Jeeva and Others v Receiver of Revenue, Port Elizabeth, and Others

• Jurisdiction: South Africa
• Judge: Jones J
• Judgment Date: 15 December 1994
• Docket Number: 2301/94
• Hearing Date: 19 September 1994
• Court: South Eastern Cape Local Division

Jones J:

This is an application in terms of s 23 of the Constitution of the Republic of South Africa Act 200 of 1993 for access to certain information in the possession of the Receiver of Revenue. It was brought C on 19 September 1994 and argued as a matter of urgency. On 23 September 1994 I made an order in the following terms and stated that I would give reasons in due course:

'1.

The first respondent (the Receiver of Revenue) is ordered to give the applicants access to all information in his possession relating to the companies Spirvin Bottling Co (Pty) Ltd (in liquidation) and D Theunsus Transport (Pty) Ltd (in liquidation) except

(a)

any confidential information or communication which passed between the first respondent and his legal adviser

(i)

to enable him to obtain and his legal adviser to give legal E advice; or

(ii)

which relates to litigation contemplated by the first respondent;

(b)

any evidential material, information or witness statement created and brought into being with the dominant purpose of being used in contemplated litigation between the first F respondent and the applicants or any of them.

2.

The second and third respondents are restrained from proceeding with the interrogation of any of the applicants at the inquiry to be held in terms of ss 417 and 418 of the Companies Act 61 of 1973 until the first respondent has furnished the information referred to above to G the applicants and a period of five Court days has elapsed between the date of furnishing the information and the date of the interrogation of the applicant concerned.

3.

The respondents are ordered to pay the applicants' taxed party and party costs of this application, which shall include the costs of two H counsel.

The facts

The application is directly related to the affairs of two companies, Spirvin Bottling Co (Pty) Ltd (in liquidation) and Theunsus Transport (Pty) Ltd (in liquidation). I shall call them Spirvin and Theunsus. Five of the applicants are former directors of or shareholders in Spirvin or I Theunsus. Two of them are the wives of two of the former directors and shareholders. Four of them are former officers or employees of Spirvin or Theunsus or both of them. The two companies were placed under a final winding-up order in about December 1993. The petitioning creditor was the Receiver of Revenue. He is the first respondent in this application and J the only creditor thus far to prove a claim in liquidation. The second and

Jones J

A third respondents are the joint liquidators of Spirvin. The second respondent is a joint liquidator of Theunsus. The second joint liquidator of Theunsus was by mistake not cited and sued, but no point is made of this; the parties and the missing liquidator are agreed that the matter should proceed as if both joint liquidators of Theunsus are before the B Court. No relief is sought against the joint liquidators, except a costs order in the event of opposition. They have indeed opposed.

The Receiver of Revenue began to interest himself seriously in the affairs of Spirvin and Theunsus in early 1990 when his special investigation department authorised a raid on the companies' offices and the homes of the directors. All the company documents were seized in the raid. They C have not been returned. They are now in the possession of the Receiver of Revenue. His investigations go back as far as 1985. They are not complete. They have led him to conclude that he has claims against Spirvin and Theunsus for payment of income tax and sales tax. The amount D of the claim against Spirvin is presently alleged to exceed R49 000 000. The amount in the case of Theunsus is nearly R500 000. The investigations also led to the suspicion that the two companies, through their then directors and employees (including some of the applicants), fraudulently divested themselves of their assets and ceased to trade in order to defeat the Receiver's claims. These facts have been conveyed to the joint liquidators. They have not been able to discover the existence of any E company assets. The result has been that the joint liquidators, acting at the instance of the Receiver of Revenue, applied to the Master of the Supreme Court for leave to hold a commission of inquiry into the affairs of the two companies in terms of ss 417 and 418 of the Companies Act 61 of F 1972, as amended. The Master granted leave on 19 August 1994. Senior counsel was appointed as commissioner with directions to report to the Master on

'(1) (t)he identity of the witnesses who gave evidence before him, the nature and purpose of the evidence of each such witness, the relevancy thereof and the way in which such witness' evidence was of assistance in regard to the matters being investigated;

G (2) what assets or money, if any, were or are likely to be recovered for the benefit of creditors in consequence of the evidence revealed at the enquiry;

(3) what offences and/or irregularities, if any, were revealed as a result of such enquiry and whether or not there are matters which should be referred to the Attorney-General for his consideration;

(4) the duration of and costs incurred in the holding of such commission H of enquiry.'

Dates were fixed for holding the inquiry (26 September 1994 to 6 October 1994) and subpoenas were issued and served upon various persons, including all eleven applicants, to attend the inquiry and to submit to interrogation.

I The eleven applicants called upon the Receiver of Revenue to give them access, in terms of s 23 of the Constitution, to all information in his possession relevant to the inquiry. Section 23 provides:

'23. Access to information

Every person shall have the right of access to all information held by the State or any of its organs at any level of government insofar as such information is required for the exercise or protection of his or her J rights.'

Jones J

A The Receiver of Revenue refused to furnish the information. Hence this application. It was brought as a matter of urgency on 19 September 1994, just a week before the inquiry was due to commence. The urgency is conceded. The Receiver of Revenue must fund the inquiry until its conclusion, as the costs thereof will only be reconsidered then. He has already spent some R100 000 on it. He alleges considerable prejudice if B it is delayed. Both parties desire an order as soon as possible. It was accordingly made before this judgment was written.

The issues

The Receiver of Revenue admits that he is in possession of information C which is relevant to the interrogation of the applicants at the inquiry. But he denies that the applicants have a constitutionally guaranteed right under s 23 to access to it. He argues that s 23 does not apply because the applicants do not require this information for the exercise or protection of any of their rights; because most of the information in D question is confidential and privileged; and because the secrecy provisions of the Income Tax Act 58 of 1962 and the Sales Tax Act 103 of 1978 preclude the Receiver of Revenue from divulging it. In the alternative, and in the event of a finding that the applicants have a constitutional right of access to the information which they seek, the Receiver argues that the common law of legal professional privilege and E the statutory immunity of the Income Tax Act and the Sales Tax Act place justifiable limitations upon it in terms of s 33(1) of the Constitution. The joint liquidators join with the Receiver of Revenue in these submissions.

The attitude of the applicants is that they have brought themselves within the ambit of s 23 simply by showing that the State, in the person of the Receiver of Revenue, has information in its possession which is relevant to the exercise or protection of their rights. Their papers refer F specifically to the rights entrenched by ss 8, 10, 11, 24, 26 and 28 of the Constitution. They argue that the section gives them unrestricted access to all relevant information in possession of the State unless the

State is able to establish a limitation or restriction upon their right of G access under s 33(1). They submit that in this case there are no justifiable limitations in terms of s 33(1).

The respondents, on the other hand, argue for a more restricted interpretation of s 23. Mr Buchanan submits on their behalf that the H section is self-limiting. The right of access to information is dependent upon the existence of another right, a right which is either being threatened or which the person desiring the information seeks to exercise. Its content is, furthermore, limited by the content of the other right. The argument is, firstly, that the information requested does not relate to the exercise or protection of any of the rights to which the applicants I refer; and, secondly, that s 23 does not give a right of access to information which is the subject of legal professional privilege or the statutory protection of tax legislation. In the alternative, they submit that the case they make for legal professional privilege and for the statutory immunity in terms of the Income Tax Act and the Sales Tax Act is J a justifiable limitation in terms of s 33(1).

Jones J

The interpretation of s 23 A

The first issue between the parties involves the interpretation and application of the provisions of s 23, and, in particular, the question whether or not it contains within it the self-limiting characteristics for which the respondents contend. Similar issues were recently addressed by B the Full Court of this Division in the unreported decision in Phato v Attorney-General, Eastern Cape, and Another; Commissioner of the South African Police Services v Attorney-General, Eastern Cape, and Others (case Nos 1323 & 1369/94, ECD, 27 October 1994). [*] That case deals with the right of access to information in a police...