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[2010] ZAGPPHC 100
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National Director of Public Prosecutions v Firstrand Bank Limited and Others (77499/09) [2010] ZAGPPHC 100 (26 August 2010)
IN
THE NORTH GAUTENG HIGH COURT, PRETORlA
CASE
NO: 77499/09
DATE:
26/08/2010
In
the matter between:
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
Applicant
and
FIRSTRAND
BANK LIMITED AND OTHERS
Respondents
JUDGMENT
TUCHTEN
J
:
1.
The
applicants seek relief arising from a practical problem they have
encountered in the exercise of their respective duties under
the
Prevention of Organised Crime Act, 121 of 1998 ("POCA").
2.
The
first applicant is the National Director of Public Prosecutions
("NDPP"). The deponent to the NDPP's main founding
affidavit is the head of the Asset Forfeiture Unit, a division within
the National
Prosecuting
Authority. The second and third applicants are the curators to an
estate, created by order of court, of a species described
in POCA as
restraint orders. I shall refer to the second and third applicants
collectively as the curators.
3.
Under
Chapter 5 of POCA, the NDPP has been granted restraint orders in a
number of cases in terms of which assets, which the applicant
contends equate to economic benefits that the alleged criminals have
allegedly derived from crime, are frozen and then preserved
in the
hands of curators pending either the discharge of the restraint order
if the alleged criminal is found not guilty in due
course, or a final
confiscation order, sounding in money, if the alleged criminal is
found guilty in due course, in which case
the preserved assets are
available to satisfy the confiscation order.
4.
In
the nature of things, the criminal trial may take many months and
even years to complete and a confiscation order can only issue
after
conclusion of the criminal trial. During this period the assets
subject to the restraint order must be preserved by the appointed
curators. This often requires finance which the curators are either
not able, or are not prepared, to fund from their own means.
5.
Under
the powers of the court set out in s 28(3), the State is generally
declared in the restraint order to be the guarantor of
last resort in
respect of the fees, expenses and disbursements of curators, the
contemplation of the NDPP as applicant for these
restraint orders
being that the curators will as first resort seek to recover these
costs from the assets under their control or
the fruits of such
assets. Sometimes, however, in the short term the curators will be
unable to fund such costs from the assets
under their control and
seek to borrow money in their personal capacities to fund the
implementation of their duties as such.
6.
The
present is such a case. A restraint order was made in this court on 1
October 2004 following allegations that platinum group
metals were
exported unlawfully and a number of the present respondents were
charged with a number of criminal offences. Two criminal
trials began
in the South Gauteng High Court in June 2006 but have been delayed
for reasons which it is unnecessary to detail.
7.
The
restraint order in the present caser included a provision declaring
the State to be the guarantor of last resort in respect
of the fees,
expenses and disbursements of the curators. To perform their duties,
the curators opened a bank account with the first
respondent ("FNB").
They applied for and were granted an overdraft facility on the
account.
This
must be seen against the background of a standing arrangement which
the applicant has negotiated with FNB.
8.
Under
the standing arrangement, curators open an account with FNB which
provides an overdraft facility to curators in their personal
capacities, the curators cede to FNB their entitlement to any payment
of fees or reimbursement of expenses arising from the curatorship,
the NDPP undertakes to pay any amounts due to the curator for fees
and disbursements into the account so opened and drawdowns under
the
overdraft facility are only allowed against the NDPP's written
authority that the drawdown requested is reasonable and necessary
to
enable the curators to fulfil their duties under the court order
appointing them.
9.
In
the present case the curatorship has run for more than five years.
The expenses of the curatorship run to over R7,6 million against
assets under restraint valued at almost R50 million. The problem
which has arisen is that since 2009, FNB has taken the view that
the
curators have no power to borrow for purposes of the curatorship and
has refused to allow further draw downs against the overdraft
facility. This decision has caused the NDPP considerable difficulty,
particularly because there are some 110 curators in a similar
position.
10.
FNB's
position appears from a letter dated 3 July 2009 written by FNB to
the NDPP. FNB's concern quite evidently is that curators
who are
appointed by the court under the provisions of POCA have only the
powers, duties and authority provided for or implied
in POCA and such
further powers as are specified or are to be implied in the order of
court under which specific curators are appointed.
POCA itself does
not specifically authorise a curator to borrow money. FNB fears that
a curator not expressly authorised in the
court order under which
such curator is appointed may not have the power to borrow money. It
asserts that the borrowing of money
is not an unavoidable or
necessary consequence of a curator's office.
11.
In
order to resolve this difficulty, the NDPP and the curators seek
declarators on two alternative bases: firstly, in terms of prayer
1
of the notice of motion, that the curators require no further or
additional powers
as
curators
to
borrow money under the credit facility in place with FNB; secondly
(prayer 2) that the restraint order actually issued in this
case
impliedly authorises the applicants to borrow money in their personal
capacities for certain purposes. As a third alternative
(prayer 3),
the applicants seek an amendment to the restraint order to confer an
express borrowing power on the curators.
12.
The
application has been served on FNB and all other persons who have an
interest in the matter. Although there was initially some
opposition,
when the matter was called before me there was no opposition. I
accordingly did not have the benefit of full argument
against the
relief sought. The declaration sought in prayer 1 is far reaching and
in my view not necessary to enable the NDPP and
the curators to solve
their practical problem. In the exercise of my discretion, I
therefore decline relief in terms of prayer
1 of the notice of motion
as it presently stands.
13.
As
I see the matter, the concern of FNB is that as
curators,
the
curators are not authorised to borrow money. But that is not what the
curators seek to do in the present case and that is not
the effect of
their written arrangements with FNB. What the curators want to do is
borrow money from FNB
in
their personal capacities
and
use the money so borrowed to fund their curatorships.
14.
In
my view, no restrictions are imposed by virtue of the provisions of
POCA or of the restraint order on the capacity of the curators
in
their personal capacities
on
the one hand and FNB on the other hand to enter into the relationship
of moneylender and money borrower usually contemplated
in the
banker/customer relationship. I am accordingly prepared to make a
declaratory order to this effect. I must
make
it clear that this conclusion does not address questions which arise
between, on the one hand, the curators
in
their capacities as such
and,
on the other hand, the curators
in
their personal capacities
save
to say that the resolution of these questions in no way trenches upon
or inhibits the ordinary freedom of contract enjoyed
by bankers and
their customers in their relationships as such.
15.
I make the following order:
It
is declared that the second and third applicants, Zakhele Sithole and
Praveck Geaanpersadh, require no additional powers as curators
to
borrow money in their persona] capacities on such terms as may be or
have been agreed between themselves and the first respondent,
Firstrand Bank Limited, including the terms of the credit facility
agreement attached to the first applicant's founding affidavit
as
WH8.
NB
Tuchten
Judge
of the High Court
25
August 2010