Judgment summary
This is an opposed interlocutory application brought by the Commissioner for the South African Revenue Service (the CSARS) ancillary to a preservation order granted on 21 November 2024 under section 163 of the Tax Administration Act 28 of 2011 (the TAA) (paras 2-3).
The CSARS sought authorisation for the curator bonis, Mr Willem Jacobus Venter NO, to sell five immovable properties situated in Sandown, four registered in the name of the fifth respondent, Mr Yaron Peretz, and one registered in the name of 22 Aston Investments (Pty) Ltd, pending institution of an action to declare the properties or their proceeds executable for the tax debts of the first respondent, Ms Shauwn Mabongy Flora-Junior Mkhize, and/or Zikhulise Group (Pty) Ltd (paras 3-5, 32).
The application was opposed by the first, second, third and sixth respondents, who raised various points in limine, including lack of urgency, lack of jurisdiction, mootness, misjoinder and non-joinder, prematurity, and arbitrary deprivation of property contrary to section 25(1) of the Constitution (paras 78, 88, 157-166).
Henriques J dismissed all points in limine, found that urgency had been established, and held that the CSARS had made out a case for the relief sought, relying extensively on Carmel Trading Co Ltd v Commissioner, South African Revenue Service and Others [2007] ZASCA 160; 2008 (2) SA 433 (SCA) as authority for converting a deteriorating preserved asset into cash prior to the determination of executability (paras 124-220).
Background
The CSARS had assessed the first respondent's personal income tax liability and that of Zikhulise Group, of which the first respondent was held personally liable. As at 19 September 2025, the first respondent's personal income tax debt, including interest, was R13 331 166.02, and her personal liability for Zikhulise Group's tax indebtedness, including interest, was R112 574 520.43 (para 61). As at 5 September 2024, the first respondent was indebted in income tax in the sum of R14 074 510.88 and R10 000 in administrative non-compliance penalties, while Zikhulise Group's tax indebtedness was R105 124 134.78 (para 22).
On 21 November 2024, a provisional preservation order was granted under section 163 of the TAA by Poyo Dlwati JP (para 23). This was confirmed as final against the first and third to twenty-second respondents on 6 February 2026 (para 30). The preservation order vested realisable assets, including the five Sandown properties, in the curator bonis (paras 24, 31).
The CSARS alleged that the five properties were acquired by and for the benefit of the first respondent, with purchase monies flowing from the first respondent and Zikhulise Group, despite the properties being registered in the names of Mr Peretz and 22 Aston (paras 43-54, 65-68). Substantial monthly costs were being incurred to maintain, insure and secure the properties, which the CSARS was funding, as the respondents' bank accounts had been preserved and no funds were available (paras 33, 39-42).
A sworn valuation dated 13 October 2025 put the municipal value of the five properties at R22 831 000, the collective market value at R35 million, and the collective forced sale value at R24.5 million (para 36).
Core dispute
The crisp issue for determination was whether the court could vary the preservation order of 21 November 2024, as confirmed on 6 February 2026, and order that the five immovable properties subject to that order be sold (para 6).
The CSARS contended that the properties were diminishing in value due to unpaid municipal charges, lack of maintenance, and ongoing security and insurance costs, and that a case had been made for the court to exercise its discretion in favour of SARS as envisaged in rule 46A of the Uniform Rules of Court (para 8).
The opposing respondents (the first, second, third and sixth respondents) argued that the application was premature because SARS had not yet established any lawful entitlement to execute against the properties, that the relief sought constituted execution in substance, that it amounted to an arbitrary deprivation of property under section 25(1) of the Constitution, that the court lacked jurisdiction, that the matter was moot, that there was non-joinder and misjoinder of parties, and that the application lacked urgency (para 9).
Court findings
Henriques J found that the CSARS had established urgency, noting that many of the expenses relied upon, including arrear municipal charges, the valuation report, and the costs of insurance and security, only arose after the preservation order was granted, and that the CSARS had calculated the dies for filing as close as possible to the Uniform Rules timeframes (paras 102-124).
All points in limine were dismissed. On jurisdiction, the court held that the application was interlocutory to the main preservation application, and that paragraph 44 of the preservation order conferred jurisdiction on the KwaZulu-Natal Division (paras 126-129). The mootness argument concerning 22 Aston's reinstatement and the confirmation of the preservation order was rejected, as a live issue as to dealing with the preserved property remained (paras 130-133).
On rule 46A and section 26 of the Constitution, the court found the CSARS had addressed the relevant factors, including market and forced sale values, and that neither the first nor second respondent would be left without alternative accommodation given their other properties (paras 134-150).
The court held that the factual allegations in the CSARS's founding affidavit remained unrefuted, as the opposing respondents confined themselves largely to points in limine, and that no real, genuine or bona fide disputes of fact had been raised (paras 167-173).
Relying on Carmel Trading Co Ltd v Commissioner, South African Revenue Service and Others [2007] ZASCA 160; 2008 (2) SA 433 (SCA), the court held that section 163 of the TAA and the preservation order authorised realisation of deteriorating assets into cash prior to determination of executability in the contemplated action, and that this did not constitute an arbitrary deprivation of property under section 25(1) of the Constitution (paras 193-220). The court found that, on the evidence, including from the tax inquiry, the CSARS had established on a balance of probabilities that the first respondent was the beneficial owner of the properties (paras 181, 210, 219).
The court determined that no reserve price should be set for the sale, given the quantum of the tax indebtedness (para 220).
Outcome
The court condoned the CSARS's non-compliance with the rules and practice directives and heard the application as urgent under rule 6(12) of the Uniform Rules of Court (order para 1).
The curator bonis was authorised and empowered to sell the five immovable properties, to conduct the sale in accordance with paragraphs 31 and 32 of the preservation order of 21 November 2024, and to hold the full proceeds in an interest-bearing trust account (order paras 2-4).
The curator bonis was authorised to pay the fifth respondent, Mr Peretz, the outstanding balance of the purchase consideration, if any, only upon confirmation by agreement or court order, with any remaining balance to be held pending determination of the contemplated action (order paras 5-6).
The CSARS was ordered to institute an action declaring the five properties or their proceeds executable for the tax debts of one or more respondents within one month of the order (order para 7).
The first, second, third and sixth respondents were ordered to pay the costs of the application, jointly and severally, on a party and party scale, including the costs of two counsel on scale C (order para 8).
Major issues / areas of contention
- Whether the CSARS established the requisite urgency to have the application heard on a semi-urgent basis (paras 102-124).
- Whether the High Court had jurisdiction to grant ancillary relief to sell properties subject to a preservation order granted under section 163 of the TAA (paras 126-129).
- Whether the application had become moot given the reinstatement of 22 Aston Investments (Pty) Ltd and confirmation of the preservation order (paras 130-133).
- Whether the CSARS complied with rule 46A of the Uniform Rules of Court and section 26 of the Constitution regarding sale of properties alleged to be primary residences (paras 134-150).
- Whether there was a material misjoinder of Obitz (Pty) Ltd or non-joinder of other parties (paras 151-156).
- Whether the application was premature because SARS had not yet established entitlement to execute against the properties before the contemplated action (paras 157-172, 193-220).
- Whether authorising the sale of the properties constituted an arbitrary deprivation of property contrary to section 25(1) of the Constitution (paras 159, 163-164, 205-208).
- Whether Carmel Trading Co Ltd v Commissioner, South African Revenue Service and Others applied to permit realisation of immovable property into cash prior to a determination of executability (paras 165-166, 193-220).
- Whether the first respondent was the beneficial owner of the five properties despite their registration in the names of Mr Peretz and 22 Aston (paras 43-54, 181, 210, 217-219).