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[2023] ZAECQBHC 45
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National Director of Public Prosecutions v Tshamase and Others (1903/2022) [2023] ZAECQBHC 45 (8 August 2023)
FLYNOTES:
POCA and SIU – Provisional restraint order –
Realisable
property
– Aver NDPP has not met requirements
for confirmation of provisional restraint order – What
constitutes
realisable property and an affected gift –
Failed to prove respondent entities acquired affected gifts from
defendants
or hold realisable property – Requisite causal
connection required by POCA to confirm restrain order is severed –
No factual or legal basis to confirm provisional restraint order –
Prevention of Organised Crime Act 121 of 1998
,
s 14.
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA )
CASE
NO: 1903/2022
(1)
REPORTABLE: YES
(2)
OF INTEREST TO OTHER JUDGES: YES
(3)
REVISED.
DATE
07/08/2023
In
the matter between:
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
Plaintiff
and
MHLELEI
MLUNGISI TSHAMASE
First Defendant
WALTER
SHAIDI
Second Defendant
FAREED
FAKIR
Third Defendant
RUKAARD
STEFFERINE LEZARION ABRAMS
Fourth Defendant
ANDREA
JOLEEN WESSELS
Fifth Defendant
NADIA
GERWEL
Sixth Defendant
DAVID
EDUARD LE ROUX
Seventh Defendant
LE ROUX INC (a duly
registered company
represented herein by
the Second Defendant
and
the Fourteenth Respondent as directors)
Eighth Defendant
ZANDISILE
JOSEPH QUPE
Ninth Defendant
THANDO
NGCOLOMBA
Tenth Defendant
NOSIBELE
TSHAMASE
First Respondent
NOSIBILE TSHAMASE (in
her capacity as the
trustee
of the Mawela Trust)
Second Respondent
AGNES
SHAIDI
Third Respondent
JEAN
ALAN
GERWEL
Fourth Respondent
TERRYROBIN
GERWEL
Fifth Respondent
JULIETTE
LE ROUX
Sixth Respondent
NOKUZOLI
NOLITHA RUTH QUPE
Seventh Respondent
WOODLAND SAFARI (PTY)
LTD (a duly
registered company,
represented
by the Seventh
Defendant and the
Fourth
Respondent as directors)
Eighth Respondent
ABRAHAM
LE ROUX (in his capacity as
trustee
of the Abraham le Roux Family Trust)
Ninth Respondent
DAVID
EDUARD LE ROUX (in his capacity as
the
trustee of the Abraham le Roux Family Trust)
Tenth Respondent
BENHEIM
HOUSE UITENHAGE INVESTMENTS
(PTY)
LTD (a duly registered company,
represented
by the seventh defendant
as
director)
Eleventh Respondent
MRS SAVAGE (PTY) LTD
(a duly registered
company, represented
by the
seventh defendant as
director of the
twelfth
respondent)
Twelfth Respondent
VINDEX ADVISORY (PTY)
LTD (a duly
registered company,
represented by
the seventh defendant
and the fourteenth
respondent
as directors)
Thirteenth Respondent
ABRAHAM
LE ROUX
Fourteenth Respondent
DE MIST INVESTMENTS
(PTY) LTD (a duly
registered company,
represented by
the
fourteenth respondent as director)
Fifteenth Respondent
FURNIX (PTY) LTD (a
duly registered company,
represented by the
fourteen respondent,
as
director)
Sixteenth Respondent
JW CONSTRUCTION (PTY)
LTD (a duly
registered company,
represented by
the
fourteenth respondent as director)
Seventeenth Respondent
NECHAKO CAPITAL (PTY)
LTD (a duly
registered company,
represented,
by
the fourteenth respondent as director)
Eighteenth Respondent
THANGANA LE ROUX (PTY)
LTD (a duly
registered company,
represented,
by
the fourteenth respondent as director)
Nineteenth Respondent
JUDGMENT
DREYER
AJ
1.
The
Prevention of Organised Crime Act
[1]
(“POCA”) authorises the National Director of Public
Prosecutions (“NDPP”) to attach assets of accused persons
or assets that accused person acquired from the proceeds of crime
either held in their own name or transfer to another entity to
be
retained pending the finalisation of the criminal proceeding.
[2]
At the conclusion of the criminal proceedings, the assets are either
confiscated to the state, on the conviction of the accused
or
released to the accused on the acquittal of the accused.
[3]
2.
The
defendants have been charged
inter
alia,
fraud,
money laundering and racketeering in terms of the provisions of
POCA, and corruption in terms of the provision
of the
Prevention and Combatting Corrupt Activities Act,
[4]
arising from the awarding of tender by the Nelson Mandela Bay
Municipality in relation to an integrated public transport
system. The NDPP in her indictment contends that the National
Treasury through the Nelson Mandela Bay Municipality suffered
a
cumulative loss of approximately one hundred million rand
(R100 000 000).
[5]
The
eighth defendant,
[6]
the NDPP
contends further, benefitted to the sum of approximately thirty-three
million rand (R33 000 000).of the full
loss suffered by the
state. The criminal trial is pending before the high court.
3.
On 13 July 2022, the NDPP obtained a provisional restraint order
and
rule nisi against all the defendants and the respondents (“the
provisional restraint order”).
4.
The provisional restraint order required the defendants and
respondents to disclose and surrender all their property,
either specifically listed in a schedule of assets attached to
the
provisional restraint order and/or all property held by the
defendants at any time before or after the granting of the order,
including property held for and on behalf of the defendants and their
shareholding in any company. The provisional restraint order
limits
the extent of the realisable property to be restrained to the value
of R100 million.
5.
The
provisional restraint order prohibited the defendants and
respondents from dealing with the property subject to the order.
In
addition, the restraint order appointed Mr Dhanesvarin Appavoo as a
curator bonis charged with the control and supervision of
the
properties subject to the restraint order.
[7]
6.
On 30 August 2022, the provisional restraint order and
rule nisi
was made absolute as against the second defendant, fourth
defendant, fifth defendant, tenth defendant and third respondent.
7.
On 13 September 2022, the provisional restraint order was confirmed
as against the seventh defendant, the eighth defendant, the sixth
respondent and the fourteenth respondent.
8.
At the
commencement of these proceedings, counsel for NDPP requested
that, by agreement between the representative of the
NDPP and
representatives of the respective defendants and respondents
[8]
,
8.1
the provisional restraint order was made final and absolute
as
against the first, third, sixth and ninth defendants;
8.2
the provisional restraint order was made final and absolute
as
against the first and second respondents;
8.3
the provisional restraint order is discharged against the fourth
and
fifth respondents, with costs on an attorney and client scale;
8.4
the provisional restraint order is discharged
against the seventh
respondent, with no order as to costs;
8.5
the provisional restraint order
i
s confirmed over
:
8.5.1
an amount of R52 500.00 deposited into the trust account of
the
curator by the eleventh respondent on behalf of the seventh
defendant; and
8.5.2
the shareholding held by the seventh defendant and fourteenth
respondent in the seventeenth respondent, which was handed into the
possession of the curator, held in trust;
8.6
that the provisional restraint order and
rule nisi
is
discharged against the eleventh, fifteenth and seventeenth
respondents.
9.
The result of these orders, is that the provisional restraint
order
has been declared absolute as against :
9.1
all of the defendants, who are the accused in the pending criminal
trial
before this court.
9.2
the first, second, third, sixth and fourteenth respondents.
10.
The only remaining respondents who dispute the confirmation of the
provisional
restraint order are the eighth, ninth, tenth, twelfth,
thirteen, sixteenth, eighteenth and nineteenth respondents (“the
respondent
entities”).
11.
The respondent entities argue that the NDPP has not met the
requirements for
the confirmation of the provisional restraint order
in that she has failed to prove on a balance of probabilities that
any of the
respondent entities acquired “
affected gifts”
from the defendants or hold “
realisable property
”
as defined. I agree.
12.
The NDPP
may apply
ex
parte
for a restraint order against realisable property pending the
finalisation of the criminal process.
[9]
To succeed in the confirmation of the provisional restraint order,
the NDPP must show that there are “
reasonable
grounds for believing that a
confiscation
order may be made against the defendant
”
[10]
.
(own emphasis)
13.
The Supreme
Court of Appeal, articulated in
Kyriacou,
[11]
that what is required of the NDPP to show that there are “reasonable
grounds for believing that a confiscation order may
be made against
the defendant.” The test, Mlambo AJA stated was:
“
Section
25(1)(a)
confers
a discretion upon a court to make a restraint order if, inter alia,
‘there are reasonable grounds for believing that
a confiscation
order may be made…’ While a mere assertion to that
effect by the appellant will not suffice …
on the other hand
the NDPP is not required to prove as a fact that a confiscation order
will be made, and in those circumstances
there is no room in
determining the existence of reasonable grounds for the application
of the principles and onus that apply in
ordinary motion
proceedings. 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.
”
(own emphasis)
14.
The Supreme
Court of Appeal (Nugent JA ) in
Rautenbach
elaborated
on the requirements of the test as:
[12]
“
It
is plain from the language of the Act that the Court is not required
to satisfy itself that the defendant is probably guilty
of an
offence, and that he or she has probably benefited from the offence
or from other unlawful activity. What is
required
is only that it must appear to the court on reasonable grounds that
there might be a conviction and a confiscation order
.
While the court, in order to make that assessment, must be apprised
of at least the nature and tenor of the available evidence,
and
cannot rely merely upon the appellant’s opinion … it is
nevertheless not called upon to decide upon the veracity
of the
evidence. It need ask only
whether
there is evidence that might reasonably support a conviction and a
consequent confiscation order
(even if all that evidence has not been placed before it) and whether
that evidence might reasonably be believed. That will not
be so where
the evidence that is sought to be relied upon is manifestly false or
unreliable and to that extent it requires evaluation,
but it could
not have been intended that a court in such proceedings is required
to determine whether the evidence is probably
true.
”
[13]
(own emphasis)
15.
Consequently. the two elements that the NDPP must satisfy to obtain
confirmation
of a preservation order, is that firstly there is
evidence that might reasonably support a conviction and secondly that
the evidence
might reasonably be believed. The critical aspect is
that there is evidence to
secure a conviction
.
16.
Underlying these elements is the nature of the property that the NDPP
may restrain,
pending the finalization of the criminal proceedings.
The NDPP is authorised by s26 of POCA to obtain an order “
prohibiting
any person … from dealing in any manner with
property
to which the order relates
”.
17.
The term “
property
” is defined specifically,
s26(2) which details the type of property in respect of which the
restraint order may be made.
“
A
restraint order may be made -
(a)
in respect of such
realisable property
as may be specified in
the restraint order or which is held by the person against whom the
restraint order is made;
(b)
in respect of all
realisable property
held by such person,
whether it is specified in the restraint order or not;
(c)
in respect of all property which, if it is transferred to such person
after the making of a restraint
order, would be
realisable
property
.
”
18.
Common to each of these categories of properties, is the term
“
realisable property
” which itself is define in
s14 of POCA , as:
“
The
following property shall be realisable in terms of this chapter:
(a)
any property held by the defendant concerned; and
(b)
any property held by a person to whom that defendant had directly or
indirectly made any affected gift.
”
19.
Realisable property includes an
affected gift
, which is
defined in s12 of POCA as:
“
(a)
Made by the defendant concerned not more than seven years before the
fixed date; or
(b)
made by the defendant concerned at any time if it was a gift –
(i)
of property received by that defendant in connection with an offence
committed by him or her in
any person; or
(ii)
of property, or any part thereof, which directly or indirectly
represented in that defendant’s
hands property received by him
or her in that connection, whether any such gift was made before or
after the commencement of this
Act.
”
20.
Critical to both the definitions of what constitutes
realisable
property
and an
affected gift
is that a
defendant
,
either
directly or indirectly
,
gave or transferred or
made the
affected
gift
or
property
available to
the recipient.
21.
A
defendant
is defined in s12 of POCA to mean:
“
A
person against whom a prosecution for an offence has been instituted,
irrespective of whether he or she has been convicted or
not including
a person referred to in s25 (1)(b).
”
22.
A person who is connected to all the respondent entities, either as a
director
and/or a shareholder and/ or a beneficiary of a shareholder,
is the fourteenth respondent, who is not defendant. Neither are any
of the respondent entities.
23.
No criminal proceedings have been instituted against the respondent
entities.
The founding affidavits deposed to in support of the
restraint order contain no allegation that any of the respondent
entities
will be prosecuted. Similarly, there are no contentions in
the founding affidavit that the fourteenth respondent will be
prosecuted.
24.
The facts
in this matter are distinguishable from those in the matter of
National
Director of Public Prosecutors
v
Wood
decision where the case of the NDPP was that there were reasonable
grounds for believing that the
Wood
respondents would be prosecuted, at least for crimes of
inter
alia
corruption, fraud, and money laundering.
[14]
25.
The only
remaining issue, which is determinant of this application, is whether
any of the respondent entities holds
realisable
property
received as an
affected
gift
from any of the defendants. The NDPP bears the onus to show, on a
balance of probabilities, that respondents received realisable
property.
[15]
26.
Counsel for the respondent entities argued that any property the
respondent
entities received from the fourteenth respondent is not
realisable property subject to restraint, as the fourteenth
respondent
is not a defendant. Absent the fourteenth respondent being
a defendant, counsel for the respondent entities argued, the
requisite
causal connection required by POCA to confirm the restrain
order, is severed. Consequently, the provisional restraint order
against
all the respondent entities should be discharged.
27.
This is the point of departure between the parties. Counsel for the
NDDP, argued
that the fourteenth respondent is not an ordinary
respondent. The fourteenth respondent is a director of the eighth
defendant,
who is a defendant. Thus, counsel for the NDPP argued,
though the fourteenth respondent is not himself a defendant, the
definition
of “
defendant
” ought to be interpreted
broadly in favour of the State.
28.
The NDPP argues that the definition of “
defendant
”
should be interpreted to include a person who was aware
of the unlawful activities. I highlight below the extended
definition
proposed by the NDPP:
“
means
a person against whom a prosecution for the offence has been
instituted irrespective of whether he or she has been convicted
or
not, and includes a person referred to in section 25(1)(b)
and
any person who was reasonably aware of the unlawful activities and
who has benefited from the fruits of the unlawful activitie
s.
”
29.
The NDPP’s rationale for the proposed extended interpretation
of “defendant”
is that in the NDPP’s view, the
fourteenth respondent was clearly a party to or directly involved in
the organised crime
which forms the subject matter of the pending
criminal proceedings, against the defendants.
30.
The
difficulties I have with the proposed extended interpretation of the
word “
defendant
,”
is firstly, the NDPP concedes that the fourteenth respondent is
not a defendant. There is no explanation in
the papers why the
fourteenth respondent as one of two directors of the eight defendant
(the other being the seventh defendant
), was not prosecuted. There
is no assertion in the papers that there is an intention by the
NDPP to institute charges against
the fourteenth respondent. Given
that it is the NDPP herself who is in charge of the National
Prosecuting Authority, who
is authorised by the Constitution to
institute criminal proceedings
[16]
,
such deafening silence is inexcusable.
31.
Secondly,
it is clear from the reading of the definition, specifically with its
reference to s25(1)(b), that the word
defendant
i
s
limited to a person who has been charged or will be charged. Applying
such contextual interpretation complies with the approach
elucidated by the Supreme Court of Appeal in
Endumeni
[17]
.
32.
There are no facts before me to consider an extended interpretation
for the
definition of the word
defendant
. The failure by
the NDPP to prosecute the fourteen respondent, when it lies within
her authority to do so, cannot be rectified
by an extended definition
of the word “
defendant
”, particularly when the
NDPP’s own indictment, contends that the eighth defendant
(whose directors are the seventh
defendant and fourteenth
respondent) benefited by a sum of approximately R33 million of the
R100 million loss sustained by
the State.
33.
Thirdly,
the proposed extended interpretation contradicts the Constitutional
Court’s interpretation of the intention of POCA.
In
NDPP
and Another v Mohamed and Others
,
[18]
Ackerman J stated:
“
It
is common cause that conventional criminal penalties are inadequate
as measures of deterrence when organised crime leaders are
able to
retain the
considerable
gains
derived from organised crime, even on those
occasions
when they are brought to justice. The
above problems make a severe impact on the young South African
democracy, where resources
are strained to meet urgent and extensive
human needs. Various international instruments deal with the problem
of international
crime in this regard and it is now widely accepted
in the international community that criminals should be stripped of
the proceeds
of their crimes, the purpose being to remove the
incentive for crime, not to punish them. This approach has similarly
been adopted
by our legislature.
34.
In
Mohamed,
the Constitutional Court clearly identified that
that it is
criminals
(namely those persons charged,
prosecuted, and found guilty of offences within the confines of a
criminal justice system) who must
be stripped of their ill-gotten
gains.
35.
The proposed extended definition of the word
defendant
is at
odds with principles of the rule of law.
DO THE RESPONDENTS
HOLD REALIZABLE PROPERTY?
36.
This question is answered if any property held by the
respondent entities
was an
affected gift
received from
any of the defendants directly or indirectly.
37.
On an analysis of the facts set out below, none of the respondent
entities received
affected gifts
from any of the defendants or
hold
realisable assets
.
THE EIGHTH RESPONDENT
38.
The eighth respondent was incorporated as a close corporation in June
1994.
The fourteenth respondent acquired the entire members’
interest on 23 February 2006.
39.
On 24 May 2007, the fourteenth respondent transferred 50% of his
member’s
interest to the seventh defendant at no cost to the
seventh defendant.
40.
On 30 October 2007, the eighth respondent was converted from a close
corporation
to a private company.
41.
On 19 December 2014, the fourteenth respondent transferred 50% of his
shares
in the eighth respondent to the Abraham le Roux Family Trust
and the seventh defendant transferred 50% of his shares in the eighth
respondent to the Le Roux Investment Trust. The fourteenth respondent
and seventh defendant are both trustees of each of the Abraham
le
Roux Family Trust and the Le Roux Investment Trust. Both the Abraham
le Roux Family Trust and the Le Roux Investment Trust acquired
their
shareholding in the eighth respondent, at par value of R1.00per
share. Each of the Abraham le Roux Family Trust and
the Le Roux
Investment Trust acquired 50 shares.
42.
The eighth
respondent produces “
as
evidence of payment for the shares for value
”
the return for securities transfer tax. This contention is a fallacy.
Securities transfer tax is payable by the company,
whose shares are
sold or issued.
[19]
The
securities transfer tax return does not evidence a transfer of the
shareholding for value. The facts do not evidence
that the
shareholding was transferred for value.
43.
The eighth respondent does not take the court into its confidence as
to how
its shareholding was valued at R100.00 in 2014. There is no
evidence from the company’s auditor, Trevor Wait, as to the
basis
for the determination of the value of the shares. There is no
account in the “
value of the shares
” in the sum of
R100 of the underlying asset held by the eighth respondent, namely,
an immovable property which has an income
stream, monthly rental
income received from the eighth defendant.
44.
The
immovable property itself (absent the income stream) was valued at
R1.6 million on 28 April 2015. This, four months after the
seventh
defendant and fourteenth respondent had transferred their 50%
shareholding to their respective family trusts. Even were
the current
value of the mortgage bond of approximately R500 000.00 is set
off against the 2015 value of the immovable property,
the underlying
value of the shares in the company was at least in excess of R1
million.
[20]
This rough
calculation excludes the value of the income stream the eighth
respondent received from the eighth defendant.
45.
That said, the fourteenth respondent is not a defendant. The transfer
by the
fourteenth respondent of his fifty percent (50%) shareholding
in the eighth respondent, to the Abraham le Roux Family Trust
represented
in these proceedings by the ninth and tenth respondents,
does not constitute an
affected gift
. It is not
realisable
property
.
46.
The transfer by the 14
th
respondent of his fifty percent
(50%) shareholding in the eighth respondent to the seventh defendant
does not constitute an
affected gift
. It is not
realisable
property
.
47.
While the seventh defendant transferred his fifty percent (50%)
shareholding
in the eight respondent to the Le Roux Investment Trust,
the Le Roux Investment trust, it is not a respondent. Consequently,
this
transfer of the seventh defendant’s shareholding in
the eighth respondent, neither constitutes an
affected gift
nor
is it
realisable property
.
48.
Inasmuch as the eighth defendant pays monthly rental income to
the eighth
respondent, there is no evidence before me, that the
defendant pays the eighth respondent an amount below market value. I
find
that the NDPP has failed to prove on a balance of probabilities,
that the rental income the eight respondent receives from the eighth
defendant, is realisable property.
49.
In the result, there is no factual basis for the assets of the eighth
respondent
to be subject to the restraint order.
NINTH AND TENTH
RESPONDENTS IN THEIR CAPACITIES AS TRUSTEES OF THE ABRAHAM LE ROUX
FAMILY TRUST (“the Trust”)
50.
The Trust was registered, and letters of executorship issued to the
7
th
Defendant and the 14th Respondent in 2014. The Trust
acquired 50% shareholding in Woodland Safari, the eighth respondent,
in December
2014; 50% shareholding in Vindex Advisory, the thirteenth
respondent, in February 2018; the 100% shareholding in Furnix, the
sixteenth
respondent, in May 2020; furniture, paintings and six
consecutive annual donations of R100 000.00 in the period 2015
to 2020
from the fourteenth respondent.
51.
The fourteenth respondent is not a defendant. The transfers and/ or
disposals
and/or donations the fourteenth respondent made to
the Trust are not
affected gifts
. The property the Trust
acquired from the fourteenth respondent does not constitute
realisable property
.
52.
There is no factual basis for me to confirm the provisional restraint
order
against the ninth and tenth respondents in their capacity as
trustees of the Trust.
THE TWELFTH RESPONDENT
53.
The twelfth respondent was incorporated on 19 August 2020, with the
entire shareholding
held by Southern Ferries and Salvage (Pty) Ltd.
The seventh defendant was appointed as a director.
54.
On 18 March 2021, Southern Ferries and Salvage (Pty) Ltd transferred
50% of
its shareholding to Woodland Safari (Pty) Ltd, the eighth
respondent, for no value. The reason for this transfer (at no value)
advanced by the seventh defendant, is that the twelfth respondent had
no assets or liabilities.
55.
The twelfth respondent holds a licence to search for and salvage
abandoned shipwrecks.
To acquire this licence the twelfth respondent
was required to provide South African Revenue Service (“SARS”)
with
a security bond to the value of R5 000.00. Nedbank Limited
issued a security bond on behalf of the twelfth respondent to the
satisfaction of SARS, which security bond is secured by a R5 000.00
investment made by its 50% shareholder, Southern Ferries
and
Salvage (Pty) Ltd.
56.
The twelfth respondent is not a defendant. The twelfth respondent has
not received
an
affected gift
from any defendant. The twelfth
respondent holds no
realisable property
.
57.
There are no facts alleged by the NDPP, to justify confirmation
of the
provisional restraint order..
THIRTEETH RESPONDENT
58.
The thirteenth respondent was incorporated in January 2017 with the
fourteenth
respondent was the sole shareholder and director.
59.
In February 2018, the fourteenth respondent appointed the seventh
defendant
as a director; transferred 50% of his shareholding to the
Abraham le Roux Family Trust and remaining 50% of his
shareholding
to the Le Roux Family Investment Trust, for no value.
60.
As the fourteenth respondent is not a defendant, the transfer by the
fourteenth
respondent of his shareholding to the Abraham le Roux
Family Trust and to the Le Roux Family Investment Trust, does
not constitute
an
affected gift
. Consequently, the property
held by the Le Roux Family Investment Trust and the Abraham le Roux
Family Trust, being the shareholding
in the thirteenth respondent,
and the assets of the thirteenth respondent do not constitute
realisable property
.
61.
The NDPP has failed to discharge its onus on a balance of
probabilities
that the thirteenth respondent holds realisable
property. There are no facts before me to support the confirmation of
the restraint
order as against the thirteenth respondent.
THE SIXTEENTH
RESPONDENT
62.
The fourteenth respondent acquired the sixteenth respondent, which
was incorporated
in November 2019, as a shelf company in May 2020.
The fourteenth respondent registered the Abraham le Roux Family
Trust,
as its sole shareholder.
63.
In November 2020, the fourteenth respondent sold a property, Erf
22707 Kariega,
registered in his name, to the sixteenth respondent
for the sum of R900 000.00. The property is currently
leased to
Volkswagen South Africa. The sixteenth respondent is paying
the fourteenth respondent the purchase consideration from the monthly
rental income it receives.
64.
Whilst the
fourteenth respondent contends that the sixteenth respondent is
paying off the purchase consideration to the fourteenth
respondent
from the rental it receives on a monthly basis, the deed of transfer
indicates otherwise. The title deed is in the name
of the sixteenth
respondent,
[21]
consequently,
the sixteenth respondent is the legal owner. The title deed records
that that the purchase price has been paid.
65.
The
sixteenth respondent has not put up any evidence of the purchase of
immovable property from the fourteenth respondent on “
periodic
payments.
”
[22]
The deed of transfer is not in the name of the fourteenth respondent,
endorsed as sold to the sixteenth respondent, subject
to
periodic payment. It is only when the periodic payment sale
agreement, is recorded at the Deed’s Office, that the
periodic
payments become due and payable.
[23]
66.
Irrespective of the modalities that the sixteenth respondent utilised
to settle
its indebtedness to the fourteenth respondent, if any,
these are inconsequential to the issues in dispute. The fourteenth
respondent
is not a defendant. The “
sale
” by the
fourteenth respondent to the sixteenth respondent, does not
constitute an
affected gift
. The sixteenth respondent’s
immovable property, Erf 22707 Kariega, is not
realisable property
.
67.
The fourteenth respondent donated R100 000.00 to the sixteenth
respondent
in each of the 2021 and 2022 financial years. As the
fourteenth respondent is not a defendant, and the donations made by
the fourteenth
respondent to the sixteenth respondent do not
constitute
affected gifts
, the donations the sixteenth
respondent received are not
realisable property
.
68.
The NDPP has failed to prove on a balance of probabilities that the
sixteenth
respondent holds realisable assets. There are no
facts before me to confirm the provisional restraint order in respect
of
the property of the sixteenth respondent.
THE EIGHTEENTH
RESPONDENT
69.
The fourteenth respondent was a director of the eighteenth respondent
from 2007
until 15 August 2022, shortly after the granting of the
provisional restraint order. The fourteenth respondent was not a
shareholder
of the eighteenth respondent.
70.
Novara
Investment Trust is the eighteenth respondent’s sole
shareholder. In the answering affidavit filed by Gerhardus Muller,
a
director of the eighteenth respondent and a trustee and beneficiary
of the Novara Investment Trust, Muller contends that the
Novara
Investment Trust acquired the shareholding in the eighteenth
respondent on 25 October 2013.
[24]
However, this contention is contrary to both the letters of authority
appointing the trustees of the Novara Investment Trust
and the Deed
of Trust.
[25]
The
letters of authority were only issued by the Master on 24 July
2019
[26]
and the Deed of Trust
concluded in August 2019. There is no explanation in the papers for
this discrepancy.
71.
Notwithstanding the discrepancies in the response provided by the
eighteenth
respondent, the NDPP has failed to show on a balance of
probabilities that the eighteenth respondent received an
affected
gift
from any of the defendants. holds
realisable
property.
72.
The eighteen respondent is not itself a defendant. The NDPP
advances no
reasons in reply for the confirmation of the provisional
restraint order.
73.
Consequently, there is no justification on the facts before me
for the
confirmation of the restraint order as against the eighteenth
respondent.
THE NINETEENTH
RESPONDENT
74.
Thangana le Roux Inc, the nineteenth respondent, is a law firm. The
fourteenth
respondent holds forty nine percent (49%) of the
shareholding, the majority shareholding, balance of fifty-one percent
(51%)
is held by Vuyolwethu Thangana. The nineteenth
respondent was incorporated in October 2017. The nineteenth
respondent is
not a defendant.
75.
The NDPP has failed to show on a balance of probabilities that the
nineteenth
respondent received an
affected gift
from any
defendant or that it holds
realisable property
. There is
no evidence on the papers to justify the confirmation of the
restraint order as against the nineteenth respondent.
76.
In reply and in the report of the curator, the NDPP argue that the
directors’
fees paid or to be paid to directors of the
respondent entities fall to constitute
realisable property
.
The respondent sought leave to respond in a fourth set of papers to
the new material set forth in the replying affidavit and curator’s
report. I granted the application and admitted the further set of
papers in the record.
77.
As I have stated above, the fourteenth respondent is not a defendant
nor does
the NDPP intend to charge the fourteenth respondent. In such
circumstances, as I have found above, the casual connection required
by POCA between the fourteenth respondent and the respondent entities
for the confirmation of the restrain order, severed.
It follows
therefor that any directors’ fees paid to or, to be paid
to the directors of the respondent entities do
not constitute
realisable property.
78.
From an analysis of the facts above, none of the respondent entities
received
affected gifts
from any of the defendants. None
of the respondent entities hold
realisable property
. There is
no factual or legal basis to confirm the provisional restraint order
as against the respondent entities.
79.
In the result I make the following order
79.1
The rule nisi against the respondent entities
is
discharged.
79.2
The provisional restraint order against the property
of the
respondent entities is discharged.
79.3
The applicant is ordered to pay the costs of the
respondent entities,
occasioned by the application.
___________________________
DREYER
AJ
ACTING
JUDGE OF THE HIGH COURT
Representation for
Applicant:
Counsel:
Mr W Myburgh
Instructed
by:
State Attorney, Gqeberha
Representation for
8
th
, 9
th
, 10
th
, 12
th
,
13
th
, 16
th
, 18
th,
and 19
th
Respondents:
Counsel:
Adv F Van Zyl SC
Instructed
by:
Meyer Inc, Gqeberha
Date
Heard:
26 April 2023
Supplementary
heads
Filed
28 April 2023 (applicant)
2May 2023 (respondents)
Date
Delivered:
8 August 2023
[1]
Act 121 of 1998
[2]
s25 of POCA
[3]
s18 of POCA
[4]
Act 12 of 2004
[5]
Vol 1 Annexure NCN1 to the founding
affidavit of Dr Ndzengu pp76 to 178
[6]
Represented in the criminal trial by the
seventh defendant, who is one of two of its directors. The
second
director, the fourteenth respondent has not been charged by the
NDPP.
[7]
The full extent of the provisional restraint order granted by
Justice Schoeman is at Vol9 p 2643
[8]
The full extent of the provisional restraint is filed on record.
[9]
NDPP
v Kyriacou
2014
(1) SA 379 (SCA)
[10]
s25(1)(a)(ii) of POCA
[11]
Kyriacou,
supra
at para [10] fn 18
[12]
The
National Director of Public Prosecutions v Rautenbach and Others
2005 (4) SA 603
(SCA)
[13]
Quoted with approval in
National
Director of Public Prosecutions v Wood and Others
[2020] 3 All SA 179
(GJ) per Keightley J for the Full Bench at paras
[32] and [33]
[14]
Wood
(
supra
)
at para [5] and [92]. In this matter the NDPP relied on
s25(1)(b) of POCA
[15]
NDPP
v Procopos
,
2009
(1) SACR 468
(SCA) at para [35]
[16]
Section 179 of Act 106 of 1996
[17]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
2012
(4) SA 593
(SCA)
[18]
[2002] ZACC 9
;
2002 (2) SACR 196
(CC) at paras [15] and [16]
[19]
s6 of the Securities Transfer Act 26 of 2007
states
“
the amount
or
market value of the consideration given
or, where
no
consideration is given
or the consideration given is less
than the market value of that security,
the market value
of that security
;
[20]
s15(1)
of POCA states that: “
The
value of property … in relation to any person holding the
property shall be –
(a)
where any other person holds an interest in the property –
(i)
the market value of property less
(ii)
the amount required to discharge any encumbrance on the property
”
[21]
The transfer of ownership of immovable property is recorded by the
registration of the title deed in the name of purchaser.
[22]
s6(1)(s)
and (3) of the
Alienation of Land Act
68 of 1981
, requires the term of payment to be recorded. If there
are instalment payments for the purchase of the land, registration
of
the agreement is required by
s20
of the
Alienation
of Land Act
68 of 1981
to make the instalment payments due and payable
[23]
Amardian
and Others v Registrar of Deeds and Others
2019 (3) SA 341 (CC)
[24]
Court
bundle vol 8 p 2757
The Novara Investment Trust acquired the shareholding in the
eighteenth respondent from the Matisse Trust, which had itself
acquired the shareholding from the Vera Trust. There is no
explanation in the papers of the relationship between these
entities.
[25]
A trust is created by the deed of trust. It is
not a separate legal entity. It is represented by its trustees.
A
trust has no separate existence absent a deed of trust and
appointment of trustees.
[26]
Court
bundle vol 8 p 2761