Carmel Trading Company Limited v Commissioner for the South African Revenue Service and Others

A Falcon 900B executive jet, registered in South Africa but located at Le Bourget Airport in France, was subject to a preservation and anti-dissipation order obtained by the Commissioner for the South African Revenue Service (SARS) in tax recovery proceedings against David King and related entities. The jet was beneficially owned by a partnership involving Hawker Air Services (Pty) Ltd (later liquidated) and others. Despite the preservation order, Carmel Trading Company Ltd acquired partnership interests through a transaction previously found to be fraudulent and aimed at circumventing the court order. The aircraft deteriorated while stranded abroad, accruing high storage costs and rapidly losing value. To prevent the asset from becoming worthless, the High Court varied the preservation order to authorise the sheriff to sell the aircraft and hold the proceeds in trust pending finalisation of the main action. Carmel opposed any sale, leading to this appeal.

The appeal was dismissed with costs, including the costs of two counsel. The order authorising the sale of the aircraft and the retention of the proceeds in trust remained in force.

The case confirms the broad powers of South African courts to make preservation orders effective, including authorising the sale of deteriorating assets located abroad. It clarifies that preservation orders do not confer security or preference on creditors, that courts may adapt remedies to prevent abuse and asset dissipation, and that section 25 of the Constitution does not protect fraudulent or illusory property interests. The judgment reinforces judicial intolerance of asset-stripping and obstruction in tax recovery matters.