The Supreme Court of Appeal (SCA) has held that a duly authorised lay person may represent a taxpayer in Tax Court proceedings, and neither the Tax Administration Act (TAA) nor the Tax Court Rules (TCR) require a taxpayer’s representative to be a legal practitioner.
The unanimous judgment, delivered on 12 May, dismissed an appeal by the South African Revenue Service against a decision by the Full Court of the Western Cape Division.
The SCA’s decision did not determine whether the taxpayer’s 2018 assessment is correct. It addressed whether the Tax Court was entitled to exclude the taxpayer’s authorised representative and then proceed as if the taxpayer or her representative had failed to appear.
The taxpayer, Candice-Jean Poulter, appealed a SARS assessment for the 2018 tax year. The matter was set down in the Tax Court on 16 November 2022. Poulter did not attend, but executed a power of attorney authorising her father, Gary van der Merwe, to appear and present her case. SARS objected on the basis that Van der Merwe is not a legal practitioner.
The Tax Court upheld the objection, precluded him from appearing, proceeded under Rule 44(7) in the taxpayer’s absence, confirmed the assessment, and ordered costs on an attorney-and-client scale, including the costs of two counsel.
A Full Court of the Western Cape Division later set aside the Tax Court’s decision and remitted the matter for a fresh determination.
Read: Ruling confirms that a layperson can represent a taxpayer in a Tax Court
The SCA’s interpretive approach
Judge Dumisani Zondi, writing on behalf of the SCA, said the appeal by SARS concerned “the proper interpretation of section 12 and section 125 of the TAA read with rule 44(7) of the TCR” and whether those provisions preclude a non-legal practitioner from appearing for a taxpayer in the Tax Court, with SARS relying, among other things, on section 25 of the Legal Practice Act.
Judge Zondi said section 39(2) of the Constitution requires legislation to be interpreted to promote the spirit, purport, and objects of the Bill of Rights and added: “The right that is directly implicated in this case is the taxpayer’s constitutional right of access to the Tax Court and to be represented by a person of her own choice.”
TAA does not restrict representation to legal practitioners
The SCA observed that sections 12 and 125 of the TAA regulate the right of appearance of SARS officials. Section 12(2) provides that a senior SARS official may appear in the Tax Court or High Court only if the official is an admitted advocate or attorney, and section 125(1) provides that such an official may appear at the hearing in support of the assessment or decision.
Judge Zondi held: “Both sections are silent on right of appearance of the taxpayer in the Tax Court proceedings.”
This was specifically provided for in section 125(2) before it was deleted with effect from 18 of December 2017. Before its deletion, the section stated: “The appellant or the appellant’s representative may appear at the hearing of an appeal in support of the appeal.”
The SCA rejected the argument that the deletion implied the taxpayer could no longer appear or authorise representation. Judge Zondi said: “It is clear that such interpretation would be absurd because it would mean that the taxpayer, who has objected to the income tax assessment, would be prevented from attending the tax appeal hearing or authorise a person to do so on his behalf.”
He said the rights and values enshrined in section 34 of the Constitution can only be meaningfully promoted by reading the sub-section in a manner that continues to permit the taxpayer or his authorised representative to “appear at the hearing of an appeal in support of the appeal”.
He said this reading supported by the 2017 amendment’s explanatory material, which described the deletion as a “technical correction. The right of the appellant or his or her representative to appear at the hearing before the tax board is implicit.”
Judge Zondi also pointed to other provisions of the TAA referring to a taxpayer’s “duly authorised representative” and said the statutory scheme does not impose a requirement that the person who performs acts or appears for the taxpayer must be a legal practitioner. Imposing such a requirement “would disregard the fact that taxpayers engage accountants, auditors, or bookkeepers in dealing with their tax disputes with SARS because of the specialist nature of tax laws and procedures”.
Rule 44(7) does not require a legal practitioner
Rule 44(7) of the TCR applies when “a party or a person authorised to appear on the party’s behalf” fails to appear, permitting determination under section 129(2) in specified circumstances.
The SCA held that Rule 44(7) does not confine the “authorised” person to a lawyer. Judge Zondi said the words “must be given their ordinary grammatical meaning”, and read that way, “the rule does not require the person authorised to appear on the taxpayer’s behalf to be a legal practitioner. In other words, any individual vested with the taxpayer’s authority may appear on behalf of the taxpayer in the tax appeal matter before the Tax Court.”
The SCA also relied on the wider context of the TCR, noting multiple rules that contemplate steps being taken or documents being signed by a taxpayer’s “duly authorised representative” without limiting that category to legal practitioners.
The Davis Order
The SCA noted that an interlocutory order by Judge Dennis Davis (9 November 2020) had stated, among other things, that Van der Merwe was not entitled to appear because section 125(2) of the TAA had been repealed.
Given the SCA’s interpretation of the repeal as a technical correction that did not withdraw taxpayer representation rights, it concluded that the Davis Order “prohibiting the taxpayer’s authorised non-legal practitioner from participating in the hearing was not competent”. The Tax Court could not rely on it to exclude Van der Merwe at the later appeal hearing.
Tax Court is not a ‘court of law’
SARS argued that the Tax Court should be treated as a “court of law” contemplated in section 166 of the Constitution, and it is therefore subject to the same limits on lay representation that apply in ordinary courts.
Having interpreted the TAA and the TCR as not requiring a taxpayer’s representative to be a legal practitioner, the SCA said the constitutional-status question did not have to be decided to dispose of the appeal.
Judge Zondi nevertheless endorsed the Full Court’s reasoning that the Tax Court is not a court of law envisaged in section 166. He said the Tax Court is not listed in section 166 and is established ad hoc by presidential proclamation under the TAA rather than by Parliament as part of the constitutional judicial hierarchy. The judgment linked this to separation-of-powers concerns: courts in the section 166 system are created by the Constitution or national legislation, not by executive proclamation.
The SCA dismissed SARS’s appeal with costs. Poulter’s challenge to the 2018 assessment must return to the Tax Court for determination, with clarification that an authorised representative may appear.
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