Metlika Trading Limited and Others v The Commissioner for the South African Revenue Service

David King created Specialised Outsourcing Limited, listed on the JSE in 1997. Ben Nevis Holdings Limited (a BVI company) owned approximately 70% of shares, which it sold over two years for over R1 billion profit. Ben Nevis acquired various assets in South Africa including a Falcon aircraft. In September 2000, Ben Nevis sold the aircraft to a partnership between Rand Merchant Bank (RMB), Hawker Management (Pty) Ltd (Manco), and Hawker Air Services (Pty) Ltd (HAS). RMB advanced R171,110,000 to the partnership, secured by a deposit from Ben Nevis. Ben Nevis failed to declare income from the Specialised Outsourcing share sale to SARS. In January 2002, SARS discovered Ben Nevis had transferred all South African assets to Metlika Trading Limited (another BVI company) on 16 January 2001. SARS assessed Ben Nevis for tax of R1,467,844,330 and King personally for over R900 million. SARS instituted action against Metlika, Ben Nevis and King, and obtained a preservation order interdicting disposal of assets including the aircraft. RMB exercised breach clauses in the loan agreement and sold its partnership interest to Carmel Trading Company Limited (a Mauritius company) for R24,550,450 (the outstanding balance after applying security). The aircraft was flown to Switzerland. SARS applied for interim relief requiring return of the aircraft to South Africa.

• Whether interim orders were appealable despite being stated to be 'pending finalisation of an action'
• Whether the Transvaal Provincial Division had jurisdiction to order the return of an aircraft located outside South Africa
• Whether attachment of assets could confirm or found jurisdiction over Carmel, a Mauritius company
• Whether the court could grant a mandatory interdict requiring acts to be performed outside its territorial jurisdiction
• Whether the preservation order had been breached

Appeal dismissed with costs including costs of three counsel. The order requiring the partnership to procure return of the aircraft to South Africa was upheld, as were the attachment orders against Carmel and the other interim orders relating to the aircraft.

An interim order is appealable if it is final in effect - that is, if it has immediate effect and will not be reconsidered at trial or on the same facts, even if stated to be pending finalisation of other proceedings. A South African court has jurisdiction to grant a mandatory interdict requiring an incola to perform acts outside the court's territorial jurisdiction, provided: (1) the respondent is subject to the court's personal jurisdiction; (2) the order is in personam (directed at the person, not directly affecting foreign property or third parties); and (3) the order can be enforced through contempt proceedings in South Africa. The location where acts must be performed does not defeat jurisdiction over a person subject to the court. Attachment of a foreign company's assets within the jurisdiction (including partnership interests, loan accounts, and bank account interests) is sufficient to found or confirm jurisdiction ad fundandam or ad confirmandam jurisdictionem.

Streicher JA observed that 'We live in a time of rapidly growing commercial and financial sophistication and it behoves the courts to adapt their practices to meet the current wiles of those defendants who are prepared to devote as much energy to making themselves immune to the courts' orders as to resisting the making of such orders on the merits of their case' (quoting Lord Donaldson). The Court noted that while there were conflicting Roman-Dutch views on jurisdiction over movables located abroad, Voet supported jurisdiction based on the defendant's domicile. The Court suggested that the principal place of business of a partnership within a court's jurisdiction should be sufficient to confer jurisdiction over the partnership, analogous to companies, though this was not necessary to decide. The judgment indicated that English Mareva principles, while not automatically applicable, provide useful guidance for South African courts facing similar problems of asset dissipation in a globalized economy.

This judgment significantly expanded South African courts' extraterritorial jurisdiction in granting interim relief. It established that South African courts can issue mandatory interdicts requiring incolae to perform acts outside South Africa, overruling earlier restrictive authority like Lenders v Lourenco Marques Wharf Co. The case adopted a modern, purposive approach to jurisdiction aligned with English Mareva jurisprudence, recognizing that sophisticated financial structures require robust judicial remedies. It confirmed that orders can be enforced through contempt proceedings even when the acts must be performed abroad, provided the respondent is subject to the court's personal jurisdiction. The judgment is important for tax enforcement, asset preservation, and preventing judgment debtors from frustrating court orders by moving assets offshore. It reflects adaptation of South African civil procedure to globalized commerce and capital mobility.