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Cape Town – The South African Revenue Service (Sars) is celebrating after winning a vexatious litigation application in opposition to the obstructive behaviour by a taxpayer intended to delay legal proceedings.
On Thursday, it welcomed the judgment in favour of Sars in the vexatious litigation application against Gary van der Merwe and others in the Western Cape High Court. It was the first time in its history Sars had launched such an application.
This week, the court found that the legal action by Van der Merwe and others posed “a very real risk” of negatively impacting on the court system and the administration of justice and patently amounted to an abuse of the court process, Sars said in a statement.
Van der Merwe’s action was deemed ’’an extreme example of a taxpayer abusing the court system and making unsubstantiated allegations against Sars of corruption, fraud and harassment’’.
’’The implication of this judgment is that Mr van der Merwe may not institute legal proceedings against any person (including Sars) without first obtaining a court’s authority.
’’The order applies to Mr van der Merwe in his personal capacity and in his capacity as a trustee or director of any company and to the trustees of Eagles Trust.
Sars commissioner Edward Kieswetter said the legal action by van der Merwe and others over more than 10 years was intended to thwart the organisation from fulfilling its legislated mandate and to frustrate every effort to bring finality to the matters against him.
“Sars will always provide certainty and clarity to taxpayers to meet their obligations. Where a dispute arises, Sars has systems in place to amicably resolve matters without resorting to litigation.
’’This does not stop taxpayers from exercising their right to seek relief from the courts, if unsatisfied with the outcomes. However, taxpayers who use the courts to delay and frustrate the collection of taxes will be vigorously opposed.”
Kieswetter expressed the hope that the judgment would deter others from initiating frivolous and vexatious litigation against Sars to stop it from carrying out its core business, which is to collect all revenue due.
In August 2019, Van der Merwe and his daughter, Candice, had issued summonses against Sars totalling R7.6 billion. The first summons claims R5.6bn from Sars, which was the complainant in a case that put Van der Merwe through a decade-long criminal trial where he was acquitted on all tax-related charges.
The second summons was for R1 billion based on Sars falsely claiming that the money his super model daughter received in 2013 from a friend overseas was actually his.
The third summons for R1 billion was due to Sars claiming that Candice was a conduit for her father’s money in circumstances where this was later admitted by Sars not to be the case.