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Commissioner for the South African Revenue Service v Mkhize and Others[1]
Preamble
The case has drawn wide attention, not only from the tax specialist community but also from the sporting fraternity. The first respondent, Ms Shauwn Mkhize, also owned Royal AM FC, a football club that competed in the Premier Soccer League (PSL). During the legal proceedings, SARS seized the club's assets amid allegations of financial mismanagement and governance failures, and the club reportedly failed to fulfil its league obligations for about 10 months. In the end, the PSL Board of Governors terminated Royal AM's membership and expelled the club from the league.
Background to the case
SARS asked the court for permission to sell five immovable properties that were already covered by a preservation order granted on 21 November 2024. A preservation order freezes assets so that they cannot be sold, given away or otherwise disposed of while SARS works to recover outstanding tax debts.
Almost two years later, SARS returned to court to have the properties sold and turned into cash, with the proceeds held in an interest-bearing trust account until further legal proceedings are decided. Four respondents opposed the application: Ms Mkhize, her former husband and two companies.
The outstanding tax debts
SARS had assessed Ms Mkhize for unpaid personal income tax and had also held her personally liable for the tax debts of Zikhulise Group (Pty) Ltd. By September 2025 the amounts were substantial: her personal income tax liability, including interest, stood at about R13.3 million, and her personal liability for Zikhulise Group's tax debts, including interest, stood at about R112.6 million.
SARS had tried several times to recover these amounts, without success. It had also issued the required notices and given Ms Mkhize the opportunity to make representations about her personal liability for the company's tax debts, but she had not taken steps to set aside SARS's decision on that liability.
Who owns the five properties
Four of the properties were registered in the name of Mr Yaron Peretz and the fifth in the name of 22 Aston Investments (Pty) Ltd. SARS's investigation suggested, however, that the properties had in effect been bought for Ms Mkhize's benefit, even though they were registered in other names. In legal terms, SARS was saying that she was the beneficial owner, the person who enjoys the benefit of an asset even when someone else is the registered owner.
Evidence obtained during a SARS tax inquiry showed that the purchases involved several parties and companies, including Ms Mkhize, Zikhulise Group and Godi Enterprises. Some sale agreements had first been concluded with Mr Andile Mpisane, but these were later cancelled. The evidence also indicated that Ms Mkhize had been directly involved in negotiating the transactions and that substantial payments towards the purchase price had come from her and from Zikhulise Group.
There was also a disagreement about how much was still owed to Mr Peretz. He maintained that about R5.25 million of the purchase price remained outstanding, while Ms Mkhize contended that the price had been paid in full. The properties had also not yet been transferred into the names of the alleged buyers.
SARS therefore intended to bring separate action proceedings to establish who beneficially owns the properties and to obtain an order declaring them executable, which means that they may be attached and sold to settle the outstanding tax debts.
Why SARS wanted to sell the properties
SARS argued that keeping the properties under the preservation order was becoming more and more expensive and that their value was falling. The properties were not being properly maintained, municipal accounts were in arrears, and improvements had been built without approved building plans.
The costs of preserving the properties included security of about R188,262 a month, insurance premiums of about R97,922 every six months, more than R1.79 million in unpaid municipal charges on four of the properties, and further maintenance costs and the fees of the curator bonis, the person appointed by the court to look after the preserved assets. SARS was carrying these costs itself because the respondents' preserved bank accounts did not hold enough money. The properties had an estimated combined market value of R35 million and a forced-sale value of R24.5 million.
SARS argued that if the situation continued, the properties would keep losing value, which would undermine the very purpose of the preservation order. It therefore wanted to sell them and preserve their value in cash until the court decides whether the proceeds may lawfully be used to pay the tax debts.
The respondents' objections
The opposing respondents raised several preliminary legal objections. First, they argued that the application was not urgent, because SARS had waited more than a year after obtaining the preservation order before asking for permission to sell the properties.
Second, they argued that SARS could not sell the properties before a court had confirmed its right to execute against them. In their view, the proposed sale amounted to execution before the underlying legal dispute had been decided.
Third, they argued that selling the properties would be an arbitrary deprivation of property, contrary to section 25 of the Constitution. They also questioned whether the court had jurisdiction, whether the correct procedures had been followed and whether certain parties had been wrongly joined to, or left out of, the proceedings.
The court's findings
Urgency
The court rejected the argument that the application was not urgent. The judge accepted that SARS had given sufficient reasons for approaching the court on an urgent basis, noting that several problems had only come to light after the preservation order was granted in November 2024. These included the size of the municipal arrears, the unauthorised building improvements, the insurance requirements and the continuing security costs. The respondents had not disputed SARS's factual evidence about the deterioration and upkeep of the properties, so SARS had shown that waiting for the matter to run through the ordinary court process would lead to further deterioration and financial loss.
Selling before executability is decided
A central question was whether SARS could be allowed to sell the properties before the court had decided whether they were executable for the tax debts. The court relied extensively on the Supreme Court of Appeal judgment in Carmel Trading Co Ltd v Commissioner for SARS. That case established that a court may authorise the sale of an asset under a preservation order where the asset is deteriorating and keeping it is becoming impractical or financially wasteful, with the proceeds held in an interest-bearing account until further legal proceedings are decided. Although Carmel Trading concerned an aircraft rather than immovable property, the judge considered its principles equally applicable.
The court also referred to Commissioner for SARS v Majestic Silver Trading 275 (Pty) Ltd, which supports the realisation of assets that are subject to preservation orders. It concluded that SARS did not have to wait for the separate action proceedings to be finalised before asking for authority to convert the properties into cash.
Beneficial ownership
The court considered the evidence about how the properties were acquired and where the money used to pay for them came from. It found that the opposing respondents had not adequately challenged SARS's allegations about Ms Mkhize's involvement in acquiring the properties. They had concentrated largely on preliminary legal objections rather than explaining the financial arrangements, payments and contractual relationships involved.
The court was therefore satisfied, on a balance of probabilities and for the purposes of this application, that SARS had a sufficient basis to argue that Ms Mkhize was the beneficial owner of the properties. The judge further found that she had a personal right to acquire a real right to the properties, following the Esibonga judgment[2]. Put simply, she had a claim to have the properties transferred to her, even though ownership had not yet passed to her.
This was not a final decision on ownership. That question will still be determined in the action proceedings that SARS is to bring.
Constitutional rights and alternative accommodation
The court also considered the argument that the sale would be an arbitrary deprivation of property. Having regard to section 25 of the Constitution and Uniform Rule 46A, it examined the circumstances in which the properties were occupied and whether alternative accommodation was available. It noted that Ms Mkhize had access to several other properties where she could live, so these properties were not her only available housing. The court was satisfied that the proposed sale, with the proceeds preserved in an interest-bearing account, did not amount to an arbitrary deprivation of property.
The court order
The court dismissed the respondents' objections and authorised the curator bonis to sell all five properties, subject to these conditions:
• The curator bonis may sell the five properties in accordance with the original preservation order.
• The full proceeds of the sale must be paid into an interest-bearing trust account.
• Any outstanding purchase price owed to Mr Peretz may only be paid once the amount has been confirmed, either by agreement between the parties or by a court order.
• The remaining proceeds must stay in the trust account until the further legal proceedings are decided.
• SARS must bring action proceedings within one month to establish that the properties, or the proceeds of their sale, are executable for the tax debts of one or more of the respondents.
Given the size of the tax debts, the court also allowed the properties to be sold without a reserve price, which means there is no minimum price that must be reached before a sale can go ahead. The first, second, third and sixth respondents were ordered to pay the costs of the application, including the costs of two counsel, jointly and severally, so each of them can be held liable for the full amount.
What the judgment means
The judgment shows that a preservation order under section 163 of the Tax Administration Act 28 of 2011 (TAA) does not necessarily mean keeping assets in their existing form until SARS's recovery proceedings are finalised. Where keeping the assets becomes financially burdensome or causes their value to fall, a court may allow them to be converted into cash, provided proper safeguards are in place.
The sale does not mean that SARS automatically becomes entitled to the money. The proceeds must stay secured in an interest-bearing trust account until the court decides whether SARS is legally entitled to execute against the assets or their proceeds.
For taxpayers and their advisers, the judgment also shows why it matters to respond properly to SARS's factual allegations in litigation. Raising technical objections without dealing with the underlying evidence may leave SARS's version of the facts effectively unchallenged.
The central message is that preserving the value of assets is as important as preserving the assets themselves, and a court may authorise their sale before executability is finally decided, provided the proceeds remain protected until that decision is made.
[1]Commissioner for the South African Revenue Service v Mkhize and Others. Court: High Court of South Africa, KwaZulu-Natal Division, Durban. Case number: D13795/2024. Date of judgment: 26 October 2026.
[2]Commissioner for the South African Revenue Services v Esibonga Investment (Pty) Ltd and Others [2022] ZAWCHC 144 (Esibonga).