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[2021] ZAKZDHC 42
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Ngcobo v National Director of Public Prosecutions (D8053/2019) [2021] ZAKZDHC 42 (13 December 2021)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: D8053/2019
In
the matter between:
SANDILE
NGCOBO
Applicant/Second
Respondent
And
THE
NATIONAL DIRECTOR OF
PUBLIC
PROSECUTIONS
Respondent/Applicant
In
re:
THE
NATIONAL DIRECTOR OF
PUBLIC
PROSECUTIONS
Applicant
And
ROBERT
ABBU
First
Respondent
SANDILE
NGCOBO
Second
Respondent
ILANGA
LAMAHLASE PROJECTS (PTY) LTD
Third
Respondent
MZWANDILE
F
DLUDLA
Fourth
Respondent
HLENGA
SIBISI
Fifth
Respondent
UZUZINEKELA
TRADING 31
CC
Sixth
Respondent
ZITHULELE
A
MKHIZE
Seventh
Respondent
OMPHILETHABANG
CC
Eighth
Respondent
BONGANI
P
DLOMO
Ninth
Respondent
KHOBOSO
J
DLOMO
Tenth
Respondent
ELSHADDAI
HOLDING GROUP CC
Eleventh
Respondent
PRABAGARAN
PARIAH
Twelfth
Respondent
SINTHAMONE
PONNAN
Thirteenth
Respondent
CRAIG
PONNAN
Fourteenth
Respondent
MONDLI
MICHAEL
MTHEMBU
Fifteenth
Respondent
ZANDILE
RUTH THELMA GUMEDE
Sixteenth
Respondent
NANCY
SANDRA
ABBU
Seventeenth
Respondent
VUYISWA
VENERY
NGCOBO
Eighteenth
Respondent
LOGAMBAL
PARIAH
Nineteenth
Respondent
CYNTHIA
MTHEMBU
Twentieth
Respondent
JABEZ
MEDIA AND BUSINESS SOLUTIONS CC
Twenty
First Respondent
AFRICAN
COMPASS TRADING 588 CC
Twenty
Second Respondent
AKHONA
AMAHLE CONTRACTING PROJECTS CC
Twenty
Third Respondent
NTOMBIZETHU
TRADING ENTERPRISE CC
Twenty
Fourth Respondent
UHLANGA
EVENTS MANAGEMENT CC
Twenty
Fifth Respondent
UHLANGA
TRADING ENTERPRISE CC
Twenty
Sixth Respondent
SEKHOBA
TRADING 21 CC
Twenty
Seventh Respondent
PINETOURS
SERVICES AND TRADING CC
Twenty
Eighth Respondent
MATHULA
LANDSCAPING AND CIVIL
CONTRUCTION
CC
Twenty
Ninth Respondent
FANTIQUE
TRADE 188
CC
Thirtieth
Respondent
MSUNDUZI
CIVIL (PTY)
LTD
Thirty
First Respondent
SASONAKO
PROJECTS CC
Thirty
Second Respondent
UMVUYO
HOLDINGS
CC
Thirty
Third Respondent
INTERLLECTUAL
SERVICES AND INVESTORS CC
Thirty
Fourth Respondent
CYRUS
INDUSTRIES
CC
Thirty
Fifth Respondent
CROWN
ENERGY AND RECYCYLING GROUP CC
Thirty
Sixth Respondent
MMZ
MEDIA DISTRIBUTIONS AND SUPPLIES CC
Thirty
Seventh Respondent
MALAGAZI
TRADING CC
Thirty
Eighth Respondent
INANDA
DEVELOPMENT SERVICES CC
Thirty
Ninth Respondent
SIZISA
UKHANYO TRADING 382
CC
Fortieth
Respondent
DLOMO
BROTHERS
CC
Forty
First Respondent
BABUSI
TRADING
CC
Forty
Second Respondent
BHEKIZIZIWE
ELKANA SIBISI N.O.
Forty
Third Respondent
(In
his capacity as trustee on the Elkasi Trust
No.
IT872/2009/PMB)
THOKO
THEMBILE NONSIZI ZONDI N.O.
Forty
Forth Respondent
(In
his capacity as trustee on the Elkasi Trust
No.
IT872/2009/PMB)
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email, and release to
SAFLII.
The date and time for hand-down is deemed to be have been at 10h00 on
13 December 2021.
ORDER
The
following order is issued:
The
application is dismissed with costs; such costs are to include the
costs of two counsel where so employed.
JUDGMENT
Delivered
on: 13 December 2021
Marks
AJ:
Introduction
[1] This
matter served before me as an interlocutory application in terms of s
26(6) and (10) of the Prevention
of Organised Crime Act 121 of 1998
(POCA) for the release of certain restrained assets, and for the
payment of R1 million for reasonable
living and legal expenses. The
application was opposed.
[2] The
applicant, Sandile Ngcobo (Ngcobo) and his wife, Vuyiswa Ngcobo
(Vuyiswa) are respondents in the main application,
whereby the
National Director of Public Prosecutions (the NDPP) secured a
restraint order granted ex parte by this court on 4 October
2019 in
the form of a rule nisi
.
Ngcobo has opposed the confirmation
of the rule and is applying for a discharge thereof. This matter
referred to as the main application
is set down for hearing on the
opposed roll on 4 February 2022 at the Durban High Court. The rule
nisi has been discharged in respect
of Vuyiswa and therefore the
interlocutory application proceeded in respect of Ngcobo only.
[3] For
reasons which shall become apparent, it is necessary to set out the
prayers sought in the notice of motion
that was filed on behalf of
both Ngcobo and Vuyiswa in the interlocutory application on 8 January
2020.
[4] The
notice of motion seeks an order in the following terms:
‘
(1) In
terms of Section 26 (10) of POCA, the interim order issued on 4
October 2019 (the restrain order)
is rescinded or varied to exclude:-
1.1 The
Jaguar XF – registration ND [...];
1.2 The
Porsche Cayenne – registration ND [...];
1.3 The
Absa bank account number [...];
1.4 The
second respondent’s salary;
1.5 The
cash sum of R 41 500, 00.
(2) That
the order in paragraphs 1.1 to 1.5 above shall operate within
immediate effect.
(3) The
curator bonis
shall return the property referred to in para.
1.1, 1.2 and 1.5 above to the second and eighteenth respondents
within (3) days
of this order.
(4) Payment
is to be made by the
curator bonis
in terms of Section 26 (6)
of POCA for the reasonable legal expenses of the second and
eighteenth respondents in the sum of R1
million into the trust
account of Calitz Crockart and Associates Inc. within (7) seven days
of the order.
(5) Further
and or alternative relief.
(6) Costs
in the event that the application is opposed.’
The
issues
[5] The
issues requiring determination are whether Ngcobo has complied with s
26(6) and (10) of POCA in respect
of his application for the release
of restrained assets and funds for reasonable living and legal
expenses. If so, whether the
court should exercise its discretion
concerning the release of funds for the payment of these reasonable
expenses. Before analysing
the legal principles, it is necessary to
give a brief background and summary of facts, which are either not in
dispute or are common
cause.
Background
facts and facts which are common cause
[6] Ngcobo
is employed at the eThekwini Municipality as the Deputy Head of
Supply Chain Management and the Chairperson
of the Bid Adjudication
Committee. It is alleged that he, together with others, was involved
in a fraudulent, corrupt scheme whereby
employees of the eThekwini
Municipality acted in concert with certain service providers in order
to defraud the municipality in
excess of R230 million. The NDPP has
instituted proceedings against Ngcobo and others in the high court,
however, the trial has
not yet begun. Besides these charges, there
are other cases pending against Ngcobo in the Durban Specialised
Commercial Crime Court.
[7] On
4 October 2019, Henriques J granted a provisional order in
terms of s 26 of POCA against 44 respondents,
including Ngcobo. In
terms of the order, realisable property to the value of
R230 571 760.96 was to be restrained from
the 44
respondents. The property which Ngcobo was required to surrender in
terms of the order included property specified and set
out in the
schedule annexed to the order, as well as other assets held by him at
the time of the granting of the order or subsequently.
The curator
bonis appointed by the court was authorised to take possession of the
property and to administer the realisable property.
At a meeting held
with Mr
Howse SC
, Ngcobo’s legal representative, the
curator bonis requested a list of Ngcobo’s income and
expenditure on oath for her
to administer his bank accounts. She also
requested a statement on oath declaring his interests in the
properties under restraint.
According to the curator’s first
report dated 22 November 2019, Ngcobo’s restrained assets had
an expected realisation
value of approximately R7 million. It is from
this value that Ngcobo is seeking R1 million for reasonable living
and legal expenses.
[8] In
order to deal with the merits of the application, it is necessary to
mention certain provisions of the order
and thereafter consider the
purposes of POCA, confiscation orders, restraint orders and the
applicable legal principles.
The
restraint order
[9] In
terms of the court order granted on 4 October 2019, the appointed
curator bonis was given certain powers
and duties. The order further
advises the 44 respondents at para 1.3.24 that they must disclose to
the curator bonis on affidavit,
in such form as she determines, a
description and whereabouts of all property not physically
surrendered or to be transferred to
the respondents, or any gifts
made by the respondents. Further, at para 1.6.1 it spells out that
the court may order the release
of realisable property within the
control of the curator bonis if a respondent satisfies the court that
he has made full disclosure
to the curator bonis under oath of all
his interests in the property subject to the restraint and he cannot
meet the expenses concerned
out of the unrestrained property.
Legal
principles
[10] It
was succinctly stated by Mathopo JA in
National
Director of Public Prosecutions v Ramlutchman
[1]
that the object of POCA is to:
‘
. . .strip
criminals of the proceeds of their criminal conduct. To this end the
legislature has, in chapter 5 of POCA, provided
an elaborate scheme
to facilitate such stripping. This chapter deals with the making of
confiscation orders by a criminal court
at the end of a criminal
trial.’
[11] The
purpose of a restraint order is to preserve the defendant’s
assets pending the ultimate determination
of a confiscation order in
terms of s 18 of POCA. However, a confiscation order may or may not
ultimately be granted at the end
of the day for a variety of reasons,
namely, the
defendant may be acquitted or the
court hearing the application for a confiscation order may decide in
the exercise of its discretion,
not to make such an order. The
restraint order will then be rescinded, and the defendant’s
assets returned to him. These
factors, which must be taken into
account, are not decisive factors but merely guiding principles that
the court’s discretion
may not be exercised on the basis that a
confiscation order will inevitably be made. Whether a confiscation
order will ultimately
be made is for the determination of the court
that deals with the criminal case. Dealing with restraint orders
requirements set
out in subsections (6) and (10) of POCA must be
analysed.
[12] Turning
to the relief sought in terms of s 26(10) of POCA and the
applicability thereof. Section 26(10) reads
as follows:
‘
(10)
A
High Court which made a restraint order-
(a)
may
on application by a person affected by that order vary or rescind the
restraint order or an order
authorising
the seizure of the property concerned or other ancillary order if it
is satisfied-
(i)
that
the operation of the order concerned will deprive the applicant of
the means to provide for his or her reasonable living expenses
and
cause undue hardship for the applicant; and
(ii)
that
the hardship that the applicant will suffer as a result of the order
outweighs the risk that the property concerned may be
destroyed,
lost, damaged, concealed or transferred; and
(b)
shall
rescind the restraint order when the proceedings against the
defendant concerned are concluded.’
[13] The
rule nisi against Vuyiswa was discharged on 12 November 2020 and the
cash sum of R41 500 in para
1.5 of the notice of motion was
released by the curator bonis
.
Furthermore, the curator bonis
consented to the release of the Jaguar motor vehicle with
registration letters and numbers ND [...]
mentioned in para 1.1. The
Porsche Cayenne motor vehicle with registration letters and numbers
ND [...] mentioned in para 1.2 was
destroyed in the July 2021 unrest
that took place in KwaZulu-Natal and is no longer capable of being
restored or released. Ngcobo’s
salary mentioned in para 1.4 was
never restrained, and he receives his salary every month. It was only
the bank accounts, including
the bank account mentioned in para 1.3
that was restrained in terms of the court order. It is common cause
that Ngcobo opened a
new bank account into which he is receiving his
salary. The bank account sought for release in the prayer is
inextricably linked
to the prayer for the release of funds for living
and legal expenses.
[14] The
requirements for the release of restrained assets for living and
legal expenses are set out in s 26(6)
of POCA. Section 26(6) states:
‘
Without derogating
from the generality of the powers conferred by subsection (1), a
restraint order may make such provisions as
the High Court may think
fit-
(a)
for
the reasonable living expenses of a person against whom the restraint
order is being made and his or her family or household;
and
(b)
for
the reasonable legal expenses of such person in connection with any
proceedings instituted against him or her in terms of this
Chapter or
any criminal proceedings to which such proceedings may relate,
if the court is satisfied
that the person whose expenses must be provided for has disclosed
under oath all his or her interests
in property subject to a
restraint order and that the person cannot meet the expenses
concerned out of his or her unrestrained
property.’
[15] These
legal requirements have been identified in a number of Constitutional
Court judgments. In
Fraser
v Absa Bank Ltd
[2]
it was stated:
‘
A defendant who
applies to the High Court in terms of section 26(6) to make provision
for reasonable living and/or legal expenses
must satisfy the Court
that he or she has disclosed under oath all his or her interests in
property subject to the restraint order
and that he or she cannot
meet the expenses for which an allowance is sought out of the
unrestrained property. If the court is
satisfied in this regard,
section 26(6) gives the court a discretion: it may “make such
provision as the High Court may think
fit” for the reasonable
living and/or legal expenses.’
[16] In
the unanimous decision of
Naidoo
& others v National Director of Public Prosecutions &
another
,
[3]
the meaning of s 26(6) was discussed at length by Cameron J
.
The court dealt extensively with the conditions that must be met upon
a proper interpretation of s 26(6) before an order can be
made. In
essence, the court found that s 26(6) made allowance for reasonable
living and legal expenses on limited terms and that
access to the
assets is conditional. The two conditions being that there must be
full disclosure of interest in property subject
to the restraint
order, and that the expenses cannot be met from the unrestrained
property. The principles in
Naidoo
were confirmed in the majority decision of
National
Director of Public Prosecutions v Elran
.
[4]
[17] An
applicant must therefore meet the conditions before the court is
entitled to exercise its judicial discretion
in his favour. It
follows therefore that there must be full disclosure under oath of
all his interests in the restrained property,
and that the expenses
which are reasonable, cannot be met from the unrestrained property.
[18] At
the onset of the interlocutory being heard, Mr
Howse
contended
that the provisions of s 26(6) and (10) of POCA have been complied
with and therefore the court may and should exercise
its discretion
in the applicant’s favour as he has a fundamental right to
legal representation. Counsel for the respondent,
Mr
Cassim SC,
conceded that the applicant requires legal representation. However,
he contended that the applicant had not made out his case in
the
founding papers and neither has he satisfied the requirements laid
down in s 26(6) of POCA. Moreover, the release of the bank
account in
para 1.3 of the notice of motion was moot as Ngcobo had opened a
second bank account without the knowledge of the curator,
and in
contravention of the restraint order.
[19] The
complaint that the applicant has not made out a case in the founding
papers requires attention. The general
rule, which is well
established, is that an applicant ought to make out his/her case in
the founding affidavit and papers and not
in the reply. It is a basic
requirement that the relief sought has to be supported by the facts
as set out in the founding affidavit.
[20] It
is trite that an applicant must stand or fall by his founding
affidavit and that he is not permitted to
make out his case in reply.
The principle was stated by Diemont JA in
Director
of Hospital Services v Mistry.
[5]
‘
When, as in this
case, proceedings are launched by way of notice of motion, it is to
the founding affidavit, which a Judge will
look to determine what the
complaint is. As was pointed out by KRAUSE J in
Pountas’
Trustee v Lahanas
[6]
and as has been said in many other cases:
“
. . .an Applicant
must stand or fall by his petition and the facts alleged therein and
that, although sometimes it is permissible
to supplement the
allegations contained in the petition, still the main foundation of
the application is the allegation of facts
stated therein, because
those are the facts which the respondent is called upon either to
affirm or deny”.
Since it is clear that
the applicant stands or falls by his petition and the facts therein
alleged,
“
it is not
permissible to make out new grounds for the application in the
replying affidavit”’
In
this regard see also
Pearson
v Magrep Investments (Pty) Ltd & others
,
[7]
KwaZulu-Natal
Law Society v Debba
,
[8]
and more recently, in
My
Vote Counts NPC v Speaker of the National Assembly & others
.
[9]
[21] I
now turn to the founding affidavit and the papers attached thereto.
The deponent to the founding affidavit
is Sandile Ngcobo, the
applicant. The affidavit is verbose comprising 55 paragraphs. It
relates to the restraint order, the purpose
of POCA, the property
that was seized, and the purpose of confiscation orders. Most of the
assertions in the affidavit are irrelevant
as most of the property
has been returned. I shall therefore confine myself to those facts
still relevant in this application.
Ngcobo admits that he opened
another bank account in order to receive his salary and access the
funds. He avers that it was done
out of necessity as the curator had
failed to remove the restraint. In respect of the legal fees, he
explains that he cannot meet
the legal expenses incurred from the
unrestrained property as the legal expenses in the criminal matter
alone total R500 000. Further
legal expenses shall be considerably
more. His assets under restraint are valued at approximately R7
million and he urged the court
to award R1 million as it is unlikely
that the confiscation order will ultimately be made.
[22] In
regard to the disclosure, he relies on the court order, together with
Annexure ‘A’. He then
asserts, under oath, that the
property mentioned in the Annexure ‘A’ attached to the
court order is the only property
that he and his wife have an
interest in. At para 48 of the founding affidavit he states:
‘
I
hereby declare on oath that the property described in paragraph 11 to
16 of Annexure ‘A’ to the order issued on 4
October 2019
is property in which my wife and/or I have an interest.’
[23] I
am not persuaded that the requirement in s 26(6) relating to full
disclosure is met by a mere assertion
by Ngcobo, even under oath. I
am fortified in this belief in that further in the founding
affidavit, on his own admission, he admits
that disclosure to the
curator has not yet taken place. At para 49 it reads:
‘
Disclosure will be
made on affidavit to the
curator bonis
as soon as the
curator
bonis
reverts in regard to the form in which she requires such
disclosure (the form of disclosure is first requested in a letter by
our
attorneys dated 24 October 2019 marked “SN6”.’
[24] The
NDPP, in the opposing affidavit of Mr Samuels, states that Ngcobo has
to date failed to provide the curator
bonis with a schedule of income
and expenses under oath as requested by her in terms of the order.
Further, that according to the
interim first report filed by the
curator, Ngcobo was not forthcoming with information relating to his
assets and all the bank
accounts that were held at Absa Bank. It was
only after investigations that the other accounts at Absa Bank
containing the cash
amounts of over R6 million was uncovered. In
respect of the upliftment of his bank account, Ngcobo has on his own
admission and
in defiance of the court order opened another bank
account at Absa Bank without the knowledge or consent of the curator
into which
his salary is being paid
.
Further, Ngcobo has not
issued a statement under oath to the curator of his interests in the
assets under restraint.
[25] The
purpose of the requirement to make a full disclosure of his interests
in the assets to the curator pursuant
to the restraining order was
discussed by Goosen J
,
in
Randell
v Eybers NO & another (Greenwood Primary School & another
intervening)
:
[10]
‘
The very purpose
of the requirement is to enable the court to determine whether it
should exercise a discretion in favour of the
applicant. In my view
it must follow, as a matter of logic, that the court should be
apprised of the nature of the property, the
origin of the interest in
such property, the extent of such interest where relevant and,
perhaps most importantly, what, if any,
competing interests in said
property exist.’ (Footnote omitted).
[26] In
the present matter, it does not avail Ngcobo to merely state that his
interests in the assets restrained
are ownership of such assets.
There must be full and frank disclosure. Based on these facts, there
has clearly been no full and
frank disclosure to the curator bonis or
the court for that matter, of his interests in the restrained
property. It is of no surprise
that the curator bonis has not acceded
to his requests for the restraint of his assets to be lifted and for
her to release funds
for his reasonable living and legal expenses.
Without the full disclosure aforementioned, she would be unable to
ascertain whether
the restraints should be lifted and what amounts of
funds are reasonable and should be realisable.
[27] The
founding affidavit, in my view, appears to be a lecture in law, and
fails to disclose any facts or make
out a case that entitles Ngcobo
to the relief sought. He was required by the court order to disclose
his interests in the restrained
property, which he has by his own
admission failed to do. There must be a properly motivated
application for the release of funds.
The applicant bears the onus of
proof. In discharging the onus, an applicant must go further than
merely stating he is unable to
meet his expenses. In conclusion, I
find that the applicant has failed to make out a case for the relief
sought and accordingly
the application falls to be dismissed.
Costs
[28] Mr
Cassim
has argued for a punitive costs order against the
applicant as he contends that the application was an abuse of court
process as
the applicant failed to comply with the curator’s
request and the initial restraint. I do not believe that a punitive
order
for costs will be justified in these circumstances. The general
principle is that the costs normally follow the result and I can
find
no reason to deviate from this general principle.
Order
[29] In
conclusion, the following order is issued:
The application is
dismissed with costs; such costs are to include the costs of two
counsel where so employed.
Marks
AJ
Case
Information
Date
of Set Down: 24
November 2021
Date
of Judgment: 13
December 2021
Appearances
Counsel
for the Applicant: Mr
Howse SC
Instructed
by: Mr
Calitz Crockart & Associates
19
Village Road, Kloof
Email:
calcro@calitzcrockart.co.za
Ref:
IC/RAC/ave/02N004003
Counsel
for the Respondent: Mr
Cassim SC with Ms Freeze
Instructed
by: State
Attorney KZN
6
th
Floor, Metropolitan Life Building
391
Anton Lembede Street, Durban
Email:
Bmothilall@npa.gov.za
Ref:
AFU:Adv B. Mothilall/119/683/19/A/P32
[1]
National
Director of Public Prosecutions v Ramlutchman
2017 (1) SACR 343
(SCA) para 7.
[2]
Fraser
v Absa Bank Ltd
[2006] ZACC 24
;
2007
(3) SA 484
(CC) para 55.
[3]
Naidoo
& others v National Director of Public Prosecutions &
another
2012
(1) SACR 358 (CC).
[4]
National
Director of Public Prosecutions v Elran
2013
(1) SACR 429
(CC).
[5]
Director
of Hospital Services v Mistry
1979 (1) SA 626
(A) at 635H-636B.
[6]
Pountas’
Trustee v Lahanas
1924 WLD 67
at 68.
[7]
Pearson
v Magrep Investments (Pty) Ltd & others
1975
(1) SA 186
(D).
[8]
KwaZulu-Natal
Law Society v Debba
2016
JDR 0787 (KZP).
[9]
My Vote
Counts NPC v Speaker of the National Assembly & others
2016
(1) SA 132
(CC) para 177.
[10]
Randell
v Eybers NO & another (Greenwood Primary School & another
intervening)
[2014]
1 All SA 107
(ECP) para 53.