German businessman loses case against RAF

Peters had claimed this large amount as loss of current and future earnings, as he could no longer work after his road accident, during which he sustained serious head injuries. The judgement outlined Peter's lavish lifestyle before the accident. He earned millions in Germany and had a penchant for Versace suits and expensive watches - but it was proved he had hardly paid any tax. The judgement said Peters had been dishonest in his tax affairs with regards to his business in Germany and that the German Receiver of Revenue had clamped down on him for tax evasion.

Roy Barendse, director in the dispute resolution practice at Cliffe Dekker Hofmeyr in Cape Town represented the RAF in this case. He said that the judgement placed due emphasis on the context in which Peters derived his income and on the legal consequences of his longstanding fraudulent activities.

Evaded tax on a massive scale

"The approach followed by the court is commended and welcomed as it often happens that the focus is entirely on determining how much a claimant earned before the injuries and to compensate him accordingly. Much time and effort went into analysing Peters' financial statements and reconstructing them as his case was that he earned much more than what his financial statements reflected," he noted.

The evidence showed that Peters had evaded the payment of income tax on a massive scale while operating his magazine subscription business in Germany. He did this by submitting false returns to the German tax authorities. It was also established that with the German Receiver closing in on him, it was not likely that he would be able to continue his business in Germany as he could have been incarcerated. Due to the nature of his business, it would also have been unlikely that he could continue his business once he was released from prison.