The appellant strongly argued against the alteration of the contract of lease concluded between the related parties by the respondent.While counsel for the respondent conceded, that, the respondent did not have the legal authority to alter the contract of the related parties, he forcefully argued, that, it had the power ...
The appellant strongly argued against the alteration of the contract of lease concluded between the related parties by the respondent.
While counsel for the respondent conceded, that, the respondent did not have the legal authority to alter the contract of the related parties, he forcefully argued, that, it had the power either to disregard the existence of the contract or to neutralise its perverse income tax consequences and assess a fair and reasonable tax....,.
It is correct, that, the respondent did not have the legal power to vary the contracts concluded by the related parties. However, while the sanctity of contracts is a fundamental and foundational principle of our law, it may be abridged by legislation.
This point was made by INNES CJ in Law Union and Rock Insurance Company Ltd v Carmichael's Executors 1917 AD 593…, when he stated that:
“…, public policy demands, in general, full freedom of contract; the right of men freely to bind themselves in respect of all legitimate subject matters. The general interest of the community may, and does, in certain cases, require the abridgement of this right. But, language enforcing such abridgement should be narrowly regarded and strictly construed. For, it cannot be thought that the legislature would, in the interests of the public, infringe upon so fundamental a principle of public policy to a greater extent than would be required to obviate the mischief aimed at.”
