Strydom v Duvenhage NO en 'n Ander (569/96) [1998] ZASCA 70; 1998 (4) SA 1037 (SCA); [1998] 4 All SA 492 (A) (18 September 1998)

Strydom v Duvenhage NO en 'n Ander (569/96) [1998] ZASCA 70; 1998 (4) SA 1037 (SCA); [1998] 4 All SA 492 (A) (18 September 1998)

The Supreme Court of Appeal held that there was no express or tacit agreement obliging the purchaser to pay VAT in addition to the purchase price. The contract did not mention VAT, and the evidence did not support a common intention to impose such an obligation. The bystander test was not satisfied, as it was not clear that both parties would have agreed that the purchaser should pay VAT if asked at the time of contracting. The obligation to pay VAT rests on the vendor, and section 64(1) of the VAT Act deems the price to include VAT unless otherwise specified. The appeal was upheld, and the orders sought by the appellant were granted.

Citation
[1998] ZASCA 70
Parties
Appellant: Willem Andreas Ferdinand Strydom; Respondent: Mev J W Duvenhage NO; Respondent: Die Kommissaris van Binnelandse Inkomste
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
18 September 1998
Case Number
569/96
Procedural Posture
Civil Appeal / Appeal From the Northern Cape Division of the High Court
Outcome
Appeal upheld with costs. The orders sought by the appellant are granted and the respondent's counter-application is dismissed with costs.
Judges
Farlam, Van Heerden, Smalberger, Howie, Ngoepe
Legal Topics
Value Added Tax, Implied Terms in Contract, Sale of Land, Business Efficacy, Rectification of Contract
Tax Law Land and Property Value Added Tax Implied Terms in Contract Sale of Land Business Efficacy Rectification of Contract

Case Brief

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Parties

Willem Andreas Ferdinand Strydom

Appellant

Mev J W Duvenhage NO

Respondent

Die Kommissaris van Binnelandse Inkomste

Respondent

Procedural Posture

Civil Appeal / Appeal From the Northern Cape Division of the High Court

Legal Issues

  1. 1 Whether the purchase price of three farms included value-added tax (VAT).
  2. 2 Whether a tacit term should be implied into the sale agreement obliging the purchaser to pay VAT in addition to the purchase price.
  3. 3 Whether the purchaser is entitled to a VAT invoice under section 20 of the VAT Act.

Ratio Decidendi

The Supreme Court of Appeal held that there was no express or tacit agreement obliging the purchaser to pay VAT in addition to the purchase price. The contract did not mention VAT, and the evidence did not support a common intention to impose such an obligation. The bystander test was not satisfied, as it was not clear that both parties would have agreed that the purchaser should pay VAT if asked at the time of contracting. The obligation to pay VAT rests on the vendor, and section 64(1) of the VAT Act deems the price to include VAT unless otherwise specified. The appeal was upheld, and the orders sought by the appellant were granted.

Court Disposition

Appeal upheld with costs. The orders sought by the appellant are granted and the respondent's counter-application is dismissed with costs.

Orders

  • An order is issued in terms of prayers 1, 2, and 3 of the applicant's notice of motion.
  • The first respondent's counter-application is dismissed with costs.