Tshwane, 7 February 2025 – On the 9 May 2024, the Pietermaritzburg division of the KZN High Court granted a preservation order to SARS in respect of the assets of the Shandi Trust. In November 2024, a separate preservation order was granted by the Durban High Court in favour of SARS over the assets of 23 respondents, one of whom is Royal AM Football Club (“The Club”). The Shandi Trust and the Club are related parties, under the control of Ms Mkhize.
This week two judgments relating to these preservation orders were issued by the North Gauteng and Kwa-Zulu Natal Division, Pietermaritzburg high courts, both in SARS favour.
In December 2024, the curator and the management of the Club engaged on the Club’s financial position to determine if the Club could meet its future obligations for the 2024/25 fixtures. After extensive engagements, the Club’s financial position was escalated to the National Soccer League (“NSL”).
As a result of the Club’s financial challenges, on the 22 January 2025 the NSL suspended all Royal AM Football Club’s future fixtures.
On 29 January 2025, the Club instituted action against the curator, SARS and the NSL by way of an urgent application. The application sought the court to direct the Curator to issue a letter of comfort to the NSL, guaranteeing the Club’s financial ability to fulfil its league fixtures. The application also sought to review the Curator’s decision not to issue the letter of comfort as irrational, unreasonable and unlawful. In the alternative, the Club requested the court to compel the NSL to allow the club to play the remainder of the football season’s league and Nedbank Cup games.
SARS, the curator and NSL opposed the urgent application. The matter was heard on 5 February 2025 and struck from the roll for lack of urgency, with costs.
The court was satisfied that the Club had failed to meet the test for urgency as set out in the court’s practise note. The court stated that procedures and practice notes are not there for the taking; an applicant needs to set out facts showing why the matter is urgent. The urgency was self-created as the Club was aware of its precarious position vis a vis the Curator’s inability to provide a letter of comfort to the NSL, way before it elected to launch the urgent application The court did not deal with the merits, and because of the court’s ruling, the Club remains suspended from the NSL.
The judgment of the Pietermaritzburg High Court in respect of the Shandi Trust, dismissed the leave to appeal the Court’s judgment, with costs. In July 2024, the Trustees brought an urgent application to stay the preservation order, effectively seeking to interdict the Curator from executing on the order. The Court struck the matter from the roll with costs. The Trustees appealed the Court’s decision. The leave to appeal was dismissed on 6 February 2025 with costs as no case had been made out by the Trustees for leave to appeal.
SARS’ key strategic intent is to foster a culture of voluntary compliance. To achieve that objective, SARS provides clarity and certainty to taxpayers to fulfil their legal obligations. Where taxpayers intentionally seek to engage in non-compliant behaviour, SARS responds by making such non-compliance hard and costly.
SARS Commissioner Edward Kieswetter reacted to this development by noting that “SARS is pleased with the court’s decision to strike the matter from the court’s roll for lack of urgency. Taxpayers have a legal obligation to all at times fulfil this without fail and remain compliant with their tax affairs. It boggles the mind that taxpayers will turn to courts with ease yet derelict in their responsibility to meet with their obligations with similar enthusiasm. SARS is enjoined by the law to administer the law without fear or favour and to ensure that all taxpayers who are expected to register, file and pay their taxes do so with ease. In executing our mandate, SARS will remain committed to dealing lawfully with taxpayers who are acting with wilful intent to neglect their tax obligations. The role of tax in addressing the country’s pressing challenges of paying for pensions, grants, financing schooling, health cannot be over-emphasized.”
SARS will not comment further about this subject.
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