Bengis and Others v Government of South Africa and Others; In re: Bengis and Others v Government of South Africa and Others (16884/2013, 2199/2014) [2016] ZAWCHC 14; [2016] 2 All SA 459 (WCC) (24 February 2016)

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[2016] ZAWCHC 14
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Bengis and Others v Government of South Africa and Others; In re: Bengis and Others v Government of South Africa and Others (16884/2013, 2199/2014) [2016] ZAWCHC 14; [2016] 2 All SA 459 (WCC) (24 February 2016)

THE
HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
In the matter between
Case No: 16884/2013
DATE: 24 FEBRUARY 2015
ARNOLD MAURICE
BENGIS
...................................................................................
1st
APPLICANT
DAVID
BENGIS
..........................................................................................................
2nd
APPLICANT
JEFFREY
NOLL
.........................................................................................................
3rd
APPLICANT
And
THE GOVERNMENT OF SOUTH
AFRICA
........................................................
1st
RESPONDENT
THE MINISTER OF JUSTICE &
CONSTITUTIONAL
DEVELOPMENT
....................................................................................................
2nd
RESPONDENT
THE DIRECTOR-GENERAL: THE
DEPARTMENT OF JUSTICE & CONSTITUTIONAL
DEVELOPMENT
....................................................................................................
3rd
RESPONDENT
THE NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS: THE NATIONAL PROSECUTING
AUTHORITY
.............................................................................
4th
RESPONDENT
THE MINISTER OF
AGRICULTURE, FORESTRY & FISHERIES
...............
5th
RESPONDENT
THE MINISTER OF
ENVIRONMENTAL AFFAIRS & TOURISM
.................
6th
RESPONDENT
HORST GERHARD HERMANN
KLEINSCHMIDT
..........................................
7th
RESPONDENT
MARIUS
DIEMONT
...............................................................................................
8th
RESPONDENT
And in the matter between
Case No: 2199/2014
ARNOLD MAURICE
BENGIS
...................................................................................
1st
APPLICANT
DAVID
BENGIS
..........................................................................................................
2nd
APPLICANT
JEFFREY
NOLL
.........................................................................................................
3rd
APPLICANT
And
THE GOVERNMENT OF SOUTH
AFRICA
........................................................
1st
RESPONDENT
THE MINISTER OF JUSTICE &
CONSTITUTIONAL DEVELOPMENT
...
2nd
RESPONDENT
THE DIRECTOR-GENERAL: THE
DEPARTMENT OF JUSTICE & CONSTITUTIONAL
DEVELOPMENT
....................................................................................................
3rd
RESPONDENT
THE NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS: THE NATIONAL PROSECUTING
AUTHORITY
.............................................................................
4th
RESPONDENT
THE MINISTER OF
AGRICULTURE, FORESTRY & FISHERIES
...............
5th
RESPONDENT
THE MINISTER OF
ENVIRONMENTAL AFFAIRS & TOURISM
.................
6th
RESPONDENT
BRUCE GAYE
MORRISON
..................................................................................
7th
RESPONDENT
JOHANNES D
KOTZE
...........................................................................................
8th
RESPONDENT
MARIUS
DIEMONT
...............................................................................................
9th
RESPONDENT
Coram
:
ROGERS J
Heard:
2 & 3 FEBRUARY 2016
Delivered:
24 FEBRUARY 2016
JUDGMENT
ROGERS
J:
Introduction
[1]
The issue in these
consolidated applications, very broadly, is whether the South African
government and other state agencies and
officials, in alleged
violation of arrangements reached with the applicants when they
concluded a plea bargain
[1]
in South Africa, unlawfully assisted the United States authorities to
prosecute them in America for related crimes and to obtain

restitution orders. Prayers for declaratory orders and review are
accompanied by prayers for consequential relief that any restitution

obtained by the United States authorities be repaid by the
respondents to the applicants (such restitution has been ordered in

the amount of $22 446 720) and that the South African
government and three former officials pay the applicants damages
in
the amount of $11 351 703.
[2]
I shall refer to Case
16884/13 as the first application and Case 2199/14 as the second
application.
[3]
The same three persons
feature as applicants in both cases. I shall refer to the first and
third applicants as Bengis and Noll.
The second applicant is Bengis’
son. To avoid confusion, and meaning no disrespect, I shall refer to
him by his first name
David.
[4]
The same persons
feature as the first to sixth respondents in both cases: the
Government of South Africa; the Minister of Justice
and
Constitutional Development; the Director-General of the Department of
Justice and Constitutional Development (‘DOJ’);
the
National Director of Public Prosecutions (‘the NDPP’);
the Minister of Agriculture, Forestry and Fisheries; and
the Minister
of Environmental Affairs and Tourism (‘EAT’). The
ministry at the time relevant to this case was called
the Department
of Environmental Affairs and Tourism (‘DEAT’). Within the
DEAT was a unit called Marine and Coastal
Management (‘MCM’).
The relevant executive functions (including MCM) now reside within
the Department of Agriculture,
Forestry and Fisheries (‘DAFF’).
For convenience I shall refer throughout to the DEAT.
[5]
The seventh respondent
in the first application is Mr Horst Kleinschmidt (‘Kleinschmidt’).
He was the Deputy Director
of MCM until his resignation in April
2005.
[6]
The eighth respondent
in the first application is Mr Marius Diemont (‘Diemont’),
an attorney. Until early 2007 he was
an employed legal adviser within
MCM. He resigned from the DEAT at the end of December 2007 and
entered private practice. Diemont
is also the ninth respondent in the
second application.
[7]
The seventh respondent
in the second application is Mr Bruce Morrison (‘Morrison’),
an advocate. At the relevant time
he was a Deputy Director of Public
Prosecutions attached to the Directorate of Special Operations
(‘DSO’) in Cape Town.
The DSO, also known as the
Scorpions, no longer exists. Morrison is now in private practice.
[8]
The eighth respondent
in the second application is Mr Johannes Kotze (‘Kotze’),
formerly a Senior Special Investigator
with the Scorpions.
[9]
The applicants were
represented before me in the first application by Mr Marcus SC
leading Mr Watson and in the second application
by Mr Katz SC leading
Mr Quixley. All the respondents were represented before me by Mr
Duminy SC leading Ms Dzai and Ms Cronje.
Factual
background
Resolution
of disputes of fact
[10]
The applicants seek
final relief on motion. Bona fide factual disputes must thus be
determined on the respondents’ version.
A purported factual
dispute will lack bona fides if the respondent’s version is a
bald or uncreditworthy denial or is palpably
implausible, far-fetched
or so clearly untenable that the court is justified in rejecting it
on the papers.
[2]
Hout Bay
Fishing Industries and its illegal conduct
[11]
Hout Bay Fishing
Industries (Pty) Ltd (‘HBFI’) conducted fishing
operations in South African waters for about four decades
before
ceasing operations towards the end of 2002. Bengis was a director of
the company and its chief executive officer. Noll was
a senior
executive. David joined the company in 1999. By 2001 the applicants
resided abroad (Bengis and his son in the United Kingdom,
Noll in the
United States). Colin van Schalkwyk (‘Van Schalkwyk’),
now deceased, was the director in charge of operations,
based in Cape
Town. The Cape Town-based executive in charge of finance was Kerry
Spooner (‘Spooner’).
[12]
HBFI had quotas for
various marine products including Hake, South Coast Rock Lobster and
West Coast Rock Lobster. (For brevity’s
sake I refer to these
species collectively as ‘fish’.)
[13]
According to facts
subsequently admitted in a South African plea bargain, the South
African lobster industry was virtually paralysed
in 1986 by punitive
anti-apartheid sanctions imposed by the United States. HBFI, with the
knowledge of the apartheid government,
was able to circumvent these
sanctions. However enhanced regulation and transformation in the
fishing industry in the 1990s and
the resultant drastic reduction of
HBFI’s quotas had the result that by 1999 the company could no
longer support its extensive
infrastructure and operating costs.
HBFI’s solution was to harvest fish in excess of its quotas and
to buy illegally harvested
fish from other catchers. This conduct
violated inter alia the Marine Living Resources Act 18 of 1998 (‘the
Marine Act’).
The illegally harvested fish was exported to the
United States, the Far East and Europe. In the course of these
illegal activities
Van Schalkwyk paid bribes to fishery control
officers with cash supplied to him by Spooner.
[14]
In the present
proceedings Bengis has admitted (though he did not do so at the time
of the South African plea bargain) that this
course of illegal
conduct emanated from a decision made by him as HBFI’s chief
executive officer.
The South
African criminal investigation
[15]
In early June 2001 a
container of fish exported to the United States under false export
declarations was detained in New Jersey.
Shortly thereafter the DEAT
asked the DSO to assist in an investigation into illegal harvesting
and exporting by HBFI. Authority
for this investigation in terms of
s 28(1)(a) of the National Prosecuting Act 32 of 1998 (‘the
NPA Act’) was issued
on 20 June 2001 covering the seasons
1999/2000 and 2000/2001. The investigation was later expanded to
include two earlier seasons.
Documents and other exhibits were seized
by the DSO during a search at HBFI’s premises in June 2001.
[16]
In July 2001 the
National Prosecuting Authority (‘the NPA’) submitted a
request for assistance to the United States
government under the
Mutual Legal Assistance Treaty (‘MLAT’) subsisting
between the two countries.
[3]
Morrison’s involvement began at this time. He was appointed to
lead the DSO investigation with Kotze as the principal investigator.

There was henceforth close cooperation between the South African and
United States authorities. The United States subsequently
made MLAT
requests to South Africa in regard to related criminal investigations
in America.
[17]
On 6 December 2001 the
DSO caused warrants of arrest to be issued for Bengis, Noll and
David. On the following day various South
African-based employees,
including Van Schalkwyk, were arrested and released on bail.
Plea
bargain and related discussions
[18]
By November 2001 Bengis
had engaged an Adv A Bezuidenhout (‘Bezuidenhout’) of the
Johannesburg Bar to assist him and
HBFI in relation to the South
African investigation. On 28 November 2001 Bezuidenhout met with the
then Regional Head of the DSO,
Mr TD Prins, at a Cape Town hotel to
explore a possible deal. Bezuidenhout conveyed that Bengis was
anxious that his son should
not be convicted. Bezuidenhout met with
Prins and Morrison on the following day. Morrison gave an indication
of the range of charges
under consideration and the persons who might
be charged. Bezuidenhout argued that the matter should be kept
simple, that charges
should be confined to the Marine Act and that
only HBFI should feature as an accused.
[19]
There were a number of
meetings and telephonic discussions between Bezuidenhout and Morrison
regarding a plea bargain in terms of
s 105A of the Criminal
Procedure Act (a provision which came into operation during December
2001). According to Morrison,
he told Bezuidenhout that the US
authorities intended to prosecute Bengis for offences under American
law (these concerned the
importing into the United States of fish
illegally harvested in South Africa) but that if Bengis were to face
the full brunt of
the case against himself and HBFI in South Africa
and plead guilty here personally, it might count in his favour in the
United
States. Bezuidenhout’s instructions were that Bengis
would not do so, that he would take his chances in the United States,

and that he would at most come to South Africa on strict conditions
of indemnity against personal prosecution.
[20]
In January 2002 Prins
wrote to Bezuidenhout confirming that the warrants of arrest for
Bengis, Noll, David and a fourth executive,
Mr G Berman (‘Berman’)
who was based in the United States, had not been circulated via
Interpol, that they had not
been red-flagged internationally and
that, while the process of negotiation was ongoing, the warrants
would not be circulated and
no attempt would be made to effect the
arrests.
[21]
On 6 March 2002 there
was a meeting in Pretoria attended by Bezuidenhout and Bengis’
UK solicitor, Mr Kevin Gold (‘Gold’),
representatives of
the NPA and the Asset Forfeiture Unit (‘AFU’), and
Kleinschmidt. Since Bengis was not present and
since neither
Bezuidenhout nor Gold has filed affidavits, what Bengis says about
the meeting is hearsay. Morrison confirms he was
at the meeting and
recalls that other attendees included Adv P Sonn (the DSO Head), Adv
L McCarthy (Investigating Director of the
DSO in Pretoria), Adv
Hofmeyr of the AFU and Kleinschmidt. Bengis asserted that Prins was
also present.
[22]
Bengis claims that at
the time of this meeting he and his representatives knew that the
United States authorities were conducting
a criminal investigation.
He claims that Morrison said that the South African authorities had
already sent documents to the United
States investigators but that
they had no interest in the United States proceedings and that,
subject to the conclusion of a plea
bargain in South Africa, no
cooperation would be given beyond that which was ‘required by
law’.
[23]
As noted, Bengis’
evidence about the meeting is hearsay. Morrison denies Bengis’
version. He says this was one of the
occasions on which he told
Bezuidenhout of the close and extensive ongoing cooperation between
South Africa and the United States.
Bezuidenhout wanted the meeting
to agree that the South African plea bargain would be the ‘final
word’. Morrison responded
that, if a plea bargain was
concluded, the NPA’s intention would not be to prosecute HBFI
and its controllers further in
South Africa for offences known at the
time. However, South Africa could not bind the United States, which
was intent on prosecuting
Bengis and others. The South African
authorities had assisted and would continue to assist the United
States in its investigation.
Morrison adds that he only ever spoke on
behalf of the NPA. He did not represent the AFU or MCM. Morrison’s
evidence to this
effect cannot be rejected on the papers and is
indeed not contradicted by admissible evidence.
The South
African plea bargain, convictions and sentences
[24]
By late April 2002 the
terms of the South African plea bargain had been settled. An
appearance in the criminal case against HBFI
and Van Schalkwyk was
scheduled for 30 April 2002. On 29 April 2002 Kotze drove Morrison
and Bezuidenhout to the presiding magistrate
to inform him of the
plea bargain. By this stage Bengis and David had arrived in Cape Town
with Gold to attend the hearing. Bengis
was to represent HBFI in the
plea bargain proceedings.
[25]
On 30 April 2002 in the
Wynberg Regional Court HBFI (represented by Bengis) and Van Schalkwyk
pleaded guilty to various counts in
accordance with the signed plea
bargain. Morrison appeared for the prosecution and Bezuidenhout for
the accused. In accordance
with the plea bargain HBFI was sentenced
to fines totalling R7,45 million. An amount of R19 million was to be
confiscated in terms
of s 18(1) of the Prevention of Organised
Crime Act 121 of 1998 (‘POCA’) as a benefit derived from
the commission
of the offences. In addition, one of HBFI’s
vessels and the contents of a specified container were to be
forfeited to the
State in terms of s 68(1) of the Marine Act.
Van Schalkwyk was sentenced to a fine of R1 million failing
payment of which
imprisonment of five years and to a further five
years’ suspended imprisonment.
[26]
The plea agreement
recorded that the DEAT was the de facto complainant in the criminal
case and that it had been given the opportunity
to make
representations to the NDPP and DSO regarding the content of the
agreement and the forfeitures. The plea agreement stipulated,

further, that HBFI was to pay R750 000 to the DEAT as further
compensation for legal costs incurred by the DEAT in various
civil
applications initiated by HBFI.
[27]
HBFI and Van Schalkwyk
met their commitments under the plea bargain.
The Ngcuka
letter
[28]
On the same day, 30
April 2002, Mr B Ngcuka (‘Ngcuka’), at that time the
NDPP, addressed a letter to Bezuidenhout (‘the
Ngcuka letter’).
This letter, which was drafted by Bezuidenhout, is of considerable
importance to the applicants’ case.
The heading listed HBFI and
various individuals, including the applicants, defining them
collectively as ‘the entities’.
Para 1 recorded the
investigation which had been initiated in June 2001 and listed the
possible offences which were the initial
focus of the investigation.
Paras 2 and 3 confirmed that a plea bargain had been concluded
between the State (the DSO) and HBFI
and Van Schalkwyk and that HBFI
and Van Schalkwyk would appear in the Wynberg Regional Court on 30
April 2002 where they would
be convicted on charges of contravening
the Marine Act and (in Van Schalkwyk’s case) corruption.
[29]
Paras 4, 5 and 6
continued thus:
‘
4.  It
is confirmed that subsequent to this conviction and sentence the
entities will not be prosecuted for any of the
offences related to
the subject matter of the investigation referred to above.
5.  The DSO undertakes
that no information pertaining to the investigation outlined above
will be released to any state
department unless it is requested, no
law prohibits such disclosure and the National Director of Public
Prosecutions has exercised
his discretion in terms of
section 41(6)
of the
National Prosecuting Authority Act, No 32 of 1998
, as amended.
6.  The Government of
the United States of America will be informed of the finalisation of
the investigation in as much
as it pertains to the investigation
against the entities, the result of the trial, the sentence and
orders made.’
The alleged
composite settlement agreement
[30]
The applicants allege
in the first application that the plea bargain and the Ngcuka letter
formed part of a ‘composite settlement
agreement’ which
had been concluded some time before 29 April 2002. The terms of the
composite settlement were alleged to
be the following: (i) that
plea and sentence agreements would be entered into between HBFI and
Van Schalkwyk on the one hand
and the State on the other; (ii) that
these plea agreements would address not only confiscations pursuant
to POCA but also
forfeiture in terms of s 68(1) of the Marine
Act; (iii) that, in order to achieve this, the arrest warrants
against the
applicants would be cancelled so that Bengis could travel
to South Africa to enter the plea on behalf of HBFI; (iv) that,
in exchange for the foregoing, the State would drop all prosecutions
against the applicants as well as other entities and that this
would
be in respect of all offences committed prior to the agreement
relating to the harvesting and exportation of South Coast
Rock
Lobster, West Coast Rock Lobster and Hake; (v) that any and all
other civil and criminal proceedings as between the applicants,
the
State and the MCM arising from the facts investigated pursuant to the
initial investigation authorized on 31 May 2001 (actually
20 June
2001) would be finally concluded; (vi) that the State’s
obligations in terms of the composite agreement would
be reflected in
a letter to be issued by the NDPP after conclusion of the plea
bargain.
[31]
The main complaint in
the first application is that the conduct of the South African
government after 30 April 2002 in connection
with restitution
proceedings in the United States (restitution, like sentencing, being
a post-conviction phase of the United States
criminal proceedings)
was in breach of the alleged composite settlement agreement or a
violation of the Ngcuka letter or in bad
faith (since it was
allegedly contrary to representations made by the State during
negotiations or an intentional circumvention
of the composite
settlement).
[32]
In the second
application the applicants make the more ambitious allegation that,
as part of the settlement discussions, the applicants
were
‘explicitly assured’ that, subject to the satisfactory
conclusion of the South African settlement arrangements,
the South
African government ‘would not provide any cooperation or
assistance to the relevant authorities in the [United
States] beyond
that which was required by law’.
[33]
The main complaint in
the second application is that the conduct of South African officials
after 30 April 2002 in connection with
the prosecution in the United
States (and not merely the post-conviction restitution phase) was in
breach of the explicit assurance
because the South African officials
provided assistance beyond that which was ‘required by law’.
Respondents’
version on composite agreement and the Ngcuka letter
[34]
Morrison, Kotze and
Prins deny the existence of a composite settlement agreement or the
giving of an assurance that no assistance
would be given to the
United States beyond that which was ‘required by law’.
They also deny being party to any discussions
that a letter would be
issued such as that signed by Ngcuka on 30 April 2002. Indeed, they
say they had no knowledge of the existence
of the Ngcuka letter until
a later time.
[35]
In Morrison’s
case, he saw the Ngcuka letter for the first time as an attachment to
a letter written to him on 31 May 2002
by the applicants’ South
African attorney, Mr B de Sousa of Abrahams & Gross (‘De
Sousa’). Morrison adds
that Bezuidenhout told him on several
occasions that he (Bezuidenhout) drafted the letter, something not
denied in reply.
[36]
Kotze says he only
learnt of the existence of the letter when De Sousa emailed it to him
years later (on 16 October 2012).
[37]
Prins initially alleged
that he only learnt of the Ngcuka letter by way of the present
proceedings. In reply the applicants attached
a document showing that
at 13h21 on 30 April 2002 the Ngcuka letter was faxed to Bezuidenhout
(c/o Abrahams & Gross) under
cover of a DSO cover sheet signed by
Prins with the message ‘Attached please find the letter as
discussed’. In a supplementary
affidavit Prins acknowledges his
signature and writing but says he has no recollection of it. He
believes he may simply have been
acting as a conduit. His version
remains that he was not party to discussions about providing such a
letter.
[38]
Insofar as the MCM is
concerned, Kleinschmidt denies knowledge of a composite settlement
agreement. He says that neither the DSO
nor the NPA had any mandate
to represent the MCM or DEAT. The DEAT was consulted about the plea
bargain. The MCM took this opportunity
to resolve the various civil
applications brought against it by HBFI. This led to the inclusion in
the plea bargain of the term
requiring HBFI to pay MCM an amount of
R750 000 in respect of costs. In this respect MCM’s
interests were represented
by Ms Mugkenkar of the State Attorney’s
office. The applicants themselves were anxious that all pending civil
matters should
be resolved. This is reflected in letters written by
Abrahams & Gross to Ms Mugkenkar on 10 and 17 April 2002 in which
De Sousa
said that in negotiations with Morrison and Prins it had
been made clear that the ‘overall settlement’ would be
inclusive
of all matters involving HBFI, civil and criminal. It is
apparent, particularly from the second of these letters, that MCM
through
the State Attorney did not share this view. Ultimately,
though, the negotiated solution was that HBFI would make the costs
contribution
of R750 000. (Presumably this was to be accompanied
by the withdrawal by HBFI of any civil applications which had not
already
been dismissed. Kleinschmidt says that the pending civil
applications were indeed withdrawn after acceptance of the plea
bargain.)
[39]
Kleinschmidt likewise
denies having known of the Ngcuka letter before the present
proceedings were launched. If he had been consulted
about it in
advance, he would have sought advice within the DEAT and from the
State Attorney. He doubts that anyone within the
DEAT would have
approved anything beyond the plea bargain. Even the terms of the plea
bargain were accepted by him with reluctance
because he believed that
HBFI and its controllers had personally benefited in far greater
amounts than the agreed forfeitures and
had caused immense damage to
South Africa’s marine resources.
[40]
Diemont did not
participate in any of the negotiations. His involvement in the HBFI
matter started in July 2004. He was aware of
the South African plea
bargain but only learnt of the existence of the Ngcuka letter when
the present proceedings were instituted.
[41]
In his replying
affidavit Bengis claims that agreement was reached on a first draft
of the Ngcuka letter on or about 24 April 2002.
He says that he
required the draft to be supplemented by the inclusion of a paragraph
to the effect that the United States would
be informed of the
finalisation of the investigation (this became para 6 of the Ngcuka
letter). Since Bengis was not personally
involved in the
negotiations, I cannot treat this as admissible evidence of the
negotiations. I accept, though, that Bengis asked
his counsel to
include in his draft a provision along the lines of para 6.
[42]
Bengis alleges in his
replying affidavit that he, David and Gold arrived in Cape Town on
the morning of 29 April 2002 with a view
to Bengis’ appearing
in the criminal case as HBFI’s representative. This was under
immunity from personal arrest. He
says that on that day the three of
them, Van Schalkwyk and Bezuidenhout met at the DSO’s offices
in the Reserve Bank Building
with Morrison, Prins and Kotze. Bengis
says that a signed version of the Ngcuka letter dated 29 April 2002
was presented to Bezuidenhout.
The latter added by hand the following
words in para 5: ‘… and the NDPP has exercised his
discretion ito
Sec 41(6) of the National Prosecution
Act’. Bengis says that this was an amendment of a formal
nature. He attaches a copy
of the letter with Bezuidenhout’s
handwritten insertion. He alleges that by the end of this meeting he
was satisfied that
a composite agreement had been reached involving
all the entities referred to in the Ngcuka letter and that it was on
this basis
that he and Van Schalkwyk signed the plea agreement.
Morrison and Bezuidenhout then left to see the magistrate.
[43]
This is the one meeting
(if it happened) about which Bengis can testify from personal
knowledge. However Morrison, Kotze and Prins
all deny that there was
any such meeting. Morrison says Bengis’ version is a
fabrication. To the best of his recollection
he was not on that day
at Prins’ office or in the Reserve Bank Building at all.
Morrison’s office at that time was
in Plein Street. His version
is that on 29 April 2002 he was putting the final touches to the plea
agreement. He spoke with Bezuidenhout
on the phone and told him he
wanted to give a copy to the magistrate in advance of the next day’s
hearing. This is how it
came about that they drove to Wynberg.
[44]
Kotze, who drove
Bezuidenhout and Morrison to the magistrate on 29 April 2002, says
that before the court appearance on 30 April
2002 he had not set eyes
on Bengis and that he has never in his life met Gold. He records that
Morrison and Bezuidenhout arrived
at his office in Adderley Street
wanting him to take them to court.
[45]
Prins also denies
knowledge of any such meeting. He discloses a subsequent medical
event which has affected aspects of his memory
but considers that he
is still able to recall people he has met. He has no recollection of
ever having met Gold, Van Schalkwyk,
Bengis or David. Bengis claimed
that Prins was at the meeting of March 2002, which if true would mean
that Prins had at least met
Gold. Morrison, however, does not mention
Prins as one of the attendees. Prins himself says that subsequent to
the meeting with
Bezuidenhout in November 2001 he attended one
further meeting in Pretoria where Bezuidenhout was present. That may
have been the
meeting of 6 March 2002, in which case Prins would have
met Gold there.
[4]
The emergence of Prins’ fax of 30 April 2002 might be a further
consideration casting doubt on the reliability of his version.
[46]
However, the fact that
Prins’ version may not be accurate in all respects does not
mean that his denial of the meeting of
29 April 2002 can be rejected
on the papers as false. His denial does not stand alone. There is the
evidence of Morrison and Kotze.
Bengis does not claim that he and his
legal team met with Prins alone nor would that have been a plausible
scenario (unless there
was something underhand about the meeting) in
view of the fact that Morrison was the prosecutor and the one
finalising the plea
agreement from the State’s side. It may
also be mentioned that Bengis’ allegation of a meeting of 29
April 2002 is
not supported by affidavit from Bezuidenhout or Gold.
[47]
In regard, more
generally, to the absence of an affidavit from Bezuidenhout
confirming Bengis’ allegations, it was suggested
in argument
that there are ethical obstacles in the way of an advocate’s
furnishing an affidavit. However, an advocate may
make an affidavit
with the permission of his bar council, a permission which is hardly
likely to have been refused, given that
Bezuidenhout was not acting
as counsel in the current litigation and that his South African
attorney (De Sousa) was absent from
most of the oral discussions
(including the alleged meeting of 29 April 2002).
[48]
On the papers,
therefore, I must find that there was no such meeting as alleged by
Bengis on 29 April 2002. With that finding goes
one of the main
grounds on which I was asked to reject as untenable the evidence of
Morrison and Kotze to the effect that they
had no knowledge of the
Ngcuka letter until well after 30 April 2002.
[49]
This does not entail a
rejection of the existence of an earlier version of the Ngcuka letter
dated 29 April 2002 on which Bezuidenhout
made the handwritten
annotation. But it does entail a rejection of the version that
Morrison, Kotze and Prins were present at a
meeting where that
version of the letter was discussed.
[50]
There is a further
circumstance tending to support Morrison’s evidence that he had
no knowledge of the Ngcuka letter as at
30 April 2002. No reference
to it was made in the proceedings before the magistrate on 30 April
2002 (a transcript of which forms
part of the papers). Morrison says
that he was aware of the duty to inform the court of all
circumstances relevant to a consideration
of the plea agreement, that
the Ngcuka letter would have been a relevant circumstance, and that
had he been aware of the letter
he would have disclosed it to the
magistrate. I have no doubt that a duty of disclosure would have
applied to the Ngcuka letter.
Section 105A(2)(b) requires a plea
agreement to state fully the terms of the agreement, the substantial
facts of the matter and
all other facts relevant to the sentence
agreement. On the applicants’ version, the Ngcuka letter was an
undertaking inter
alia in favour of HBFI and Van Schalkwyk and thus
part of the agreement between the State and those two accused. The
undertakings
purportedly given in favour of other suspects, including
the applicants, that no one else would be prosecuted, was also
something
the magistrate was entitled to know. Morrison would have
had no reason to conceal the letter from the magistrate.
[51]
This leaves, as
something of a mystery, the circumstances in which Ngcuka came to
issue the letter. Morrison says in his supplementary
affidavit that
in hindsight he believes it was deliberately concealed from him.
Ngcuka has refused to consult with or provide an
affidavit to the
respondents. There is no evidence from Bezuidenhout on the matter.
Whether the applicants have approached Ngcuka
for evidence does not
appear.
[52]
As a fact the Ngcuka
letter was issued. On the assumption that it contains valid
undertakings, it supplements the terms of the plea
bargain. There is
in my view no satisfactory and admissible evidence of terms or
assurances going beyond the plea bargain and the
Ngcuka letter. In
truth, the composite settlement agreement alleged in the founding
affidavit in the first application
[5]
does not appear to entail much more, if anything, than is recorded in
these two documents.
[53]
The applicants assert
that it was a term of the composite settlement that all civil and
criminal proceedings as between the applicants,
the State and MCM
arising from the South African investigation would be finally
concluded. I accept that this was the combined
effect of the plea
bargain and Ngcuka letter in relation to South African criminal
proceedings and in relation to the pending civil
litigation between
HBFI and MCM. However, and as I shall presently explain, the plea
bargain and Ngcuka letter cannot be construed
as prohibiting the
rendering of assistance by the South African prosecuting authorities
to American prosecutors or as precluding
South Africa from
participating in and benefiting from the restitution phase of
American criminal proceedings. On the papers no
agreement to this
effect
dehors
the
plea bargain and Ngcuka letter can be found to have existed.
[54]
The same applies to
Bengis’ repeated assertion that the applicants believed that
the plea and sentence agreement would bring
an end to any further
endeavours by the law enforcement agencies in South Africa to
investigate or prosecute the applicants. To
the extent that this is
intended to convey that there was an agreement (
dehors
the plea bargain and Ngcuka letter) that the South African
authorities would not assist in the American prosecution or
participate
in restitution proceedings, such a finding cannot be made
on the papers.
Disclosure
of assistance to the United States
[55]
Morrison says that on
more than one occasion he made it clear to Bezuidenhout that the
South African authorities had already assisted
the United States in
its investigations and would continue to do so even if a plea bargain
was reached in South Africa. Kotze alleges
that he told Bengis’
South African legal team that there was an independent investigation
underway in the United States which
entailed potential prosecutions
in terms of the Lacey Act (more of this below) and that evidence
gathered by Kotze would be made
available to the United States
authorities. Morrison says, and Kotze confirms, that in the car on
the way to the magistrate on
29 April 2002 Morrison told Bezuidenhout
that South African assistance to the US prosecutors would continue.
Bezuidenhout did not
respond that this was against the spirit or
terms of anything understood or agreed.
[56]
I cannot reject this
evidence as untenable on the papers. If Bengis had a contrary
perception, it was not engendered by those representing
the State in
the plea bargain discussions.
The United
States investigation
[57]
HBFI, as already
mentioned, exported illegally harvested fish from South Africa to the
United States. This was in violation of the
Lacey Act contained in 16
USC §3372.
[6]
That Act makes it a federal crime to import into the United States
wildlife or fish harvested in violation of foreign law. The
charges
which the United States authorities investigated included multiple
violations of the Lacey Act by HBFI and its senior management.
There
was also an investigation into the separate offence of conspiracy to
violate the Lacey Act, the crime of conspiracy being
in violation of
18 USC §371.
[58]
There had been
cooperation between South African and United States authorities prior
to the plea bargain in South Africa. Following
the plea bargain the
US Department of Justice on 11 June 2002 directed to the
Director-General of the DOJ
[7]
a formal request for assistance pursuant to the MLAT. The South
African authorities were asked to furnish a range of specified

documentation and computer records to the United States authorities,
including all information, materials and the hard drive seized
during
the search of HBFI’s premises as well as the South African plea
bargain. The United States also requested the presence
in that
country of Kotze and another Scorpions investigator, one Lazarus, to
assist the American investigators in their examination
and analysis
of documents. The United States would meet the travel costs.
[59]
On 20 June 2002 Prins
notified the United States authorities that the request had been
approved. In July 2002 Adv Sonn (Head of
the DSO) directed a request
to Ngcuka (still NDPP), Ms Sparg (the DOJ’s Chief Financial
Officer) and the then Minister of
Justice Dr PM Maduna for the
approval of subsistence expenditure which Kotze and Lazarus would
require while in the United States.
All three recipients noted their
approval. (One must infer that Ngcuka did not regard the assistance
to be furnished by Kotze and
Lazarus as inconsistent with his letter
of 30 April 2002.)
[60]
In July 2002 the DSO
dispatched documents to the United States. Kotze and Lazarus went
there to provide the requested assistance.
[61]
On 11 April 2003 the
United States made a second MLAT request for Kotze and Lazarus to
travel once again to the United States. The
respondents’
attorney says that due to the lapse of time it has been difficult to
locate documents. The copy of the letter
containing the second
request as attached to the attorney’s affidavit is
incomplete
[8]
but its ambit appears from an internal memorandum dated 17 April 2003
addressed by McCarthy (who had succeeded Sonn as Head of
the DSO) to
Sparg, Ngcuka and Minister Maduna. The request was for Kotze and
Lazarus (i) to assist United States investigators
in debriefing
a person who might be a witness in the prosecution of Bengis, Noll,
Berman and other US entities; (ii) to testify
in grand jury
proceedings to enable the US Attorney to indict these persons. The
MLAT request was described as a continuation of
the previous request.
It can be inferred from the internal memorandum that the
Director-General of the DOJ had formally approved
the MLAT request.
As before, the purpose of the internal memorandum was to obtain
approval for subsistence costs supplementary
to those which would be
covered by the United States. The request was approved by Sparg,
Ngcuka and Dr Maduna. (Once again, one
can infer that Ngcuka did not
regard this as contrary to his letter of 30 April 2002.)
[62]
Kotze and presumably
Lazarus then went again to the United States. The grand jury returned
an indictment on 3 August 2003. On 6
August 2003 Bengis, Noll and
David were arrested in the United States.
The United
States plea bargains and convictions
[63]
Each of the applicants
signed plea bargain agreements in the form of letters addressed to
their respective American attorneys by
the lead prosecutor Mr Marcus
Asner (‘Asner’). Bengis and Noll signed theirs on 2 March
2004 and David signed his on
2 April 2004. They appeared on those
respective dates in the Southern District Court of New York (‘the
District Court’)
where they were convicted in accordance with
the plea bargains.
[64]
The convictions were
one count of conspiracy to violate the Lacey Act and three further
counts of violations of that Act. In the
case of Bengis and Noll, the
period of their admitted involvement in the conspiracy was 1987 to
August 2001. In David’s case,
his admitted involvement was from
1999 to August 2001. (This indicates that HBFI was engaged in the
illegal harvesting of fish
in South Africa over a far longer period
than was admitted in the South African plea bargain.)
[65]
The United States plea
bargains stipulated sentencing ranges (in the case of Bengis, for
example, imprisonment of 46-57 months and
fines of $10 000-$100 000).
The imposition of fines in addition to imprisonment was, on my
understanding, in the discretion
of the court. In terms of the plea
bargains the applicants were permitted to argue, by way of departure
motion, that sentences
below the low-end should be imposed but on the
sole basis that the circumstances of the case took it ‘outside
of the heartland
of the Lacey Act because matters at issue in this
case previously were investigated and prosecuted by the Republic of
South Africa’.
It was recorded that the United States would
oppose any such departure. The applicants agreed that forfeiture
would be ordered
in an amount to be determined which would be not
less than $5 million. They also acknowledged that the court was
obliged to order
restitution in accordance with 18 USC §§3363,
3363A and 3664 which would be paid according to a plan established by
the
court.
[66]
During the plea bargain
proceedings in court, the judge asked each applicant whether he
understood (i) that mandatory restitution
was required under the
statute; (ii) that the forfeiture to which they had agreed would not
be treated as satisfaction of any fine
or restitution. Each applicant
answered affirmatively.
The United
States sentencing and forfeiture proceedings
[67]
The sentencing and
forfeiture proceedings began in the District Court on 28 May 2004.
Among the documents filed in respect of that
hearing were (i) a
statement by Kleinschmidt dated 12 May 2004, described by Asner as a
victim statement; (ii) an affidavit
by Morrison dated 26 May
2004.
[68]
Kleinschmidt used his
official title in the victim statement. He says he prepared the
statement in his capacity as Deputy Director-General
of the MCM and
did not need any separate or special authorization. He did so
pursuant to a request, communicated to him via Morrison,
to prepare a
report on the effects of HBFI’s over-fishing in South Africa.
According to his recollection there had been an
MLAT request for this
assistance. If there was, documentary evidence of it has not been
adduced. The only MLAT requests in the
record are those of June 2002
and April 2003. This does not necessarily mean that there were not
others. The first application
was only issued in October 2013 and the
respondents’ attorney has explained the difficulty in locating
documents. On the
other hand, Asner says that some requests for
assistance ‘may have been made without following all the treaty
protocols,
because they were acceded to’.
[69]
Kleinschmidt prepared
his report with the assistance of a Dr JC Groeneveld, MCM’s
expert on South Coast Rock Lobster. Kleinschmidt’s
report was
in essence a summary of a paper published by Groeneveld in the
African Journal of
Marine Science
in
2003
[9]
in which the author assessed the implications of under-reporting of
catches of South Coast Rock Lobster with reference to a forensic

investigation into a fishing company styled ‘Company A’
(ie HBFI). With reference to data in Groeneveld’s paper
(which
he attached), Kleinschmidt said in his report that it was clear, in
retrospect, that all attempts by the authorities to
stabilise the
South Coast Rock Lobster resource over the period 1987 to 2001 by
reducing the total allowable catch had been negated
by continued
over-fishing by HBFI until 2001. Its exit from the fishing industry
in 2001 had resulted in an immediate stabilisation
of the resource.
[70]
The applicants filed a
departure motion on 21 May 2004. As foreshadowed in the plea
bargains, the motion was based on the fact that
the illegal
harvesting had happened in South Africa and that following a full and
vigorous investigation South Africa had prosecuted
and punished the
crimes which were the basis for the American charges. The South
African prosecution was said to have vindicated
South Africa’s
interests, so much so
‘…
that in
exchange for the guilty plea in that case, [Bengis, David and Noll],
targets of the South African investigation and subjects
of arrest
warrants, were promised immunity from future prosecution by South
Africa’s National Director Of Public Prosecutions.’
These extraordinary circumstances were said to take the
case well outside the heartland of Lacey Act prosecutions and to
provide
a compelling basis for a substantial downward departure. The
South African investigation, the South African plea bargain and the

Ngcuka letter were fully described. The circumstances of the case
were said to reveal that the purposes of sentencing had been
fully or
partially fulfilled (ie by way of the South African prosecution and
plea bargain) prior to the imposition of sentence
in the United
States. The fact that South Africa had decided not to include the
applicants in the formal charges was said to be
‘a meaningless
distinction and of no significance’, the point being that the
crime underlying the Lacey Act case ‘was
prosecuted vigourously
by the victim sovereign, and was prosecuted to its satisfaction’.
[71]
Morrison’s
affidavit was filed as part of the United States prosecutor’s
opposition to the departure motion. The affidavit’s
primary
purpose seems to have been to deal with the applicants’
contention that South Africa’s interests had been fully

vindicated by the South African plea bargain and the Ngcuka letter.
Morrison said that the Scorpions had considered prosecuting
Bengis,
Noll and David by seeking their extradition. For two reasons the
Scorpions decided not to pursue that course: (i) A
main
practical concern was the time and expense in ‘investigating,
hunting down and prosecuting’ the US-based defendants,

particularly Bengis who had substantial financial resources and was
known to frequent the United Kingdom and Israel. Practically
these
defendants ‘simply were beyond the reach of South African
authorities’. (ii) Another important factor was
that the
applicants’ crimes would probably not go unpunished in view of
the United States investigation of which the Scorpions
were aware.
For these reasons the Scorpions focused their resources on SA-based
entities, the targets including HBFI, Van Schalkwyk,
a number of
other fishermen and 14 fisheries inspectors. Consistent with the
Scorpions’ conclusion that the US-based defendants
deserved to
be prosecuted and punished, the Scorpions continued actively to
assist the US authorities.
[72]
Morrison pointed out
that HBFI had not been charged in South Africa with over-harvesting
prior to 1999 or with the sale or exportation
of over-harvested fish.
[73]
He referred to the
South African plea agreement and the Ngcuka letter (of which by then
he obviously was aware). Morrison said that
nothing in the Ngcuka
letter even remotely suggested that South Africa sought to bind, or
could bind, the United States. This had
been explained to the
applicants’ counsel (ie Bezuidenhout) on various occasions.
There had also been no indication or suggestion
that South Africa
would cease its active cooperation with the United States. He
confirmed that such active cooperation had continued.
[74]
In his opposing
memorandum Asner described the United States prosecution as the
‘culmination of a three-year, joint United
States/South Africa
investigation’. The United States and South Africa had a
‘settled on a double-barrel approach to
dismantling the Bengis
organisation’, the South African authorities focusing on the
SA-based entities and United States focusing
on the US-based
entities.
[75]
Asner advanced three
main contentions in opposition to the departure motion: (i) The
fact that matters in issue in the United
States were also
investigated and prosecuted in South Africa was not, as a matter of
law, an appropriate basis for a departure.
(ii) In any event,
and as a matter of fact, the applicants had not been prosecuted in
South Africa for the same conduct: the
prosecutions concerned
different crimes, different time-frames, different species of fish
and different defendants. (iii) Even
if an American court had
authority in law to depart from the sentencing range in the light of
the South African prosecution, the
court should decline to do so in
view of the seriousness of the crimes, their duration, the ‘sheer
greed involved’,
the need for punishment and general deterrence
and ‘the remarkable disdain for authority displayed by the
co-conspirators
both during the course of the criminal scheme and
during the investigation’.
[76]
Asner’s opposing
memorandum made reference not only to the statements of Kleinschmidt
and Morrison but also to Kotze’s
earlier affidavits and to
victim statements from two rival fishing companies.
[77]
After hearing the
applicants’ counsel, and without calling on Asner, Judge Kaplan
dismissed the departure motion. He was unpersuaded
that in law he had
a discretion to grant a departure on the basis of the South African
prosecution, expressing the view that the
South African decision to
grant immunity in exchange for HBFI’s plea bargain was not
legally relevant material in the United
States. He added that even if
such material were legally relevant he would not in his discretion
depart from the sentencing range.
[78]
Each of the applicants
was thereupon sentenced to a period of imprisonment: Bengis 46
months, Noll 30 months and David 12 months.
Bengis and Noll were
ordered jointly and severally to pay $5,9 million as forfeiture.
David was ordered to forfeit the proceeds
of the sale of his United
States fish processing factory in the sum of $1,5 million.
[79]
It was agreed that the
question of restitution would stand over for later determination.
The
restitution phase
[80]
The ordering of
restitution is a function of the court convicting and sentencing a
defendant. Depending on the type of offence,
restitution is either
discretionary (18 USC §3663 – the Victim and Witness
Protection Act of 1982) or mandatory (18
USC §3663A – the
Mandatory Victims Restitution Act of 1996). The procedure for the
issuance and enforcement of restitution
orders is contained in 18 USC
§3664.
[81]
Whether the applicants
were subject to discretionary or mandatory restitution was
contentious. The mandatory restitution provisions
applied if the
applicants could be said to have been convicted of an ‘offense
against property’ under Title 18 USC
in which ‘an
identifiable victim’ had suffered ‘pecuniary loss’.
The conspiracy conviction was an offence
under Title 18 USC. The key
issues were thus whether the conspiracy to harvest fish illegally in
South Africa and import it into
the United States constituted an
offence ‘against property’ and whether there was an
‘identifiable victim’
which had suffered ‘pecuniary
loss’. For purposes of both mandatory and discretionary
restitution, ‘victim’
is defined as meaning ‘a
person directly and proximately harmed as a result of the commission
of the offence in question’.
[82]
Asner on behalf of the
United States contended that the illegally harvested fish had
belonged to the South African government or
that the South African
government under the Marine Act had had a sufficient interest in the
fish to qualify the conspiracy offence,
in American law, as one
‘against property’ and in respect of which the South
African government was an ‘identifiable
victim’ that had
suffered ‘pecuniary loss’. The applicants’ lawyers
contested these propositions.
[83]
Diemont became involved
at this stage. He was asked to furnish a legal opinion as to whether
the South African government was entitled
to claim ownership of the
illegally harvested fish. He recalled the approach as having come
from Morrison who said an opinion was
sought pursuant to a request
for mutual legal assistance. Once again, there is no documentary
evidence of a formal MLAT request
at this stage.
[84]
Diemont furnished the
opinion in his capacity as an MCM official. He says he did so in the
ordinary course of his functions as an
employed legal adviser within
MCM.
[85]
Diemont’s first
opinion was dated 26 July 2004. He submitted that the DEAT/MCM was
entitled to claim ownership of the illegally
harvested fish on behalf
of the South African government. The opinion canvassed the common law
in regard to
occupatio
,
the status of wild animals as
res
nullius
and the
regulatory regime imposed by the Marine Act. Although the germ of the
reasoning ultimately adopted by the American court
is discernible in
this opinion, it was not stated with particular clarity.
[86]
Diemont and
Kleinschmidt liaised with a Cape Town-based consultancy firm, Ocean
and Land Resources Assessment Consultants (‘OLRAC’),

which was to prepare a report on the quantification of the South
African government’s pecuniary loss.
[87]
During September and
October 2004 the applicants’ American lawyers submitted legal
opinions and expert reports on the restitution
issue. These included
legal opinions by South African counsel (Mr Marcus SC and Mr
Chaskalson), in which they commented on Diemont’s
opinion, and
reports by Prof Baird of South Africa and Dr Bjorndal of the United
Kingdom. The reports of Prof Baird and Dr Bjorndal
apparently
criticised OLRAC’s methodology but did not offer an alternative
theory of how damages should be calculated.
[10]
(None of these and the later opinions and reports filed on behalf of
the applicants has been attached in the present proceedings.)
[88]
Diemont arranged for
the reports of Prof Baird and Dr Bjorndal to be furnished to OLRAC
which gave a further report.
[89]
OLRAC propose two
alternative quantification methods: (i) what it would cost South
Africa to restore the rock lobster fishery
to the level at which it
would have been but for the defendants’ over-harvesting;
(ii) the market value of the over-harvested
fish.
[90]
In December 2004 the
United States submitted its recommendation on restitution, proposing
that the court adopt method 1 which, after
deducting the fines and
forfeitures already paid in South Africa, came to $39,7 million.
In the alternative the court was
asked to adopt method 1 which
yielded $54,9 million. In addition to the OLRAC reports and
Diemont opinion, the United States
had also obtained opinions from
Ads Goldblatt and Steyn and a report by Prof Glaszewski, all from
South Africa, regarding the ownership
of illegally harvested fish.
[91]
On 21 January 2005
Judge Kaplan requested clarification on what fish had actually been
forfeited to the South African government.
In a supplementary opinion
dated 11 April 2005 (and corrected on 18 April 2005) Diemont
explained that the only fish of which the
South Africa government had
actually obtained ownership pursuant to forfeiture was the fish in
one specified container. Although
none of the other fish illegally
caught by HBFI over the years had been forfeited, this was because it
had been illegally exported
in secretive operations before the South
African government could exercise its rights of seizure and
forfeiture in terms of ss 51(3)(c)(ii)
and 68(1) of the Marine
Act. Had South Africa been able to seize the fish before it was
exported, HBFI would have had no defence
to conviction and resultant
forfeiture.
[92]
The applicants
thereupon filed a further opinion and memorandum by Messrs Marcus SC
and Chaskalson.
[93]
Diemont subsequently
provided a note dated 18 May 2005 setting out ‘general
principles of forfeiture’ in South African
law. This note made
reference to provisions of the Criminal Procedure Act, the Marine Act
and POCA. Diemont noted that the Sea
Fisheries Act 12 of 1988, which
was repealed by the Marine Act,
[11]
had contained similar provisions to the Marine Act.
[94]
Judge Kaplan encouraged
the parties to reach settlement on restitution. In the latter part of
2005 and in 2006 there were negotiations
to this end. Diemont
travelled to the United States and attended a meeting in New York
with Asner and one of the applicants’
American lawyers. Several
draft settlement agreements were prepared. It appears from one such
draft that any settlement would need
to be signed by Asner, the
applicants, their attorneys and by Diemont on behalf of the DEAT/MCM.
The United States and Diemont,
so it seems, were willing to accept a
settlement in terms whereof Bengis would pay $1 million in cash
and an ‘in-kind’
payment consisting of ‘certain
truthful information and cooperation’ to be provided by Bengis.
If the District Court
determined that Bengis had failed to meet these
obligations, he would pay, as restitution to South Africa,
$10 million (less
any part of the $1 million cash already
paid). The information and cooperation related to documents,
information and evidence
in a South African criminal investigation
against another large fishing company and a named individual.
[95]
Bengis in the event
declined to settle on these terms and the restitution phase
proceeded. As permitted by §3664, Judge Kaplan
referred the
question of restitution to a ‘magistrate judge’ for
investigation and recommendation. The magistrate judge
issued a first
report recommending a finding that mandatory restitution under §3663A
was not payable because the illegally
harvested fish was not
‘property’ owned by anyone. The magistrate judge
subsequently issued a second report recommending
that no
discretionary restitution be ordered under §3663 because there
was no ‘victim’ as defined.
[96]
On 13 August 2007 the
United States made a further MLAT request to South Africa. It has not
been attached to the papers and its
scope is unclear though it
apparently did not relate to the restitution proceedings.
[12]
[97]
On 12 September 2007
Judge Kaplan accepted the magistrate judge’s recommendations
and declined to make a restitution order.
[13]
[98]
The United States
appealed this decision. Asner’s opening brief, the defendants’
opposing brief and Asner’s replying
brief were filed over the
period May-October 2008. The matter was heard by the United States
Court of Appeals for the Second Circuit
in December 2008. Diemont,
who had by this stage resigned from the DEAT, travelled to America to
assist Asner in the appeal hearing.
During the appeal hearing the
court asked Asner what the South African government’s view was
on the restitution proceedings.
Asner replied that South Africa had
supported restitution, that Diemont had come to America to assist,
that the South African government
had been extremely helpful and ‘had
been behind this 100%’ because it was an ‘important issue
for environmental
law worldwide and also for the cooperation between
governments in an effort to police these types of cases’.
[99]
Diemont had by this
stage left the DEAT and was in private practice. In advance of the
appeal hearing he wrote to the Minister of
EAT motivating his
proposed attendance at the appeal hearing and requesting that the
DEAT bear the costs. Diemont’s request
was recommended by the
Director-General and approved by the Minister on 21 November 2008.
[100]
In his letter of
motivation Diemont said that he had prepared a restitution claim
against the applicants on behalf the South African
government. It was
extremely rare for criminal cases to be appealed, indicating the
importance of the case to the United States.
If the appeal succeeded,
the restitution would be paid to the Marine Living Resources Fund.
Since leaving the DEAT he had spent
considerable time and effort in
advising the United States Attorney’s Office on the appeal
(reviewing the appeal and writing
opinions on South African legal
aspects). The case was of considerable importance from both a South
African and an international
perspective.
[101]
On 4 January 2011 the
Second Circuit upheld the appeal, holding that mandatory restitution
in terms of §3664 was applicable.
The Second Circuit remitted
the matter to the District Court to quantify the restitution. The
Second Circuit’s reasoning
was in essence this:
(i) Under the Marine Act illegally harvested fish
does not become the property of the possessor but is subject to
seizure and
forfeiture by the South African government. The right to
seize fish is a property right vested in the South African
government.
Evading seizure deprives South Africa of the opportunity
to sell the illegally harvested fish at market prices and retain the
proceeds.
This goes beyond a merely regulatory interest in the
administration of fishing. The applicants’ participation in a
conspiracy
to harvest fish illegally in South Africa and export it to
the United States thus constituted an ‘offense against
property’
under Title 18 of the USC.
(ii) The South African government was a ‘victim’
of the said offence because the conspiracy had deprived South Africa

of its right to seize and sell the illegally harvested fish. (This
conclusion, if I may say, appears to follow almost axiomatically
from
the finding on the first point.)
[102]
On 14 June 2013 Judge
Kaplan determined the restitution in an amount of $22 446 720,
payable by the applicants jointly
and severally.
[14]
[103]
The applicants filed an
appeal against Judge Kaplan’s determination. This appeal was
pending at the time the first application
was issued on 14 October
2013 and was still pending when the second application was issued on
10 February 2014.
[104]
On 16 April 2015 the
Second Circuit dismissed the appeals of Bengis and Noll but remitted
David’s case to the District Court
to determine, in the light
of the fact that he only joined the conspiracy in 1999, whether he
should have known the scope and impact
of all the past activities of
the conspiracy so as to hold him jointly and severally for the full
amount. According to the respondents’
heads of argument, the
District Court made a final restitution order against David in
November 2015.
[15]
[105]
It is my understanding
from the papers and from what was said during argument that Bengis
and Noll have not yet paid the amount
of restitution owed by them
jointly and severally though various assets of theirs have been
frozen. David, I gather, has paid the
lesser amount of restitution
ordered against him.
Legality of
respondents’ conduct
The South
African plea bargain
[106]
A plea bargain in terms
of s 105A of the Criminal Procedure Act is by its nature an
agreement between the NPA and the accused
persons who are party to
the agreement. That such an agreement is binding on the NPA I do not
doubt. The applicants’ counsel
referred in that regard inter
alia to
Van Eeden v
Director Of Public Prosecutions, Cape of Good Hope
2005
(2) SACR 22 (C).
[16]
The ambit of the agreement is a matter of interpretation of the plea
bargain. In
Van
Eeden
it was said
that this might include terms derived from the doctrine of
quasi-mutual assent. It was common cause in that case that
there was
a plea bargain between the State and the applicant’s co-accused
in a drug case. The question was whether the plea
bargain included a
term that charges against the applicant would be withdrawn. The court
found that even if there was not actual
agreement to that effect such
a term should be found to exist on the basis of quasi-mutual assent
(para 18).
[107]
I was also referred to
S v EA
2014
(1) SACR 183
(NC). That case did not deal with a plea bargain. A
juvenile offender had been diverted from the criminal justice system.
The charges
against him were later reinstated and he was convicted.
The High Court set aside the conviction on the basis that the
decision
to reinstate the charges was susceptible to review because
it was in violation of a legitimate expectation, created by the
prosecution
in the accused’s mind, that he would not be
prosecuted if he completed the diversion program successfully.
[108]
If the NPA were seeking
to prosecute HBFI or Van Schalkwyk for further offences, questions
might arise as to the extent of any implied
undertakings of
non-prosecution or reasonable expectations created in that regard.
However, the NPA has not sought to prosecute
HBFI or Van Schalkwyk
for further offences. Van Schalkwyk is now deceased. HBFI has
probably ceased to exist. At any rate, they
are not parties to the
present proceedings and no relief in their favour has been claimed.
[109]
The plea bargain
records no agreement between the NPA and the applicants. The plea
bargain cannot be interpreted as meaning that
the NPA would not
prosecute the applicants in South Africa. Unlike the
Van
Eeden
case, there
is no factual foundation for finding that the applicants were parties
to the plea bargain, either by actual agreement
or quasi-mutual
assent. The applicant in
Van
Eeden
had been
charged as a co-accused. Pursuant to a plea bargain his co-accused
was convicted while charges against the applicant were
withdrawn. The
applicants in the present case, by contrast, had not been charged in
South Africa and the plea bargain did not involve
any withdrawal of
charges against them. But the question is academic because the NPA
has not sought to prosecute them. To the extent
that any of the
declaratory relief claimed by the applicants is in such general terms
as to extend to future South African prosecution,
it does not (as Mr
Marcus conceded) present a live issue calling for decision.
[110]
Even if the applicants
did by implication acquire rights from the plea bargain, there is no
justification for interpreting the plea
bargain as containing an
implied undertaking by the NPA that it would not assist the United
States in prosecuting the applicants
for offences under American law.
On the respondents’ evidence Morrison told Bezuidenhout on
several occasions that South
Africa would continue to provide
assistance to the American prosecutors. For the same reason it cannot
be said that the respondents
created in the applicants’ minds a
legitimate expectation that the NPA would not assist in the United
States prosecution.
[111]
The plea bargain
required HBFI to pay MCM R750 000 in respect of pending civil
litigation. This was not properly within the
ambit of a s 105A
agreement but the DEAT/MCM does not dispute that such an agreement
was reached. The fact that it was recorded,
perhaps inappropriately,
in the plea bargain is of no moment.
[112]
The agreement between
HBFI and MCM as recorded in the plea bargain does not, however,
extend beyond the settlement of the civil
litigation which was
pending in the Cape court as at April 2002. I note two points in this
regard:
(i) MCM’s agreement was with HBFI only. There
is no evidence that anyone else was a party to the civil litigation.
No
agreement was recorded in the plea bargain between MCM and any of
the applicants.
(ii) It
is impossible to imply, from the plea bargain, a waiver by MCM of any
financial restitution which might flow to it
or the South African
government under American law pursuant to the United States
prosecution of the applicants. The applicants,
on whom the onus
rests, do not in terms allege waiver. It is a burden not easily
discharged, particularly where it is said to have
been tacit.
Furthermore it must be clearly proved that the person who is said to
have waived his rights knew what those rights
were (
National
Union of Metalworkers of South Africa v
Intervalve
(Pty) Ltd & Others
2015
(2) BCLR 182
(CC) para 60; Christie
Law
of Contract in South Africa
6
th
Ed at 457-459). The applicants have not alleged that Kleinschmidt was
aware of the restitution provisions in American law as at
April 2002.
Indeed, the applicants do not say that they themselves were aware of
those provisions.
[113]
The plea bargain
incorporated the forfeiture of a vessel and a container of fish by
HBFI to the State in terms of s 68(1) of
the Marine Act. This
was properly a matter for the plea bargain because forfeiture is part
of the criminal jurisdiction of the
convicting court. In terms of
s 69 the disposal of forfeited assets is determined by the
Minister of EAT. The government,
through the DEAT, may be regarded in
a sense as the beneficiary of forfeiture. The DEAT/MCM was consulted,
inter alia about forfeiture,
in its capacity as de facto complainant.
This does not mean that the stipulated forfeiture represented an
agreement between HBFI
and DEAT/MCM. In any event, and as I have
observed, the applicants were not party to any such agreement and no
waiver by DEAT/MCM
in respect of the American restitution has been
established.
[114]
It follows that the
applicants cannot, on the strength of the South African plea bargain,
impugn the validity of anything the South
African government or the
NPA did in relation to the American proceedings.
The Ngcuka
letter
[115]
On the facts as I must
find them, the Ngcuka letter did not form part of any agreement
negotiated by Morrison and those involved
in the plea bargain. The
Ngcuka letter nevertheless embodies an undertaking given by the NDPP
to Bezuidenhout representing the
applicants and other identified
persons.
[116]
The respondents, in
their opposing papers and in argument, have contended that the State
is not bound by the Ngcuka letter. They
say Ngcuka did not have the
authority to issue it and that its terms are impermissibly wide and
open-ended. However Ngcuka’s
decision as embodied in the letter
stands until set aside on review (
MEC
For Health, Eastern Cape & Another v Kirland Investments (Pty)
Ltd t/a Eye &
Lazer
Institute
2014
(3) SA 481
(CC) paras 87-102).
[17]
As I understand the authorities, this is so even if the decision were
bad on its face. The respondents have known of the letter’s

existence for some years.
[117]
This does not, however,
take the applicants very far. Ngcuka as NDPP could not bind any
agency other than the NPA. His letter cannot
be interpreted as
purporting to bind the executive government. It merely embodies an
undertaking by the NPA that it will not prosecute
the defined
entities for offences related to the subject of the HBFI
investigation and that it will not pass on information to
any state
department unless so requested. In regard to the second of these
undertakings, the meaning of the qualifications in para
5 of the
letter is somewhat obscure but it is unnecessary to go into that
question because I am satisfied that the ‘state
departments’
contemplated in para 5 are South African state departments. I did not
understand the applicants’ counsel
to argue otherwise.
[118]
As in the case of the
plea bargain, the Ngcuka letter does not present any live issue
insofar as prosecution of the identified entities
in South Africa is
concerned. Nearly 14 years have passed and the NPA has not sought to
prosecute the applicants or the other entities
in South Africa. There
is also no complaint that the NPA has shared information with
departments of state in violation of the letter.
[119]
The Ngcuka letter did
not preclude the NPA/DSO from providing information to the United
States in respect of a prosecution in that
country. The Ngcuka letter
did not purport to waive any benefit which the South African
government might derive from restitution
ordered pursuant to an
American prosecution. No such waiver can be implied. Apart from the
fact that Ngcuka could not speak for
the South African government (a
relevant factor in considering what he could reasonably have been
understood to be undertaking),
there is no evidence that he was aware
of the restitution provisions of American law.
[120]
In oral argument Mr
Katz submitted that, although the NPA for purposes of our domestic
law is not part of the executive, it is different
in international
law. He cited Dugard
International
Law: A South African Perspective
4
th
Ed p 71 where the learned author observes that it is
‘undesirable for the State to speak with two voices’. In

similar vein, Mr Marcus referred me to the statement in
Reuters
supra that it was
untenable to have two State officials adopting conflicting
standpoints (528i-j). Neither of these authorities
provides a
foundation for an argument that the Ngcuka letter reflects the single
voice by which the State, including the executive
government, is
bound:
(i) Prof Dugard, in the passage referred to, is
dealing with the extent to which executive certificates are
conclusive on questions
of high state, for example the recognition of
foreign states and leaders, whether particular territory forms part
of the constituent
state, whether a person is entitled to diplomatic
status and so forth. As a matter of policy, it is regarded as
undesirable for
the executive and judiciary to speak with different
voices on such matters, hence judicial deference to the executive.
Prof Dugard
briefly considers whether and to what extent executive
certificates should still be conclusive in our new constitutional
order.
None of this has any application to the Ngcuka letter.
(ii) The statement in
Reuters
was made with
reference to conflicting standpoints by two senior prosecutors, each
with ostensible authority to speak on the subject.
Ngcuka was not an
official in executive government, did not have ostensible authority
to speak for it and did not purport to do
so. Ngcuka only purported
to speak on behalf of the NPA. Although I must find that Morrison and
Kotze were unaware of the Ngcuka
letter at the time the South African
plea bargain was finalised, they did not purport to repudiate the
Ngcuka letter in the American
proceedings.
The
applicants’ understanding of the South African deal
[121]
On the facts as I must
find them, Morrison made it clear to Bezuidenhout that, despite the
proposed South African plea bargain,
South Africa’s active
cooperation with the United States would continue. If Bezuidenhout
told his clients this, the applicants
could not have understood that,
with the conclusion of the plea bargain and the issuing of the Ngcuka
letter, such cooperation
would cease. If the applicants were under a
misapprehension because Bezuidenhout failed to tell them what
Morrison had said, that
cannot be laid at the respondents’ door
and the applicants’ misapprehension cannot affect the legality
of the respondents’
conduct. The applicants cannot be said to
have had any legitimate expectation that assistance to the United
States would cease.
[122]
If there was no
understanding or legitimate expectation that the respondents would
refrain from cooperating with the American prosecutors,
there is no
rational basis for distinguishing between degrees of cooperation. The
fact that the cooperation subsequently given
might have been more
extensive than the applicants anticipated cannot make the cooperation
unlawful.
[123]
Kotze said that he was
not aware of the mandatory restitution provisions of American law. If
he had known of the possibility of
restitution pursuant to
prosecution, he would have told Bengis and his lawyers, just as he
had disclosed the extent of his assistance
to the United States
investigators. Not to have done so would, he believes, have been
underhand.
[124]
Although the applicants
have placed some emphasis on this evidence, I do not think it assists
them. As a fact (so the respondents
allege), Kotze and Morrison did
not know of the restitution provisions of American law. There was
thus no non-disclosure or anything
‘underhand’ on their
part in relation to the conclusion of the South African plea bargain.
[125]
Bengis says that HBFI
would not have entered into the South African plea bargain had he and
his co-applicants been aware that South
Africa would subsequently
cooperate in, and benefit from, restitution proceedings in the United
States. The respondents deny this.
They say that the evidence for the
South African prosecution was strong. Bengis would still have
accepted the South African deal
and taken his chances in the United
States, where he believed (mistakenly in the event) that the
prosecutors had little interest
in pursuing him.
[126]
Even if Bengis’
attitude to the South African plea bargain would have been materially
influenced by the prospect of American
restitution proceedings, the
applicants were (at best for them) unaware of that prospect, as were
the respondents. One cannot say
that, if the prospect of American
restitution had been explained to the parties by an officious
bystander, there would have been
prompt unanimity that South Africa
naturally could not participate in and benefit from such restitution
proceedings. On the respondents’
evidence it seems unlikely
that the DSO or the DEAT/MCM would have agreed to such a term. It is
unnecessary to consider what effect
a shared over-looking of the
prospect of American restitution might have had on the South African
plea bargain if HBFI were seeking
to escape its terms and set aside
its South African conviction (in regard to unilateral and common
erroneous assumptions/mistakes
of motive, see
Van
Reenen Steel (Pty) Ltd v Smith NO & Another
2002
(4) SA 264
(SCA) paras 7-13
[18]
).
The important point is that the shared ignorance (if such it be) of
the prospect of American restitution, a mistake going to
motive, does
not create a deemed undertaking from the respondents in accordance
with what the applicants would have wanted if the
issue had been
raised prior to the conclusion of the plea bargain.
[127]
Mr Marcus referred me
to
R (on the
application of Quintavalle) v Secretary of State for Health
[2003]
2 All ER 113
(HL) as authority for the proposition that, although
statutory language retains the meaning it had when the lawmaker used
it, the
statute is nevertheless ‘always speaking’, so
that it might be construed as applying to matters which could not
have
been in the lawmaker’s mind at the time of enactment. In
Quintavalle
certain provisions of the Human Fertilisation and Embryology Act of
1990 were held to apply to the creation of live human embryos
by cell
nuclear replacement even though that procedure was not known to
science as at 1990. (In
Malcolm
v Premier, Western Cape Government
2014
(3) SA 177
(SCA) there was cautious acceptance of this principle
(para 11) and it played some part in the conclusion in that case that
the
meaning of the word ‘minor’ in
s 13(1)(a)
of the
Prescription Act 68 of 1969
had been altered by the change in the age
of majority brought about by
s 17
of the Children’s Act 38
of 2005.)
[128]
Mr Marcus sought to
deploy the
Quintavalle
principle in support of the proposition that the deal struck in South
Africa could be interpreted as precluding South Africa from

participating in the restitution proceedings in the United States and
from retaining any restitution paid to it, even though the
parties
may not have been aware as at April 2002 of the restitution
procedure. In my view the
Quintavalle
principle has
no relevance to the present case. On the assumption that the
principle applies also to the interpretation of
contracts and other
instruments, as may well be the case,
[19]
there is no language in the plea bargain or Ngcuka letter which can
be interpreted as covering American criminal proceedings and

restitution. We are concerned here with an existing state of affairs
(the American law on restitution) that was simply not dealt
with at
all in the plea bargain or Ngcuka letter, perhaps because the parties
were ignorant of it.
Quintavalle
says (though one does not need foreign authority for this
proposition) that one cannot fill gaps by guessing at what Parliament

would have done in particular circumstances; one can only interpret
the terms of the legislation itself (see the passage from
Royal
College of Nursing of the UK v Department of Health and Social
Security
[1980] UKHL 10
;
[1981] 1
All ER 545
quoted in
Quintavalle
at 119 and125). If
we were dealing in this case with legislation, the question would be
whether a particular term was a necessary
implication.
[20]
In the contractual setting, the test would be that applicable to
inferring tacit terms.
[21]
A tacit term in favour of the applicants fails on all levels.
[129]
The respondents’
conduct can thus not be impugned with reference to the applicants’
supposed understanding at the time
the plea bargain and the Ngcuka
letter came into existence.
Bona fides
in contract
[130]
The applicants
submitted that bona fides is a fundamental feature of our law of
contracts. The respondents’ conduct was said
to have breached
the duty of good faith owed pursuant to the composite settlement
agreement.
[131]
I have rejected the
existence of the supposed composite settlement agreement. The plea
bargain and Ngcuka letter may be viewed from
a contractual
perspective. Leaving aside, however, the obstacles I have already
identified in the way of the applicants’
asserting rights under
these arrangements, good faith is not an independent substantive rule
that courts can employ to intervene
in contractual relationships.
Abstract values such as good faith, reasonableness and fairness
‘perform creative, informative
and controlling functions
through established rules of the law of contract’ but ‘cannot
be acted upon by the courts
directly’ (
Brisley
v
Drotsky
2002 (4) SA 1
(SCA)
paras 21-25;
Afrox
Health Care Bpk v Strydom
2002 (6) SA 21
(SCA) paras 31-32;
SA
Forestry Co Ltd v York Timbers Ltd
[2004]
4 All SA 168
(SCA) paras 26-31;
Maphango
(Mgidlana)
&
Others v Aengus Lifestyle Properties (Pty) Ltd
[2011]
3 All SA 535
(SCA) paras 22-25). Good faith might, for example, be
relevant in determining whether as a matter of law a particular term
should
be recognised as an implied term of contracts generally or
contracts of a certain class (
SA
Forestry
para 28))
[132]
Mr Marcus referred me
to
Botha v Rich NO
2014 (4) SA 124
(CC) para 45 as the most recent and authoritative statement of the
law. I do not read the passage in question as saying something

different from the authorities just cited. Nkabinde J did not suggest
that good faith could be invoked as an independent substantive
rule
of contract. What she said was that the principles of reciprocity and
the exception
non
adimpleti contractus
give
expression to good faith, in that bilateral contracts – being
cooperative ventures involving performances by each to
benefit both –
cannot be a matter of each side pursuing self-interest without regard
to the other party’s interests
(see para 46).
[133]
We are not concerned in
this case with whether the law should recognise an implied term in
contracts of a certain class. In so far
as good faith may affect the
interpretation of ambiguous contractual provisions (
SA
Forestry
para 32),
I was not directed to any terms of the plea bargain or Ngcuka letter
whose interpretation might be influenced by the assumption
that
parties negotiated with one another in good faith.
[134]
I simply add that, even
if bona fides could be directly invoked by the applicants, I do not
think that the respondents violated
any such duty.
Bona fides
in exercise of public powers
[135]
I naturally accept, as
the applicants submitted, that public functionaries must exercise
their powers in accordance with the principle
of legality, in good
faith and for proper purposes (
President
of the Republic of South Africa & Others v South African Rugby
Football Union & Others
2000
(1) SA 1
(CC) para 148). Associated with these principles is the
proposition that a public power may not lawfully be exercised to
achieve
indirectly and piecemeal that which cannot lawfully be
attained directly (
Collins
v Minister of the Interior & Another
1957
(1) SA 552
(A) at 574D-577C per Schreiner JA; cf 570E-H per
Centlivres CJ).
[136]
In the present case,
however, I cannot see on what basis the conduct of any of the
respondents could be branded as mala fide (for
public law purposes)
except as supposedly being at odds with the South African plea
bargain and Ngcuka letter. I have found that
the respondents’
conduct was not inconsistent with those documents.
[137]
I also do not see how
it can be said that the respondents have attempted to achieve
indirectly what they could not achieve directly.
Either the South
African plea bargain and Ngcuka letter prohibited participation in
the American criminal proceedings and the restitution
phase or they
did not. The conviction of the applicants in the United States at the
instance of United States prosecutors for Lacey
Act contraventions,
and the resultant ordering of restitution by the American court,
cannot be said to have achieved, by piecemeal
action on the part of
the respondents, the applicants’ impermissible conviction and
punishment on matters in respect of which
they had been indemnified
against prosecution under the South African plea bargain and Ngcuka
letter. The South African plea bargain
and Ngcuka letter did not
purport to protect the applicants against these American outcomes.
Other
complaints regarding respondents’ conduct in the US proceedings
[138]
For all the reasons
stated above, I reject the central complaints in the first and second
applications that the assistance provided
by the South African
government and/or its officials to the United States prosecutors
violated any agreements, undertakings, assurances
or representations.
[139]
I must now consider
other grounds on which the respondents’ conduct in the United
States proceedings is said to have been
unlawful.
[140]
In the first
application the applicants allege (i) that Diemont and
Kleinschmidt were not authorized to participate in the
restitution
proceedings; (ii) or, if they were so authorized, that any
decision of Minister Van Schalkwyk so to authorise
them was unlawful.
The second of these complaints does not seem to be founded on
anything more than that the giving of authorization
would have
violated the composite settlement agreement. I thus need not give it
further consideration. The first complaint, by
contrast, is
freestanding: even if Diemont and Kleinschmidt could lawfully have
received authority to participate, they allegedly
did not in fact
receive it.
[141]
In the second
application the applicants seek declarations that the conduct of the
South African government and of Morrison, Kotze
and Diemont in
assisting the United States prosecutors was in bad faith, actuated by
improper motive  and contrary to the
standards of professional
ethics demanded by s 195 of the Constitution; and that such
conduct violated the applicants’
rights of dignity guaranteed
by s 10 of the Constitution and their right to have disputes
between the applicants and respondents
decided in a fair public
hearing in accordance with s 34 of the Constitution. I have
found it difficult to discern how any
of these complaints could have
traction if the applicants’ version of the composite settlement
were rejected and the respondents’
version of disclosures made
to Bezuidenhout accepted. In oral argument Mr Katz said that in the
second application the applicants
stood or fell on the contention
that the conduct of Morrison and Kotze in the United States
prosecution was contrary to standards
of prosecutorial conduct laid
down in the cases to which I shall presently refer.
[142]
I shall consider these
further complaints with reference to the three phases of the United
States criminal proceedings.
The US
conviction phase
[143]
I start with the
conviction phase which concluded with the American plea bargains of
March/April 2004.
[144]
In the second
application the applicants say that the respondents were not entitled
to assist in the American prosecution beyond
that which was ‘required
by law’. Since this contention is inextricably tied up with the
South African plea bargain,
the Ngcuka letter, and the undertakings
allegedly given or representations allegedly made when those
documents came into existence,
I cannot find that the respondents’
permissible assistance was confined to that which was ‘required
by law’.
[145]
The South African
official most involved in assisting United States prosecutors in the
conviction phase was Kotze. Some of this
assistance was furnished
prior to April 2002 and thus outside the scope of the applicants’
criticism. Kotze’s assistance
in this early phase started with
a telephonic conference in May/June 2001 and included affidavits made
in December 2001 and January
2002.
[146]
Subsequent to April
2002 Kotze’s assistance involved sending documents to the
United States and travelling on two occasions
to that country to
assist the United States prosecutors in understanding the documents.
This assistance was given pursuant to duly
approved MLAT requests of
June 2002 and April 2003. I understood the applicants’ counsel
to accept that assistance given
pursuant to an MLAT request was
assistance ‘required by law’ within the meaning of their
cause of action in the second
application.
[147]
It is not possible from
the record to know the full ambit of the evidence available to the
United States prosecutors during their
plea bargain discussions with
the applicants’ lawyers. The affidavits, documents and
explanations given by Kotze would have
been part of that material. I
am willing to assume that Kotze’s input was a sufficiently
material part of the prosecution’s
case to have influenced the
attitude of the applicants and their lawyers in the plea bargain
discussions. However, such assistance
was not contrary to agreements
reached in South Africa and was consistent with Morrison’s
disclosures to Bezuidenhout. Even
on the applicants’ case the
assistance met the ‘required by law’ qualification for
which they contend.
[148]
Bengis alleges in his
founding affidavit that the South African plea bargain would have
served as evidence to secure a conviction
in the United States and
that the applicants therefore ‘had no option’ but to
plead guilty. Even if that were true,
the MLAT request of June 2002
included the South African plea bargain. Kotze was entitled to make
it available to the United States
prosecutors. But Bengis’
assertion is in any event inaccurate. In the South African plea
bargain HBFI admitted illegal fishing
over the period 1999 to 2001.
Although there was an admission in general terms that HBFI ‘largely
exported’ its fish
products to the Far East, Europe and the
United States, there was no admission of the quantities of illegally
harvested fish exported
to the United States over the period 1999 to
2001 (this being an important element of the Lacey Act
contraventions). There were
no admissions whatsoever in regard to
illegal fishing over the period 1987 to 1998 (part of the period
covered by the alleged Lacey
Act conspiracy). And the South African
plea bargain did not implicate the applicants individually in any
conspiracy. Asner was
thus right when he said, in his affidavit in
the present proceedings, that the information in the South African
plea bargain would
have been insufficient to support the applicants’
convictions in the United States.
[149]
The applicants’
counsel referred me to a passage in
S
v Jija & Others
1991
(2) SA 52
(E) at 67J-68B, quoted with approval in
Reuters
Group Plc & Others v Viljoen NO & Others
2001
(2) SACR 519
(C) para 45, to the effect that a prosecutor ‘stands
in a special relation to the court’ and that his ‘paramount

duty is not to procure a conviction but to assist the court in
ascertaining the truth’. A similar view was expressed in
S
v Shaik & Others
[2007] ZACC 19
;
2008
(2) SA 208
(CC) para 67 where the court quoted with approval the
proposition that the role of a prosecutor ‘excludes any notion
of winning
or losing’ and that his function ‘is a matter
of public duty’ which must be ‘efficiently performed with

an ingrained sense of dignity, the seriousness and the justness of
judicial proceedings’.
[150]
The applicants’
counsel in the second application sought to deploy these general
propositions, as well as the fair-trial rights
in s 34 of the
Constitution and the values and principles of public administration
laid down in s 195 of the Constitution,
in support of an
argument that the DSO’s conduct, Morrison’s in
particular, in relation to the South African plea bargain
and the
parallel prosecution in the United States was unlawful and in
violation of the high constitutional standards of impartiality,
good
faith, honesty, accountability and transparency.
[151]
Morrison says in
general terms that the South African prosecution team worked closely
with the United States authorities, meeting
with them several times
in South Africa and in the United States and communicating by
telephone and email. Some of this occurred
before April 2002. There
is nothing to indicate that Morrison personally provided any material
assistance after April 2002.
[152]
More importantly, I can
discern no prosecutorial misconduct on Morrison’s part nor any
violation by him or Kotze of the constitutional
rights and values
invoked by the applicants. The applicants are aggrieved by what they
regard as overly enthusiastic support by
the DSO for the United
States prosecution. They also view as objectionable the
‘double-barrel’ approach which Asner
described in
relation to the South African and United States prosecutions.
However, the DSO was not precluded by law from assisting
its American
counterparts. The plea bargain and the Ngcuka letter did not prevent
assistance, and the fact that it would continue
to be provided was,
on the evidence as I must find it, disclosed to Bengis and his legal
team. The most material assistance –
that provided by Kotze –
was furnished pursuant to MLAT requests. Compliance with
prosecutorial standards of conduct did
not oblige Morrison and Kotze
to assist in a desultory fashion rather than thoroughly. It has not
been suggested that they provided
false or inaccurate information to
their American counterparts or goaded them into pursuing the
applicants.
[153]
The relief sought in
respect of the later phases of the American proceedings must thus be
assessed on the footing that the respondents
were not guilty of any
unlawful conduct in relation to the applicants’ conviction in
the United States.
Respondents’
conduct in sentencing/forfeiture phase of US proceedings
[154]
In regard to
sentencing, I remind myself that a sentencing range for imprisonment
and fines had already been agreed as part of the
American plea
bargain. The imprisonment imposed by the District Court was, for each
applicant, the lowest sentence within the agreed
sentencing range.
The District Court did not impose fines. It follows that nothing done
by any of the respondents caused the applicants
to suffer
imprisonment in excess of the lowest level to which the applicants
had already agreed in their plea bargains.
[155]
The applicants were
permitted by the plea bargains to argue that a sentence below the
low-end of the agreed range should be imposed
but only on the basis
that the South African investigation and prosecution took the case
outside the ‘heartland of the Lacey
Act’. Judge Kaplan
rejected the departure motion on the primary basis that the South
African prosecution was, as a matter
of American law, an irrelevant
consideration when assessing whether to depart from the applicable
sentencing range.
[156]
It follows, insofar as
incarceration is concerned, that the statements filed by Kleinschmidt
and Morrison did not influence the
outcome.
[157]
I shall nevertheless
briefly address the question whether they acted unlawfully by making
their statements. The applicants have
argued that Kleinschmidt and
Morrison (and later Diemont) lacked delegated authority to represent
South Africa in the American
proceedings.
[158]
In advancing this
contention, the applicants did not identify what power the officials
in question had purported to exercise and
in whom that power
primarily resided as a matter of law (ie who could have delegated the
power to the officials). I assume the
argument’s premise is
that the Minister of EAT had the primary authority to speak for the
South African government on matters
affecting fishing resources and
that the Minister of Justice or perhaps the NDPP had the primary
authority to speak for South Africa
in regard to the scope of the
South African prosecution.
[159]
This, in my view,
misconceives what Kleinschmidt and Morrison did. They did not purport
to represent the South African government
or the NPA/DSO in American
proceedings. They were witnesses. In South African law, and I have no
reason to think American law is
different, a witness speaks for
himself, even though he is an employee or agent and his evidence
concerns matters in which his
employer or principal may be
concerned.
[22]
It was appropriate for Kleinschmidt and Morrison to state their
official positions because that accounted for their knowledge of
the
matters in question. Asner, one may safely assume, wanted to place
evidence before the court of the harm caused to South Africa’s

fishing resources by the HBFI conspiracy and in response to the
central thrust of the applicants’ departure motion, namely
that
South Africa’s interests had been fully vindicated by the South
African prosecution. Whom better to seek this evidence
from than
Kleinschmidt and Morrison respectively? If they had been in America,
they could notionally have been subpoenaed to give
the evidence they
did. In Kleinschmidt’s case, I may add, all he really did was
to summarise and attach Dr Groeneveld’s
scientific paper which
seems to have been prepared independently of the American
proceedings.
[160]
In regard to
forfeiture, it appears from the transcript that the amounts ordered
($5,9 million jointly and severally by Bengis and
Noll and $1,5
million by David) were agreed after the plea bargains were concluded
but before sentencing.
[23]
There is nothing to indicate that anything done by Kleinschmidt or
Morrison during the sentencing phase affected the amount of

forfeiture.
Respondents’
conduct in restitution phase of US proceedings
[161]
I have already
concluded that the South African plea bargain and Ngcuka letter did
not preclude the South African government from
participating in and
benefiting from the restitution phase of the American proceedings and
that no undertakings were given beyond
the scope of those documents.
What I must now address is the self-standing contention advanced by
the applicants that Diemont and
Kleinschmidt lacked authority to
participate in or represent the South African government in the
restitution phase.
[162]
A person’s status
as a ‘victim’ for purposes of restitution is one of
objective fact: was the person directly
or proximately harmed as a
result of the commission of the offence? The victim may but is not
required to participate in the restitution
proceedings (§3664(g)).
If the victim does participate, he is not a claimant. If he does not
participate but the offence calls
for mandatory restitution (§3663A),
restitution must still be ordered.
[24]
The measure of restitution is fixed: in the case of loss of property,
the greater of the value of the property at date of loss
or date of
sentencing, minus the value of any part of the property returned
(§3663A(b)).
[163]
I was not addressed on
the question whether a victim may waive restitution. Section 3363A
read with §3364 does not say that
this is possible. My own brief
research indicates that restitution cannot be waived because it is a
criminal penalty having deterrent
and rehabilitative effects beyond
the goal of compensating the victim. The most pertinent statement to
this effect for present
purposes is in
United
States v Johnson
378F
3d 230 at 244-245, which was decided by the Second Circuit, the
appellate court with jurisdiction in the present case. The
court
(i) rejected an argument that restitution should not have been
ordered in respect of one of the victims because he had
waived the
right and (ii) rejected a further argument that restitution
should be refunded if the other victim declined to
accept it.
Restitution was obligatory in terms of §3663A
even
if the victim declined restitution. To hold otherwise would be
inconsistent with the statutory scheme and would undermine the
power
of the criminal justice system to punish defendants through orders of
restitution. It appears from the court’s decision
that a
refusal by a victim to receive restitution would probably constitute
an assignment to the Crime Victims Fund in the Treasury
in terms of
§3664(g)(2), an assignment which does not impair the obligation
of the defendant to pay the restitution.
[25]
[164]
I take this to be in
accordance with Asner’s statement in the present proceedings
that restitution was mandatory and that
the South African government
was not a claimant. At any rate, the applicants have not shown that
the legal position in America
was otherwise. It is true that there
were settlement discussions in which Diemont represented the MCM. The
proposed terms of settlement
suggest that de facto an American court
might accept agreed terms of restitution without insisting on an
investigation into the
actual loss suffered by the victim. To that
extent, the attitude of the victim might have de facto significance.
In the event,
though, there was no settlement and the American court
was not called upon to consider terms of settlement. What the
applicants
complain of is the respondents’ conduct in the legal
proceedings which led to the restitution order. That must be assessed

in accordance with the legal position as I have attempted to
summarise it.
[165]
This has important
implications for the applicants’ case. Prayer 4 in the notice
of motion in the first application seeks
a declaratory order that the
South African government is and was precluded from seeking
restitution via the United States in terms
of §3663 and/or
§3663A. Prayer 5 seeks a consequential order that any
restitution received by the South African government
be repaid to the
applicants. The premise is that the South African government was a
claimant in the restitution proceedings. That
is incorrect. To the
extent that Diemont may have loosely suggested otherwise in his
letter to the Minister of 19 November 2008,
he erred (and has
corrected himself by affidavit in the present proceedings).
[166]
It is so that Asner,
during the course of the restitution proceedings, made written and
oral statements suggestive of the South
African government’s
status as a claimant but these cannot determine the question whether
in law the South African government
was a party or claimant in the
restitution proceedings. Asner also made statements to the effect
that the South African government
supported the United States’
position on restitution. I have no doubt that Asner held that belief,
one that was probably
justified (see below). But that was not
ultimately the decisive question in the restitution proceedings.
[167]
Even if the applicants’
American offences triggered discretionary rather than mandatory
restitution, the South African government
would not have been a
claimant. The American court would not have been precluded from
ordering discretionary restitution even if
the South African
government’s attitude was that it did not seek it. I am willing
to assume, however, that an American court
might, in assessing
discretionary restitution, have taken the South African government’s
attitude into account. However,
the Second Circuit held that the
applicants’ offences triggered mandatory restitution.
Restitution thus had to be ordered
in accordance with the measure
prescribed by §3663A, regardless of the South African
government’s attitude. That is
what the District Court did on
remittal and its quantification was upheld by the Second Circuit.
[168]
The applicants complain
that Diemont’s opinions were decisive in moving the Second
Circuit court to find that the applicants’
offences fell within
the mandatory restitution provisions of §3663A. There are three
criticisms of Diemont: (i) If he
represented the South African
government, the latter was precluded by the South African settlement
from claiming restitution. (ii) If
he did not have authority to
represent the South African government (and this seems to be the
applicants’ primary factual
assertion), he acted unlawfully by
purporting to give opinions on behalf of the South African
government. (iii) His opinions,
to the effect that the South
African government owned or had a proprietary interest in the
illegally harvested fish, and was thus
entitled to restitution as a
victim, were wrong.
[169]
It is convenient to
start with the third point. The criticism of Diemont’s opinions
is twofold. (i) Firstly, the applicants
contend that in terms of
South African law the government does not own or have a proprietary
interest in illegally harvested fish,
save to the extent that it has
actually been seized and declared forfeit to the government in terms
of s 68(1) of the Marine
Act. The fish illegally harvested and
exported to the United States had not been seized or declared forfeit
to the South African
government. (ii) Second, even if the
provisions of the Marine Act gave the South African government a
proprietary interest
in illegally harvested fish, that proposition
did not apply in the particular circumstances of the present case.
That is for the
reason that the South African plea bargain and Ngcuka
letter precluded any further prosecution of HBFI and the applicants.
There
was thus no scope, even potentially, for forfeiture of the fish
which were the subject of the American convictions.
[170]
Both criticism are
misconceived. The question whether §3663A applied to the
applicants’ American offences was a question
of American law.
The content of South African law, in particular the provisions of the
Marine Act, were – from the perspective
of an American court –
questions of fact forming part of the material upon which the
American court would decide the §3663A
issues. Nobody suggests
or can suggest that the Marine Act did not contain the provisions for
seizure and forfeiture which Diemont
identified or that he misquoted
them or that he failed to disclose other relevant statutory
provisions. The applicants’ American
lawyers, with the
assistance of South African counsel, knew about the Marine Act. The
case seems to have been argued both in the
District Court and in the
Second Circuit on the common (and correct) understanding that the
Marine Act contained the provisions
in question.
[171]
Whether those
provisions led to the conclusion that the applicants’ American
crimes were offences ‘against property’
in respect of
which the South African government was a ‘victim’ were
questions strictly of American law. The legal
authorities debated by
the American lawyers in the District Court and Second Circuit were
for obvious reasons American cases. Diemont
had no expertise on
American law. To the extent that he ventured any view in that regard,
his opinion was irrelevant and could
not conceivably have been
influential.
[172]
Accordingly, on the
matters of South African law on which the Second Circuit relied (not
common law ownership but statutory rights
of seizure and forfeiture),
Diemont’s ‘opinions’ were right and
uncontroversial. Although an American lawyer,
Mr Creizman (David’s
lead counsel in the more recent restitution phase), has filed an
affidavit stating that Diemont’s
‘analysis’ was
decisive in the restitution appeal, that cannot be correct except in
the limited sense that the provisions
of the Marine Act
uncontroversially identified by Diemont were central to the much more
controversial questions of American law
which divided the District
Court and Second Circuit.
[173]
The other criticism of
Diemont’s opinions is that because of  the South African
plea bargain and the Ngcuka letter  seizure
and forfeiture in
terms of the Marine Act had ceased to be a possibility, given that
HBFI could not be further prosecuted in South
Africa. Whether that
criticism is sound is again a question of American law. The existence
of the South African plea bargain and
the Ngcuka letter was common
cause in the American courts but they appear to have been regarded by
the American lawyers on both
sides as irrelevant to mandatory
restitution. The applicants’ appeal brief is not part of our
record but it seems from Asner’s
replying appeal brief that the
applicants’ lawyers did not even argue that the foreclosure of
future forfeiture by the South
African plea bargain and Ngcuka letter
meant that there had been no offence ‘against property’
or that the South African
government was not a ‘victim’
of such offence.
[174]
Although not so
explained in the present papers, it seems likely that the relevant
question in American law was whether, at the
time of the Lacey Act
conspiracy and its implementation (1987 to August 2001), the South
African government had a proprietary interest
in the illegally
harvested fish and was a victim as and when the conspiracy was
implemented. In answering that question the events
of April 2002 were
irrelevant. When I invited Mr Marcus, who was not unacquainted with
the American proceedings, to say whether
this was a fair inference,
he was inclined to agree.
[175]
I now return to the
first and second points mentioned earlier, namely Diemont’s
authority to represent the South African government.
Once it is
recognised that the case was one for mandatory restitution, the
attitude of the South African government, even if Diemont
purported
to convey it, seems to have been legally irrelevant as a matter of
American law.
[176]
In any event, the
debate about Diemont’s authority is again misconceived.
Although he identified himself in his opinions
as an MCM
official, he was in truth an expert witness on matters of South
African law. It was also in that capacity that he later
travelled to
the United States to assist Asner in preparation for the appeal
hearing. My earlier observations regarding the capacity
in which
witnesses testify apply to Diemont, just as they apply to any
opinions by South African counsel furnished to the courts
on behalf
of the applicants. I do not think Diemont purported to assert a claim
to restitution on behalf of the South African government.
What he did
was to express an opinion that in law the DEAT/MCM was entitled to
claim ownership either in the strict sense or in
the broader
regulatory sense. Because he identified himself as an MCM official, a
reader might have inferred that the DEAT/MCM
as an executive agency
supported his view but that was not his assertion nor so it seems
would it have been a relevant assertion.
[177]
In quantifying the
restitution upon remittal, the District Court had regard to the OLRAC
reports. Kleinschmidt and Diemont played
some role in procuring
these. The reports themselves are not part of the record. There is
nothing to indicate that Kleinschmidt
and Diemont performed more than
a liaison function. OLRAC was providing expert evidence on quantum to
the United States prosecuting
team. There is no evidence that
Kleinschmidt or Diemont purported to present the OLRAC reports as
representing an official South
African government position. There is
also no evidence that the South African government paid OLRAC for
services rendered.
[178]
Although Kleinschmidt
and Diemont did not purport to represent the South African government
in any legally relevant sense, I do
not wish to leave the impression
that they were acting as loose cannons. Kleinschmidt says that,
although he and Diemont did not
require any specific authorization to
testify in the American proceedings by way of statements or opinions,
successive Ministers
of EAT (Ministers Moosa and Van Schalkwyk) were
very interested in the HBFI matter. He reported to them regularly.
They were both
fully aware of progress and supported the assistance
given to the United States prosecutors.
[179]
Apart from the fact
that this evidence cannot be rejected on the papers, it is borne out
by objective evidence. It is unlikely that
Diemont would have been
permitted to travel to the United States for settlement discussions
without ministerial approval. One knows
that in November 2008, by
which time he was in private practice, Diemont wrote a letter to
Minister van Schalkwyk motivating his
proposed attendance at the
appeal hearing at the DEAT’s expense. The letter starts, ‘You
will recall …’,
and proceeds to give a summary of the
restitution proceedings to date. The Minister approved the request.
In a letter dated 26
April 2013, in response to a complaint from
Abrahams & Gross dated 22 November 2012 concerning the conduct of
Kleinschmidt
and Diemont,
[26]
the Director-General of the DOJ said that the DAFF had informed the
DOJ that it supported and still supported the restitution proceedings

in favour of the South African government and that Diemont and
Kleinschmidt were duly mandated.
[27]
And, of course, all the respondents, including the current Minister
of EAT/DAFF, oppose the applications with no hint that Kotze,

Morrison, Kleinschmidt or Diemont were on frolics of their own.
[180]
Since Kleinschmidt and
Diemont regarded their contributions in the American proceedings as
having been made in the ordinary course
of their duties within the
MCM, there seems to have been no formal process of seeking authority
from the Minister. However, the
above evidence points strongly to a
conclusion that if authority was needed it was given. Particularly
given the delay in the institution
of proceedings, the respondents
cannot really be criticised for having failed to give more specific
evidence about the occasions
on which Kleinschmidt reported to
successive Ministers and received their support and about the precise
content of the communications.
It has not been argued that, if the
Minister’s authority was in law needed, the giving of authority
had to be attended by
any particular formalities.
[181]
The present case is
distinguishable from
Chairman,
Board on Tariffs and Trade & Others v Teltron (Pty) Ltd
1997
(2) SA 25
(A), to which Mr Marcus referred me on the question of
onus. In that case there was a bald but unsubstantiated allegation
that
a specific statutory power, vested in a board comprising 17
members, had been delegated to a committee. In the event the court’s

decision was not based on a factual finding that delegation had not
been proved (32B-C) but on a legal finding that the statutory
power
could not be delegated (35C).
[182]
During argument I
raised with Mr Marcus whether the evidence to which I have referred,
and the respondents’ conduct in opposing
the applications, did
not at least establish ratification (again assuming authority was
needed). His response was twofold: (i) The
onus was on the
respondents to allege and prove ratification. (ii) Ratification
is not possible in public law.
[183]
I accept the first of
these propositions. However, in the circumstances of the present
case, the rather general nature of Kleinschmidt’s
evidence is
understandable as I have already indicated.
[184]
As to the second
proposition, it is rather broadly stated. Mr Marcus referred me to
Mathipa v Vista
University & Others
2000
(1) SA 396
(T) at 401-402, a passage cited with approval by Langa CJ
in his dissenting judgment in
AAA
Investments (Pty) Ltd v Micro Finance Regulatory Council &
Another
[2006] ZACC 9
;
2007 (1) SA
343
(CC) para 91. The precise scope of the proposition that an
invalid administrative act cannot be ratified may require further
attention
from our higher courts. The cases cited by Mr Marcus
concerned specific statutory powers which had been purportedly
exercised not
by the designated body but by someone else. The true
principle to be derived from these cases and from the authorities
mentioned
in
Mathipa
may be that the question whether an unauthorized exercise of a power
may be ratified by the true repository of the power is a matter
of
statutory interpretation. This is the position, for example, where
private parties conclude a transaction in violation of a
statute (an
example being another case mentioned by Mr Marcus,
Neugarten
& Others v Standard Bank
of South Africa Ltd
1989 (1) SA 797
(A) – it is a matter of statutory
interpretation whether the prohibition renders the transaction void
ab initio in the sense
that it is to be regarded as never having been
concluded and thus incapable of ratification (808F-809E)).
[185]
These questions,
however, do not seem to me to call for decision in this case. I have
previously observed that the applicants did
not identify any
statutory power of the Minister which Kleinschmidt or Diemont
purported to exercise. It has been held that the
launching of legal
proceedings, even on behalf of a public body, is not an
administrative act but a procedural one. As with private
parties,
[28]
the unauthorized institution of proceedings in the name of a public
body may be ratified (
Smith
v Kwanonqubela Town Council
1999
(4) SA 947
(SCA) paras 9-10).
[29]
The proposition that the institution of legal proceedings by a public
body is not administrative action has been academically
questioned.
[30]
But apart from the fact that
Smith
is binding on me,
the administrative act/private act distinction may not ultimately be
the decisive point. Even if a public body’s
decision to
institute legal proceedings is an administrative act, it appears to
be an act of a kind where ratification is permissible.
[186]
If the Minister could
ratify the unauthorized institution of legal proceedings by one of
his officials in the name of the DEAT/MCM,
I do not see why he could
not also ratify the making of a restitution claim in the American
courts (which is how the applicants
erroneously typify what happened)
or the giving of evidence by his officials. Both of these seem to me
to be a fortiori cases.
[187]
I make one final
observation on this aspect. If the applicants and their American
lawyers thought that the South African government
needed to be a
party to the restitution proceedings, the appropriate time and place
to have challenged the authority of Kleinschmidt
and Diemont was in
the American courts during the restitution phase. The applicants and
their lawyers do not seem to have known
anything more on this issue
when the current applications were launched than during the American
restitution phase.
Conclusion
[188]
Since I have concluded
that the applications must be dismissed on their merits it is
unnecessary to address the respondents’
defence that the
applications should in any event be dismissed for unreasonable delay.
[189]
The applicants
submitted that, if the applications were dismissed, the parties
should be ordered to bear their own costs in accordance
with
Biowatch
Trust v Registrar Genetic Resources & Others
2009
(6) 232 (CC) paras 23-24. The approach laid down in that case is that
if a private person fails in constitutional litigation
against the
State the parties should ordinarily bear their own costs. The court
may depart from this approach if the application
is frivolous or
vexatious or in any other way manifestly inappropriate. A court
should not, however, lightly turn its back on the
general approach
where matters of genuine constitutional import arise.
[190]
The respondents argued
that the applications were indeed frivolous or vexatious or
manifestly inappropriate. They also argued that
the supposed
constitutional aspects were contrived. They submitted that the true
causes of action for the main relief sought (refunds
and damages)
were, though ill-pleaded, contractual or delictual or enrichment
claims.
[191]
I do not think I can
find that the applicants dragged in specious reference to the
Constitution in order to dress up a common law
case as a
constitutional matter (cf
Biowatch
para 25).
Compliance by the State with arrangements such as those reflected in
the plea bargain and Ngcuka letter has a distinctly
constitutional
dimension relating inter alia to the rule of law, fair-trial rights
and so forth. The same is true of issues such
as whether particular
functionaries were authorized to represent the State.
[192]
The American
prosecution had very significant adverse impacts on the applicants.
They have failed in the present case in part because
of their failure
to adduce direct (rather than hearsay) evidence of the alleged
broader settlement, in part because factual disputes
have to be
resolved in the respondents’ favour in accordance with the
Plascon-Evans
rule,
and in part because of my view on the legal issues which arise. I do
not think I can typify their conduct in bringing the
first
application, with its ultimate focus on the restitution orders, as
frivolous or vexatious or manifestly inappropriate.
[193]
The second application
stands on a different footing. Its focus was alleged unlawful conduct
by the respondents in relation to the
American prosecution as a
whole. The basis for reliance on ss 10 and 34 of the
Constitution was extremely vague. The consequential
relief sought was
damages, comprising expenses of $11 351 703 allegedly
incurred by them in defending themselves in the
American proceedings.
The claim for damages was asserted not only against the South African
government but also against Morrison,
Kotze and Diemont personally.
The applicants’ case that Kotze and Morrison provided unlawful
assistance in the American proceedings
in the conviction and
sentencing phases was decidedly weak. To the extent that there was
anything in that case, it could and should
have been dealt with in
the first application. The bringing of a second application involved
a large amount of duplication and
the inconvenience for the
respondents (and the court) of distinguishing between what was
repetitious and what was new. There was
also the inevitable need for
an application for consolidation.
[194]
Apart from the fact
that the cause of action in the second application was weak, the
consequential relief for damages (even if one
calls it constitutional
damages) was hopeless on the papers. Even where properly pleaded,
damages can very rarely be determined
in motion proceedings. Here the
damages were not properly pleaded. They were baldly alleged with
reference to a schedule. No particulars
or substantiating vouchers
were provided. Some of the expenses pre-dated April 2002. No attempt
was made to identify those expenses
which the applicants would in any
event have incurred in defending themselves in America as distinct
from those specifically caused
by the respondents’ allegedly
unlawful meddling. The applicants, who had separate representation in
the American proceedings,
did not identify which of them incurred any
particular expenses (their claims, if any, would be individual).
There was also no
attempt to explain why Morrison, Kotze and Diemont,
who made separate contributions in separate phases of the American
proceedings,
should be jointly and severally liable for the whole of
the damages. In argument Mr Katz for the applicants wisely declined
to
elaborate on the damages claim.
[195]
I thus consider that
the second application, if not vexatious or frivolous, was at least
‘manifestly inappropriate’.
The applicants should
therefore pay the respondents’ costs of the second application.
[196]
Since the respondents
filed consolidated opposing papers and since the hearing itself was
consolidated, the extent to which the
second application increased
the respondents’ costs cannot be determined with precision. By
my estimate about 30% of Morrison’s
and Diemont’s main
affidavits dealt with new allegations in the second application
(where they were personally sued for damages).
Given that Kotze was
not cited in the first application and filed an opposing affidavit as
a respondent in the second application,
the whole of his affidavit
would be attributable to the second application. There was also the
inconvenience, when drafting the
opposing papers, of identifying the
paragraphs in the second application which matched those in the first
application.
[197]
I did not keep an exact
note of how much court time was occupied with matters concerning the
second application. Mr Duminy subjected
the notices of motion in both
cases to analysis. The respondents’ counsel would have needed
to study the heads of argument
in the second application. The
applicants’ heads in the second application were slightly
longer than those in the first.
In oral argument, though, Mr Katz’s
submissions probably occupied not more than 10% of court time.
[198]
Taking all things into
account, I think my conclusion that the applicants should pay the
respondents’ costs in the second
application would be fairly
reflected if the applicants were ordered to pay 30% of the
respondents’ total costs in the consolidated
applications.
Since I was not addressed on how costs should be allocated if I
granted a costs order in only one of the applications,
I will make a
provisional order to this effect with leave to the parties to make
submissions for revision.
[199]
There were various
interlocutory proceedings in which costs were reserved. Mr Marcus
informed me that the parties were in agreement
that reserved costs
should follow the result. I think what was meant is that whatever
costs order I made in the main cases should
apply to the reserved
costs. Since I intend to make differing costs orders in the main
cases, the costs orders in the interlocutory
matters may vary. As far
as I can see, the costs reserved in relation to the application to
compel the production of a rule 53
record related to the first case.
The same is true of the application to compel the delivery of
answering papers. In respect of
all costs reserved in those two
interlocutory applications, the parties should thus bear their own
costs. In the consolidation
application the order was that cost
should be ‘costs in the cause’, ie in the main cases. I
thus consider that the
applicants must pay 30% of the respondents’
costs in the consolidation application. This allocation, as in the
main cases,
will be provisional.
[200]
The respondents
employed three counsel. This was a reasonable precaution in view of
the volume of the papers, the issues raised
and the magnitude of the
relief claimed. (The applicants employed four counsel across the two
applications.)
[201]
I make the following
order:
(a) Both applications are dismissed.
(b) The parties shall bear their own costs in Case
16884/13.
(c) The applicants must pay the respondents’
costs in Case 2199/14, including those attendant on the employment of
three
counsel.
(d) Effect is to be given to the orders in paras
(b) and (c) by requiring the applicants jointly and severally to pay
30% of
the respondents’ total costs in the consolidated cases,
including those attendant on the employment of three counsel.
(e) The applicants must jointly and severally pay
30% of the respondents’ costs in the interlocutory application
to consolidate
the two cases, including those attendant on the
employment of two and/or three counsel where more than one counsel
was employed.
(f) In respect of all other reserved costs in
interlocutory proceedings, the parties shall bear their own costs.
(g) The
30% allocation reflected in paras (d) and (e) is provisional. Within
two weeks’ of this order any of the parties
may file written
submissions requesting the court to revise the allocation. If no
written submissions are received, the allocation
will become final.
If written submissions are received, further directions if necessary
will be given regarding the final determination
of the allocation.
ROGERS
J
APPEARANCES
For
Applicants in Case 16884/13: Mr G Marcus SC and Mr D Watson
Instructed
by   Abrahams & Gross Inc
1st
Floor, 56 Shortmarket Street
Cape
Town
For
Applicants in Case 2199/14 Mr A Katz SC and Mr G Quixley
Instructed
by: Minde Schapiro & Smith Inc
Tyger
Valley Office Park II
Cnr
Old Oak & Willie van Schoor Roads
Bellville
For
Respondents in both cases Mr WRE Duminy SC, Ms L Dzai and Ms H Cronje
Instructed
by The State Attorney
4th
Floor, Liberty Life Centre
22
Long Street
Cape
Town
[1]
I use this expression to denote a plea and
sentence agreement as contemplated in
s 105A
of the
Criminal
Procedure Act 51 of 1977
.
[2]
Fakie NO v CCII Systems (Pty) Ltd
[2006] ZASCA 52
;
2006
(4) SA 326
(SCA) para 55;
National
Director Of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009
(2) SA 277
(SCA) para 26.
[3]
The MLAT is an agreement as contemplated in
s 27
of the International Cooperation in Criminal Matters Act 75 of 1996.
See also s 231 of the Constitution. It appears that
the MLAT
and a related Extradition Agreement entered into force on 25 June
2001 (this date of entry into force is reflected in
the copy of the
MLAT included in the applicants' bundle of authorities; see also
President of the Republic of South
Africa & Others v
Quagliani
& Related Cases
2009
(4) BCLR 345
(CC) para 16).
[4]
In fairness to Prins I should add that the only
person who says Prins was present at a meeting in March 2002
attended by Gold
is Bengis who was not himself there and thus does
not have personal knowledge of the matter. I should also mention
that there
is a conflict between Morrison and Bengis as to whether
the meeting took place on 6 or 8 March 2002. If there were two
meetings,
it is possible that Prins was only present at a meeting
with Bezuidenhout.
[5]
Para 37 record 21-22, summarised in para 30
above.
[6]
USC stands for United States Code which is an
official compilation of federal statutes. ‘16’ is a
Title in the USC.
§3372 is a section in that Title.
[7]
In his capacity as the ‘Central Authority'
for South Africa as contemplated in Article 2 of the MLAT.
[8]
Record 1504-1505 (one can see from the fax page
numbering that the second page of the letter of 11 April 2003 is
missing).
[9]
Record 128-132.
[10]
See Asner's subsequent appeal brief at 1022.
[11]
The Marine Act came into force on 1 September
1998.
[12]
See para 84.1 at record 1174 read with para 33 of
Manuel’s affidavit in the interlocutory record B/66.
[13]
The magistrate judge's reports and Judge Kaplan's
ruling are not in the record. Information about them appears from
the appeal
court's decision and Asner's appeal briefs.
[14]
The method of computation does not appear from
the record. However, in the publicly available judgment of the
Second Circuit in
a further appeal (handed down on 16 April 2015) it
is stated that Judge Kaplan had referred the computation to a
magistrate judge.
The latter recommended that restitution be ordered
in accordance with OLRAC's Method 2 in an amount of $54 883 550,
being the market value of the illegally harvested West Coast and
South Coast Rock Lobster after deducting the financial penalties

already paid by the applicants in South Africa. Judge Kaplan reduced
the restitution to $22 446 720, which related
to West
Coast Rock Lobster only, because in his view the United States had
not proved that the illegally harvested South Coast
Rock Lobster was
intended for export to the United States.
[15]
Particulars of this do not appear from the
record.
[16]
See also
North
Western Dense Concrete CC & Another v Director of Public
Prosecutions (Western Cape)
2000 (2)
SA 78
(C) at 92B-D;
S v
Armugga
& Others
2005
(2) SACR 259 (N).
[17]
See also
Merafong
City Local Municipality v AngloGold Ashanti Ltd
[2015]
ZASCA 85
paras 15-17;
Tasima (Pty) Ltd
v Department of
Transport
[2016]
1 All SA 465
(SCA) paras 26-27.
[18]
See also
Transnet
Ltd v Rubinstein
[2005] 3 All SA 425
(SCA) para 29;
Legator McKenna Inc &
Another v Shea & Others
20
10
(1) SA 35
(SCA) para 24.
[19]
Such an approach is to be discerned in a
contractual case to which Mr Marcus referred me,
Motorcraft
(Pty) Ltd v Sonaref (South
Africa)
(Pty) Ltd
1980 (3) SA 493
(D), a
judgment reported only in digest form. For the full bench appeal in
the same case, see 1981 (1) 889 (N).
[20]
In
Rennie NO v
Gordon & Another NNO
1988 (1) SA 1
(A) Corbett JA said, with reference to a plethora of earlier cases,
that our courts have consistently adopted the position that
words
cannot be read into a statute by implication ‘unless the
implication is a necessary one in the sense that without
it effect
cannot be given to the statute as it stands’ (at 22E-H).
[21]
See Christie
The Law
of Contract in South Africa
6
th
Ed at 175—179: Is the term necessary in the business sense to
give efficacy to the contract? Or can it confidently be said
that,
if an officious bystander had raised the circumstances which
subsequently arose, the parties would both have given a prompt
and
unanimous assertion of the term which was to apply?
[22]
See
Simmons NO v
Gilbert Hamer & Co Ltd
1963 (1) SA
897
(N) at 913A-D;
O’Shea NO v
Van Zyl NO & Others
2012 (1) SA 90
(SCA) para 19.
[23]
See record 969. There was no argument regarding
the amount of forfeiture.
[24]
There is, in the case of offences against
property, an exception to this rule where determining complex issues
of fact relating
to the cause or amount of the victim's losses would
complicate or prolong the sentencing process to a degree that the
need to
provide restitution to any victim is outweighed by the
burden on the sentencing process – §3663A(c)(3).
[25]
See also
US v
Savoie
985F 2d 612 (1993) para 25 [restitution is not a
civil affair; it is a criminal penalty meant to have deterrent and
rehabilitative
effects; private parties cannot simply agree to waive
the application of a criminal statute]
;
US v Parsons
141F 3d 386 (1998) [a
civil settlement with the victim and a general release granted by
the latter does not preclude or cap discretionary
restitution as
part of criminal sentencing in a case where there is no double
recovery];
US v
Scheinbaum
[1998] USCA5 272
;
136 F3d 443
(1998); Goodman
Imposition
and Enforcement of Restitution
June
2000
Federal Probation
.
Cases in support of this view generally quote
Kelly
v Robinson
479 US 36
(1986) which
dealt with another restitution statute. See also
Pasquantino
v US
[2005] USSC 3474
;
544 US 349
(2005) where it was said that the object of mandatory restitution
(in that case, the harm was a loss of tax by a foreign government)

was 'not to collect a foreign tax but to mete out appropriate
criminal punishment' (at 365).
[26]
Record 183-199.
[27]
Record 202-203.
[28]
See
Merlin Gerin
(Pty)
Ltd v All Current and Drive
Centre (Pty) Ltd & Another
1994
(1) SA 659
(C) and cases there discussed.
[29]
See also
Uitenhage
Municipality v Uys
1974 (3) SA 800
(E)
at 806H-807H;
Moosa & Cassim NNO v
Community Development Board
1990 (3)
SA 175
(A) at 180H-181C);
Damane
v Central Energy Fund
[2013]
ZASPJHC 71 paras 32-36.
[30]
Hoexter
Administrative
Law
2
nd
Ed at 193.