Commissioner for the South African Revenue Service v Hawker Air Services (Pty) Ltd and Others

The Commissioner for the South African Revenue Service (SARS) sought the liquidation of Hawker Air Services (Pty) Ltd (HAS) and the sequestration of the Hawker Aviation Services partnership. The partnership had claimed VAT input tax on two aircraft on the basis that they were used solely for commercial chartering. SARS later determined, after audit, that the aircraft were predominantly used for unrecompensed private purposes, mainly for the benefit of Mr David King, HAS’s sole director. VAT assessments totalling approximately R73 million were issued against the partnership, for which HAS was jointly and severally liable under the VAT Act. SARS obtained statutory VAT judgments and nulla bona returns, and urgently applied for liquidation and sequestration, citing concern over the disappearance and deterioration of the partnership’s principal asset, a Falcon 900B jet aircraft. The Pretoria High Court dismissed both applications with punitive costs. SARS appealed to the Supreme Court of Appeal.

The appeal was upheld. The orders of the Pretoria High Court were set aside and replaced with orders granting the liquidation of Hawker Air Services (Pty) Ltd and the sequestration of the Hawker Aviation Services partnership. The punitive costs orders against SARS were overturned.

The case clarifies that urgency is not a substantive defence once a court has entertained the merits of an application. It affirms SARS’s powers as a creditor to rely on VAT assessments as deemed debts for insolvency proceedings, reinforces the 'pay now, argue later' principle, and confirms that partnerships may be sequestrated even where one partner cannot be sequestrated. The judgment is important for tax enforcement, insolvency practice, and the limits of judicial discretion in winding-up proceedings.