Metlika Trading Ltd v Commissioner for the South African Revenue Services (24997/2011) [2012] ZAGPPHC 360; 74 SATC 289 (20 July 2012)

Metlika Trading Ltd v Commissioner for the South African Revenue Services (24997/2011) [2012] ZAGPPHC 360; 74 SATC 289 (20 July 2012)

The court found that the order in the piercing action, which disregarded the separate corporate personalities of Ben Nevis and Metlika to the extent of the asset transfers, is operative and binding. The assets in question are declared to be regarded as assets owned by Ben Nevis and may be attached and sold in execution to satisfy its tax liability to SARS. The guarantee agreement, while made an order of court, does not preclude SARS from executing against the assets, as only the initial guarantee was in place and no final guarantee was ever issued. The applicants failed to establish the requisites for interim interdictory relief, particularly a prima facie right and irreparable harm, and...

Citation
[2012] ZAGPPHC 360
Parties
Applicant: Metlika Trading Ltd; Applicant: Ben Nevis Holdings Ltd; Respondent: Commissioner for the South African Revenue Services; Respondent: DC King
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
20 July 2012
Case Number
24997/2011
Procedural Posture
Urgent Application / Application for Interim Interdict Pending Final Determination of Disputes Regarding a Guarantee Agreement and Execution Against Assets
Outcome
Application for interim interdict dismissed. Costs awarded against applicants and King.
Judges
Meyer
Legal Topics
Piercing the Corporate Veil, Interim Interdict, Guarantee Agreement, Execution Against Assets, Income Tax Assessment, Delay in Instituting Action
Tax Law Civil Procedure Commercial and Corporate Piercing the Corporate Veil Interim Interdict Guarantee Agreement Execution Against Assets Income Tax Assessment +1 more

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Parties

Metlika Trading Ltd

Applicant

Ben Nevis Holdings Ltd

Applicant

Commissioner for the South African Revenue Services

Respondent

DC King

Respondent

Procedural Posture

Urgent Application / Application for Interim Interdict Pending Final Determination of Disputes Regarding a Guarantee Agreement and Execution Against Assets

Legal Issues

  1. 1 Whether the applicants are entitled to interim interdictory relief restraining SARS from executing against Metlika's assets pending resolution of disputes regarding the guarantee agreement.
  2. 2 Whether the guarantee agreement remains valid and enforceable or has lapsed or been cancelled.
  3. 3 Whether the order in the piercing action authorises SARS to execute against the assets in question.

Ratio Decidendi

The court found that the order in the piercing action, which disregarded the separate corporate personalities of Ben Nevis and Metlika to the extent of the asset transfers, is operative and binding. The assets in question are declared to be regarded as assets owned by Ben Nevis and may be attached and sold in execution to satisfy its tax liability to SARS. The guarantee agreement, while made an order of court, does not preclude SARS from executing against the assets, as only the initial guarantee was in place and no final guarantee was ever issued. The applicants failed to establish the requisites for interim interdictory relief, particularly a prima facie right and irreparable harm, and...

Court Disposition

Application for interim interdict dismissed. Costs awarded against applicants and King.

Orders

  • The application dated 26 April 2011 is dismissed.
  • The first applicant, the second applicant and the second respondent, jointly and severally, are ordered to pay the first respondent's costs of the application and counter-application, including the costs of three counsel.