critical analye of the judicial precedent
A critical analysis of recent Supreme Court of
Appeal judgments that have deviated from the stare decisis principle
Lizl Pretorius
June 2012
Dissertation submitted in partial fulfilment for the degree of
Higher Diploma in Taxation
International Institute for Tax & Finance in association with the
Thomas Jefferson School of Law
Abstract
The decisions and methodology used by the Judges in a higher court, such as the
Supreme Court of Appeal is binding on the lower courts. It is therefore imperative that the principles established are sound and in line with the intention of the
Legislator when hearing matters on tax cases on areas where the Income Tax Act
No. 58 of 1962 (“IT Act”) is ambiguous or unclear.
In recent tax cases heard by the Supreme Court of Appeal, the tax community has been left puzzled and in some cases outraged by the comments made by the
Judge(s) and for passing judgments which have deviated from the stare decisis principles that have become embedded in our Law and have been applied for many years. In the cases reviewed the Judges have found that the stare decisis principle is not applicable to the case or needs to be expanded in order sustain its usability.
The objective is to determine if the reasoning and rationale followed by the
Judge(s) are sound and whether or not it is in line with the conclusion that a reasonable man would reach if he was presented with the same facts.
We will delve into three recent court cases, and examine the reasoning of the
Judge(s) for reaching a different conclusion and the reasons why the tax community was not impressed with the conclusions reached in the judgment handed down.
Where possible, the principles determined by similar foreign cases have been mentioned, as well as how the new principles have been applied in cases heard since the judgments were handed down.
The dissertation is performed with the view of assisting the reader to ‘think outside of the box’ and to broaden
Appeal judgments that have deviated from the stare decisis principle
Lizl Pretorius
June 2012
Dissertation submitted in partial fulfilment for the degree of
Higher Diploma in Taxation
International Institute for Tax & Finance in association with the
Thomas Jefferson School of Law
Abstract
The decisions and methodology used by the Judges in a higher court, such as the
Supreme Court of Appeal is binding on the lower courts. It is therefore imperative that the principles established are sound and in line with the intention of the
Legislator when hearing matters on tax cases on areas where the Income Tax Act
No. 58 of 1962 (“IT Act”) is ambiguous or unclear.
In recent tax cases heard by the Supreme Court of Appeal, the tax community has been left puzzled and in some cases outraged by the comments made by the
Judge(s) and for passing judgments which have deviated from the stare decisis principles that have become embedded in our Law and have been applied for many years. In the cases reviewed the Judges have found that the stare decisis principle is not applicable to the case or needs to be expanded in order sustain its usability.
The objective is to determine if the reasoning and rationale followed by the
Judge(s) are sound and whether or not it is in line with the conclusion that a reasonable man would reach if he was presented with the same facts.
We will delve into three recent court cases, and examine the reasoning of the
Judge(s) for reaching a different conclusion and the reasons why the tax community was not impressed with the conclusions reached in the judgment handed down.
Where possible, the principles determined by similar foreign cases have been mentioned, as well as how the new principles have been applied in cases heard since the judgments were handed down.
The dissertation is performed with the view of assisting the reader to ‘think outside of the box’ and to broaden
Bibliography: SA 654 (SCA) ITC 1806 (2005) 68 SATC 117 (G) CSARS v NWK (27/10) [2010] ZASCA 168 (1 December 2010) CIR v Conhage (Pty) Ltd 1999 (4) SA 1149 (SCA), 61 SATC 391 Michau v Maize Board 2003 (6) SA 459 (SCA) at 464A, 66 SATC 288 S v Friedman Motors (Pty) Ltd 1972 (1) SA 76 (T), upheld on appeal, 1972 (3) SA Tax Court Cases (Western Cape High Court, Cape Town) Cases No 12760, 12828 and 12756, judgment delivered on 14 September 2011 by Judge Allie May 2011) Commissioner, South African Revenue Service v Brummeria Renaissance (Pty) Ltd