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[2010] ZAWCHC 614
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National Director of Public Prosecutions v Kleinhans and Others (13327/09) [2010] ZAWCHC 614 (9 December 2010)
IN THE HIGH COURT
OF SOUTH AFRICA
[WESTERN CAPE
HIGH COURT, CAPE TOWN]
Case
No.: 13327/09
In
the matter between:
THE NATIONAL
DIRECTOR OF
PUBLIC
PROSECUTIONS
…...................................................................................
Applicant
and
FRANCOIS
EMIL JACQUES KLEINHANS
…....................................................
Defendant
HILDA
GRACE KLEINHANS
…................................................................
First
Respondent
AQUILA
HOLDINGS (PTY) LTD
….....................................................
Second
Respondent
FINISHING
TOUCH TRADING 75 (PTY) LTD t/a
AQUILA
PROPERTY SOLUTIONS
…....................................................
Third
Respondent
RICH
REWARDS TRADING 52 (PTY) LTD t/a
AQUILA
FINANCIAL SERVICES
….....................................................
Fourth
Respondent
GLOBAL
PACT TRADING 73 (PTY) LTD
…..........................................
Fifth
Respondent
and
in the related application of
CHRISTIAN
FINDLAY BESTER N.O.
….................................
First
Intervening Applicant
GERARD
LEONARD PARIS N.O.
(in
their
capacity
as joint provisional liquidators of
Aquila
Holdings
(Proprietary)
Limited
(in
provisional liquidation)
…............................................
Second
Intervening Applicant
JUDGMENT
DELIVERED: 9 DECEMBER 2010
FOURIE,
J
[1] This is the
return day of a provisional restraint order granted by this court on
3 July 2009, in terms of section 26 of the
Prevention of Organised
Crime Act No. 121 of 1998 ("POCA"). The order makes
provision for the restraint of assets of
defendant and his wife
(first respondent), as well as the assets of some of the other
respondents who are entities linked to
defendant.
[2] Defendant and
the first to fifth respondents gave notice of their initial
intention to oppose the confirmation of the provisional
restraint
order, the return day of which has been extended at their instance
in order for them to file opposing papers. No opposing
papers have
been filed and applicant now seeks the confirmation of the
provisional restraint order. Save for the intervention
application,
referred to hereunder, the relief sought by applicant is not
opposed.
[3] Subsequent to
the granting of the restraint order on 3 July 2009, second respondent
was liquidated, the final winding-up order
being granted on 10 May
2010. On 24 May 2010, the provisional liquidators of second
respondent brought an intervention application,
seeking a variation
of the provisional restraint order. The intervention application
relates solely to the question whether or
not 490 shares in Optipharm
Health Care (Pty) Limited ("Optipharm"), held by second
respondent, ought to be excluded
from the ambit of the restraint
order.
[4] For the sake of
convenience, I firstly deal with the intervention application. In so
doing, I will refer to the intervening
applicants as "the
liquidators". I should add, that it appears to me that the
liquidators do not formally require leave
to intervene in these
proceedings. Second respondent is a party thereto and the
liquidators, having stepped into second respondent's
shoes, are
entitled, in terms of section 28 (2) (a) of POCA, to apply for the
variation of the restraint order. Be that as it may,
the liquidators
contend that the 490 shares in Optipharm ("the shares"),
held by second respondent, fall to be excluded
from the restraint
order by the operation of section 36 (2) of POCA.
[5] Section 36 of
POCA deals with the effect of the winding up of a company, on
realisable property of the company that may be restrained
in terms of
POCA. The relevant parts of section 36 of POCA read as follows:
"(1)
When any competent court has made an order for the winding-up of any
company ...which holds realisable property
(a)
no property for the time being subject to a restraint order made
before
the relevant time;... shall form part of the assets of any such
company or juristic person.
(2)
Where an order mentioned in subsection (1) has been made in respect
of a company or other juristic person ...the powers conferred
upon a
High Court by sections 26 to SI and 33 (2) or upon a curator bonis
appointed under this Chapter, shall not be exercised
in respect of
any property which forms part of the assets of such company or
juristic-person.
(3)Nothing
in the Companies Act, 1973 (Act 61 of 1973), or any other law
relating to juristic persons in general or any particular
juristic
person, shall be construed as prohibiting any High Court or curator
bonis appointed under this Chapter from exercising
any power
contemplated in subsection (2) in respect of any property or proceeds
mentioned in subsection (1).
(4)
For the purposes of subsection (1), 'the relevant time' means-fa)
where an order for the winding-up of the company or juristic
person,
as the case may be, has been made, the time of the presentation to
the court concerned of the application for the winding-up;
or... "
[6] It is clear from
the aforegoing, that section 36 of POCA deals with different
scenarios, based on the dates when particular
events relating to the
winding up of a company and the granting of restraint orders in terms
of POCA, took place. In the instant
matter the relevant events and
their dates, are the following:
(i)
On
19 November 2008, the application for the winding-up of second
respondent was presented to the court. This is the "relevant
time" in terms of section 36(1) and (4) of POCA.
(ii)
On
3 July 2009, the provisional restraint order was granted.
(iii)
On
10 March 2010, second respondent was provisionally wound up.
(iv)
On
10 May 2010, second respondent was finally wound up.
[7]
In considering the different scenarios catered for in section 36 and
interpreting the provisions thereof, one has to apply the
"golden
rule" of interpretation, viz. the language used by the
legislature is to be given its grammatical and ordinary
meaning,
unless this would result in some absurdity or some repugnancy or
inconsistency with the rest of the statute. See
Coopers
& Lybrand v Bryant,
[1995] ZASCA 64
;
1995
(3) SA 761
(A) at 767E.
[8]
The first
scenario is found in section 36 (1), read with section 36 (4), of
POCA. It applies in the case where a restraint order
has been made
before the "relevant time" stipulated in section 36 (4),
i.e. before the application for liquidation was
presented to the
court. Section 36 (1) provides that in that case, no property being
subject to the restraint order shall form
part of the assets of the
company in liquidation. It is common cause that in the instant matter
this first scenario does not apply,
as the provisional restraint
order was made after the relevant time, i.e. after the date of the
presentation of the liquidation
application to the court on 19
November 2008.
[9] The second
scenario is addressed by section 36 (2) of POCA. It provides that,
where a winding-up order has been made, the powers
conferred on the
court and the curator bonis in terms of POCA, shall not be exercised
in respect of any property which forms part
of the assets of the
company concerned.
[10] In construing
section 36 (2), applicant argues that, where a winding-up order has
been made prior to a restraint order, the
assets form part of the
assets of the company in liquidation and are, accordingly, not
subject to the restraint order. Therefore,
in the instant matter,
applicant contends that, as no winding-up order had been made at the
time when the provisional restraint
order was granted, section 36 (2)
of POCA does not apply.
[11] The
liquidators, on the other hand, contend that section 36 (2) does not
refer to the time when the winding-up order was actually
made, but
rather to the date when the application for the winding-up of the
company was presented to court. They accordingly argue
that, as in
this instance, where the application for the winding-up of second
respondent had been presented to the court before
the date upon which
the restraint order was made, the assets of second respondent are not
subject to the restraint order.
[12]
I do not agree with the liquidators* interpretation. Firstly, section
36 (2) refers in terms to a winding-up order which "has
been
made". As submitted on behalf of applicant, that is plainly a
reference to an event which had actually taken place at
the time when
the restraint order is made. It is not a reference to the deemed date
of commencement of the winding-up, as
contended
for by the liquidators. Had the latter been the intention of the
legislature, I would have expected it to have been expressly
stated
in section 36 (2), or have been incorporated by reference to section
36 (4) (a), which deals with the concept of the "relevant
time",
i.e. the time of the presentation to the court of the application for
the winding-up of the company. This was not done
and, in my opinion,
there is, upon a proper interpretation of section 36 (2), no room for
the incorporation of a provision of this
nature.
[13] Secondly, this
contention of the liquidators, despite the denial by their counsel,
seems to be based on section 348 of the
Companies Act No. 61 of
1973, which provides that a winding-up is deemed to commence at the
time of the presentation of the winding-up
application to the court.
However, section 36 (3) of POCA expressly provides that nothing
contained in the Companies Act shall
be construed as prohibiting the
court from making an order in terms of sections 26 to 31 and 33 (2)
of POCA in respect of realisable
property held by a company. It
follows, in my view, that the deeming provision in section 348 of
the Companies Act, cannot be
utilised to exclude assets of the
company in liquidation from the provisional restraint order.
[14]
I have also been referred to authority which appears to support my
interpretation of the provisions of section 36 (2) of
POCA. This is
the judgment of Mynhardt J in
Securefin
Ltd v
KJNA
Insurance
and Investment Brokers (Pty) Ltd
2001
(3) ALL SA 15
(T) at 27-28, where the interplay between liquidation
proceedings and restraint proceedings in terms of POCA, was
explained as
follows:
"In
the event of a winding-up order becoming effective on a date before
the date upon which a restraint order is granted,
section 36 (2) of
Act 121 of 1998 precludes a court from granting a restraint order
which will have effect on, and will relate
to, 'any property which
forms part of the assets of such company...' This will of course
only be the position if the winding-up
order has in fact been
granted by the court before the date upon which the restraint order
is granted. This is borne out by the
wording of subsection (2) of
section 36 which refers to a winding-up order which 'has been made'
and then goes on to decree that
certain powers of the court 'shall
not be exercised' by the court in respect of property which forms
part of the assets of the
company. Those assets will already fall
under the control of the liquidator by the time that the court
considers exercising its
powers under the sections mentioned in
subsection (2) of section 36. The deeming provisions of section 348
of the Companies Act
cannot be applied in such an instance and that
is why subsection (4) refers only to subsection (1) of section 36".
I am in respectful
agreement with this reasoning of Mynhardt J.
[15] In view of the
aforesaid, I conclude that section 36 (2) does not apply to the
present case, as the relevant winding-up orders
were only made after
the provisional restraint order was made on 3 July 2009. I agree
with the submission made on behalf of applicant,
that, in the
present case, the assets of second respondent are no different from
the assets of any other person whose estate
has not been
sequestrated or liquidated. If they are "realisable property"
in terms of section 14 of POCA, the assets
are liable to be
restrained. If the provisional restraint order is made at a time
when a winding-up order has not been made,
the date of commencement
of the liquidation is of no relevance to the terms of the
provisional restraint order. This interpretation
does not, in my
opinion, result in any absurdity, or some repugnancy or
inconsistency with the rest of the provisions of POCA.
[16] I accordingly
find that the liquidators' contention that the shares ought to be
excluded from the restraint by virtue of
the provisions of section
36 (2) of POCA, is without merit. The intervention application
accordingly falls to be dismissed. As
regards the costs of the
intervention application, I am satisfied that the matter warranted
the appointment of two counsel.
[17] This brings me
to the main application for the confirmation of the provisional
restraint order. As mentioned earlier, this
application is
unopposed. I am satisfied that, on the papers before me, applicant
has made out a case for the relief sought.
In particular, applicant
has shown that there are reasonable grounds for believing that a
confiscation order may be made against
defendant at the conclusion
of the criminal trial, in an amount roughly equivalent to the amount
sought to be restrained, namely
R4 810 953.88, calculated as at June
2010. I should add that the criminal trial is part-heard and set to
continue on 13 December
2010.
[18] I therefore
conclude that it is appropriate to confirm the provisional restraint
order made on 3 July 2009, in order that
assets of defendant and the
other entities linked to him, may be available for realisation once
a confiscation order is made
by the trial court.
[19] In the result
the following orders are made:
1. The intervention
application brought by the joint provisional liquidators of second
respondent, is dismissed with costs, including
the costs of two
counsel.
2. The provisional
restraint order granted on 3 July 2009, is confirmed in accordance
with the draft order which 1 have initialed
and marked X.
P
B Fourie, J