Johannesburg — THE Supreme Court of Appeal yesterday dismissed an appeal by Carmel Trading Company, a company owned by entrepreneur Dave King, who was assessed to be owing the taxman more than R900m from as far back as 2002.

The issue concerned a Falcon 900B executive jet owned by Carmel that was flown out of the country in 2003 when the commissioner of the South African Revenue Service (SARS) wanted to have the jet sold and the proceeds kept in trust pending the finalisation of the litigation against King.

In its judgment yesterday, the court ruled that the jet should be sold in spite of objections by Carmel. The jet has been languishing at the Dassault maintenance facility at Le Bourget Airport near Paris since April 2003 and the commissioner has tried a number of times to have the jet returned to SA.

The Falcon is still registered in SA with the local civil aviation authorities in the name of Hawker Air Services, a company liquidated by order of the appeal court in March last year.

On September 3 2002, the Pretoria High Court issued a preservation and antidissipation order in relation to the Falcon. Two days later, Carmel "took over" the interests of Hawker Air Services in the Falcon. Carmel's attitude was that it could do this because it was not bound by the preservation order .

In a later judgment, in February 2003, the high court extended the preservation and antidissipation order and ordered Carmel to return the Falcon to SA.

The court held that the sale of the interests in the Falcon to Carmel was "a contrived transaction to bypass the preservation order" and that Carmel was but a tool of King and under his direct control.

The appeal court dismissed Carmel's appeal. An application for leave to appeal to the Constitutional Court was dismissed.

The jet remained at Le Bourget and this led to a contempt application against, among others, King, Hawker Air Services and Carmel.

The judge who heard the contempt application said King could not be held liable for the breach of the order by Hawker as he had resigned as director of Hawker.

After the dismissal of the contempt proceedings, King was reinstated as the sole director of Hawker. The jet could not return to SA because Carmel refused to make any funds available for returning it and refused to give consent to the sheriff to return it.

"Carmel's first problem is that the Falcon is not Carmel's property," said Judge Louis Harms. "Carmel may have had a proprietary interest in the Falcon in its capacity as partner in the partnership that was the beneficial owner of the Falcon. A former partner has no proprietary claim in respect of the property of a dissolved partnership."

Harms said for a reason not disclosed, Carmel did not want the Falcon back in the country.

"It sought to register it in Mauritius and the high court had to interdict it from doing so.

"It also made a nonbinding offer according to which it would consent to the return of the Falcon provided the liquidator of (Hawker) and the commissioner release the necessary funds and that it be registered in Mauritius and be used by Carmel for chartering business."

Harms said at the time of the preservation order in 2002, the value of the Falcon was R200m but its value was fast deteriorating and it would soon be practically worthless. He said Carmel's opposition to the sale of the Falcon was merely out of spite and obstreperousness.

"It reminds one of the farmer who, in order to escape paying tithe, destroyed his whole crop. The Romans had a short answer for such conduct: There must be no indulgence to malice."