A B v Zimbabwe Revenue Authority (ZIMRA)

The applicant inherited immovable property from her late husband on 8 March 2012. She earned rental income from the property. ZIMRA assessed her for tax on rental income for the period 2011 to 2016. The applicant objected to certain aspects of the assessments, including: when her tax liability commenced (she claimed 2016 when she allegedly took over management, rather than 2012 when she inherited); disallowance of cleaning and general expenses; disallowance of director's salary claimed for 2016; and ZIMRA's use of estimated rental figures. Her appeals against ZIMRA's decisions were dismissed by the court in a composite judgment (HH 197-21) delivered on 22 April 2021. The applicant then sought leave to appeal to the Supreme Court, filing seventeen grounds of appeal spanning four pages. The amount in dispute was RTGS $74,773.30 (comprising principal of RTGS $37,386.66 plus equal penalties). During argument, it was revealed that the applicant's legal fees exceeded the principal amount in dispute.

• Whether leave to appeal should be granted based on the Pichanick criteria: reasonable prospects of success, whether the amount is trifling, whether the matter is of substantial importance, and where the balance of convenience lies
• Whether the proposed grounds of appeal complied with Rule 44(1) of the Supreme Court Rules 2018 requiring concise grounds
• Whether an appeal raising only factual disputes (as opposed to novel legal issues) has prospects of success

The application for leave to appeal was dismissed with costs.

Leave to appeal will be refused where: (1) the proposed grounds of appeal are not concise as required by Rule 44(1) of the Supreme Court Rules 2018, rendering them invalid and eliminating prospects of success; (2) applying the Pichanick criteria cumulatively, there are no reasonable prospects of success (the appeal merely disputes factual findings without raising novel legal issues), the amount in dispute is trifling (assessed objectively), the matter is not of substantial importance (objectively assessed), and the balance of convenience (including finality in litigation and the administration of justice) favours refusal; (3) the appeal would merely turn the appellate court into a platform for a trial de novo. In tax law, under section 11(3) of the Income Tax Act, liability for tax on income from inherited property commences on the date of inheritance, not on any subsequent date of transfer or management takeover.

The court noted that no single factor in the Pichanick test is exclusively decisive - some factors may be more relevant in some cases than others. For example, strong prospects of success may compensate for inadequacy in other factors. However, where all factors point in the same direction (against granting leave), the outcome is clear. The court also observed that balance of convenience encompasses not just the parties' convenience but also the convenience of the courts and the whole administration of justice. The court criticized the applicant and her legal advisers for "dogmatically refusing to recognise" the obvious legal hurdles in her case, suggesting a lack of objectivity in assessing the merits. The revelation that the applicant's legal fees exceeded the amount in dispute was characterized as significant in undermining any argument about the subjective importance of the matter to the applicant.

This case demonstrates the strict application of the Pichanick criteria for leave to appeal in Zimbabwean tax matters. It emphasizes: (1) the requirement for concise grounds of appeal under Supreme Court Rules and that non-compliance renders grounds invalid; (2) that leave to appeal will not be granted merely to dispute factual findings where the lower court gave detailed reasons; (3) that the assessment of whether an amount is trifling or a matter is important is objective, not subjective; (4) that balance of convenience includes the courts' convenience and the need for finality in litigation; (5) specific tax principles including that under section 11(3) of the Income Tax Act, tax liability on inherited property accrues from the date of inheritance; and (6) that sole traders cannot claim director's salaries as deductibles as these constitute drawings for personal upkeep. The case serves as a precedent for refusing leave where appeals would merely constitute trials de novo without raising novel legal points.