Abstract

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 1861 1

* 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.

A legal maxim is an established principle or proposition of law. 7

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."

principle, 9

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).

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 cases 15

15 See para 4.2 in the main text.

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

16 Diageo case para 56.

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: 17

17 As at 13 June 2024.

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

22 Claassen and Claassen Claassen's Dictionary of Legal Words.

where the offence is trivial. 25

25 S v Kgogong 1980 3 SA 600 (A) 603.

In South African criminal law the de minimis maxim is a defence that is applied judicially. 29

29 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 129.

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

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."

used efficiently. 37

37 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 137.

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

44 Veech and Moon 1947 Mich L Rev 543-544.

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

47 Ashworth and Horder Principles of Criminal Law 28.

Hoctor provides a comprehensive overview of the South African case law dealing with the de minimis rule in criminal cases. 49

49 Hoctor "Assessing the De Minimis Non Curat Lex Defence".

Several (cumulative) factors identified in the literature 54

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.

harm caused, 56

56 Inesi 2006 Berkeley Tech LJ 951.

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. 60

60 Hoctor "Criminal Law" 3.

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

63 S v Visagie 2009 2 SACR 70 (W) para 14.

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 Kgogong 64

64 S v Kgogong 1980 3 SA 600 (A) (hereafter the Kgogong case).

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

67 Kgogong case 603-604.

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

68 Nedzamba case 676.

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

69 Nedzamba case 673.

In S v Visagie, 71

71 S v Visagie 2009 2 SACR 70 (W) (hereafter the Visagie case).

[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

74 Visagie case para 36.

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 Klue 75

75 Director of Public Prosecutions v Klue 2003 1 All SA 306 (E) (hereafter the Klue case).

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

79 Klue case para 13.

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

82 Magidson case 832H.

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

83 Klue case para 13.

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

84 Klue case para 13.

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

86 Klue case para 13.

Kroon J held that the magistrate was "clearly wrong" 87

87 Klue case para 11.

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 delict 88

88 See a discussion of "deliktereg" in Labuschagne 1973 Acta Juridica 301-302.

In Pharma Valu Sunnyside BK v Pretorius, 91

91 Pharma Valu Sunnyside BK v Pretorius 2010 JDR 1037 (GNP) (hereafter the Pharma case).

the pharmacy (which in fact he did not do), overreacted and was easily offended. 93

93 Pharma case para 30.

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

95 Walton case para 30.

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 Meyer 96

96 Benoni Town Council v Meyer 1961 3 All SA 294 (W) (hereafter the Benoni Town Council case).

Another area of law where the maxim has been applied is insurance law. In AA Mutual Insurance Association Ltd v Sibothobotho, 102

102 AA Mutual Insurance Association Ltd v Sibothobotho 1981 4 SA 593 (A) (hereafter the AA Mutual Insurance case).

considered that the purpose of the legislation was "to give the greatest possible protection to third parties [claimants]." 105

105 AA Mutual Insurance case 602.

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

106 AA Mutual Insurance case 603.

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

107 AA Mutual Insurance case 603.

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

108 Veech and Moon 1947 Mich L Rev 542 (footnotes omitted).

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

109 Section 104 of the Tax Administration Act 28 of 2011 (the TAA).

taxpayer may appeal to the tax board or the tax court. 110

110 Section 107(1) of the TAA.

The tax court is not a court of law which sets precedent, 113

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.

Civil tax cases are, therefore, not heard in magistrate courts. 121

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.

taxpayer. 122

122 Section 114(3) of the TAA.

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

124 Income Tax Case 1670 1998 62 SATC 34 (G).

[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 elsewhere 125

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").

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 resolution 126

126 Section 107(5) of the TAA.

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

127 R v Stone 1959 1 SA 125 (SR) (hereafter R v Stone).

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

129 Diageo case para 5.

[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

133 Diageo case paras 23 and 49.

The taxpayer argued for a "purposive interpretative approach" 134

134 Diageo case para 25.

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

137 Diageo case para 30.

stake "amounts to millions of Rands annually". 139

139 Diageo case para 42.

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

140 Diageo case para 70.

[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

143 Diageo case para 39.

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

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.

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

147 Diageo case para 7.

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 context 148

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).

[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

151 Diageo case para 44.

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

152 Diageo case para 47.

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

153 Diageo case para 50.

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

154 Diageo case para 51.

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 Maguire 155

155 R v Maguire 1969 4 SA 191 (RA).

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

156 Diageo case para 57.

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

158 Diageo case para 61.

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

159 Diageo case para 69.

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

160 Diageo case para 70.

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

161 Diageo case para 70.

In light of the purpose of the relevant provisions to, inter alia, incentivise the use of wine spirits rather than cane spirits, 162

162 Diageo case para 61.

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

165 See para 3.2 in the main text, where this case is discussed.

In ITC 1939 166

166 Income Tax Case 1939 2020 83 SATC 157 (case number VAT 1712) (hereafter ITC 1939).

SARS submitted that this non-declaration rendered the VAT returns incomplete as provided for in section 45. 169

169 ITC 1939 para 14.

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

171 ITC 1939 para 20.

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

172 ITC 1939 para 10.

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

174 ITC 1939 para 25.

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

175 ITC 1939 para 19.

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

178 Income Tax Case 489 1941 12 SATC 68 (U) (hereafter ITC 489).

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

179 ITC 489 69.

Similarly, in ITC 824 180

180 Income Tax Case 824 1956 21 SATC 79 (T) (hereafter ITC 824).

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

181 ITC 824 83.

Accordingly, the quantum of rental income was irrelevant in the determination of the nature of the loss. 182

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."

By contrast, in ITC 749 183

183 ITC 749 1952 18 SATC 319 (T) (hereafter ITC 749).

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

184 ITC 749 323.

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

185 Commissioner of Taxes v Shein 1958 3 SA 14 (FC) (hereafter the Shein case).

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

186 Shein case 17.

Accordingly, as a matter of practicality (or in tax parlance, administrability), the fact that some duties regarded as "trivial and incidental" 187

187 Shein case 17.

In ITC 1092, 188

188 ITC 1092 1966 28 SATC 228 (R) (hereafter ITC 1092).

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

189 ITC 1092 231.

Accordingly, this "matter of little importance" 190

190 ITC 1092 230.

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 Taxpayer 191

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

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

193 Hoctor "Assessing the De Minimis Non Curat Lex Defence" 130 (footnote omitted).

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

194 Natal Joint Municipal Pension Fund case paras 17-26.

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, Williams and Klue Silke on Tax Administration

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

Ashworth and Horder Principles of Criminal Law

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

Burchell Principles of Criminal Law

Burchell J Principles of Criminal Law 5th ed (Juta Cape Town 2016)

Burchell and Milton 1980 Annu Surv SA L

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

Claassen and Claassen Claassen's Dictionary of Legal Words

Claassen RC and Claassen M Claassen's Dictionary of Legal Words and Phrases (LexisNexis Durban July 2022 – SI 25)

Croome and Olivier Tax Administration

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

Du Plessis et al Introduction to Law

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

Du Toit Pharos Bilingual Police Dictionary

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

Feinberg Harm to Others

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

Hoctor "Assessing the De Minimis Non Curat Lex Defence"

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) 119-150

Hoctor "Criminal Law"

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

Hoctor Snyman's Criminal Law

Hoctor SV Snyman's Criminal Law 7th ed (LexisNexis Durban 2021)

Inesi 2006 Berkeley Tech LJ

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

Labuschagne 1973 Acta Juridica

Labuschagne JMT "De Minimis Non Curat Lex" 1973 Acta Juridica 295-302

Mukheibir et al Law of Delict

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

Nemerofsky 2001 Gonz L Rev

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

Ruedin 2008 EHRLR

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

Veech and Moon 1947 Mich L Rev

Veech ML and Moon CR "De Minimis Non Curat Lex" 1947 Mich L Rev 537-570

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 1998 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 https://www.merriam-webster.com/

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

Oxford English Dictionary 2022 https://www.oed.com/

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

SAFLII 2024 http://www.saflii.org

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

SARS 2023 https://www.sars.gov.za/legal-counsel/dispute-resolution-judgments/dispute-resolution-process/

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

List of Abbreviations