CRITERIA FOR LAUNCHING URGENT APPLICATIONS

In Square Root Logistics (Pty) Ltd v The Commissioner for the South African Revenue Services and Others (D2068/2022) [2022] ZAKZDHC 11 (28 February 2022), a judgment handed down earlier this year, an urgent application was brought by Square Root Logistics (Pty) Ltd (“the Applicant”) against the Commissioner for SARS, the Minister of Finance and two tax debtors. The subject matter of the application was some 50 motor vehicles, attached by SARS, which it believed were owned by the tax-debtors, and which were in the possession of the tax-debtors. The Applicant alleged that it was the owner of the motor vehicles and not the tax debtors and that is why the application was brought as a matter of urgency.

The urgent application was delivered to the Honourable Lopes J on Friday morning, and set down to be heard on Friday afternoon at 2:00pm. It consisted of 451 pages. The application was opposed by SARS who took the preliminary point that the applicant had not complied with the provisions of section 96 of the Customs and Excise Act, 1964 (“the Act”).

Section 96 reads as follows:

Notice of action and period for bringing action – (1)(1)(a)(i) No process by which any legal proceedings are instituted against the State, the Minister, the Commissioner or any officer for anything done in pursuance of this Act may be served before the expiry of a period of one month after delivery of a notice in writing setting forth clearly and explicitly the cause of action, the name and place of abode of the person who is to institute such proceings (in this section referred to as “the litigant”) and the name and address of his attorney or agent, if any.

(ii) Such notice shall be in such form and shall be delivered in such manner and at such places as may be described by rule.

(iii) No such notice shall be valid unless it complies with the requirements prescribed in this section and in such rules.’

(c) (i) The State, the Minister, the Commissioner or an officer may on good cause shown reduce the period specified in paragraph (a) . . . by agreement with the litigant.

(ii) If the State, the Minister, the Commissioner or any officer refuses to reduce or extend any period as contemplated in subparagraph (i), a High Court having jurisdiction may, upon application of the litigant, reduce or extend any such period where the interests of justice so requires.’

The Applicant contended that as SARS had incorrectly attached the goods of a third party who was not the tax-debtor, SARS could not have purported to have acted in terms of section 114 of the Act, and therefore section 96 (1) was irrelevant.

Lopes J stated the following:

The fact that SARS may have attached goods not belonging to a tax-debtor, does not mean that it was not acting pursuant to the Act. It purported to act in terms of s 114. If, in doing so, it acted incorrectly, that does not, in my view, take the act of SARS outside the ambit of it being ‘in pursuance of the Act’. The provisions of s 96 are jurisdictional and procedural in nature and determine the process to be adopted when an application is to be brought against SARS. If SARS incorrectly attached goods belonging to the applicant, and not the correct tax-debtor, the applicant is obliged to follow the process laid down in the Act, including giving SARS the requisite notice.

In addition to the above interpretation of section 114 and section 96 of the Act, Lopes J commented on the manner in which the application was brought and the urgency it purported to carry. The following must be noted from the judgment:

1. Matters of urgency are able to be set down on several days’ or a week’s notice, however care must be taken when issuing the certificate of urgency as it has become an unfortunate practice that matters are being brought for reasons not as urgent as the certificate suggests.
2. The abovementioned matter being brought on an urgent basis was an abuse of legal process.
3. Life and death, or extreme prejudice warrants such urgency that a matter cannot wait for the next day or for a few days.
4. Divisions of the High Court would simply be unable to function efficiently if work is continually interrupted by unnecessary urgent applications being brought.
5. The Court rules and practice directives anticipate and include urgent applications as part and parcel of the daily functioning of the High Court. They do not envisage applications such as this one being heard on such short notice.
6. Whether or not the applicant will be greatly prejudiced must be considered. In the abovementioned matter, the prejudice to the applicant would have been the possibility of used vehicles standing outside and potentially exposed to theft. This could have been catered for by the hiring of a few security guards, the cost of which would have been insignificant given the values involved, and which could have been recovered in due course.