt of the funds you had not identified a specific property to
purchase;
3.3 you met Mr
[redacted] six-month prior to the receipt of funds in question during
a trip to the
Seychelles; and
3.4 Mr Muhamad
Rawas reflected on the relevant declaration to The Standard Bank of
South Africa Limited
is in fact an assistant to Mr [redacted] and not
the donor of the funds in question
.
Evaluation
Relevant statutory
provisions
[36]
The
Tax Administration Act, which
came into
operation on 1 October 2012, replaced the common law preservation
interdict which required that an applicant prove on
a balance of
probabilities that the assets sought to be preserved would be
diminished with the specific objective of frustrating
the claimant’s
claim if the interdict were not granted.
Knox
D’Arcy Ltd v Jamieson and others
[1996] ZASCA 58
;
1996 (4) SA 348
(A) at 372F-G and approved of in
Janse
van Rensburg NO and another v Minister of Trade and Industry and
another
2001 (1) SA 29
(CC) at para 33.
[37]
A preservation order may be made in terms
of s 163(3) of the Act ‘
if required to secure the
collection of tax’,
with its purpose in s 163(1) being ‘
to
prevent any realisable assets from being disposed of or removed which
may frustrate the collection of the full amount of tax
that is due or
payable or the official on reasonable grounds is satisfied may be due
or payable’.
[38]
A preservation order obtained remains in
force in accordance with section 163(10) pending any appeal against
the order or ‘
until the assets
subject to the preservation order are no longer required for purposes
of the satisfaction of the tax debt
’,
with a tax debt defined in s 1 as ‘
an
amount of tax due by a person in terms of a tax Act
’.
In preserving the assets of a person, the order neither divests a
person of such assets, nor grants an order of forfeiture
against the
assets and the person against whom the order is made is not obliged
by its terms to settle any tax debt.
[39]
There is no requirement contained in s 163 that the applicant
prove that the assets sought to be preserved would be diminished if
the order were not made. The basis on which a preservation order, in
terms of s 163(3), may be made is ‘
if required
to
secure the collection of tax
’. Mr
MacWilliam
SC
argued for the second respondent that the w
ords
‘
if required
’
make the provision ‘vastly intrusive and draconian’. He
contended that the provision must be interpreted to
require an
objective standard of necessity to prevent dissipation. In support of
this contention he argued that a statute must
be construed in such a
manner that it will alter the common law no more than is necessary
(
Reek N.O v Registrateur van Aktes,
Transvaal
1969(1) SA 589 (T) at 594H to
595A) and in cases of uncertainty or ambiguity, a fiscal statute is
to be interpreted
contra fiscum
(
Estate Reynolds v CIR
1937
AD 57
at 70).
[40]
In
National Director of Public
Prosecutions v van Staden and Others
2013 (1) SACR 531
(SCA) at
para 12, in the context of an application for a restraint order under
the provisions of s 26 of the
Prevention of
Organised Crime Act 121 of 1998 (‘POCA’),
Lewis JA
took issue with the finding of the court
a
quo
that the effect of that provision
was draconian. The judge stated that although it ‘
may
be
harsh, it is not generally accepted to be draconian.
The defendant is not deprived of his property arbitrarily. He is
simply restrained
from dissipating what are alleged to be the
proceeds of unlawful activities until such time as he has been
convicted and a court
is persuaded that such proceeds should be
confiscated
.’
[41]
Similar reasoning applies to a preservation
order under s 163. Whilst the grant of a preservation order may be
considered harsh,
there are compelling reasons within the context of
our constitutional democracy why steps which assist the fiscus
securing the
collection of tax are required, which include court
orders to preserve assets so as to secure the collection of tax. Had
it been
intended by the legislature that the court infuse the
requirement of necessity to prevent dissipation into a determination
as to
whether a preservation order should be granted in terms of
s163(3), as much would have apparent from the statute. This is given
that there exists a clear distinction between the word ‘required’
and the requirement of necessity. As much is event
from the Concise
Oxford English dictionary definition of ‘required’ as
‘need or depend on, wished to have’,
as opposed to
‘necessity’ which is defined as ‘an indispensible
thing’.
[42]
Necessity to prevent dissipation is also
not capable of being read into the statute by implication or
otherwise. Corbett JA in
Rennie NO v
Gordon and another NNO
1988 (1) SA 1
(A) at 22E-G stated that –
‘
Over the
years our Courts have consistently adopted the view that words cannot
be read into statute by implication unless the implication
is a
necessary one in the sense that with out it effect cannot be given to
the statute as it stands
(see e.g.
Germiston Municipality v Rand Cold
Storage Co
Ltd
1913 TPD 530
at 539;
Taj
Properties (Pty) Ltd v Bobat
1952 (1)
SA 723
(N) at 729 E-H;
S v Van Rensburg
1967 (2) SA 291
(C) at 294C-D;
The Firs
investments (Pty) Ltd v Johannesburg City Council
1967 (3) SA 549
(W) at 557B-C;
DEP
Investments (Pty) Ltd v City Council, Pietermaritzburg
1975 (2) SA 261
(N) at 265G-H;
Hamman en
‘n ander v Algemene Komitee, Johannesburgse Effektebeurs en ‘n
ander
1984 92) SA 383
(W) at 391 H…’
[43]
No necessary implication exists which
warrants reading a requirement of the requirement of necessity into
the statute. It follows
therefore that for a court to determine
whether a preservation order is required to secure the collection of
tax in terms of s
163(3), it does not need to be shown that the grant
of the order is required as a matter of necessity, or to prevent
dissipation
of the assets. Rather, in making the assessment as to
whether to grant the order or not, t
he court must be apprised
of the available facts in order to arrive at a conclusion,
reasonably
formed
on the material before it, as to whether a preservation
order is required or not to secure the collection of tax. These facts
must
not amount to a statement of the applicant’s opinion but
must illustrate an appropriate connection between the evidence
available
and the nature and purpose of the order sought. It is not
required of the court to determine whether the tax is, as a matter of
fact, due and payable by a taxpayer or other person contemplated in
s163(1) which will be determined by later enquiry.
Rather,
at the preservation stage sufficient information is to be placed
before the court to enable the court to determine whether
such an
order is required against the persons against whom it is sought.
[44]
Once it has been shown that the order is required to secure
the collection of tax, the court is properly seized of its discretion
and of the view I take of the matter, as with the granting of a
restraint order under the provisions of POCA, it is not open to
the
court to then frustrate the statutory provision when it purports to
exercise its discretion
(cf Kyriacou, footnote 1, paras 9 and 10
referred to in NDPP v Rautenbach and another
[2005] 1 All SA 412
(SCA) at para 27
).
Does confirmation of the
order amount to final relief?
[45]
It is trite that in order to obtain interim
interdictory relief an applicant must establish
a
prima
facie
right to such relief,
show there to
exist
an apprehension of harm which may be irreparable, that
the the balance of convenience favours it and
indicate
the absence of a satisfactory alternative remedy.
Howard
Farrar
,
Robinson & Co v East London Municipality
(1907)
24 SC 685
687;
Ferreira v Grant
1941 WLD 186
192;
SA Motor
Racing Co Ltd v Peri-Urban Areas Health Board
1955 1 SA 334
(T) 338–339;
Van den Berg v OVS Landbou Ingenieurs
(
Edms
)
Bpk
1956 4 SA 391 (O) 400;
Windhoek
Municipality v Lurie & Co
(
SWA
) (
Pty
)
Ltd
1957 1 SA 164 (SWA) 170. Where a clear right is
shown to exist a final interdict may be granted.
Prinsloo v Shaw
1938 AD 570.
[46]
Mr
Gauntlett
SC for the applicant argued that confirmation of the rule
nisi
granted did not have the effect of a final interdict in that the
terms of the order are in effect interlocutory, capable of variation
or discharge if circumstances change. Furthermore, the
order
has no final effect on the category of assets preserved and simply
confirms the interim arrangement pertaining to the assets.
[47]
In determining whether an order is final ‘
not merely
the form of the order must be considered but also, and predominantly
its effect
’ (
South African Motor Industry Employers’
Association v South African Bank of Athens Ltd
1980
(3) SA 91
(A) at 96H, and
Zweni
v
Minister of Law and Order
1993 (1) SA
523
(A)
at 532I).
An order which is purely
interlocutory in effect is one which if reversed on appeal would
remain purely interlocutory in its effect.
Priday
t/a Pride Paving v Rubin
1992 (3) SA
542
(C) at 547H. This is given that a court in interlocutory
proceedings is not called upon to determine disputes of fact and is
only
required to determine if a
prima facie
case
has been made out.
Fourie
v Oliver and another
1971 (3) SA 274
(T) at 285.
[48]
Where the decision of the court is
determinative of a self-standing issue which has been finalised and
in respect of which the trial
court is bound, it may be appealable.
Caroluskraal Farms (Edms) Bpk v Eerste
Nasionale Bank van Suider-Afrika Bpk; Red Head Boer Goat (Edms) Bpk v
Eerste Nasionale Bank
van Suider-Afrika Bpk; Sleutelfontein (Edms)
Bpk v Eerste Nasionale Bank van Suider-Afrika Bpk
[1994] ZASCA 23
;
1994 (3) SA 407
(A).
To be appealable, a decision of the High
Court must be a judgment or order that is final in effect, definitive
of the rights of
the parties in that it grants definitive and
distinct relief and dispositive of at least a substantial portion of
the relief claimed
in the main proceedings.
Zweni v Minister of
Law and Order
1993
(1) SA 523
(A).
[49]
If the issues raised by the interim order are not to be reconsidered
in the main proceedings, the order may be final in effect and thus
appealable.
Metlika Trading Ltd and others v Commissioner for SARS
2005 (3) SA 1 (SCA) at para 23.
[50]
A restraint order under the provisions of POCA was found in
Phillips and Others v National Director of Public Prosecutions
[2003] 4 All SA 16
(SCA) at paras 12 and 21
to
have only temporary duration, operative pending the outcome of later
events and is rescindable.
Howie
JA in
Phillips
at
para 22 nevertheless found that the effect of such an order was to
strip the defendant of the restrained assets and any control
or use
of them as a result of which he ‘
is
remediless’
pending the
conclusion of the trial. This ‘
unalterable
situation’
he concluded was
final ‘
in the sense required by
the case law for appealability
’
and that in spite of the order lacking certain characteristics of a
final order, the legislature clearly contemplated it
to be
appealable.
[51]
Section 163(10) provides that a preservation order
remains in force
pending the setting aside of such order on
appeal, if any, or until the assets subject to the preservation order
are no longer
required for purposes of the satisfaction of the tax
debt. The legislature clearly contemplated therefore that such an
order is
capable of being appealed. Thus, while the order may, as
with a restraint order under POCA, be of temporary duration and
rescindable,
where it is neither rescinded nor set aside on appeal
its effect is to create an otherwise unalterable situation which
removes
control, and in certain instances, use of such assets from a
person.
[52]
It therefore displays elements of final relief insofar as its
purpose and effect is concerned. Final interdictory relief requires
proof of a clear right, an actual or threatened invasion of such
right and no other suitable remedy permit the grant of final relief.
Setlogolo v Setlogolo
(1914) AD 221
at 227;
Hall & Another v Heyns & Others
(1991) (1) SA 381
at 395 E -
F).
In my mind given the distinct
species of relief sought in a preservation order, it is not
appropriate that the test for final interdictory
relief apply to the
grant of such order, not only given that the order is not in all
respects final given that its terms may be
varied but also given the
unique nature of such order. If I am correct in this regard, it
follows as a necessary consequence that
disputed evidence in
applications of this nature would not be subject to the well-known
rule enunciated by Corbett JA in
Plascon-Evans
Paint Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) but that the court would be
entitled to arrived at a conclusion reasonably formed
on a
consideration of the material before it
that such
an order ‘
is required to secure
the collection of tax
’.
[53]
Support for this conclusion is to be found
in the judgment of Mlambo AJA (as he then was) on behalf of the
majority of the court
in
NDPP v Kyriacou
2004 (1) SA 379
(SCA) in which he rejected the notion that disputed
evidence in a preservation application under POCA must be dealt with
in accordance
with the principles applicable to motion proceedings
set out in
Stellenbosch Farmers Winery
Ltd v Stellenvale Winery (Pty) Ltd
1957
(4) SA 234
(C) and
Plascon Evans Paint
Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A).
Referral to oral
evidence
[54]
In the event that this Court is not
inclined to grant a final preservation order, SARS seeks an order in
terms of Rule 6(5)(g) of
the Uniform Rules of Court referring the
matter to oral evidence and that the second respondent be ordered to
appear in person
to be cross examined on a number of issues. The
second respondent opposes a referral to oral evidence on the basis
that the application
for a final order is to be determined on the
papers and only where a matter cannot properly be decided on
affidavit, in terms of
Rule 6 that issues may be referred to oral
evidence.
[55]
Rule 6 (5)(g) of the Uniform Rules of Court
provides that -
‘
Where an
application cannot properly be decided on affidavit the court may
dismiss the application or make such order as to it seems
meet with a
view to ensuring a just and expeditious decision. In particular, but
without affecting the generality of the aforegoing,
it may direct
that oral evidence be heard on specified issues with a view to
resolving any dispute of fact and to that end may
order any deponent
to appear personally or grant leave for him or any other person to be
subpoenaed to appear and be examine and
cross-examined as a witness
or it may refer the matter to trial with appropriate directions as to
pleadings or definition of issues,
or otherwise.’
[56]
A party who is obliged by law to bring
proceedings by way of notice of motion, such as in the current
instances, and who seeks to
discharge an onus of proof which rests
upon him or her by asking for an opportunity to adduce oral evidence
or to cross-examine
deponents to answering affidavits, should not be
lightly deprived of that opportunity.
AECI
Limited v Strand Municipality
1991 (4)
SA 688
(C) at 698J-699A;
Freedom Under
law v Acting Chairperson: Judicial Service Commission
2011 (3) SA 549
)SCA) at 564F-H. However, in
Hopf
v Pretoria City Council
1947 (2) SA 752
(T) at 768 the court cautioned that the Rule is ‘
intended
to provide an expeditious method of settling disputed questions of
fact’
and that its function is not
to
engage in a fishing excursion in relation to one’s case.
[57]
In
Room Hire
Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155
(T) at 1164 it was stated that -
‘…
entirely
different considerations apply where purely interim relief is sought
in interlocutory matters such as interdicts pendente
lite. Where
however permanent relief is sought, it does not follow that the only
way of deciding the dispute of fact is by trial
action. The Court has
a discretion in the matter. The presiding Judge may find it
convenient, in cases where the issues are clearly
defined, the
dispute of fact comparatively simple even though material, and a
speedy determination of the dispute desirable, to
act under Rule 9
(the predecessor of Rule 6(5)(g)). The employment of this Rule is at
the Court’s option, exercisable whether
or not either party
requests him to invoke it – and even if the party who has
raised the dispute by denials or counter-allegations
refuses oral
evidence. In other circumstances the Court’s discretion may
well be exercised in the direction of either dismissing
the
application, or of sending the parties to trial, with such direction
as to costs and of filing pleadings as it deems fit. What
particular
course should be taken depends upon the circumstances of each case,
and it is undesirable to lay down any rule regarding
the exercise of
the Court’s discretion
.’
[58]
A real, genuine and
bona fide
dispute of fact can exist
only where the court is satisfied that the party who raises the
dispute has unambiguously addressed the
fact in his or her affidavit.
Harms DP
in
National
Director of Public Prosecutions v Zuma
2009 (1) SACR 361
(SCA) at 26
stated
as follows:
‘
Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common cause facts.
Unless the circumstances are special
they cannot be used to resolve factual issues because they are not
designed to determine probabilities.
It is well established under the
Plascon-Evans rule that where in motion proceedings disputes of fact
arise on the affidavits,
a final order can be granted only if the
facts averred in the applicant's (Mr Zuma’s) affidavits, which
have been admitted
by the respondent (the NDPP), together with the
facts alleged by the latter, justify such order. It may be different
if the respondent’s
version consists of bald or uncreditworthy
denials, raises fictitious disputes of fact, is palpably implausible,
far-fetched or
so clearly untenable that the court is justified in
rejecting them merely on the papers.
Plascon-Evans Paints Ltd v Van
Riebeeck Paints (Pty) Ltd
1984 (3) SA 623 (A)
634-5; Fakie NO v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA)
para
55; Thint (Pty) Ltd v National Director of Public Prosecutions;
Zuma v National Director of Public Prosecutions
[2008]
ZACC 13
;
2008
(2) SACR 421
(CC)
para 8-10. The court below did not have regard to these propositions
and instead decided the case on probabilities without
rejecting the
NDPP’s version. Sewmungal NNO v Regent Cinema
1977 (1) SA 814 (N); Trust Bank van Afrika
Bpk v
Western Bank Bpk NNO 1978 (4) SA 281 (A)
’.
[59]
A similar view was expressed by Heher JA in
Wightman t/a JW Construction v Head Four
(Pty) Ltd & another
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA) at paras 12 and 13 in which he stated that -
‘
Recognising that the truth
almost always lies beyond mere linguistic determination the courts
have said that an applicant who seeks
final relief on motion must in
the event of conflict, accept the version set up by his opponent
unless the latter’s allegations
are, in the opinion of the
court, not such as to raise a real, genuine or bona fide dispute of
fact or are so far-fetched or clearly
untenable that the court is
justified in rejecting them merely on the papers
.’
[60]
This Court has a discretion as to whether
or not to grant an interdict (
LAWSA
11:408). Such wide discretion
includes the refusal of an interim interdict, even if the requisites
have been established but
it is one that must be exercised according
to law and upon established facts.
[61]
There is no dispute between the parties that there exists no tax
debt
currently owed by the second respondent to SARS, nor is it disputed
that various tax debts are owed by her father and various
enterprises
with which he was involved to SARS.
[62]
Mr
Gauntlett
questioned the probabilities of a young
model earning in the region of R20,000 per annum enjoying the serial
generosity of a benefactor
on an unparalleled scale and argued that
they should dismissed as far-fetched, too implausible to be capable
of belief, highly
improbable in human experience and as amounting to
a ‘breathtaking fairytale’. SARS contends that the second
respondent’s
assets stand to be preserved to secure the
collection of her unquantified future tax debt that may arise in due
course, no doubt
as a consequence of her procuring the assets she
has, and her father’s tax debts on the basis that ‘
the
preservation of any assets of a taxpayer
or
other person
’ (my emphasis) is permissible under
s163(1)
. The first defendant is alleged by SARS to
have misused the juristic personality of various of the respondents
for improper purposes
and has, and continues to use his family
members as fronts or nominees for him according to the applicant.
This is evident in the
fact that bank accounts and the assets of the
second respondent and Zonnekus Mansions have been used as his
personal accounts in
an attempt to hide his true wealth and taxable
income from SARS.
[63]
Furthermore, it is argued for SARS that the
manner in which the receipt of the R142 million by the second
respondent was dealt with
by her father, whose contact details were
provided in the application to sell foreign currency and who, it is
alleged, has signing
powers over the account to which the funds were
transferred, illustrated her father’s control over the funds.
SARS contends
that the second respondent accordingly holds assets on
behalf of her father, or some of the other respondents, against which
SARS
may execute in the collection of the taxes and that it is
required that these assets be preserved to secure the collection of
tax.
It is for these reasons undesirable to leave him in control of
his daughter’s assets.
The second
respondent, it is argued, raises no
bona
fide
dispute that the transactions
regarding the R142 million ‘probably have tax implications and
therefore must be investigated’.
On this basis alone,
reasonable grounds have been shown for the preservation order against
her to secure tax in relation to her
assets while the receipt of the
assets is being investigated.
[64]
Mr
MacWilliam
persisted that the second respondent’s explanation for her
receipt of $15.3 million, as well as the cars and cellphones,
was
that they were gifts remitted by Rawas,
and
that had the contrary been so, the second respondent’s conduct
in having funds previously overseas and beyond the reach
of SARS
imported into the country is conduct contrary to an intention to
dissipate. SARS, it was argued, could have investigated
the
source of the funds to verify her explanation. The receiving bank did
scrutinise and validate the transactions, as did the South
African
Reserve Bank and the Financial Intelligence Centre. The vast majority
of the funds were used to acquire immovable property
in Cape Town and
improve such property, conduct also incompatible with dissipation. In
addition, the involvement of her father
was not surprising given that
the second respondent is young with no business experience.
[65]
Having regard to the version put up by
the second respondent, I am persuaded that this Court is entitled to
exercise its discretion
to find that such version, in the words of
Harms JA, ‘
consists of bald or
uncreditworthy denials, raises fictitious disputes of fact, is
palpably implausible, far-fetched or so clearly
untenable that the
court is justified in rejecting them merely on the papers’.
T
he
probabilities that a young model, earning in the region of R20,000
per annum, would, following a few short visits to a resort
in the
Seychelles, enjoy the serial generosity of a donor or benefactor on
an unparalleled scale I find to be far-fetched and implausible.
No
support was put up by the second respondent, whether by way of
confirmatory affidavit or otherwise, to confirm her visits to
the
Seychelles, nor the basis of her contract or the secrecy and
confidentiality requirements associated with it. No explanation
is
provided as to why, having left the Seychelles, any such secrecy or
confidentiality obligation, if it had existed, would remain
binding
on the second respondent. There is no confirmation from her modelling
agency, or any person associated with it, that it
was aware of any
contract she held in the Seychelles or which provides details of any
such contract. There is no explanation provided
as to why the second
respondent shies away from disclosing details of her assignments in
the Seychelles or the persons she came
into contact with there in the
face of the current application.
[66]
Furthermore, n
o
details are provided by the second respondent regarding who she had
become friendly with in the Seychelles with whom she discussed
her
asset dreams, or why such dreams would be fulfilled. Similarly, there
is no detail provided, when given the opportunity to
provide it in
answering to this application, as to who the persons were who visited
her in Cape Town, what the purpose of such
visit was, what her
relationship with such persons is or why she discussed housing
preferences with such persons. No explanation
is provided for the
extraordinarily large cash transfer made to her when a property had
not as yet been secured by her for purchase,
how the amount of the
transfer was arrived at or why. There is also no indication provided
regarding the nature of the interactions
which took place with the
donor or benefactor prior to the transfer of the funds, with whom
these interactions occurred, what was
discussed or any detail
provided as to the basis on which the funds were transferred to her.
Nor is there any detail as to who
Rawas is. There is also no
information put up which provides details as to who the benefactor or
donor is or details of the second
respondent’s relationship
with such benefactor or donor and what interest such benefactor or
donor would have in making such
large asset transfers to her.
Furthermore, there is no explanation advanced as to why two motor
vehicles would be purchased for
her in cash shortly after one
another, the name of the donor or benefactor by whom they were
purchased is not disclosed, nor is
the underlying reason for the
purchase of both vehicles.
[67]
The failure on the part of the second
respondent to provide such material information, when provided with
an opportunity to do so
in her answering affidavit, must be
considered against
the case put forward by
SARS, including the history and sum of her father’s tax debts,
the explanation for her father being
cited as contact person in
relation to the receipt and sale of the foreign currency and her
loans and donations to various entities
with which members of her
family hold a direct or indirect interest, without explanation as to
on what basis funds provided to
her to purchase property were used to
alleviate financial difficulties experienced by enterprises with
which her family hold varied
interests.
[68]
What is clear to me is that the second
respondent’s denials made are bald and uncreditworthy and that
they are palpably implausible.
It follows that this Court is
justified in rejecting them merely on the papers and that there is no
basis on which to warrant the
referral of any issues to oral
evidence, nor would this serve a just and expeditious determination
of the application before this
Court. In any event, in light of the
evidence put up by the second respondent in her answering affidavit,
I am not persuaded that
oral evidence would serve any purpose in
determining the truth in that the opportunity to make the necessary
disclosure on affidavit
existed and was available to the second
respondent but was not taken up in the appropriate manner. It follows
that cross examination,
given the factual paucity of the second
respondent’s version, would only serve as an opportunity to
fill gaps in her version
which is not the purpose of such a referral.
The application for confirmation of the preservation order is
accordingly one capable
of determination on the papers and without a
referral to oral evidence.
Confirmation of order
[69]
The second respondent takes issue with
the furnishing by SARS of new material evidence in its replying
affidavit. In addition, issue
is taken with the fact that
the
applicant must act
bona fide
and disclose all the information
that it has available to it to the court when proceeding
ex parte
– the
uberrima fides
rule.
Zuma
v National Director of Public Prosecutions
2009
(1) SA 1
(CC) para 296.
When
confirmation of the order is sought the same rule does not apply
given that, as was said by Smalberger JA in
Trakman
NO v
Livschitz
1995
(1) SA 282
(A) at 288F-H –
‘
Material
non-disclosure, mala fides, dishonesty and the like in relation to
motion proceedings may, and in most instances should,
be dealt with
by making an adverse or punitive order as to costs but cannot, in my
view, serve to deny a litigant substantive relief
to which he would
otherwise have been entitled
.’
[70]
I am unable to find that there to exist
grounds on which to support any suggestion that the applicant did not
act with
uberrima fides
when it obtained the provisional preservation order against the
second respondent
ex parte
.
Certain of the information included in the replying affidavit, I
accept was new and had not been placed before the Court at the
time
that the provisional order was sought. The Court is told that this is
because such evidence, such as the SARB letter, was
not available to
it. However, even disregarding the reply filed by the applicant, the
view I take of the matter is that the applicant
has shown that a
final preservation order is required against the second respondent to
secure the collection of tax on its version
contained in the founding
papers considered against the second respondent’s answer
provided thereto. The second respondent
sought the dismissal of the
order, alternatively a postponement of the matter pending the
determination of constitutional and other
issues relevant to her
which may be raised by her or the other respondents. There is no
basis on which to grant either order.
[71]
It was also argued by the second respondent
that SARS was obliged to prove, in accordance with s 182(1), that the
assets were received
from the first defendant, or were his assets. I
find there to exist no merit in such contention given that s182(1)
provides that
‘(a)
person
(referred to as a transferee) who receives an asset from a taxpayer
who is a connected person
in relation to the transferee
without consideration or for consideration below the fair market
value of the asset is liable for
the outstanding tax debt of the
taxpayer
’.
[72]
The sudden wealth acquired by the second
respondent lies squarely within her knowledge and she was obliged in
such circumstances
to provide the answer necessary to substantiate
her opposition to a final order being granted. The case put up by her
in answer
to that of the applicant is so highly improbable in human
experience that it cannot be accepted. For these reasons, I am
satisfied
that the provisional preservation order granted in terms of
s 163(3) stands to be confirmed.
[73]
This being the case, there is no reason as
to why costs should not follow the result, including the costs of
three counsel.
Order
[21] In
the result, the following order is made:
The
provisional order granted by this Court on 30 August 2013 against the
second respondent is confirmed with costs, including the
costs of
three counsel.
KM
SAVAGE
ACTING
JUDGE OF THE HIGH COURT
Appearances
:
For
applicant: J J Gauntlett SC, H Snyman SC and H Cassim
instructed
by MacRoberts Attorneys
For
second respondent:
MacWilliam SC with Adv A Kantor
Instructed
by Carl der Merwe Attorneys