Judicial Forays in Statutory Construction

• Jurisdiction: South Africa
• Date: 01 June 2021
• Published date: 01 June 2021
• DOI: 10.10520/ejc-btclq_v12_n2_a3
• Pages: 8-18
• Published By: Siber Ink
• Author: Milton Seligson SC

8© Siber ink

Judicial Forays in Statutory

Construction:

ENDUMENI AND ITS IMPACT ON THE

INTERPRETATION OF FISCAL LEGISLATION

MILTON SELIGSON SC*

AbstrAct

This article discusses the changes in the approach of the courts to statu-

tory interpretation that were first articulated in the landmark decision of the

Supreme Court of Appeal (SCA) in the case of Natal Joint Municipal Pension

Fund v Endumeni Municipality.1 The article further explores subsequent impor-

tant decisions of the SCA in which the Court has applied the Endumeni

approach to fiscal legislation. These decisions are analysed and the article

assesses their impact in the field of tax law.

The author contrasts the approach to statutory construction in Endumeni

with that of earlier case law in which ‘the intention of the Legislature’ was

sought in the ‘ordinary grammatical meaning’ of the language used — the

so-called ‘golden rule’ of statutory interpretation.

The principles embodied in the ‘new’ approach as signalled by the unani-

mous decision in Endumeni, which have since been widely adopted by South

African courts and approved by the Constitutional Court, are summarised and

explained. In essence, the new approach departs from the over-emphasis on

literal construction of the past and uses the language of the provision itself

as the inevitable point of departure, but read in context and having regard

to the purpose of the provision and the background to its preparation and

production. The author concludes that the ‘golden rule’ of statutory construc-

tion has in effect been relegated to the dustbin of legal history, the emphasis

now being on contextual, purposive and sensible interpretation of statutes.

The article discusses the application of the Endumeni approach to taxing

statutes with reference to two recent decisions of the SCA: Commissioner,

South African Revenue Service v United Manganese of Kalahari (Pty) Ltd

2 and

Telkom SA Soc Ltd v Commissioner, South African Revenue Service.3 In the first

of these cases, the SCA held that context is fundamental to the interpreta-

tion of all written instruments, including statutes and contracts, even though

there may be differences in context with different documents. In the second

decision, the SCA endorsed the view that the contra fiscum rule applies in

the context of a fiscal provision, whether anti-avoidance in nature, or other-

wise, but only where interpretational analysis results in irresoluble ambiguity

as to the meaning of the provision in question. The SCA also held that the

common-law presumption that statute law is not unjust, inequitable or unrea-

sonable may facilitate resort to constitutional values in interpreting statutes

and may prove useful in that process.

1

* Honorary Member, Cape Bar.

2012 (4) SA 593 (SCA).

2

2020 (4) SA 428 (SCA).

3

2020 (4) SA 480 (SCA).