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[2010] ZAECPEHC 44
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National Director of Public Prosecutions v Mansoor and Another (3197/2009) [2010] ZAECPEHC 44; 2011 (1) SACR 292 (ECP) (6 July 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT ELIZABETH)
Case
No.:
3197/2009
Date
heard:
18 March 2010
Date
delivered:
06 July 2010
In
the
ex
parte
application
of:
NATIONAL DIRECTOR OF PUBLIC
PROSECUTIONS
Applicant
and
FAHMIDA MANSOOR
First
Defendant
KRITH
SINGH
Second
Defendant
IN RE:
APPLICATION
IN TERMS OF
SECTION 26
OF THE
PREVENATION OF ORGANISED CRIME ACT, NO.
121 OF 1998
J U D G M E N T
DAMBUZA, J
:
On 10 November
2009, this Court
granted
a provisional restraint order together with a rule
nisi
,
calling upon the defendants to show cause on
15 December 2009,
why the provisional restraint order should not be made final. The
provisional restraint order was served
on the defendants on 3
December 2009. In terms of the provisional order the defendants
are prohibited from dealing with realisable
property as defined in
sections 12 and 14 of the Prevention of Organised Crime Act, Act 121
of 1998 (
“POCA”
).
A
curator
bonis
was
appointed to take into his possession or under his control and to
administer the property which is the subject of the order.
The
matter was, however not finalised on 15 December 2009 and was
postponed to enable the defendants to file their answering
papers.
The answering papers were filed out of time, which led to the
applicant’s reply also being filed out of time. The
applicant
requests that such filing of his replying affidavit be condoned.
The application is
brought in terms of s 26 of
POCA.
The applicant seeks a final order restraining the defendants from
dealing in any manner with the property identified in
the
provisional restraint order.
The applicant is
the National Director of Public Prosecutions in South Africa. The
first defendant is an adult female physiotherapist
residing in
Durban
and who, during the period relevant to this application, conducted
business as a physiotherapist at 73 Lorne Street, Durban.
The
second defendant is an adult male who, during the same period (1
August 2006 to April 2008), was employed as a practice
manager at
the business conducted by the first defendant.
The defendant’s
have been charged in the
Special Commercial Crimes Court, Port Elizabeth with 610 counts of
fraud (alternatively, theft) involving an amount of R3,619,483.54
and 610 counts of forgery. The charges of fraud against the
defendants emanate from a complaint made by the managing director
of
a business known as Compensation Solution Pty Limited (
“Compsol”
),
Johann Julius Friedrich Lüttich. Compsol conducts a business
of “debtors factoring” of injury on duty claims
(IOD
claims). In its business Compsol purchases accounts from
individual medical practices or practitioners in the country
at a
discounted value. The seller cedes his or her rights, title and
interest in the accounts to Compsol. Compsol then submits
the
account to the Compensation Commissioner who pays Compsol the amount
due on the account.
In this case the
allegation is that Compsol
discovered
forgery in the accounts it had bought from the first defendant’s
practice. In particular, it is alleged in the
founding affidavit
that during April 2008 it became evident to Compsol that a certain
patient known as Jabulile Ndlovu, whose
account was presented by the
first defendant had, in fact, never received physiotherapy treatment
from the first defendant.
This caused Compsol to conduct an
investigation which revealed that this account and many others were
fraudulent claims sold
by the first defendant to Compsol. The
applicant contends that the first defendant never rendered
physiotherapy treatment to
the patients in respect of which the
charges have been brought against the defendants and that they
falsely presented that these
patients had been referred to the first
defendant by Doctors Harilall and Raniga who used to refer patients
to her. By the
time of discovery of the alleged fraud in 2008 Dr
Raniga had left South Africa and had, during 2006, immigrated to
Australia.
There is no confirmation from him as to whether the
disputed handwriting and signature appearing on documents relating
to
some of the patients to whom the charges relate, is indeed his
and whether he had referred the patients concerned to the first
defendant for treatment. Dr Harilall disputes that an imprint made
by a rubberstamp on referrals relating to the patients was
his or
was a stamp used by him.
The
details
of the charges against the accused are that during the period August
2005 to April 2008, they falsely and with intent
to defraud, gave
out and pretended to Compsol and to the Compensation Commissioner
that the persons mentioned in the charge
sheets were patients
treated by accused no. 1 and that those persons had been referred to
the first defendant for physiotherapy
by either Dr Raniga or Dr
Harilall, and that as a result of such treatment, the first
defendant was entitled to payment of the
R3,619,483.54 by Compsol
and/or the Compensation Commissioner.
It appears to
be common cause that as a result of the defendants or one of them
rendering accounts in respect of physiotherapy
rendered to the
patients whose particulars are set out in the schedule which is also
attached to the applicant’s founding
papers, payments were
made by either Compsol or the Compensation Commissioner in respect
of such accounts. The issue is whether
treatment was rendered by the
first defendant to the relevant patients and whether the patients
had been referred to her by Drs
Harilall and Raniga. The
applicant’s case is that no treatment was rendered to the
patients and that the defendants forged
referral notes, falsely
representing that Drs Raniga and Harilall had referred the patients
to the first defendant and that she
treated the patients based on
such referrals.
Section
26 of POCA authorises an applicant to seek an order from the High
Court, prohibiting any person from dealing in any manner with
any
property to which the order relates. In terms of s 25 of POCA a
High Court may grant a restraint order when:
(1)
a
prosecution for an offence has been instituted against the defendant
concerned;
(2) either a
confiscation order has been made against that defendant or
it
appears to the Court that there are reasonable grounds for believing
that a confiscation order may be made against that defendant
;
and
(3) the proceedings against that
defendant have not been concluded.
It is common cause
that prosecution has been instituted against
the defendants and that such prosecution has not been concluded.
What remains to be determined is whether there are grounds for
believing that a confiscation order may be made against the
defendants. In
National
Director of Public Prosecutions v Kyriacou
2004
(1) SA 379
(SCA) at para [10] the court held that a mere assertion
to the effect that there are reasonable grounds for believing that a
confiscation order may be made will not suffice. But the applicant
is not required to prove as a fact that a confiscation order
will be
made; what is required is no more than evidence that satisfies the
court that there are reasonable grounds for believing
that the court
that convicts the person concerned may make such an order. The
principles applicable and the onus are those applicable
in ordinary
motion proceedings.
In
National
Director for Public Prosecutions v Basson
2002
(1) SA 419
(SCA), at paragraph 19 the court held that a mere summary
of the allegations made against the defendant concerned, and an
expression
of opinion by members of the appellant’s (in this
case, applicant’s) staff that a confiscation order will be
made
is not sufficient; it should rather appear to the court itself
that there are reasonable grounds for such a belief. This requires,
at least, that the nature and tenure of the available evidence be
disclosed.
Sections 25 and 26
of POCA are
aimed
at depriving criminals from benefiting from their criminal
activities. Other provisions in POCA, also intended to deprive
criminals of the benefits of their criminal activities are section
18(1) read with section 12(3) of POCA which provide that a
Court
convicting a defendant may make a confiscation order if it finds
that the defendant has derived a benefit from the offence
convicted
of or any other offence of which the defendant has been convicted at
the time of trial or any criminal activity which
the Court finds to
be sufficiently related to such offences.
1
A
s
I have stated, a Court is not required to be satisfied of the guilt
of the defendant before a restraint order is granted;
what is
required is that there should be reasonable grounds for believing
that the defendant may be convicted.
2
An applicant for restraint order is only required to set out
evidence which satisfies a Court that there are reasonable grounds
for believing that the Court that convicts the person concerned may
make an order of confiscation.
3
Consequently, what
I am required to determine is whether on the evidence set out in the
applicant’s papers there
are
reasonable grounds for believing that a Court that convicts the
defendants of fraud and forgery, may make an order of confiscation
against them.
The defendants
contend that the applicant has failed to establish that there are
reasonable grounds for believing that a confiscation
order may be
made against them as envisaged in s 25(1)(a)(ii) of POCA.
It was submitted
both in the defendants’ Heads of Argument and during argument,
that the police investigations are inadequate
and that the charge
sheet is carelessly drawn. The defendants also rely on certain
indications or undertakings allegedly made
by the Special Prosecutor
that, at the trial the state intends to lead (only) the evidence
relied on in this application. They
contend that this evidence is
unlikely to lead to a conviction and a consequent confiscation
order. Further, the first defendant
maintains that she treated
all the patients in respect of whom she submitted invoices to the
Compensation Commissioner and/or
to Compsol. She refers to the
lack of sworn statements by the patients in this application and
maintains that this is an indication
that they (the patients) will
not be called as witnesses at the criminal trial.
I
do
not agree. Even if I were to accept that the State Prosecutor
gave the undertaking referred to, it seems to me that the
State
cannot be precluded, as a result thereof, from leading other
evidence in its possession presently or such evidence as it
may
secure at a later stage. In my view such an undertaking would, in
any event, not be a proper one to make. However, during
argument I
did raise with the applicant’s counsel the glaring lack of
such evidence as one would ordinarily expect to find
in a case of
this nature. The response was that prior to this application the
defendants or at least the first defendant, had
expressed an
intention to plead guilty to the charges. This gives an impression
that the applicant then deemed it unnecessary
to obtain further
evidence to support this application. On the other hand the
applicant does state that he still intended to
revise (and improve)
the charge sheet which the defendants contend was carelessly drawn.
From the papers it
appears that the
first
defendant was first charged during 2008. The application for
provisional restraint order was made and granted during
November
2009. But there is no evidence, for example by Ndlovu, whose
account sparked the wider investigation, that s/he was
never treated
by the first defendant as the Investigating Officer in the criminal
case alleges. If the applicant relies only
on the account drawn by
the defendants in respect of Ndlovu for concluding that Ndlovu never
received treatment from the first
defendant, details of the
irregularity in this account are lacking. My view is that whatever
indications may have been made by
the defendants regarding their
intended plea in the criminal proceedings do not relieve the
applicant of his responsibility to
make out a proper case for the
relief it seeks in this application and to properly support the
allegations of fraud that the
makes. It is not sufficient for the
applicant to argue that the evidence it has presented in support of
this application is not
the same or the only evidence that it will
use to prove the charges at the criminal trial. It remains the duty
of the applicant
to make out a coherent, persuasive case that there
is evidence on which a court may convict the defendants of the
charges against
them and on which that court may also grant a
confiscation order, based on the benefit derived by the defendants
from their criminal
conduct.
T
he
factual allegations in support of this application are contained in
the supporting affidavit of the Investigating Officer,
Keith Van
Molendorff. Van Molendorff states that Dr Harilall denies having
referred some of the patients to which the charges
relate, to the
first defendant for physiotherapy. According to him Dr Harilall also
disputes the authenticity of referral notes
presented by the
defendants as having been made by Dr Raniga on a “prescription
pad” which was no longer in use (presumably
at the time of
making the referral), instead of a “referral note pad”
which the doctors used at the time. A further
irregularity on which
the applicant relies is the fact that some of the referrals by Dr
Raniga were made after he had immigrated
to Australia. Dr Harilall
further disputes as ”false”, the rubberstamp imprint
that appears on some of the referrals
presented as having been made
by him. He also denies that he used Dr Raniga’s stationery
to refer patients to the first
defendant for treatment as the
defendants allegedly presented. A “statement” by a
patient Naidoo in which he disputes
receiving treatment from the
first defendant forms part of the applicant’s founding papers.
According to Van Molendorff,
some of the patients, together with
their employers, deny having received treatment from the first
defendant; some of these patients
allege that they were treated by
other physiotherapists. One patient is presented as having been
treated by the first defendant
on a date when the patient was
already dead.
In the main, the
defendants’ case is that the first defendant treated all the
patients referred to in the charges. They contend that the
applicant has not shown that there is a reasonable prospect that the
defendants will be convicted for fraud, theft and forgery
and that a
consequent confiscation order will be made in the amount of
R3,619,483.54. In the answering affidavit the first defendant
states
that even on the applicant’s version, only a small number of
the patients deny having received treatment from her.
Even then,
none of these or any other patients have made sworn statements
denying that she treated them.
I do not think
that
the lack of sworn statements by the proposed state witnesses would
detract from the overall weight of the evidence if clear
details of
the allegations by those “witnesses” were set out
clearly. The difficulty in this case is that when I
consider the
allegations made against the defendants and the admissions that such
denials or some of them, are correct, together
with lack of basic
detail in relation to the remaining counts I am unable to make an
informed assessment as to whether a court
that convicts the
defendants may make an order of confiscation. In fact I have
difficulty in determining which of the counts
of fraud and forgery
the defendants could be convicted of.
The
defendants point out that only 114 charges of fraud relate to Dr
Harilall’s referrals (the applicant insists that the correct
number is 121 instead of 114). Dr Harilall’s written comments
on the schedule with the patient’s names are only
to the
effect that
the
referrals are not in his handwriting.
Regarding
Dr Raniga’s referrals, Dr Harilall comments that 58 of these
appear
to be in the handwriting of Dr Raniga
.
The most that can be concluded from Dr Harill’s comments, so
contend the defendants, is that
it
is unclear who made these referrals
,
therefore it is improbable that the charges in the criminal case
will lead to a conviction on the evidence presented by the
applicant.
In support of
their contention that there is no reasonable prospect that the
evidence against them will lead to a conviction the
defendants refer
to particular counts which, they argue, show that the Special
Prosecutor did not apply her mind to the issue
when drawing the
charges. Count 28 of the charges relates to the patient Shunmugan
Pillay . The amount alleged to have been
fraudulently claimed is R2
314,25. Dr Harilall’s comment in respect of the referral in
respect of this patient is that
the referral
“seems
to be”
in the handwriting and signature of Dr Raniga. The defendants argue
and I agree that, Dr Harilall’s evidence in respect
of this
referral will be that it is most likely, a genuine referral.
Consequently there is no evidence of fraud in respect thereof.
Further patient, Ishanth Singh, according to the schedule, confirmed
telephonically that he had received treatment from the
first
defendant. Consequently there is no evidence to support this
charge.
The defendants
have attached to the answering papers, affidavits by five patients,
randomly selected from the charge sheet.
It is not in dispute that
these patients had not, at the time of deposing to the affidavits,
been approached by the police or
any investigators in respect of
this application or the criminal case against the defendants.
According to the defendants these
five patients confirm having
received treatment from the first defendant. The affidavits are
however handwritten and the handwriting
is illegible; as such I am
unable to decipher the contents thereof. The applicant, however,
does not dispute, in reply, that
these patients did receive
treatment from the first defendant. Mr
Willie
Ludwig Kingsley
who deposed to the founding and replying affidavits merely points
out that the defendants only rely on a few discrepancies amidst
numerous irregular or fraudulent claims. He also criticises the
defendants for contravening their bail conditions by approaching
(potential) state witnesses without permission from the state.
The courts have
warned against literal interpretation of the provisions of sections
25 and 26 of POCA in the light of possible
arbitrary deprivation of
property contrary to the provisions of
section
39 of the Constitution of South Africa Act 108 of 1996 (the
Constitution).
4
In my view, this means that when considering an application for
restraint, a court has to strike a balance between the ultimate
aim
of depriving criminals of the fruits of their criminal conduct and
the constitutional imperative of protecting the rights
of accused in
criminal cases, including the right to presumption of innocence
until proven guilty. In this regard it was submitted
on behalf of
the applicant that the fundamental assumption is that the applicant
is faced with a criminal who may be expected
to conceal, as far as
possible, the benefits of his/her nefarious activities. In my view
the proper approach “where sufficient
evidence of criminal
activity has been presented before a court the fundamental
assumption is . . . “.
In this
application t
he
evidence on which most of the charges are founded (in respect of 381
claims) seem to be Dr Harilall’s assertion that
the
handwriting and signature thereon “does not look” like
Dr Raniga’s. This comment is, on its own, not conclusive.
Further, given that Dr Harilall is not a handwriting expert, I have
difficulty in understanding how a conviction would result
from a
comment he makes about another person’s signature and
handwriting. Regarding the claims relating to patients referred
by
Dr Raniga after he had left South Africa, my view is, that although
this may sound and look suspicious, there is no evidence
indicating
that the only inference that can be drawn in this case is that the
defendants forged Dr Raniga’s signature.
I also have
difficulty in determining exactly to which counts the allegations
relate to the amounts received by the defendants
in respect thereof
and/or the amounts paid by the Compensation Commissioner in respect
thereof.
Dr
Harilall’s
comments that the handwriting and/or signature on some referrals
does look like Dr Raniga’s is as inconclusive
as his comments
that on some referrals, the signature does not look like Dr
Raniga’s. A further factor to be considered
is that, in
respect of 304 of the charges referral notes or letters could not be
found. It was submitted on behalf of the applicant
and I agree
that it is not, at this stage realistically able to place before the
court more than a limited portion of the material
which is likely to
influence the court faced with an application for confiscation.
Indeed the courts have held that at the
restraint stage the
applicant cannot produce more than a limited portion of the material
which is likely to influence the court
faced with the confiscation
application
NDPP
v Phillips
5
.
But I think even the limited evidence placed before a court in an
application for restraint should, must at least, make out
a
relatively clear coherent and consistent case. The evidence before
me in this application does not satisfy this requirement.
As I understand
the charges against the defendants, the counts of fraud are
inextricably linked to the allegations of forgery.
Where, at least,
half of the referrals allegedly forged cannot be found I am unable
to find that a conviction is likely to follow
from the charges.
I am mindful of the statement by one of the patients, Naidoo, that
he was never treated by the first defendant. I am also persuaded
that an inference of fraud and forgery may be drawn in respect of
the patient where referral was made after his death. But
the
contention by the defendants that, based on the admissions by some
of the five patients that they did receive treatment from
the first
defendant and Dr Harillal that some of the referrals appear to be in
Dr Raniga’s handwriting and/or signature,
it is probable that
more patients to whom the charges relate may confirm having been
treated by the first defendant is not unreasonable.
The applicant
does agree in reply that some of the counts are not supported by the
evidence and in fact appear to be disproved
by the evidence
presented. It seems to me that the only counts in respect of which
there is relatively clear evidence are the
ones relating to Naidoo
and the “dead” patient.
A
further consideration is that a confiscation order will be made if
the court finds that the defendants derived a benefit from
their
criminal conduct. In this case, where the accounts were sold to
Compsol at a discounted rate, I am not satisfied that
a proper case
has been made that the defendants benefited from these two cases.
In any event the amount involved in the claims
is only a minute
fraction of the amount of R3,619,483.54, for which the applicant
seeks an order of restraint.
In the end
I
am not satisfied that the applicant has made out a proper case that
there is evidence on which a court faced with an application
for
confiscation would be reasonably persuaded to grant the application.
Consequently
the
following order shall issue:
The
Rule
Nisi is discharged with costs.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
Appearances
:
For the
applicant:
Adv
H J Van der Linde SC instructed by State Attorney.
For the
defendants: Adv
J Howse instructed by Keeran Bhagwan Attorneys of Port Elizabeth.
1
Benefit is defined in section 12(3).
2
NDPP
v Rebuzzi
2002 (1) SACR
128
(SCA) at 133 E para 20.
3
NDPP v Kyriacou
2003
(2) SA 524
(SCA) and
NDPP v
Rautenbach and Others
2005
(1) SACR 530
(SCA).
4
National
Director of Public Prosecutions v R O Cook Properties (PTY) LTD
;
National
Director of Public Prosections v 37 Gillespie Street Durban (PTY)
(LTD) and Another
;
National
Director of Public Prosecutions v Seevnarayan
2004 (2) SACR 208
(SCA) para [15].
5
National Director of Public
Prosecutions v Phillips and Others
2001
(2) SACR 542
(W) at 554-6.