Commissioner of the South African Revenue Service v Rappa Resources (Pty) Ltd (2021/22981) [2021] ZAGPJHC 623 (8 November 2021)

EPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NUMBER: 2021/22981

REPORTABLE: NO

OF INTEREST TO OTHER JUDGES: NO

REVISED NO

In the matter between:

COMMISSIONER OF THE SOUTH

AFRICAN REVENUE SERVICE

Applicant

And

RAPPA RESOURCES (PTY) LTD

Respondent

LEAVE TO APPEAL JUDGMENT

Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by e-mail. The date and time for hand-down is deemed to be 10h00 on the 08th of November 2021.

DIPPENAAR J:

[1] The respondent in the interlocutory application under r 30A for production of the record in pending review proceedings, applies for leave to appeal to the Supreme Court of Appeal against the whole of the judgment and order granted by me on 16 September 2021. In terms of the order, the respondent was directed to provide the record in terms of r 53(1)(b), subject to affording the respondent the opportunity to object to the production of certain documents on specified terms. The issues pertaining to s 105 of the Tax

Administration Act[1] (“the TAA”) were postponed sine die to be heard together with the main review proceedings. The applicant opposes the application. For ease of reference the parties are referred to as in the interlocutory application.

[2] I have considered the papers filed of record and the grounds set out in the application for leave to appeal as well as the parties’ extensive arguments for and against the granting of leave to appeal. I have further considered the submissions made in their respective heads of argument and the various authorities referred to by the respective parties.

[3] It must be considered whether there is a sound and rational basis for the conclusion that there are prospects of success on appeal[2], considering the higher threshold test[3] envisaged by s17 of the Superior Courts Act[4] (“the Act”).

[4] Central to this application is the respondent’s contention that the respondent’s right to review only vests once a directive is issued in terms of s105 of the TAA and that this court had no jurisdiction to order the production of the record, absent making a determination on whether the high court has jurisdiction to consider the appeal. The respondent’s sole basis for opposition to the r 30A application was that the respondent had no right to seek the record absent a directive in terms of s 105 of the TAA, which directive it contended should be refused.

[5] The respondent contended that it has reasonable prospects of success on appeal as envisaged by s 17(1)(a)(i) of the Act and that another court would come to a

different finding would not have directed that the issues pertaining to s 105 of the TAA be deferred to be heard with the main

application, nor have granted an order for the production of the record under r 53(1)(b). It argued that absent an express finding

being made on the s105 issues, no order should have been granted directing the production of the record under r 53(1)(b).

[6] There was extensive debate between the parties as to whether the order granted was appealable. It is now well settled that whether the order is interim or final is not definitive, but whether it is in the interests of justice to grant leave to appeal[5].

[7] During argument, extensive reliance was placed by the respondent on a judgment of the Constitutional Court in Competition Commission v Standard Bank of South Africa Ltd and related matters[6] (“Standard Bank”), to which I had not been referred in the interlocutory application.

[8] In Standard Bank, the majority of the Constitutional Court held that where jurisdiction is contested a ruling must be made on that issue preceding other orders[7]. It was also held that an order for production of the record under r 53(1)(b), is appealable as it is final in effect and based on the interests of justice test.[8]

[9] The respondent argued that it is in the interests of justice that an appeal court should interpret s105 of the TAA and provide guidance when and under what circumstances a s105 directive should be issued. It contended for prejudice and inconvenience which negatively impacted the applicant’s administration of the TAA and would result in a floodgate opening promoting forum shopping in circumstances where review proceedings were instituted absent a directive under s105 of the TAA. It further argued that it had good prospects of success on appeal.

[10] The applicant disputed that any prospects existed or that it was in the interests of justice for leave to appeal to be granted. It contended for prejudice if leave to appeal was granted, caused by a substantial delay in the finalisation of the proceedings which would cause it financial hardship and the inappropriateness of piecemeal appeal proceedings.

[11] The applicant further sought to distinguish Standard Bank based on its particular facts and the particular statutory framework which underpinned the judgment, being the Competition Act. I do not agree it is distinguishable purely on the facts and I am bound by that judgment.

[12] In light of the import of s105 and its effect in challenging the jurisdiction of the high court, the issue of jurisdiction had to be determined before any further order could have been granted. Considering all the facts and the relevant factors requiring consideration, I am persuaded that there are reasonable prospects of success on appeal as envisaged by s 17(1)(a)(i) of the Act and that it is in the interests of justice that leave to appeal be granted.

[13] For this reason, it is not necessary to consider the other grounds of appeal or arguments raised by the respondent.

[14] I grant the following order:

[1] Leave to appeal to the Supreme Court of Appeal is granted.

[2] The costs of the application, including the costs of two counsel, are to be costs in the appeal.

EF DIPPENAAR

JUDGE OF THE HIGH COURT

JOHANNESBURG

APPEARANCES

DATE OF HEARING

: 03 November 2021

DATE OF JUDGMENT

: 08 November 2021

APPLICANT’S COUNSEL

: Adv E. Coetzee SC

: Adv. H De Wet SC

APPLICANT’S ATTORNEYS

: VZLR INC

RESPONDENT’S COUNSEL

: Adv. R Bhana SC

: Adv. G. Goldman

: Adv. G. Singh

RESPONDENT’S ATTORNEYS

: Girard Hayward Inc.

[1] 28 of 2011

[2] Four Wheel Drive Accessory Distributors CC v Rattan NO 2019 (3) SA 451 (SCA) at para 34

[3] Acting National Director Public Prosecutions and Others v Democratic Alliance [2016] ZAGPPH 489 (24 June 2016) at para 25

[4] 10 of 2013

[5] International Trade Administration Commission v SCAW South Africa (Pty) Ltd 2012 (4) SA 618 (CC) at para [53]; Tshwane City v Afriforum 2016 (6) SA 279 (CC) at para [40]; Khumalo v Holomisa 2002 (5) SA 410 (CC) at para [8]

[6] 2020 (4) BCLR 429CC

[7] Justice Theron judgment paras [120]-[121]; majority judgment para [201].

[8] Justice Theron judgment paras [46]-[48]