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Kirsten and Thomson CC t/a Nashua East London v CSARS

22 March 2013   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical


The North Gauteng High Court heard the matter between Kirsten and Thomson CC t/a Nashua East London v CSARS and ABSA Bank Ltd (case number 1681/08).

In this matter, the Plaintiff claimed reimbursement for a double payment it had made to the Defendant in order to settle its VAT liability. The Plaintiff relied on the condictio indebiti against the Defendant. The condictio indebiti is an equitable remedy which seeks to ensure that no one is unjustifiably enriched at the expense of another.


Kirsten and Thomson CC t/a Nashua East London ("Plaintiff”) was liable to pay VAT to SARS ("First Defendant”) for its trading activities for the period February – March 2007 in the amount of R432 375.34.

In order to discharge its liability, the Plaintiff drew a cheque on 5 April 2007 on the East London branch of FNB. It was made payable to SARS and marked "non-transferable”. The cheque was delivered to the East London branch of SARS on the same date.

SARS did not deposit the cheque or receive its proceeds, as it was probably stolen by an unknown person. The unknown person then copied certain particulars of the cheque and effectively cloned the original cheque.

The name of the payee on the cloned cheque was changed from SARS to "Bihlongwa Construction CC”. The cloned cheque was deposited at an ABSA branch on 30 April 2007 for the credit of Bihlongwa.

Since the proceeds of the original cheque was never collected by SARS, the Plaintiff’s VAT liability remained due and in order to avoid interest and penalties in the amount of some R40000, a second cheque was issued by the Plaintiff on 18 May 2007.

The following elements of condictio indebiti had to be considered: impoverishment, enrichment and sine causa.


There were clearly visible discrepancies in the dates of the original cheque and it was argued that FNB should have refused to pay the cheque and should have sent it back to ABSA so that it could be referred to drawer. The Plaintiff failed to prove that FNB was not negligent and therefore failed to establish impoverishment on the facts.

SARS did not receive payment of the first cheque. Therefore, the only way to prove enrichment was to show that SARS had a good and viable claim against ABSA.

SARS clearly had a reason to retain payment of the second cheque since it had a statutory obligation to collect VAT. The Plaintiff also had a clear reason to make the second payment (it had to discharge its VAT obligation). The second payment was therefore not sine causa.

Accordingly, it was held that the Plaintiff had not proved the requirements of condictio indebiti.

The claim was dismissed with costs including the costs of two counsel.

Please click here to access the full case.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


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