ARTICLES

 

How Have the Courts Decided What De Minimis is in Tax Law?

 

 

S de Lange; MT Malan

University of Stellenbosch, South Africa. Institute for Austrian and International Tax Law, Austria. Email: silkeb@sun.ac.za; Monique.malan@wu.ac.at

 

 

---

ABSTRACT

This article analyses how South African courts have decided the applicability of the de minimis non curat lex maxim and, more broadly, considered the de minimis concept in tax law. A doctrinal research methodology is employed with the focus on an analysis of predominantly reported judicial decisions. The applicability of the maxim is found to be decisive in only one tax case: the Diageo SA (Pty) Ltd v Commissioner for the South African Revenue Service case of 5 July 2023. Consequently, this study thus also reviews judicial precedent in respect of the applicability of the maxim in other areas of the law with consideration of the relevance to tax law. Further, several tax cases that refer to the broader de minimis concept or to trivial or trifling matters are examined. As there is no one definitive test to determine the applicability of the maxim, the courts have used several factors to guide their determination. Through inductive reasoning, the following conclusions are drawn. (i) In respect of statutory interpretation: First, the primary factor in the determination of the applicability of the maxim is the purpose of the provision. This is aptly demonstrated in the Diageo judgment. Secondly, where the statute sets a clear, objectively verifiable limit or amount, there is essentially no room for the application of the maxim in interpreting the statute. Where, however, no such verifiable basis is provided, a purposive interpretation is paramount - which may in fact require the application of the maxim. (ii) The use of the de minimis concept in tax law appears to depend on whether the matter is one of principle (substance) or practicality (administrability). In the former case, the amount (the factor of extent or value) is irrelevant whereas in the latter, the de minimis concept has been applied.

Keywords: De minimis non curat lex; trivial; trifling; tax law; judicial discretion; interpretation of statutes.

---

 

 

1 Introduction

De minimis non curat lex: the law does not regard trifles. The use of this well-known legal maxim (hereafter "the de minimis maxim" or "the maxim") in South African case law can be traced as far back as 1861¹ and appears in various areas of the law. The application of the maxim in South African law was last comprehensively discussed in the academic literature by Labuschagne (1973) in De Minimis Non Curat Lex.² More recently, but confined to the field of criminal law, its applicability was discussed by Hoctor (2019) in "Assessing the De Minimis Non Curat Lex Defence in South African Criminal Law".³ Although Labuschagne explores the use of the maxim in various areas of the law,⁴ the area of tax law is not mentioned. Perhaps this is because, despite the maxim being referred to in tax cases from as early as 1931,⁵ there does not appear to be a tax case that turned on the applicability of the maxim until 2023, when the case Diageo SA (Pty) Ltd v Commissioner for the South African Revenue Service⁶ was decided in the High Court.

A legal maxim is an established principle or proposition of law.⁷ The legal maxim de minimis non curat lex has also been referred to as a doctrine,⁸principle,⁹ rule,¹⁰ or legal notion.¹¹ Related to but distinct from the maxim is the Latin term de minimis, with its etymon de minimis non curat lex.¹² The term, which can be used as an adjective, an adverb or a noun, is defined as describing something that is insignificant, negligible, unimportant or "unworthy of attention".¹³ In tax law, the term - which is broader than the maxim (i.e. the rule or principle) - is used far more frequently than the maxim. In this article we refer to the use of the term as "the de minimis concept" or "the concept" to prevent confusion with the maxim.¹⁴

The question that this article aims to address is: how have the courts decided the applicability of the de minimis maxim in the context of tax law? As the courts have only very rarely decided this question in tax cases¹⁵ the research question is extended to include how the courts have considered the broader de minimis concept in the context of tax law. Understanding how the judiciary has applied the de minimis maxim and concept in tax cases can provide a useful foundation for answering further questions (beyond the scope of this study) about de minimis tax matters, such as how these matters are dealt with in tax legislation and tax administration.

The applicability of the maxim has, however, been more frequently considered by the judiciary in other areas of South African law, predominantly in criminal law.¹⁶ Given the limited judicial authority on the use of the maxim in tax law, this study also examines how the judicial precedent in respect of the applicability of the maxim in other areas of the law could be applied to tax law.

This study employs a doctrinal legal research methodology with descriptive and theory-building objectives. Answering the research questions requires an analysis of judicial decisions. Through inductive reasoning, general principles are inferred from the analysis. The population of cases considered in this study are those contained in the following databases:¹⁷SAFLII,¹⁸ Lexis Library (LexisNexis South Africa)¹⁹ and Juta Law Online Publications (Jutastat e-publications).²⁰ It is incumbent upon us to draw attention to a methodological limitation of this study. Legal databases of judgments consist mostly of reported judgments of the higher courts.²¹ Not all judicial decisions in South Africa are reported (or, in the context of magistrate courts' decisions, even typed). As the focus of this study is on that which the courts consider de minimis or trivial, using academic legal databases that contain mostly reported judgments results in an inherent selection bias. This notwithstanding, a study of what the judiciary has determined are the most relevant cases is still a worthwhile endeavour that may produce valuable findings.

The substantive part of this article commences with an analysis of the meaning and purpose of the de minimis non curat lex maxim in part 2. Part 3 discusses the applicability of the maxim in areas of South African law other than tax law - firstly in criminal law and then in private law. Part 4 is the core of the article. It analyses when and how the courts have referred to and considered the applicability of the de minimis maxim and concept in tax cases. Part 5 summarises the findings and concludes the article.

 

2 Meaning and purpose of de minimis non curat lex

De minimis non curat lex has been defined as "[t]he law does not concern itself about trifles",²² or with trivialities.²³ It has been stated that "[t]he maxim signifies 'that mere trifles and technicalities must yield to practical common sense and substantial justice'".²⁴ Although the maxim refers to "the law" not concerning itself about trifles, it is in fact rather mainly the courts that do not take notice of trivial matters and thereby, for example, acquit an accused where the offence is trivial.²⁵ This is stated by Hoctor as "these trifles are not regarded by the court as being a worthy basis for a decision"²⁶ and thus it can be said that courts, in exercising their judicial discretion, do not regard trifles. The interaction between "the law" and "the courts" has also been explained as "the law does not concern itself with a fact or thing that is so insignificant that a court may overlook it."²⁷ As the courts should not be concerned with trivialities, the maxim has also been described as "de minimis non curat lex (vel praetor)", meaning "the law does not concern itself with trifles (nor does a judicial officer)."²⁸

In South African criminal law the de minimis maxim is a defence that is applied judicially.²⁹ For example, in the case of the theft of a paperclip or "assault by drawing a cap over the eyes of the wearer",³⁰ the accused's conduct remains unlawful, even if trivial.³¹ However, as it would be unreasonable to convict and punish the accused for such insignificant conduct, "the court does not regard, heed or take account of the unlawful conduct."³² The outcome is then an acquittal of the accused,³³ as a result of the exercise of a judicial discretion.³⁴ The maxim is thus not a defence which excludes unlawfulness, but rather a decision by the court to allow the conduct to go unpunished.

While the meaning of the maxim may be clear, why should the law not concern itself with trifles? What is the justification for this maxim? By acquitting the accused for unlawful but trivial conduct, the constitutional norms of reasonableness and proportionality are served.³⁵ The judicial discretion to apply the maxim is thus "entirely consistent with the role of the courts in a constitutional democracy with a justiciable Bill of Rights."³⁶ The maxim has also been rationalised as ensuring that judicial resources are used efficiently.³⁷ If a court's time is taken up by trivial matters, it will not be able to timeously deal with other matters more worthy of the court's time. The judge in S v Bester³⁸ illustrates this point aptly in a criminal law context.³⁹ This sentiment has also been expressed in a private law context in Delange v Costa,⁴⁰ where the court states that if all that was required for a successful action for damages for iniuria was the utterance of words towards another "which offend such person's subjective sensitivities", then it could lead to the courts being "inundated with a multiplicity of trivial actions by hypersensitive persons."⁴¹ It avoids a position where a (social) cost-benefit analysis does not make sense, and the maxim is therefore applied for purposes of practicality.⁴² In essence, the application of the maxim thus enables a better administration of justice.⁴³

It has also been said that the maxim can function "as an interpretive tool to inject reason into technical rules of law and to round-off the sharp corners of our legal structure."⁴⁴ In this regard Veech and Moon describe the maxim as a "rule of reason".⁴⁵ The Constitutional Court has recently supported this in a majority judgment stating that "the principle that the law does not concern itself with trivialities [with reference to de minimis non curat lex] can play a role in the interpretation of statutes."⁴⁶

Before analysing the judicial authority regarding the use of the de minimis maxim and concept in tax law in part 4, in the following part we first discuss the judicial precedent in respect of the applicability of the maxim in other areas of the law and consider how this could be applied to tax law.

 

3 Applicability of the maxim in other areas of law

Whilst it is not the aim of this study to undertake a comprehensive analysis of the applicability of the maxim in all areas of South African law, some of the areas are briefly addressed here for the purposes of providing context for the further analysis in respect of South African tax law. Firstly, the area of criminal law is considered. Parallels can be drawn between criminal law and tax law as they are both fields of public law. Secondly, some examples of civil cases dealing with areas of private law are provided. The applicability of the maxim in a civil context may prove useful since most tax cases are civil cases.

3.1 Criminal law

The point of departure for criminalising conduct is the harm principle. The state is justified in criminalising conduct that causes harm or creates an unacceptable risk of harm to others.⁴⁷ It is a question of degree, however, whether and if so when such conduct warrants criminal prosecution, conviction and sanction. In cases where seriousness is an element of the crime (such as for crimen iniuria) the courts are tasked with deciding what is serious. In other cases where it is not, the de minimis rule can serve as a "mediating maxim for the application of the harm principle."⁴⁸

Hoctor provides a comprehensive overview of the South African case law dealing with the de minimis rule in criminal cases.⁴⁹ He references ample cases where the courts have exercised their judicial discretion in applying the de minimis rule to acquit the accused when the court regarded the violation of the law to be trivial. What is clear is that there is no one definitive test that can be applied to determine triviality.⁵⁰ In S v Dimuri⁵¹ Gillespie J states that the determination requires the judicial officer to make a "value judgment"⁵² or a "policy decision to be exercised according to all the relevant circumstances of the case."⁵³ The exercise of this discretion is analogous to the courts' determination of the seriousness of an insult, such as that it would constitute crimen iniuria.

Several (cumulative) factors identified in the literature⁵⁴ have been used by the courts to guide their determination of the applicability of the de minimis maxim. These include (as further elaborated upon below): (i) the extent (of the harm caused), also referred to as the value⁵⁵ or the size and type of harm caused,⁵⁶ (ii) intent,⁵⁷ (iii) practicality, referring to the administration of justice and (iv) the purpose⁵⁸ (ratio legis) of the provision (in other words, the harm or mischief the rule in question is designed to prevent).⁵⁹

Further, it is worth recalling that crime falls within the sphere of public law as opposed to that of private law and is directed against a public interest rather than a private interest. It is the state that prosecutes the alleged perpetrator of a crime, irrespective of the views of a private individual.⁶⁰Accordingly, the public interest will thus necessarily always be a factor requiring consideration in criminal cases - whether implicit or explicit.⁶¹ This is aptly quoted in S v Dimuri,⁶² with reference to Burchell and Hunt, and as also subsequently cited in S v Visagie, as follows:

It is true that crime affects the interests of the community as a whole and not merely the individual complainant. But if the harm done is of a very trifling nature the community is not really affected and would not be prejudiced if the accused were acquitted.⁶³

In theft cases, the extent of the harm caused, expressed as the value of the item stolen, has guided the courts' determination. In the Appellate Division case S v Kgogong⁶⁴ Trollip JA held that the piece of paper taken by the appellant containing notes that "had served their purpose"⁶⁵ "was of no value or merely of very trivial value or interest."⁶⁶ The court held that the magistrate had thus erred in not applying the de minimis rule. Trollip JA concludes:

Hence, in my view, where the offence alleged is a simple theft of an article of trivial or no value, the accused should not be prosecuted therefor, but if he is, he should generally be acquitted.⁶⁷

By contrast in S v Nedzamba, where theft was also the offence in question, the de minimis rule was not applied. Liebenberg J held that:

[n]ot only the value of the article but also the purpose of the thief in stealing it, the effect the deed has on the interests of the community and all the circumstances under which the deed was committed should be taken into account.⁶⁸

In this case the accused had stolen two blank cheque forms from the complainant's cheque book. He subsequently made out one of the cheques to cash and cashed it at the bank. He was charged with one count of theft and one count of fraud.⁶⁹ Despite the negligible value of the blank cheque forms, the court did not consider it appropriate to apply the de minimis rule to the theft charge since the blank cheque forms were stolen with the intent to commit fraud and thereafter used for this purpose.⁷⁰

In S v Visagie,⁷¹ where the applicability of the de minimis rule to the crime of assault was considered, intent and practicality factored into the court's decision to apply the maxim and overturn the conviction.⁷² The facts of the case involved an altercation between the appellant and the complainant. It resulted in the appellant's pushing the complainant, who consequently tripped over a piece of equipment, fell, and broke his wrist. As regards intent, the court held that the complainant's conduct was "provocative and aggressive."⁷³ As regards practicality, EM Du Toit AJ paraphrases Trollip JA in S v Kgogong:

[I]t would in all the circumstances of the case better serve the administration of justice in our busy courts, while at the same time not adversely affect the interests of the community as a whole, if the courts were not to be concerned with this trivial and childish confrontation...⁷⁴

In determining whether to apply the de minimis maxim, the purpose of the criminal law provision, although also a relevant factor for common law crimes, is most evidently considered by the courts in respect of statutory offences.

In Director of Public Prosecutions v Klue⁷⁵ the Director of Public Prosecutions appealed against the magistrate's acquittal of the accused on the grounds that the magistrate erred in finding the maxim applicable.⁷⁶ The issue that this case turned on was whether or not exceeding the statutory limit of alcohol concentration in a driver's blood of 0.05% (i.e., 0.05 grams per hundred millilitres of blood)⁷⁷ by 0.02g/100 ml - in other words, having a blood alcohol concentration of 0.07% - was an insignificant or trivial transgression. The magistrate had ruled that it was. Kroon J, writing the judgment for the high court, categorically disagreed with the magistrate in this regard.⁷⁸

In his judgment Kroon J, notwithstanding citing the relevant parts of the Kgogong case, clearly distinguished between the application of the maxim where a statutory offence is concerned as opposed to a common law offence.⁷⁹ He inter alia cited Ackermann J⁸⁰ in S v Magidson:⁸¹

The maxim is also applicable to statutory offences but the approach in such cases is somewhat different. The enquiry there is directed to the intention of the Legislature and whether such intention is a manifestly severe one.⁸²

Kroon J clearly stresses the importance of considering the purpose of the legislation:

[W]here the application of the maxim is to be considered in regard to a statutory offence, the aims and objectives of the legislation are important considerations. There is no room for an application of the maxim if it would be contrary to the clear intention of the legislature, even in respect of relatively non-serious contraventions.⁸³

Kroon J proceeds with an assessment of the purpose of section 65 of the National Road Traffic Act and states that these provisions "are aimed at combating the carnage on our roads."⁸⁴ He points out that by introducing these stringent rules designed to ensure safer public roads, the public interest has been served.⁸⁵

He is instructive as to how the courts should interpret a statutory limit:

[W]here the legislation has determined a statutory limit, there is no room for the application of the de minimis rule where the limit is exceeded. In a sense, the legislature has already determined what would be regarded as negligible, and it is not for the Courts to raise that limit. To hold otherwise...would not only introduce uncertainty, but would indeed also ignore the clear wording of the Act and permit the courts to usurp the function of the legislature.⁸⁶

Kroon J held that the magistrate was "clearly wrong"⁸⁷ in applying the de minimis rule and in acquitting the respondent. The appeal was upheld.

The various factors discussed above played a role in the determination of the applicability of the de minimis maxim in criminal cases - whether in respect of common law or statutory offences. Where statutory offences are concerned, the purpose of the legislation is the vital factor. Where a clear statutory limit has been set, the legislature has determined the level, and thus the discretion of the courts is limited. As the source of tax law is almost exclusively legislation (statutory law), judicial authority in respect of tax law usually deals with issues of statutory interpretation. Accordingly, we can expect that the purpose of the legislation would be the predominant factor in determining the applicability of the de minimis maxim in tax cases.

3.2 Private law

Despite the diversity of areas of private law in which the de minimis maxim has been applied, only a few examples of these are provided here with a few brief observations.

In the law of delict⁸⁸ it has been held that the actio iniuriarum has a number of elements that must be satisfied for a successful action for damages, "subject to the principle de minimis non curat lex".⁸⁹ A court would accordingly be able to dismiss a claim for damages for trivial matters. In contrast to the prevailing position in criminal law that trivial conduct remains criminally unlawful, in the law of delict "trivial infringements should not be considered wrongful".⁹⁰

In Pharma Valu Sunnyside BK v Pretorius,⁹¹ for example, it was held that a delictual claim for defamation should be refused on the basis of de minimis non curat lex.⁹² It was held that the respondent, who, when leaving a pharmacy, was stopped by a security guard and accused of stealing from the pharmacy (which in fact he did not do), overreacted and was easily offended.⁹³ With reference to R v Walton⁹⁴ the court agreed that:

[i]n the ordinary hurly-burly of everyday life a man must be expected to endure minor or trivial insults to his dignity.⁹⁵

The de minimis maxim has also been applied by the court in a civil case -in the context of an interdict pertaining to a water servitude. In Benoni Town Council v Meyer⁹⁶ the town council applied for an interdict against the owner of land to prohibit the owner from continuing to fill up a vlei (a swamp or a natural basin) as that would create a danger of flooding to the adjacent public road controlled by the town council. The court held that the reclamation of the vlei would create a danger of infringement of the plaintiff's rights. However, the judgment continues, "not every danger of infringement will entitle a plaintiff to relief" as the de minimis maxim can be applied in appropriate circumstances.⁹⁷ The court proceeded to evaluate whether the danger of infringement of the town council's rights was negligible or not. Acknowledging that "[i]t would be difficult to formulate a definition of minimum that would be valid for all circumstances",⁹⁸ the court considered the following factors relevant to the evaluation: "the extent, duration and frequency of the expected infringement"⁹⁹ (own emphasis). The court held that the danger of infringement of rights, although the occurrence of floods would be rare, was not negligible and granted the interdict against the further reclamation of the vlei.¹⁰⁰ In respect of the reclamation that had already occurred (which was found to be "a negligible infringement of the plaintiff's rights"), the owner was not ordered to restore the vlei due to the de minimis non curat lex maxim.¹⁰¹

Another area of law where the maxim has been applied is insurance law. In AA Mutual Insurance Association Ltd v Sibothobotho,¹⁰²for example, the Appellate Division applied the maxim in the interpretation of a provision of the (now repealed) Compulsory Motor Vehicle Insurance Act 56 of 1972.¹⁰³The insurer sought to avoid liability on the grounds that the plaintiff (claimant) was "being conveyed in or upon the insured vehicle".¹⁰⁴ The court considered that the purpose of the legislation was "to give the greatest possible protection to third parties [claimants]."¹⁰⁵

The court concluded as follows:

Looking at the whole incident in broad perspective it seems to me that, whatever may be said about the driver's intentions and the passenger's intentions, this is a case in which the de minimis non curat lex rule can appropriately be applied. A man sits or stands on the front of a motor vehicle performing a simple mechanical operation. The vehicle jerks forward three or four times. He has been moved, perhaps five paces, but to say that he has been conveyed as a passenger for this distance is to strain the language of the Motor Vehicle Insurance Act.¹⁰⁶

Accordingly, the maxim was applied in the interpretation of legislation and it was emphasised by the court that a "broad perspective", including a consideration of the purpose of the legislation, required this.¹⁰⁷

 

4 Applicability of the de minimis maxim and concept in tax law

It has been argued that the maxim as a "rule of reason ... may be applied in all courts and to all types of issues."¹⁰⁸ There is thus in principle no reason why it cannot apply to tax law. Due to the limited number of tax cases that referenced the maxim itself, a wider search was performed to also consider relevant cases where the term "de minimis" or the words "trifling" or "trivial" were referred to (what we refer to in this article as the de minimis concept). In this part we analyse judicial decisions that have applied or referred to the de minimis maxim or concept in South African tax law.

Before the relevant cases are analysed a basic understanding of the tax dispute resolution structures, with specific reference to the different bodies and their decisions or judgments, is required. This leads to a possible explanation of why there are so few tax cases dealing with de minimis matters and provides the context necessary for the analysis of the tax cases.

4.1 Tax dispute resolution structures

Chapter 9 of the Tax Administration Act 28 of 2011 (hereafter the TAA) deals with dispute resolution. A taxpayer may, in terms of section 104 of the TAA, object to an assessment and to certain decisions of the South African Revenue Service (hereafter SARS).¹⁰⁹ If SARS disallows an objection, a taxpayer may appeal to the tax board or the tax court.¹¹⁰ The tax board hears an appeal in the first instance if the tax in dispute does not exceed ZAR 1 million and if a senior SARS official and the taxpayer so agree.¹¹¹ If these requirements are not met, the tax court hears the appeal after the objection was disallowed. Furthermore, the tax court also hears appeals (de novo) where either party is dissatisfied by the decision of the tax board.¹¹²

The tax court is not a court of law which sets precedent,¹¹³ but rather "a creature of statute" established and functioning as directed by the TAA.¹¹⁴It is, however, a court of record,¹¹⁵ meaning that "its proceedings are recorded and if an appeal proceeds to a higher court, that court will receive a record of the tax court's proceedings."¹¹⁶ The president of the tax court is a judge or an acting judge of the High Court, who hears the appeal together with an accountant and a representative of the commercial community.¹¹⁷The tax court's judgments must be published for general information in anonymised form,¹¹⁸ but the judgments do not set precedent as they only resolve the issue between SARS and the taxpayer.¹¹⁹ Where a party is dissatisfied by a decision of the tax court, a right of further appeal to a full bench of the High Court and the Supreme Court of Appeal is also provided for in the TAA.¹²⁰

Civil tax cases are, therefore, not heard in magistrate courts.¹²¹ The tax board is where one would typically expect disputes of a trivial nature to be heard due to the monetary limit determining the board's jurisdiction. These decisions are, however, not available for analysis since a decision of the tax board is only required to be submitted to SARS and the appellant taxpayer.¹²² As stated by SARS, "[t]he sittings of the Tax Board are not public and the Board's decisions are not published by SARS."¹²³

The intention of the legislature in developing this dispute resolution structure whereby the tax board (previously, the special board) hears appeals prior to an appeal to the tax court (previously, the special court) was considered in ITC 1670.¹²⁴ The special court held that:

[i]t is therefore clear that the Legislature intended that trivial cases not occupy the time of the Special Court, but are rather dealt with quickly and more cheaply elsewhere¹²⁵ (own translation).

This could explain why there are so few tax cases where the applicability of the de minimis maxim is considered (as further discussed in para 4.2 below). The time and cost of litigation is another factor that may result in taxpayers accepting SARS's assessments and decisions and paying the tax in dispute rather than litigating. As both SARS and taxpayers would guard against resolving trivial disputes litigiously, such disputes would therefore likely be resolved during the objection, tax board or alternative dispute resolution¹²⁶ stages.

4.2 Tax cases

The only tax case identified where the outcome of the case turned on the applicability of the de minimis non curat lex maxim was the very recent Diageo case. Interestingly, the judgment by Van der Schyff J does not cite as authority any other tax case in which the de minimis maxim was referred to. This supports our finding that there has been no prior South African tax case where the applicability of the de minimis maxim formed part of the court's ratio decidendi. Further, only one criminal tax case in which the applicability of the de minimis maxim was referred to (as one of the grounds of the appeal) was identified.¹²⁷ As the court only briefly responded to this ground by stating that "the increases would not have been trivial"¹²⁸(referring to the increases in income over several years, resulting in increased tax and penalties) without any further discussion, this case is not analysed further.

In the Diageo case the High Court on appeal had to consider "the applicability of the maxim de minimis non curat lex in excise tariff classification."¹²⁹ It had to be determined by the court whether the vanilla in a liqueur (made with wine spirits), added for flavouring and with an alcohol content of 0.6%,¹³⁰ disqualified the product from being classified under a certain tariff subheading which was subject to a lower excise duty. The tariff subheading with the reduced rate applies to liqueurs and cordials with an alcoholic concentration "exceeding 15 percent by vol. but not exceeding 23 percent vol"¹³¹ referring to the alcohol content of the final product. Further, Additional Note 4¹³² states that this tariff subheading:

[s]hall only apply to liqueurs, cordials and other spirituous beverages containing the following:

(a) ... or

(b) wine spirits to which other non-alcoholic ingredients have been added.

Additional Note 4 was introduced to support the labour-intensive wine industry. The purpose of the lower excise rate was so that the more expensive wine spirits (derived from the distillation of wine) could be competitively used as a substitute for C-spirits (derived from other sources such as sugar cane) in the manufacture of spirituous beverages.¹³³

The taxpayer argued for a "purposive interpretative approach"¹³⁴ and contended that since the alcohol content of the vanilla flavouring is "so minutely small", the de minimis maxim applies.¹³⁵ Therefore, the taxpayer argued that the alcohol content of the vanilla flavouring, which was described by the taxpayer as "nugatory and insignificant", should not be taken into account in the classification process.¹³⁶

The Commissioner for the SARS (hereafter the Commissioner), on the other hand, contends with reference to Additional Note 4(b) that "non-alcoholic" means 0% alcohol and "since the vanilla extract contains 0.6% alcohol, that is the end of the matter."¹³⁷ The Commissioner also argued that if the taxpayer's de minimis argument were to be upheld, the loss suffered by SARS would be "no trivial loss and not de minimis"¹³⁸ and that the duty at stake "amounts to millions of Rands annually".¹³⁹ The Commissioner therefore focussed on the factor of extent (in the parlance of the factors used in part 3) - both as regards the amount of alcohol and of the tax at stake.

The Commissioner further made use of an analogy to section 65 of the National Road Traffic Act to argue that the de minimis maxim cannot apply and that "'non-alcoholic ingredient' means an ingredient with 0% ABV [alcohol by volume]".¹⁴⁰ Section 65(2) of the said Act prohibits driving on a public road where the driver's blood alcohol concentration is "not less than 0.05 gram per 100 millilitres".¹⁴¹ In the Klue case the court ruled that the de minimis maxim cannot be applied in interpreting the aforementioned provision.¹⁴² The Commissioner contends:

[w]hen the question arises whether section 65 has been breached, the test is simple. If the test result is 0.049 g/100 ml, it has not been breached. If it is 0.05 g/100 ml it has been breached.¹⁴³

The court a quo determined that the case turned on whether the vanilla flavouring constituted a "non-alcoholic ingredient" for the purposes of Additional Note 4(b).¹⁴⁴ The judge performed an analysis of the ordinary meaning of the words "ingredient", "alcoholic" and "non-alcoholic". He determined the ordinary meaning of "non-alcoholic" to be "0% vol"¹⁴⁵ and concluded that "[w]hat is relevant is the presence of alcohol".¹⁴⁶ The court a quo agreed with the Commissioner's interpretation and dismissed the appeal.

The full court, however, found issue with the court a quo's judgment by stating:

[i]nterpreting Additional Note 4(b) without considering the context within which it operates ... is a misdirection by the court a quo, in law as far as statutory interpretation is concerned ... ¹⁴⁷

In her judgment, Van der Schyff J (with Munzhelele J and Millar J concurring) structured her discussion under the following three headings: "Statutory Interpretation", "Purpose of the Customs and Excise Act 91 of 1964", and "De minimis non curat lex".

In respect of the discussion on statutory interpretation, she cited several prominent cases that stress the importance of having regard to context¹⁴⁸thus requiring a purposive approach to interpretation. While acknowledging that the starting point of statutory interpretation "is the language of the provision itself"¹⁴⁹ she also referred to the recent judgment from the Supreme Court of Appeal in South African Nursing Council v Khanyisa Nursing School (Pty) Ltd¹⁵⁰ and stated:

[t]he court held that there is no straightforward attribution of a dictionary meaning of a word as the word's ordinary meaning to construe a statute.¹⁵¹

She concluded her discussion on statutory interpretation:

In my view, the Commissioner erred in holding the view that meaning had to be attributed to the phrase 'non-alcoholic' and the word 'ingredient'. Diageo correctly identified the issue at hand, not as the attribution of meaning to two loose-standing words or phrases, but as holistically interpreting Additional Note 4(b) having regard to its purpose within the broader customs and excise regulatory regime. It is also in this context, that Diageo's reliance on the de minimis doctrine must be considered.¹⁵²

As regards Van der Schyff J's comments on the purpose of the Customs and Excise Act 91 of 1964, she agreed with the taxpayer's view that the purpose of Additional Note 4(b) is to prevent a manufacturer from adding cheaper C-spirits to the more expensive wine spirits to increase the alcohol content of the beverage and still benefit from the lower rate.¹⁵³

In the above context, she evaluated the amount (or extent) of the alcohol in the vanilla flavouring not in terms of absolute value but in terms of its contribution to the alcohol content of the final product and concluded that:

[a]n ingredient can only be regarded as an alcoholic ingredient if it significantly contributes to the ABV of the final product.¹⁵⁴

Under the heading "De minimis non curat lex", the judgment discussed some of the case law dealing with the de minimis maxim including two criminal cases (R v Maguire¹⁵⁵ and the Visagie case) and two civil cases (the Benoni Town Council and AA Mutual Insurance cases). The inference made from the analysis of the said case law was that "the question as to whether the principle applies depends solely on the factual matrix of each case."¹⁵⁶ The court, however, proceeded to make the determination of the applicability of the de minimis maxim by evaluating the specific facts in light of the purpose of the legislation.¹⁵⁷

In response to the Commissioner's contention regarding the potential loss of revenue to the fiscus, the judge contended:

By promulgating tariff subheading 2208.70.21, National Treasury weighed up the benefit of promoting the local wine and soft fruit industries ... against the loss of excise duty ... and concluded that the benefit outweighs the loss.¹⁵⁸

The court disagreed with SARS's argument that the de minimis principle is not applicable as the excise duty lost is not trivial. The court's view was that the volume and quantity of exports of the product was irrelevant to the determination of the product's tariff subheading classification.¹⁵⁹

Van der Schyff J found the Commissioner's analogy with section 65 of the National Road Traffic Act to be misplaced and held:

[i]n Additional Note 4(b), the term 'non-alcoholic' is not defined. Meaning must be attributed to the term 'non-alcoholic' through the process of interpretation...¹⁶⁰

She concluded that the position in respect of the meaning of "non-alcoholic ingredient" is different from section 65 of the National Road Traffic Act as "no verifiable basis is provided for determining the meaning"¹⁶¹ of such an ingredient.

In light of the purpose of the relevant provisions to, inter alia, incentivise the use of wine spirits rather than cane spirits,¹⁶² the court held that the additional alcohol from the vanilla was negligible (contributing 0.00004% to the ABV of the final product), and insufficient to invoke the application of Additional Note 4(b).¹⁶³ The court, therefore, applied the de minimis maxim and upheld the appeal.¹⁶⁴

While the factor of extent was considered in the Diageo judgment, the purpose of the provision was the predominant factor in determining the applicability of the maxim. The extent of alcohol content in the vanilla flavouring did not undermine the purpose for which the lower excise duty category was introduced. In adopting a purposive approach to interpreting the provision in question in its broader context, the judgment is congruent with the reasoning in the AA Mutual Insurance case.¹⁶⁵

In ITC 1939¹⁶⁶ the Johannesburg Tax Court had to decide a case on the other end of the spectrum of significance, viz. whether a matter was material. While the court, strictly speaking, did not have to consider the triviality of a matter in this case, the case nonetheless provides some valuable insights. The case entailed the interpretation of section 45 of the Value-Added Tax Act 89 of 1991 (hereafter the VAT Act). Section 45 provides that the Commissioner is liable for interest on delayed refunds. However, where a return is "incomplete or defective in any material respect"¹⁶⁷ the delay, for the purposes of calculating the interest, is determined differently. In this case SARS had paid interest amounting to ZAR 3 570 115.33 (in respect of delayed VAT refunds of ZAR 71 229 183.86) to the taxpayer in terms of section 45 of the VAT Act.¹⁶⁸ Thereafter SARS recalled the interest as it transpired during an audit that deemed output tax of ZAR 601.09 in aggregate on a fringe benefit was not declared.

SARS submitted that this non-declaration rendered the VAT returns incomplete as provided for in section 45.¹⁶⁹ SARS's view was that the taxpayer's failure to declare the fringe benefit was non-compliance and, therefore, an error.¹⁷⁰ SARS further argued that an error is material to SARS and that non-compliance with the legislation cannot be condoned, as:

[t]he Commissioner is tasked with collecting all the taxes due to the fiscus, regardless of how 'immaterial' they may seem to be.¹⁷¹

The taxpayer did not appeal against the merits of the output tax finding -after its objection was disallowed - because, given the minimal amount of output tax, it made no sense from an economic viewpoint.¹⁷² However, the taxpayer objected to and appealed against the decision of SARS to recall the interest based on the argument that the amount of ZAR 601.09 did not render the return "incomplete or defective in any material respect", but rather that the quantum of the output tax was "trifling and clearly immaterial."¹⁷³ The court interpreted section 45 as follows:

Section 45 is a pragmatic provision not concerned with principle but with materiality. It recognises the fact that vendors may render returns that are incomplete or defective. If it were a matter of principle then any defective or incomplete return would carry the consequence of SARS not having to pay interest. But, the Legislature, in its wisdom, determined that expedience trumps principle insofar as the payment of interest by SARS is concerned.¹⁷⁴

The court expressed the size (or extent) of the non-declaration as a relative value, being the ratio of the amount of output tax to the total amount of the refund, which was 0.0006%.¹⁷⁵ The court held that this fraction does not satisfy the materiality test that the legislature included in section 45 of the VAT Act.¹⁷⁶ As such, the court held that the taxpayer's VAT returns were not "incomplete or defective in any material respect", as contemplated in section 45(1)(i) of the VAT Act.¹⁷⁷

Two useful insights emerge from this case. First, the court distinguished between provisions of principle and provisions of expedience or pragmatism. This distinction offers a paradigm which may be useful in analysing how the courts have determined what is de minimis in tax law. Secondly, the Commissioner's contention, at least in this case, that all taxes due to the fiscus are material, was rebutted.

The amount (or extent) of tax at stake in a dispute does not necessarily determine whether a dispute is trivial nor does it have a bearing on the applicability of the de minimis maxim. In ITC 489,¹⁷⁸ for example, the issue entailed the deductibility of transportation expenses by a journalist. The court had to determine whether these expenses were incurred in the production of the appellant's income and were thus deductible. The court clearly regarded this determination as a matter of principle:

The amount of tax involved is small, but we have to consider small amounts as well as large. However trivial the amount of tax involved, the principle may be of great importance to a great many taxpayers throughout the country.¹⁷⁹

Similarly, in ITC 824¹⁸⁰ the court did not consider that the magnitude (or extent) of an amount would lead to a different conclusion. The court had to decide whether a loss could be claimed as a deduction or whether it was a capital loss and thus not allowable as a deduction. In respect of a building held for sale, the loss was the result of the running expenses of the building exceeding the rental income earned. In reaching its conclusion against the taxpayer, the court held as follows:

The loss so incurred was a capital loss expended for the purpose of equipping the ultimate profitmaking undertaking. Mr Nathan [the appellant's counsel] suggested that a distinction could be drawn between the cases herein referred to and the instant case, on the ground that the rentals there derived were trivial whereas they are substantial in this case. In my opinion the difference in the rentals cannot distinguish the principle to be applied in this case from that applied in the other cases.¹⁸¹

Accordingly, the quantum of rental income was irrelevant in the determination of the nature of the loss.¹⁸² This case and ITC 489 - both cases that dealt with matters of principle - illustrate that in respect of matters of principle, the magnitude (or extent) of the amount is irrelevant and thus even small amounts are relevant.

By contrast, in ITC 749¹⁸³ a trivial component of a transaction was disregarded by the court. Under the Income Tax Act 31 of 1941 only income derived from a source in South Africa (the Union at the time) or deemed to be in the Union fell in its ambit. Income was deemed to be from a source in the Union if it was received, inter alia, for services rendered in the carrying on in the Union of any trade. In this case, auditing and accounting work was performed outside South Africa by a partnership with its main office in Johannesburg. All the work was performed outside the Union, other than some typing and copying work which took place upon return to the Johannesburg office. The court held that the work performed outside the Union was not closely enough linked to the carrying on of the firm's business in the Union for the fees to be deemed to be from a Union source, to which the court added the following reservation:

so far as there was an ascertainable charge for the copying work done in Johannesburg this would be assessable, unless it is so small that it should be ignored by virtue of the maxim de minimis lex non curat.¹⁸⁴

The court, therefore, acknowledged that income which is "ascertainable" but "so small" can be disregarded. The court here took a pragmatic approach in not requiring apportionment of the income to trivial components.

Also, in Commissioner of Taxes v Shein,¹⁸⁵ an appeal case decided in the Federal Supreme Court of Southern Rhodesia, the issue was whether the source of income accruing to the respondent was Bechuanaland or Southern Rhodesia. In dismissing the appeal and deciding in favour of the taxpayer that the source of the income was from outside Southern Rhodesia and thus not taxable in Southern Rhodesia, the court held as follows:

When a man is engaged to perform a certain work in a given country but has minor duties, which are purely subsidiary and incidental, that fall to be performed in another country, then I do not think it is a practical approach to suggest that portion of his income has its source in that other country. When he is not paid separately for these extraneous duties, it becomes particularly artificial to try to allot portion of his earnings to them.¹⁸⁶

Accordingly, as a matter of practicality (or in tax parlance, administrability), the fact that some duties regarded as "trivial and incidental"¹⁸⁷ were performed in another country did not require a value to be placed on those services and an apportionment of the income to be made to those (trivial) services.

In ITC 1092,¹⁸⁸ a receipt, that the court held to be capital in nature, had a trivial component that, strictly speaking, was income in nature. The court had to decide whether the value of certain business assets received by the appellant taxpayer was of a capital or income nature. The transaction was essentially a barter transaction whereby the appellant took over certain obligations of a company in liquidation in exchange for the business assets. As part of the agreement, and in taking over some debtor accounts, the appellant had agreed to collect some of the other accounts on behalf of the liquidator. The Commissioner had contended that the business assets had been received in respect of services rendered by the appellant to the company in liquidation, which would result in the receipt being income in nature. The court held as follows:

While in this respect appellant may have rendered a small service to the liquidator I do not consider that this consideration was of any moment in the negotiations. It was a trifling matter which does not, I consider, suffice to alter the essential nature of the transaction as I have found it to be.¹⁸⁹

Accordingly, this "matter of little importance"¹⁹⁰ did not change the nature of a transaction from capital to income (nor did it require an apportionment of the amount). The court, therefore, disregarded the trivial component of the transaction.

There are other cases that, although making mention of the maxim, "de minimis" or other similar terms such as "trifling" or "trivial", do not contribute much to the understanding of how the courts have determined what is de minimis in a tax content. These include, for example, the Ochberg case, Commissioner of Taxes v Taxpayer¹⁹¹ and ITC 1838.¹⁹²

 

5 Conclusion

In criminal law, determining the applicability of the de minimis maxim is a matter of judicial discretion that requires courts to make a value judgement weighing up various considerations. While there is no one definite test for determining the applicability of the de minimis maxim, several factors have guided the courts' decisions. This article set out how the factors of extent, intent, practicality and purpose played a role in this determination in criminal cases dealing with common law offences (such as in the Kgogong, Nedzamba and Visagie cases). In cases - whether criminal or civil - that turned on statutory interpretation, the purpose of the provision was the primary factor in the determination of the applicability of the maxim (as demonstrated by the Klue and AA Mutual Insurance cases).

Let us now recall the question posed at the outset of this article: how have the courts decided the applicability of the de minimis maxim, and more broadly, considered the de minimis concept in the context of tax law? While "the 'fact intensive nature of de minimis determinations' militates against theoretical development",¹⁹³ from our analysis of judicial authority we infer the following:

In the Diageo case the predominant factor in determining the applicability of the de minimis maxim was the purpose of the legislation - as in the Klue and AA Mutual Insurance cases. More importantly, the court thereby followed the "proper approach to interpretation" set out in the Natal Joint Municipal Pension Fund case.¹⁹⁴ In applying the maxim, the Diageo case is a cogent example of how the maxim "can play a role in the interpretation of statues" as recently alluded to by the Constitutional Court.¹⁹⁵

Where the courts are called upon to determine whether the de minimis maxim should be applied in the interpretation of a statute, two situations should be distinguished. First, those situations where the statute provides a very clear-cut limit or level expressed as a number and such amount is objectively verifiable - such as a blood alcohol concentration of 0.05g/100ml, as was the case in the Klue case. Second, those situations where it is the words or phrases in the statute that require interpretation. With regard to the former, where the text of the provision is unambiguous, almost all judicial discretion in respect of the interpretation of the statute has been removed and there is little leeway for the courts to apply the de minimis rule. On the contrary, regarding the latter situations, the words used in the statute should be given meaning within the context and the purpose of the statute - which may in fact require the application of the de minimis maxim. For example, considering the purpose of the legislation in which these words appear, the courts interpreted the words or phrases "conveyed" (the key term in the AA Mutual Insurance case) and "non-alcoholic" (in the Diageo case) by applying the de minimis non curat lex maxim.

The use by the courts of the de minimis concept in tax law appears to be influenced by whether the issue at hand is a matter of principle (a substantive matter), or a matter of practicality (administrability). Where matters of principle are concerned - such as the deductibility of an expense as seen in ITC 489 or determining whether a loss is income or capital in nature such as was the case in ITC 824 - the courts seem to consider the amount (the factor of extent or value) as irrelevant and even small or trivial amounts should be considered. The courts have, however, on several occasions applied the de minimis concept in pursuit of practicality. For example, in ITC 1092 the court disregarded the income component of a receipt on account of its triviality and determined the entire receipt to be of a capital nature. In ITC 749 the court ignored trivial services performed in South Africa in respect of income sourced outside South Africa. Lastly, in the Shein case the court did not consider it a "practical approach" to apportion income to a country where the only services performed were trivial and incidental.

 

BIBLIOGRAPHY

Literature

Arendse J, Williams R and Klue S Silke on Tax Administration (LexisNexis Durban 2019)        [ Links ]

Ashworth A and Horder J Principles of Criminal Law 7^th ed (Oxford University Press Oxford 2013)        [ Links ]

Burchell J Principles of Criminal Law 5^th ed (Juta Cape Town 2016)        [ Links ]

Burchell EM and Milton JRL "Criminal Law" 1980 Annu Surv SA L 381 -405        [ Links ]

Claassen RC and Claassen M Claassen's Dictionary of Legal Words and Phrases (LexisNexis Durban July 2022 - SI 25)        [ Links ]

Croome BJ and Olivier L Tax Administration 2^nd ed (Juta Cape Town 2015)        [ Links ]

Du Plessis W et al Introduction to Law and Legal Skills in South Africa (Oxford University Press Oxford 2012)        [ Links ]

Du Toit IE Pharos Tweetalige Polisiewoordeboek / Bilingual Police Dictionary (Pharos Books Cape Town 1994)        [ Links ]

Feinberg J Harm to Others (Oxford University Press New York 1984)        [ Links ]

Hoctor SV "Assessing the De Minimis Non Curat Lex Defence in South African Criminal Law" in Schwikkard PJ and Hoctor SV (eds) A Reasonable Man: Essays in Honour of Jonathan Burchell (Juta Cape Town 2019) 119150        [ Links ]

Hoctor SV "Criminal Law" in Faris JA and Harms LTC (eds) The Law of South Africa 3^rd ed replacement (LexisNexis Durban 2023) vol 11        [ Links ]

Hoctor SV Snyman's Criminal Law 7^th ed (LexisNexis Durban 2021)        [ Links ]

Inesi A "A Theory of De Minimis and a Proposal for Its Application in Copyright" 2006 Berkeley Tech LJ 945-996        [ Links ]

Labuschagne JMT "De Minimis Non Curat Lex" 1973 Acta Jurídica 295-302        [ Links ]

Mukheibir A et al The Law of Delict in South Africa 3^rd ed (Oxford University Press Oxford 2017)        [ Links ]

Nemerofsky J "What is a 'Trifle' Anyway?" 2001 Gonz L Rev 315-341        [ Links ]

Ruedin X "De Minimis Non Curat the European Court of Human Rights: The Introduction of a New Admissibility Criterion (Article 12 of Protocol No 14)" 2008 EHRLR 80-105        [ Links ]

Veech ML and Moon CR "De Minimis Non Curat Lex" 1947 Mich L Rev 537570        [ Links ]

Case law

AA Mutual Insurance Association Ltd v Sibothobotho 1981 4 SA 593 (A)

Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism 2004 4 SA 490 (CC)

Benoni Town Council v Meyer 1961 3 All SA 294 (W)

Commissioner of Taxes v Shein 1958 3 SA 14 (FC)

Commissioner of Taxes v Taxpayer 1982 1 BLR 33 (CA)

Delange v Costa 1989 2 All SA 267 (A)

Department of Land Affairs v Goedgelegen Tropical Fruits (Pty) Ltd 2007 6 SA 199 (CC)

Diageo Proprietary Limited v the Commissioner for the South African Revenue Services (unreported) case number 93168/2019 of 17 March 2021

Diageo SA (Pty) Ltd v Commissioner of the South African Revenue Services 2023 JDR 2422 (GP)

Director of Public Prosecutions v Klue 2003 1 All SA 306 (E)

Goulding v Ferrell 117 NW 1046 (Minn 1908)

Income Tax Case 1092 1966 28 SATC 228 (R)

Income Tax Case 1670 1 998 62 SATC 34 (G)

Income Tax Case 1838 2009 72 SATC 6 (W)

Income Tax Case 1939 2020 83 SATC 157 (case number VAT 1712)

Income Tax Case 489 1941 12 SATC 68 (U)

Income Tax Case 749 1952 18 SATC 319 (T)

Income Tax Case 824 1956 21 SATC 79 (T)

Independent Community Pharmacy Association v Clicks Group Ltd 2023 JDR 1121 (CC)

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 4 SA 593 (SCA)

Nesongozwi v Commissioner for the South African Revenue Service 2022 JDR 3077 (SCA)

Ochberg v Commissioner for Inland Revenue 1931 AD 215

Pharma Valu Sunnyside BK v Pretorius 2010 JDR 1037 (GNP)

Poulter v Commissioner for the South African Revenue Service 2024 2 All SA 876 (WCC)

R v Maguire 1969 4 SA 191 (RA)

R v Stone 1959 1 SA 125 (SR)

R v Walton 1958 3 SA 693 (SR)

S v Bester 1971 4 SA 28 (T)

S v Dimuri 1999 1 SACR 79 (ZH)

S v Kgogong 1980 3 SA 600 (A)

S v Magidson 1984 3 SA 825 (T)

S v Nedzamba 1993 1 SACR 673 (V)

S v Seweya 2004 1 SACR 387 (T)

S v Visagie 2009 2 SACR 70 (W)

South African Nursing Council v Khanyisa Nursing School (Pty) Ltd 2023 JDR 1900 (SCA)

Legislation

Constitution of the Republic of South Africa, 1996

Customs and Excise Act 91 of 1964

Income Tax Act 31 of 1941

National Road Traffic Act 93 of 1996

Promotion of Administrative Justice Act 3 of 2000

Tax Administration Act 28 of 2011

Value-Added Tax Act 89 of 1991

Government publications

GN 1196 in GG 39490 of 17 December 2015

Internet sources

Merriam-Webster date unknown Merriam-Webster.com Dictionary https://www.merriam-webster.com/ accessed 18 December 2023        [ Links ]

Oxford English Dictionary 2022 Oxford English Dictionary 3^rd ed https://www.oed.com/ accessed 18 December 2023        [ Links ]

SAFLII 2024 Southern African Legal Information Institute http://www.saflii.org/ accessed 7 July 2024        [ Links ]

South African Revenue Service 2023 Dispute Resolution Process https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/dispute-resolution-process/ accessed 18 December 2023        [ Links ]

List of Abbreviations

Annu Surv SA L Annual Survey of South African Law

Berkeley Tech LJ Berkeley Technology Law Journal

EHRLR European Human Rights Law Review

Gonz L Rev Gonzaga Law Review

Mich L Rev Michigan Law Review

SAFLII Southern African Legal Information Institute

SARS South African Revenue Service

TAA Tax Administration Act 28 of 2011

VAT Act Value-Added Tax Act 89 of 1991

ZAR South African Rand

 

 

Date Submitted: 19 December 2023
Date Revised: 24 July 2024
Date Accepted: 24 July 2024
Date Published: 31 October 2024

 

 

Editor: Prof N Kilian
Journal Editor: Prof W Erlank
* Silke de Lange. BAccLLB MComm (Taxation) Admitted Attorney and Notary. Lecturer, Department of Mercantile Law, University of Stellenbosch, South Africa. Email: silkeb@sun.ac.za. ORCiD: https://orcid.org/0000-0003-3939-5209.
** Monique Tessa Malan. BAcc BAcc(Hons) PGDip (Fin Plan) LLM CA(SA) CFP®. Research and Teaching Associate and doctoral candidate in the Doctoral Program in International Business Taxation (DIBT), Institute for Austrian and International Tax Law, Department of Public Law and Tax Law, Vienna University of Economics and Business, Austria. This research is supported by the Austrian Science Fund (FWF): Doc 92-G. Email: monique.malan@wu.ac.at (corresponding author) ORCiD: https://orcid.org/0000-0002-4923-9595. We gratefully acknowledge valuable input from Emeritus Prof. David Butler (SU), Prof. Johann Hattingh (UCT), Dr Enelia Jansen van Rensburg (SU), Prof. Michael Lang (WU) and Belinda van Heerden.
1 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 125.
2 Labuschagne 1973 Acta Jurídica 295-302.
3 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 119-150.
4 Such as the law of delict, patent law, insolvency law and contract law.
5 See e.g. Ochberg v Commissioner for Inland Revenue 1931 AD 215 (hereafter the Ochberg case).
6 Diageo SA (Pty) Ltd v Commissioner of the South African Revenue Services 2023 JDR 2422 (GP) (hereafter the Diageo case)
7 Oxford English Dictionary 2022 https://www.oed.com/ defines a maxim in law as "a proposition (ostensibly) expressing a general rule of law, or of equity", whereas the glossary of legal terms in Du Plessis et al Introduction to Law states that maxims are "broad statements of principle of which the truth and/or reasonableness appears self-evident."
8 See e.g. the Diageo case para 47.
9 See, e.g. the Diageo case paras 57, 61, 63 and 64; the Ochberg case 229; Delange v Costa 1989 2 All SA 267 (A) 270; S v Visagie 2009 2 SACR 70 (W) 77 (discussed in para 3.1 in the main text); Benoni Town Council v Meyer 1961 3 All SA 294 (W) 305 (discussed in para 3.2 in the main text).
10 See, e.g. S v Kgogong 1980 3 SA 600 (A) 604; S v Nedzamba 1993 1 SACR 673 (V) (hereafter the Nedzamba case) 677; and S v Visagie 2009 2 SACR 70 (W) 87, Director of Public Prosecutions v Klue 2003 1 All SA 306 (E) 310 (discussed in para 3.1 in the main text); AA Mutual Insurance Association Ltd v Sibothobotho 1981 4 SA 593 (A) 603 (discussed in para 3.2 in the main text). Also Hoctor "Assessing the De Minimis Non Curat Lex Defence" 120 fn 12; Burchell and Milton 1980 Annu Surv SA L 389, where it is referred to as "the de minimis rule".
11 Income Tax Case 1838 2009 72 SATC 6 para 3.
12 Oxford English Dictionary 2022 https://www.oed.com/.
13 Oxford English Dictionary 2022 https://www.oed.com/; Merriam-Webster date unknown https://www.merriam-webster.com/.
14 The confusion that exists between the rule/maxim and the term is pointed out in Hoctor "Assessing the De Minimis Non Curat Lex Defence" 125. Confusion is also caused by the fact that de minimis is sometimes used by the courts and in the literature as short for de minimis non curat lex, and thus not just when the concept is meant. For example, in S v Kgogong 1980 3 SA 600 (A), a case which clearly dealt with the application of the de minimis non curat lex maxim, the court does not once use the full maxim, but refers to it throughout the case only as the "de minimis rule".
15 See para 4.2 in the main text.
16 Diageo case para 56.
17 As at 13 June 2024.
18 SAFLII 2024 http://www.saflii.org.
19 This database includes the following collections of cases: South African Tax Cases Reports and Judgments Online (which includes some unreported judgments).
20 This database includes the following collections of cases: Supplementary Tax Cases and Juta's Unreported Judgments (which contains some unreported judgments from the higher courts).
21 And the judgments of the tax court (which is not a High Court). See para 4.1 in the main text for a discussion on the tax court.
22 Claassen and Claassen Claassen's Dictionary of Legal Words.
23 Du Toit Pharos Bilingual Police Dictionary.
24 Nemerofsky 2001 Gonz L Rev 323 citing Goulding v Ferrell 117 NW 1046 (Minn 1908) 1046 as also cited in the Diageo case para 56.
25 S v Kgogong 1980 3 SA 600 (A) 603.
26 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 120-121 with reference to Nemerofsky 2001 Gonz L Rev 316.
27 Diageo case para 56.
28 S v Visagie 2009 2 SACR 70 (W) para 15.
29 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 129.
30 Hoctor "Criminal Law" 70.
31 Nedzamba case 675.
32 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 123.
33 Burchell Principles of Criminal Law 246.
34 Hoctor Snyman's Criminal Law 121.
35 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 122 describes the "rule of reason" as being associated with reasonableness; and Hoctor Snyman's Criminal Law 122 argues that the exercise of the discretion "is consistent with the constitutional imperative of proportionality and in particular the right not to be deprived of freedom arbitrarily or without just cause."
36 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 142. At 122 Hoctor highlights the significance of the de minimis rule where, for example, the initiation of the criminal process against a person has the potential to unjustifiably limit the rights of the individual - such as in respect of a trivial matter.
37 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 137.
38 S v Bester 1971 4 SA 28 (T) (hereafter the Bester case).
39 Bester case 29.
40 Delange v Costa 1989 2 All SA 267 (A) (hereafter the Delange case).
41 Delange case 271.
42 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 137.
43 S v Kgogong 1980 3 SA 600 (A) 603. This is also referred to as "practical legal policy" in Hoctor Snyman's Criminal Law 121.
44 Veech and Moon 1947 Mich L Rev 543-544.
45 Veech and Moon 1947 Mich L Rev 542.
46 Independent Community Pharmacy Association v Clicks Group Ltd 2023 JDR 1121 (CC) para 286 (hereafter the Clicks case).
47 Ashworth and Horder Principles of Criminal Law 28.
48 Feinberg Harm to Others 188, 216.
49 Hoctor "Assessing the De Minimis Non Curat Lex Defence".
50 See S v Seweya 2004 1 SACR 387 (T) (hereafter the Seweya case) para 18 stating that "no definitive rule can be formulated to distinguish between trivial cases meriting criminal censure and trivial ones that can be excluded on the principle de minimis non curat lex."
51 S v Dimuri 1999 1 SACR 79 (ZH) (hereafter the Dimuri case), where the offence in question was kidnapping.
52 Dimuri case 89B, Seweya case and S v Visagie 2009 2 SACR 70 (W), which cites Gillespie J in the Dimuri case.
53 Dimuri case 89D.
54 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 132-141; Veech and Moon 1947 Mich L Rev 544-560; Inesi 2006 Berkeley Tech LJ 951-956; and Ruedin 2008 EHRLR 87-92.
55 Veech and Moon 1947 Mich L Rev 558, Ruedin 2008 EHRLR 87 and Hoctor "Assessing the De Minimis Non Curat Lex Defence" 139 all refer to "value". Veech and Moon at 559, however, rightly note that value is an "indefinite term". In addition, Ruedin at 87 points out that value "can be expressed in terms of money, distance, weight, time etc., but, in principle, it is not possible to express what a trifle is in absolute terms."
56 Inesi 2006 Berkeley Tech LJ 951.
57 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 137-139. In assault cases, for example, this factor has frequently been employed as justifying the application of the maxim in the presence of provocation. See e.g. S v Visagie 2009 2 SACR 70 (W), where the de minimis rule was applied to quash the conviction. Ruedin 2008 EHRLR, however, notes that this factor has been used both to justify and to exclude the application of the de minimis maxim.
58 Veech and Moon 1947 Mich L Rev 545 regard this as "probably the most important of the factors."
59 Inesi 2006 Berkeley Tech LJ 958.
60 Hoctor "Criminal Law" 3.
61 In S v Visagie 2009 2 SACR 70 (W) para 15 EM Du Toit AJ adds the following to Gillespie J's sentence from the Dimuri case 89D "obviously including the perceived interests of the community as a whole", making it explicit that the public interest must also be considered.
62 Dimuri case 89C.
63 S v Visagie 2009 2 SACR 70 (W) para 14.
64 S v Kgogong 1980 3 SA 600 (A) (hereafter the Kgogong case).
65 Kgogong case 604.
66 Kgogong case 604.
67 Kgogong case 603-604.
68 Nedzamba case 676.
69 Nedzamba case 673.
70 Nedzamba case 676.
71 S v Visagie 2009 2 SACR 70 (W) (hereafter the Visagie case).
72 Visagie case para 37.
73 Visagie case para 34.
74 Visagie case para 36.
75 Director of Public Prosecutions v Klue 2003 1 All SA 306 (E) (hereafter the Klue case).
76 Klue case para 5.
77 Section 65(2)(a) of the National Road Traffic Act 93 of 1996 (hereafter the National Road Traffic Act).
78 Klue case para 13.
79 Klue case para 13.
80 Klue case para 13.
81 S v Magidson 1984 3 SA 825 (T) (hereafter the Magidson case).
82 Magidson case 832H.
83 Klue case para 13.
84 Klue case para 13.
85 Klue case para 13.
86 Klue case para 13.
87 Klue case para 11.
88 See a discussion of "deliktereg" in Labuschagne 1973 Acta Jurídica 301-302.
89 Delange case 270.
90 Mukheibir et al Law of Delict 1.14.3.
91 Pharma Valu Sunnyside BK v Pretorius 2010 JDR 1037 (GNP) (hereafter the Pharma case).
92 Pharma case para 30.
93 Pharma case para 30.
94 R v Walton 1958 3 SA 693 (SR) (hereafter the Walton case).
95 Walton case para 30.
96 Benoni Town Council v Meyer 1961 3 All SA 294 (W) (hereafter the Benoni Town Council case).
97 Benoni Town Council case 303.
98 Benoni Town Council case 303.
99 Benoni Town Council case 303.
100 Benoni Town Council case 303.
101 Benoni Town Council case 305.
102 AA Mutual Insurance Association Ltd v Sibothobotho 1981 4 SA 593 (A) (hereafter the AA Mutual Insurance case).
103 AA Mutual Insurance case 603.
104 AA Mutual Insurance case 598.
105 AA Mutual Insurance case 602.
106 AA Mutual Insurance case 603.
107 AA Mutual Insurance case 603.
108 Veech and Moon 1947 Mich L Rev 542 (footnotes omitted).
109 Section 104 of the Tax Administration Act 28 of 2011 (the TAA).
110 Section 107(1) of the TAA.
111 Section 109(1) of the TAA, read together with GN 1196 in GG 39490 of 17 December 2015: Notice fixing the amount of the threshold for the amount of tax in dispute for purposes of an appeal to the Tax Board.
112 Section 115 of the TAA.
113 Poulter v Commissioner for the South African Revenue Service 2024 2 All SA 876 (WCC) paras 28 and 52. Also see Ochberg case 218.
114 Nesongozwi v Commissioner for the South African Revenue Service 2022 JDR 3077 (SCA) para 10.
115 Section 116(2) of the TAA.
116 Croome and Olivier Tax Administration 326.
117 Section 118(1) of the TAA.
118 Section 132 of the TAA.
119 Arendse, Williams and Klue Silke on Tax Administration s 5.12.
120 Section 133(2) of the TAA. Although not provided for in the TAA, an appeal to the Constitutional Court is also possible in terms of s 167 of the Constitution of the Republic of South Africa, 1996 (hereafter the Constitution).
121 The resolution of a tax dispute by way, for example, of a judicial review in terms of the Promotion of Administrative Justice Act 3 of 2000 is excluded from the scope of this article.
122 Section 114(3) of the TAA.
123 SARS 2023 https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/dispute-resolution-process/.
124 Income Tax Case 1670 1998 62 SATC 34 (G).
125 Income Tax Case 1670 1998 62 SATC 34 (G) 37 (translation of "Dit is dus duidelik dat die Wetgewer beoog het dat nietige sake nie die tyd van die Spesiale Hof in beslag neem nie, maar elders vinnig en goedkoper afgehandel word").
126 Section 107(5) of the TAA.
127 R v Stone 1959 1 SA 125 (SR) (hereafter R v Stone).
128 R v Stone 131.
129 Diageo case para 5.
130 Diageo case para 8.
131 Customs and Excise Act 91 of 1964, Schedule 1, Part 2, Section A.
132 Customs and Excise Act 91 of 1964, Schedule 1, Part 1, Chapter 22, Additional Note 4.
133 Diageo case paras 23 and 49.
134 Diageo case para 25.
135 Diageo case para 5.
136 Diageo case para 28.
137 Diageo case para 30.
138 Diageo case para 42.
139 Diageo case para 42.
140 Diageo case para 70.
141 National Road Traffic Act 93 of 1996 s 65(2).
142 See para 3.1 in the main text, where this case is discussed.
143 Diageo case para 39.
144 Diageo Proprietary Limited v the Commissioner for the South African Revenue Services (unreported) case number 93168/2019 of 17 March 2021 (hereafter Diageo court a quo case) para 3.
145 Diageo court a quo case para 44.
146 Diageo court a quo case para 61.
147 Diageo case para 7.
148 Including Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Tourism 2004 4 SA 490 (CC); Department of Land Affairs v Goedgelegen Tropical Fruits (Pty) Ltd 2007 6 SA 199 (CC); and Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 4 SA 593 (SCA) (hereafter the Natal Joint Municipal Pension Fund case).
149 Diageo case para 45.
150 South African Nursing Council v Khanyisa Nursing School (Pty) Ltd 2023 JDR 1900 (SCA).
151 Diageo case para 44.
152 Diageo case para 47.
153 Diageo case para 50.
154 Diageo case para 51.
155 R v Maguire 1969 4 SA 191 (RA).
156 Diageo case para 57.
157 Diageo case para 60.
158 Diageo case para 61.
159 Diageo case para 69.
160 Diageo case para 70.
161 Diageo case para 70.
162 Diageo case para 61.
163 Diageo case para 60.
164 Diageo case para 72.
165 See para 3.2 in the main text, where this case is discussed.
166 Income Tax Case 1939 2020 83 SATC 157 (case number VAT 1712) (hereafter ITC 1939).
167 Value-Added Tax Act 89 of 1991 s 45(1)(i).
168 ITC 1939 paras 4, 6.
169 ITC 1939 para 14.
170 ITC 1939 para 20.
171 ITC 1939 para 20.
172 ITC 1939 para 10.
173 ITC 1939 para 10.
174 ITC 1939 para 25.
175 ITC 1939 para 19.
176 ITC 1939 para 26.
177 ITC 1939 para 28.1.
178 Income Tax Case 489 1941 12 SATC 68 (U) (hereafter ITC 489).
179 ITC 489 69.
180 Income Tax Case 824 1956 21 SATC 79 (T) (hereafter ITC 824).
181 ITC 824 83.
182 Ruedin 2008 EHRLR 87 notes that "[i]n some areas, the value factor may be irrelevant. If a seemingly trifling matter proves to embody a point of substance, the maxim should not apply."
183 ITC 749 1952 18 SATC 319 (T) (hereafter ITC 749).
184 ITC 749 323.
185 Commissioner of Taxes v Shein 1958 3 SA 14 (FC) (hereafter the Shein case).
186 Shein case 17.
187 Shein case 17.
188 ITC 1092 1966 28 SATC 228 (R) (hereafter ITC 1092).
189 ITC 1092 231.
190 ITC 1092 230.
191 Commissioner of Taxes v Taxpayer 1982 1 BLR 33 (CA).
192 Income Tax Case 1838 2009 72 SATC 6 (W).
193 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 130 (footnote omitted).
194 Natal Joint Municipal Pension Fund case paras 17-26.
195 Clicks case para 229.