Thistle and Coronation: Can a Taxpayer Place Reliance on a Legal Opinion to Avoid or Reduce Penalties While at the Same Time Withholding Disclosure of the Opinion from SARS?

by | Apr 27, 2024 | BTCLQ, BTCLQ V15 I1

Thistle and Coronation: Can a Taxpayer Place Reliance on a Legal Opinion to Avoid or Reduce Penalties While at the Same Time Withholding Disclosure of the Opinion from SARS?

Author: Matthew Blumberg SC

ISSN: 2219-1585
Affiliations: N/A
Source: Business Tax & Company Law Quarterly, Volume 15 Issue 1, 2024, p. 20 – 27

Abstract

Understatement penalties1 featured in two tax cases recently argued in the Constitutional Court. In both cases, the taxpayer had sought to avoid or reduce liability for understatement penalties on the basis that the taxpayer’s contentious tax position had been based on a favourable legal opinion. In the one case, the opinion was disclosed to SARS. In the other, it was not. In the latter case, SARS contended that the taxpayer ought to have disclosed the opinion and adduced it in evidence. The SCA had disagreed, finding that ‘it was not incumbent on [the taxpayer] to disclose a tax opinion that it had obtained, any more than it would be on any other party which litigates on the basis of a procured legal opinion.’
It is, for various reasons, difficult to predict whether or not the Constitutional Court will engage with this finding. For the reasons explored below, however, taxpayers should proceed with caution before seeking to invoke the SCA-finding as authority for the proposition that they may rely on a legal opinion to avoid or reduce penalties, while at the same time withholding disclosure of the opinion from SARS.

Common-law avoidance

Common-law avoidance

by | Apr 7, 2024 | SALJ, SALJ V141 I2 2024

Common-law avoidance

Author: Leo Boonzaier

ISSN: 1996-2177
Affiliations: Senior Lecturer, Department of Private Law, University of Cape Town
Source: South African Law Journal, Volume 141 Issue 2, p. 213-256
https://doi.org/10.47348/SALJ/v141/i2a1

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Boonzaier, L
Common-law avoidance
South African Law Journal, Volume 141 Issue 2, p. 213-256 https://doi.org/10.47348/SALJ/v141/i2a1

Abstract

This article discusses an important trend in recent judgments of our appellate courts, which I call ‘common-law avoidance’. Rather than applying established sets of common-law principles, the courts have chosen to substitute them with other sets of norms of their own invention, usually sourced in the Constitution. This marks a departure from the status quo ante, in which it was accepted that the impact of the Constitution on private-law disputes was to be felt through the common law, rather than by displacing it. I discuss three cases that evidence this new pattern, spanning the three branches of the law of obligations: AB v Pridwin Preparatory School, which implicated the law of contract; Esorfranki Pipelines (Pty) Ltd v Mopani District Municipality, involving delict; and Greater Tzaneen Municipality v Bravospan 252 CC, which raised an issue in the law of unjustified enrichment. I critically assess the trend exhibited in these cases, arguing that it is the result of (among other factors) the courts’ preference for the Constitution’s more familiar and discretionary standards, and of their increasing difficulties in meeting the demands of the common-law method.

When is discrimination unfair? A relational reconstruction of the Constitutional Court’s dignity-based approach

by | Apr 7, 2024 | SALJ, SALJ V141 I2 2024

When is discrimination unfair? A relational reconstruction of the Constitutional Court’s dignity-based approach

Author: Denise Meyerson

ISSN: 1996-2177
Affiliations: Emeritus Professor of Law, Macquarie University
Source: South African Law Journal, Volume 141 Issue 2, p. 257-292
https://doi.org/10.47348/SALJ/v141/i2a2

Abstract

In this article, I examine the dignity-based test for unfair discrimination developed by the Constitutional Court of South Africa. First, I argue that the point of antidiscrimination rights is to protect equality. They seek to prevent a comparative wrong — wrongful disparities in treatment. Violating dignity appears, however, to be a non-comparative wrong — one that is independent of the treatment extended to others. Tying unfair discrimination to dignity violations therefore seems to miss the comparative concerns that underlie anti-discrimination rights. Adding that everyone is ‘equally’ entitled to be treated with dignity does not solve the problem. I respond to this apparent difficulty with the court’s approach by suggesting that the court is best understood as concerned with a distinctive kind of dignity — status dignity. I also argue that there is an attractive conception of equality — relational equality — that explains why violations of status dignity are violations of equality. This interpretation provides the requisite egalitarian foundation for the court’s approach. Secondly, I address the criticism that a dignity-based understanding of substantive equality is too limited to address systemic inequalities. I suggest that an understanding based in status dignity is suitably robust and requires far-reaching reforms and restructuring of social practices.

The shareholder’s appraisal remedy under the Companies Act: How should the courts gauge ‘fair value’?

by | Apr 7, 2024 | SALJ, SALJ V141 I2 2024

The shareholder’s appraisal remedy under the Companies Act: How should the courts gauge ‘fair value’?

Author: Maleka Femida Cassim

ISSN: 1996-2177
Affiliations: Professor of Law, Mercantile Law Department, University of South Africa
Source: South African Law Journal, Volume 141 Issue 2, p. 293-322
https://doi.org/10.47348/SALJ/v141/i2a3

Abstract

The appraisal remedy is the right of minority shareholders to demand that the company buy out their shares in cash, at a price reflecting their ‘fair value’, when they are aggrieved by certain triggering transactions that the majority shareholders have approved. The appraisal right is an American concept that was introduced into South African law when the Companies Act 71 of 2008 came into force. The most formidable challenge concerning the appraisal right is the meaning and interpretation of the key phrase ‘fair value’ and, coupled with this, the appropriate valuation methodology that the court ought to adopt when valuing the shares of dissenting minority shareholders. Two recent judgments of the High Court have considered these thorny issues for the first time. This article critically analyses the findings of the High Court in BNS Nominees (RF) (Pty) Ltd v Zeder Investments Ltd and BNS Nominees (RF) (Pty) Ltd v Arrowhead Properties Ltd, with a particular focus on the divergent approaches that the two cases adopt in gauging the ‘fair value’ of the dissenters’ shares and the judicial discretion to appoint an appraiser to value the shares. This is followed by a detailed discussion of the proper interpretation of the pivotal phrase ‘fair value’ in appraisal proceedings and of appraisal valuation methodology. This is done with reference to the legal position in comparable foreign jurisdictions such as the United States of America and Canada. Guidelines are also suggested for the South African courts to follow when gauging the ‘fair value’ of shares in appraisal cases.

The many shades of intolerability in the workplace

by | Apr 7, 2024 | SALJ, SALJ V141 I2 2024

The many shades of intolerability in the workplace

Authors: Rochelle le Roux & Aisha Adam

ISSN: 1996-2177
Affiliations: Professor, Faculty of Law, University of Cape Town; Teaching and Research Assistant, Faculty of Law, University of Cape Town
Source: South African Law Journal, Volume 141 Issue 2, p. 323-348
https://doi.org/10.47348/SALJ/v141/i2a4

Abstract

The notion of intolerability traverses several workplace decisions. However, its meaning in the law is far from linear, and its significance varies, particularly when considering three primary dismissal-related scenarios: the meaning of dismissal; the general threshold for dismissal (also in the case of first offences); and the barriers to reinstatement in the case of unfair dismissal. This article restates established principles concerning labour dispute resolution, particularly those relating to onus and review standards and the role of breach of trust in employment relations. Drawing on recent jurisprudence, the article revisits the assumed role of intolerability and explores its nuanced impact on decision-making processes. In particular, the article demonstrates how the burden of proof and applicable review standards in the case of each of these dismissal-related scenarios can transform an ostensibly neutral term into a kaleidoscope of shades and meaning, with far-reaching implications in the workplace.