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Judge Norman Davis’s dangerous, dangerous Zuma tax judgment

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In real life, Professor Balthazar is one of South Africa’s foremost legal minds. He chooses to remain anonymous, so it doesn’t interfere with his daily duties.

This judgment, if upheld, could be a pernicious weapon in the hands of the dark side of ‘journalism’. IOL and the Radical Economic Transformation faction will no doubt be very keen to exploit it.

Professor JC de Wet, whose textbooks on criminal law and contract were hugely influential for decades, once described a judgment with which he disapproved as “taalkundig ’n gemors, regskunding ’n fiasko” (grammatically a mess, jurisprudentially a disaster). What he would have said of Judge Norman Davis’s contributions to jurisprudence would doubtless have been equally devastating.

Fresh from having had one of the most unreasoned judgments in recent history firmly overturned by the Supreme Court of Appeal, in which he held the declaration of the National State of Disaster in terms of the Disaster Management Act to be unconstitutional, Judge Davis has now applied the same logic to the disclosure of  Jacob Zuma’s tax returns. 

As a reminder to readers, when the learned judge set aside the basis by which the government sought to deal with the unique challenges posed by Covid-19, he justified his order on the basis of a range of judicial musings which represented his thinking rather than any engagement with the science that underpinned the declaration.

He has done it again. 

Certain media houses were desirous to obtain access to the tax records of  Zuma. Their problem is that the relevant legislation – the Tax Administration Act and the Promotion of Access to Information Act (PAIA) – which follows the precedent of a number of tax administrations, provides that a taxpayer’s tax returns are not to be publicly disclosed. 

The logic is impeccable. 

A taxpayer’s tax returns are a matter between the SA Revenue Service (SARS) and the taxpayer. If there is tax evasion, it is for SARS to enforce the law. Were the media able to splash these details around, the intricate process of investigation and prosecution of tax offenders could well be compromised. Furthermore, as was the case during the apartheid regime, the publication of tax affairs of opponents of the government could be used as a weapon. 

In an answering affidavit deposed to by the Commissioner of Inland Revenue, the court was informed of the importance of the privacy regime in ensuring a lasting compact between taxpayers and SARS. But obviously Judge Davis applies very little weight to the evidential rule called Plascon Evans, in which the respondent’s version, to express it simply, carries great evidential weight. 

In a judgment that brings a new meaning to surrealism, the judge begins by acknowledging that the application of which he was seized trenches upon the constitutional right of privacy and the right of access to information. In substance, he then elides over the doctrine of subsidiarity which, in this context means that PAIA caters for the right of access to information, not simply by declaring the relevant provision of PAIA unconstitutional, but by rewriting the provision to allow for disclosure of taxpayers’ returns on the basis of a public interest exception. 

In short, he inserts the public interest exception that caters for specific situations (Section 46 of PAIA) and then refashions the specific exclusion against disclosure which the legislature provided for taxpayers’ information. But in ensuring the doctrine of coherence of incoherence, the learned judge can only arrive at this conclusion by finding without any reasoned justification that the right of access to information is the more powerful right. This then leads the judgment into what is clearly in this case the mysteries of the limitation clause (Section 36 of the Constitution) in order to determine whether SARS has a justifiable basis to limit the right of the media to access to information.

At this point, the judgment further tests the limits of legal understanding. For starters, the balancing between competing rights is to be done at this stage of the inquiry; that is in the examination of the importance of the right affected by the legislation. In fairness, the Constitutional Court has for years made a right mess of the two stages of an inquiry in a case based on a constitutional right’s infringement. But in this case the reason for regarding the right of access to information as more powerful than the right to privacy is left to the readers’ imagination. Then Judge Davis embarks, as he had done in the Covid case, on an analysis of the justification for the limitation based on his own views of tax collection rather than the evidence placed before him by SARS. That it was shown that Kenya, the UK, the US, Germany, Canada and New Zealand all have similar provisions is dismissed by the judge as not constituting a universal truth. 

Not content to only redraft legislation, Judge Davis now proceeds to rewrite Section 36 of the Constitution. The limitation does not talk about the Davis universal truth but on what is reasonable in an open and democratic society based on human dignity, equality and freedom. Significantly the three jurisdictions that heavily influenced the wording of the Constitution – the US, Germany and Canada – are all present. Instead of rummaging in articles written by academic non-entities, Judge Davis may have been advised to read the Australian Tax Authority’s document on taxpayer privacy to see how important the provision is in the maintenance of a viable collection agency.

Of course, certain elements of the press have heralded this judgment as a great victory. Agreed, Zuma’s tax affairs deserve exhaustive investigation as should those of all of his family, particularly his son Duduzane, but that is to miss the key point. This judgment, if upheld, could be a pernicious weapon in the hands of the dark side of “journalism”. It could justify all manner of applications for taxpayer records. IOL and the Radical Economic Transformation faction will no doubt be very keen to exploit this judgment. 

In turn, it raises two profound questions. In the first place it should prompt a debate among progressive lawyers about the broader implications of this kind of application.  

Secondly, the quality of this judgment casts further light on the manner of appointment of judges. In the context of this repeat performance, one cannot help wonder what the quality of the jurisprudence would have been if the high courts had been graced by the likes of Geoff Budlender, Jeremy Gauntlett and Halton Cheadle, all of whom, unlike Norman Davis, were not considered good enough for appointment. DM

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All Comments 12

    • Agreed, but one needs to look at the bigger picture where there must be ‘trust’ between SARS and taxpayers. The problem is that our tax money collected by SARS gets into the hands of the anc cabal. There needs to be more general transparency and ring-fencing of revenue for specified outcomes. Of course we all know that jz and his ‘family and friends’ should be doing jail time for tax related (and many other) atrocities.

  • “In the context of this repeat performance, one cannot help wonder what the quality of the jurisprudence would have been if the high courts had been graced by the likes of Geoff Budlender, Jeremy Gauntlett and Halton Cheadle, all of whom, unlike Norman Davis, were not considered good enough for appointment.” Budlender, Gauntlett, Cheadle and a bunch of other competent jurists are obviously not anc lapdogs, so ….

  • Prof., you know much more than I will know about the matters, but I have to endorse the opinions of both Virginia and Gerrie. Mr Zuma is not just a mere citizen, he was the head of state for 8 long years, and wasted years for that matter. The right to know in this case is thus very much of public interest, and denying the public of such knowledge will be a gross violation of public rights. Should this order by Judge Davis eventually fail due to a likely appeal process, it will most definitely scar the reputation SARS significantly, especially after it suffered immensely under the leadership of commissioner Tom Moyane

  • Public access to tax records has been implemented for years in some Scandinavian countries. Reading about their experiences, it seems that at least from a social perspective, the benefits outweigh the possible misuse significantly.

  • An aspect that MUST go is the secrecy of shareholders in companies.

    If somebody wants to make use of the concept of a company dealing with the public and the state, then there must be full disclosure (as there is with directors already), of the beneficial ownership.

    All the way up the web of holding companies and trust beneficiaries : to the eventual warm bodies. It is not onerous at all as this information must exist in any event if the company has a FICA bank account.

    I should be able to go to CIPC website and see exactly who are the beneficial owners of any company.

    As to tax information : a court should be able to subpoena information reasonably required in a court case or criminal investigation.

  • How does the public hold SARS to account? What if Zuma has evaded tax (which is a crime) and SARS has turned a blind eye to keep the peace within the ANC? The public has a right to know if it’s former President is not tax compliant and if SARS is complicit! After the appointment of Tom Moyane as SARS Commissioner the public are justified in being sceptical of SARS bona fides when it comes to holding looting ANC elites accountable.

    • I agree fully.
      Tax information of public servants and anyone who is possibly involved with criminal activities or in dealings with government must be allowed to be shared with the public after the necessary court application. I am also sure that Zuma and most of the ANC and the BEE billionaires have not paid taxes on their ill gotten gains.