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CSARS v Africa Cash & Carry (Pty) Ltd and others GDHC 49274/2014 (1 December 2014)

Tuesday, 27 January 2015   (0 Comments)
Posted by: Author: Pieter Faber
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Author: Pieter Faber (SAIT)


This case considers the reasons for the confirmation of the preservation order issued on 1 October 2014 in respect of an application by the respondents to the Gauteng Division of the High Court for an extension of the return date to file opposing affidavits against the preliminary preservation order in terms section 163 of the Tax Administration Act (No. 28 of 2011) as granted to SARS against the 19 respondents.


SARS on 10 July 2014 obtained a provisional preservation order in chambers in terms of section 163 of the Tax Administration Act in respect of the 1st and 2nd respondent company’s assets, including loan accounts. On 25 July 2014 some of the respondents entered a notice of intention to oppose but this was withdrawn on the 26th August 2014. Notwithstanding, some of the other respondents then entered in such notice on the 25th of August 2014.   The matter was then, by agreement, extended to the 29th of September 2014 to be heard, but on condition that these respondents indicate to SARS by 5 September 2014 how they wanted the provisional order amended and that they file opposing affidavits by 15 September 2015. On the 29th September 2014 the respondents filed a motion to have the submission of the affidavits extended to 9 February 2015, but SARS opposed the order seeking the order to be made final. The court stood down the matter to 1 October 2014 and having heard the arguments of the parties did not confirm the postponement but rather confirmed the preservation order for the reasons as set out below.


The court considered the postponement request on the basis that any such request is an indulgence for which various factors had to be considered though the list was non-exhaustive. These factors included whether the application was made timeously, the reasons for the application and the conduct of the parties, such as terminating legal representation to secure the postponement on the basis that they would be unrepresented. The Constitutional Court has previously stated that the broader public interest and the prospects of success on the merits should also be considered.

In respect of the first aspect of timing, the court noted that the respondents had for the previous extension merely filed three days before the return date and then did not comply with any of the conditions set but rather filed for the current postponement on the return date. The reasons advanced were merely that the respondents required more time to file meaningful affidavits which was nearly the exact same reason forwarded for the previous postponement. The respondents contended that they had appointed a new legal counsel on 10 September 2014 and they required more time to prepare the documents. However, the new attorney did not apply for condonation for failing to file the required documents as per the previous postponement.

The court stated that the rules of court are there to be complied with and any indulgence of non-compliance therewith would have to be for satisfactory reasons. The court concluded that the new attorney should have known to have filed such applications and had sufficient time to do so.

In respect of the replacement of the legal counsel, the court cited Erasmus Superior Court Practice as follows [at 12]:

"Mere withdrawal by a practitioner or the termination of a mandate does not … entitle a party to a postponement as of right.”


The court concluded that the actions of the respondents fell within the ambit of the "old trick” of attempting to secure a postponement by merely changing legal counsel and that alone warrants refusal for a postponement.

In respect of the requirement of public interest, the court stated that it is in the public interest that SARS collects tax monies. In this respect a preservation order is not a collection mechanism but rather a means of preserving assets to avoid the frustration of the tax collection. To do this SARS must show that there is a material risk that the assets would without the preservation order not be available at execution in that the respondents, on a prima facie basis shown, are likely to dissipate the assets. In respect of the latter SARS had affidavits indicating the intention of the respondents to dissipate the assets.    

The court concluded that the matter would not be postponed but rather that the preservation order be confirmed and that SARS, as successful party, is entitled to costs for the application.

Please click here to access the judgement.



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