Business / Business News

Antoinette Slabbert
4 minute read
2 Nov 2016
7:54 am

‘No SARS, you are not special,’ court hears

Antoinette Slabbert

‘If SARS is defamed, the economy will collapse’ – SARS

Adv. Max du Plessis on Tuesday told the North Gauteng High Court in Pretoria that there is nothing special about South African Revenue Service (Sars) that warrants its exclusion from a legal rule that organs of state cannot sue for defamation.

This rule is based on 80 years of court rulings, including some under the current constitution.

Du Plessis was arguing on behalf of former Sars spokesperson Adrian Lackay in an interlocutory application that, if successful, would put an end to a R12 million claim for defamation instituted by Sars and its commissioner Tom Moyane in his personal and professional capacity.

The allegation refers to a letter Lackay sent to the chairs of the joint Parliamentary committee in March last year, in which he raised his concern about matters relating to the so-called “rogue unit” at Sars. Lackey indicated in the letter that he approached the committee in the public interest. He further asked the committee to question Moyane about the matter, since he was scheduled to appear before the committee a few days later.

Du Plessis referred to case law and said if organs of state were entitled to sue for defamation, criticism of government would be suppressed, which would be a serious infringement on the right to freedom of expression.

Adv. William Mkhari SC, acting for Sars and Moyane, said Sars is an organ of state of a special kind. He said it is a critical government institution. If its reputation is damaged, it makes it difficult to collect taxes and “the whole economy collapses,” he said.

Mkhari said the fact that 80 years ago a ruling was made that prohibits organs of state to claim damages for defamation, “in a Constitutional state, it doesn’t mean Sars cannot come to court to claim it was defamed on the basis it is an organ of state sui generis (unique).”

He said cases that nobody thinks can succeed are sometimes successful at Constitutional Court level, since the Constitutional Court can develop the common law and customary law within the framework of the constitution, and thereby change existing legal rules.

Du Plessis further argued that Sars and Moyane rely on reading the offending statements, including that Moyane is a liar, in isolation. Courts have, however, been clear that words should be read in context to determine whether defamation occurred.

In the present case, Lackay made the statements in the public interest. He did not present the parliamentary committee with a conclusion, but stated clearly that he has concerns, that there are other versions, and that the committee should interrogate Moyane about these concerns.

He said Lackay’s submission was made to a limited audience. It was targeting the members of the parliamentary committee and the test the court should is apply is whether a reasonable person in the position of a committee member would have understood the submission to be defamatory.

He further said Sars and Moyane’s claim is “vague and embarrassing” as it failed to clearly state whether the claim is based on Lackay’s distribution of the letter to the media as well.

He said the Sars and Moyane provided no basis for the quantum of the claim, which he said was arrived at “preposterously and abusively”.

He said Sars is claiming R10 million and Moyane R2 million in damages from Lackay, a private individual. The claimants say in their court documents it is difficult to quantify their damages and fails to explain how they arrived at the amounts.

He said the court ruled in a comparable case that R100 000 was too much and reduced it to R50 000. The claim at hand is multiples of that, he said.

He referred to case law and said the remedy in defamation cases is not aimed at punishment, but at restoring the dignity of the defamed person.

Lackay is being prejudiced since he has no idea what the basis for the amount is and could therefore not determine whether it would be prudent for him to consider a settlement, for example.

He asked whether the amount was based on a “thumb suck” and said in the absence of a proper explanation, the conclusion could be that Sars is trying to muzzle Lackay.

Du Plessis said Sars is no ordinary litigant. It is an organ of state exercising state power when it litigates. If it brings an “spurious and frivolous” defamation action, it is in fact an abuse of state power.

He asked the court strike out the claim and order that Sars and Moyane pay Lackay’s costs jointly and severally at an attorney-client scale.

Mkhari asked how one would go about to quantify damage to one’s dignity. “Is it R10 for damage at church” and another amount for damage elsewhere, he asked.

He said he would show at trial why Sars is a unique organ of state entitled to sue for defamation when someone “vindictively” damages its reputation.

He asked how the court could accept an argument that it is not defamatory to call the commissioner a liar and said arguments in this regard should be made during the trial.

Mkhari asked that the application be dismissed with cost.

Judge Nomsa Khumalo reserved judgement until further notice.

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