Stabilpave v SARS (615/12)  ZASCA 128 (26 September 2013)
27 September 2013
Posted by: Author: SAIT Technical
Author: SAIT Technical
The appellant in this case was Stabilpave (Pty) Ltd and the
respondent was the South African Revenue Service (SARS).
Stabilpave was issued with a tax assessment form (IB34), dated
16 October 2006, which stated that SARS owes Stabilpave a tax refund of
R724 494.29 The tax assessment included a notice stating that the
transfer will be made electronically but in the instance that the banking
details are incomplete or incorrect; the payment will be made by issuing a
Stabilpave’s banking details were not available to SARS and
therefore the payment was made by issuing a cheque. The cheque was crossed,
marked "not transferable”, sealed and posted with Securemail. The cheque was
stolen during transit and withdrawn by a third party. Stabilpave instituted
action against SARS for payment which was not received. The argument used by
Stabilpave was supported by the case, Barclays National Bank Ltd v Wall 1983
(1) SA 149 (A) at 156H-157C. This case stipulated that: "in law there is no payment if a cheque is posted and lost before it
reaches the creditor”.
SARS’s contention was that their obligation to pay the tax
refund was deemed fulfilled even though the amount was never credited by
Stabilpave. SARS’s argument was grounded on the principle set by Dadoo &
Sons Ltd v Administrator, Transvaal 1954 (2) SA 442 (T) at 445. This case
stipulated: "that if a creditor requests
a debtor to settle his debt by sending a cheque through the post, he agrees to
run the risk during transit”.
The court accepted the contention of SARS and the claim of
Stabilpave was dismissed with costs. The case was later appealed.
In the appeal case, it become clear that any agreement about
the particular mode of payment will be reached only if the creditor stipulates
requests or authorise a particular method of payment and the debtor accepts the
The notice in the tax assessment did not provide Stabilpave with
a choice in which method the refund will be made. The notice merely informed
the taxpayer. The notice did not imply request or election of a payment method
by Stabilpave. The payment method was dictated by SARS.
It was held that the risk of loss of the cheque was not
assumed by Stabilpave but remained with SARS. The court order read as follows:
appeal is upheld with costs.
judgement is granted in favour of the plaintiff against the defendant for:
Payment of the amount of R724 494.29;
tempore morae on the aforesaid sum at the rate of 15.5 percent per annum
from 17 October 2006 until date of payment;
Cost of suit.
Please click here to access the full case.