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[2012] ZASCA 111
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Tulip Diamonds Fze v Minister of Justice and Constitutional Development and Others (810/2011) [2012] ZASCA 111; [2012] 4 All SA 401 (SCA); 2013 (1) SACR 323 (SCA) (7 September 2012)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 810/2011
Reportable
In the matter
between:
TULIP DIAMONDS
FZE
...............................................................................
APPELLANT
and
MINISTER OF
JUSTICE AND
CONSTITUTIONAL
DEVELOPMENT
......................................
FIRST
RESPONDENT
MENZI SIMELANE NO
............................................................
SECOND
RESPONDENT
STEVEN HOLZEN NO
.................................................................
THIRD
RESPONDENT
DIRECTOR-GENERAL:
DEPARTMENT
OF JUSTICE AND
CONSTITUTIONAL
DEVELOPMENT
.......................................................................
FOURTH
RESPONDENT
BRINKS (SOUTHERN
AFRICA)
(PROPRIETARY)
LIMITED FIFTH RESPONDENT
Neutral citation:
Tulip Diamonds Fze v Minister of Justice and Constitutional
Development
(810/2011)
[2012] ZASCA 111
(7 September 2012)
Coram:
Mthiyane
DP, Brand, Cachalia, Leach and Wallis JJA
Heard: 15 August
2012
Delivered: 7
September 2012
Summary: Standing
─ International Co-operation in Criminal Matters Act 75 of 1996
─ request by Belgian examining magistrate
for assistance of
South African authorities to obtain documents ─ foreign based
company claiming confidential information
in documents in possession
of local company ─ appellant seeking to challenge decision by
South African authorities to provide
assistance and issue of subpoena
to South African company to produce documents ─ failure to
establish that information in
documents confidential ─ failure
to show that it has substantial interest in the subject matter of the
litigation.
_____________________________________________________________________
ORDER
On appeal from:
South
Gauteng High Court, Johannesburg (CJ Claassen J and Jordaan AJ
sitting as court of first instance):
The following order is made:
The appeal is dismissed with
costs, including the costs of two counsel.
___________________________________________________________
JUDGMENT
MTHIYANE DP (BRAND, CACHALIA,
LEACH AND WALLIS JJA CONCURRING)
[1] This is an appeal against an
order of the South Gauteng High Court (CJ Claassen J with Jordaan AJ
concurring) dismissing an
application by the appellant, Tulip
Diamonds Fze, a foreign company which carries on business in Dubai,
to set aside certain decisions
of the first, second and third
respondents made in terms of the provisions of the International
Co-operation in Criminal Matters
Act 75 of 1996 (the Act). The second
respondent, then the Director General: Department of Justice and
Constitutional Development,
had considered a request for assistance
from the Belgian authorities to search and seize from the fifth
respondent, a company in
South Africa, Brinks Southern Africa,
certain documents which the Belgian authorities required in
connection with a criminal investigation
they were conducting against
Omega Diamonds (Omega), a Belgian company and a citizen of that
country, Sylvain Goldberg. In the
course of a search and seizure
operation at the offices of Omega, the Belgian authorities had found
nine invoices issued by Brinks,
showing that Brinks had transported
diamond shipments between Angola and the appellant in Dubai. The
South African authorities
were requested to inspect, seize and make
copies of all relevant documents relating to similar shipments both
to the appellant,
as well as a number of other entities, including
invoices, Kimberley Certificates, packing lists, shipment documents,
insurance
policies and the like found in Brinks’ possession.
They were also requested to interview the responsible person at
Brinks
with regard to the invoices and their relationship with Omega.
[2] The Director-General and
thereafter the first respondent, the Minister of Justice and
Constitutional Development (the Minister),
acceded to the above
request. The third respondent (the Magistrate) to whom the matter was
referred, issued a subpoena requiring
Brinks to produce the required
documents and information. Brinks was willing to comply with the
subpoena.
[3] On appeal the appellant
contends, as it did in the court below, that the surrender of the
required documents by Brinks or their
disclosure would violate its
right to confidentiality in respect of the information contained in
those documents. The question
then arose as to whether the appellant
had the necessary legal standing (locus standi) in the subject matter
of the relief claimed,
in what was on the face of it a matter between
the respondents and Brinks, at the instance of the Belgian
authorities. The appellant
claimed that it had a substantial interest
in the subject matter of the litigation based on its alleged right to
confidentiality
in the documents in the hands of Brinks. It argued
that although it was a peregrinus, where its right to confidentiality
was threatened
in South Africa by South African state organs, albeit
at the instance of a foreign state, it had standing before a South
African
court to assert and protect that right.
[4] The high court rejected the
above contention on the basis that the appellant was a foreign
company which had no presence in
this country. It held that the
appellant had no standing in the courts of this country ‘to
invoke the protection and benefits
of any enshrined constitutional
right, such as fair administrative action’. The court also
rejected the appellant’s
submissions on the merits, in which it
included its claim to confidentiality. I shall return to the merits
later in this judgment.
It suffices at this stage to record that the
application was dismissed with costs and the appellant was granted
leave by the high
court to appeal to this court. Brinks who was cited
as a respondent did not appear in the appeal and abides the decision
of the
court.
[5] The appeal raises two issues.
The first is whether the appellant has standing to attack the
validity of the decisions of the
respondents to accede to a request
from the Belgian authorities on the basis of its right to
confidentiality in the documentation
requested being threatened. The
second is whether the decisions of the Minister and the
Director-General to accede to the letter
of request and the
subsequent decision of the Magistrate to issue a subpoena, should be
reviewed and set aside. The review was
sought on six separate
grounds. They were (a) the validity of the Magistrate’s
appointment; (b) the invocation by the Magistrate
of
s 205
of the
Criminal Procedure Act 51 of 1977
instead of ss 7 and 8 of the Act;
(c) non-compliance with the jurisdictional requirement that the
Director-General had to satisfy
himself as to the commission of the
offence by Omega; (d) the failure by the Director-General to take
into account relevant considerations;
(e) non-observance of
procedural fairness, in that the appellant was not afforded an
opportunity to be heard before decisions were
taken and the subpoena
issued by the Magistrate; and (f) the over-breadth of the letter of
request, in that it required the South
African officials to do more
than is permitted by ss 7 and 8 of the Act.
[6] Before turning to the issue
of standing, it is necessary to set out the relevant statutory
provisions of the Act. Section 7
provides as follows:
‘
(1)
A request by a court or tribunal exercising jurisdiction in a foreign
State or by an appropriate government body in a foreign
State, for
assistance in obtaining evidence in the Republic for use in such
foreign State shall be submitted to the Director-General.
2) Upon receipt of
such request the Director-General shall satisfy himself or herself-
a) that proceedings
have been instituted in a court or tribunal exercising jurisdiction
in the requesting State; or
b) that there are
reasonable grounds for believing that an offence has been committed
in the requesting State or that it is necessary
to determine whether
an offence has been so committed and that an investigation in respect
thereof is being conducted in the requesting
State.
3) For purposes of
subsection (2) the Director-General may rely on a certificate
purported to be issued by a competent authority
in the State
concerned, stating the facts contemplated in paragraph
(a)
or
(b)
of the said subsection.
4) The
Director-General shall, if satisfied as contemplated in subsection
(2), submit the request for assistance in obtaining evidence
to the
Minister for his or her approval.
5) Upon being
notified of the Minister’s approval the Director-General shall
forward the request contemplated in subsection
(1) to the magistrate
within whose area of jurisdiction the witness resides.’
[7] The examination of witnesses
by a magistrate is provided for in s 8. It reads as follows:
‘
(1)
The magistrate to whom a request has been forwarded in terms of
section 7(5) shall cause the person whose evidence is required,
to be
subpoenaed to appear before him or her to give evidence or to produce
any book, document or object and upon the appearance
of such person
the magistrate shall administer an oath to or accept an affirmation
from him or her, and take the evidence of such
person upon
interrogatories or otherwise as requested, as if the said person was
a witness in a magistrate’s court in proceedings
similar to
those in connection with which his or her evidence is required:
Provided that a person who from lack of knowledge arising
from youth,
defective education or other cause, is found to be unable to
understand the nature and import of the oath or the affirmation,
may
be admitted to give evidence in the proceedings without taking the
oath or making the affirmation: Provided further that such
person
shall, in lieu of the oath or affirmation, be admonished by the
magistrate to speak the truth, the whole truth and nothing
but the
truth.
2)
A person referred to in subsection (1) shall be subpoenaed in the
same manner as a person who is subpoenaed to appear as a witness
in
proceedings in a magistrate’s court.
3)
Upon completion of the examination of the witness the magistrate
taking the evidence shall transmit to the Director-General the
record
of the evidence certified by him or her to be correct, together with
a certificate showing the amount of expenses and costs
incurred in
connection with the examination of the witness.
4)
If the services of an interpreter were used at the examination of the
witness, the interpreter shall certify that he or she has
translated
truthfully and to the best of his or her ability, and such
certificate shall accompany the documents transmitted by
the
magistrate to the Director-General.’
[8] The request for assistance
from the Belgian authorities was contained in a letter from the
‘Office of Examining Magistrate
B De Hous, Antwerp’ dated
23 December 2008 addressed to the Minister and the Director-General.
In the letter, assistance
was requested from South African
authorities to gather information which might assist in the conduct
of a criminal enquiry against
Omega and Goldberg. The enquiry related
to the allegations of forgery and use of false documents, tax fraud
and violations of the
Belgian Codes dealing with income tax and
money-laundering. The provisions of the Belgian code under which the
above offences were
punishable were also quoted in the letter.
[9] The letter recorded how Omega
and Goldberg were implicated in the alleged criminal activities. It
stated that Omega imported
diamonds from Angola and Congo through an
associated company in Dubai into Belgium. Omega ordered the shipment
of diamonds purchased
in Angola and Congo in accordance with the
legally required Kimberley Certificates, for delivery to the
appellant (or other entities
not relevant for this case) located in
Dubai. The diamonds were packed in small parcels. Upon arrival in
Dubai the small parcels
were retained but repacked into larger
parcels, containing diamonds from both Angola and Congo, without
physically mixing the stones.
Thereafter the new shipment of diamonds
was provided with a new Kimberley Certificate indicating that the
shipment emanated from
the United Arab Emirates and marked ‘diamonds
of mixed origin’. The new shipment was issued with a new
invoice made
out by the appellant and addressed to Omega wherein the
value of the diamonds was increased by between 20 and 31 per cent. In
so
doing it was said that the value of the diamonds was artificially
increased, generating profits which were kept secret from the
Belgian
tax authorities.
[10] The letter alluded to the
fact that when a search and seizure operation was conducted at the
premises of Omega in Belgium,
exhibits and documents including nine
invoices on which the names of Brinks and the appellant appeared,
were found.
[11] The letter requested the
South African authorities to assist in the identification of Brinks
in South Africa and to inspect
the documents in Brinks’
possession in order to compare and investigate the nine invoices, to
search and establish whether
there were similar consignments from
Angola and Congo to Dubai, and to search and investigate all invoices
and diamond consignments
to associated companies in Dubai. Although
mention was made of the appellant, the letter of request made it
clear that the Belgian
authorities did not regard either Brinks or
the appellant as in any way implicated in the criminal activities
alleged against Omega
and Goldberg.
[12] Upon receipt of the request
the Director-General considered it and recommended that it be acceded
to by the Minister as envisaged
in s 7(4) of the Act. The request was
in due course approved by the Minister. Upon being notified of the
approval the Director-General
forwarded the request to the Magistrate
in terms of s 7(5) for the implementation of the request by way of
the issue of a subpoena
as set out in s 8 of the Act. The subpoena
was duly issued and served on Brinks.
[13] Turning to the question of
standing, a person wishing to institute or defend legal proceedings
must have a direct and substantial
interest in the right which is the
subject matter of the litigation (
Jacobs & ‘n ander v
Waks & andere
[1991] ZASCA 152
;
1992 (1) SA 521
(A) at 534A-E). Legal standing
concerns the ‘sufficiency and directness of a litigant’s
interest in proceedings which
warrants his or her title to prosecute
the claim asserted’ (
Sandton Civic Precinct (Pty) Ltd v City
of JHB & another
[2008] ZASCA 104
;
2009 (1) SA 317
(SCA) para 19 per Cameron
JA). That in sum is the nature of the interest the appellant was
required to show in order to demonstrate
its entitlement to come to
court seeking the relief it sought in this case.
[14] The high court held that the
appellant was non-suited to challenge the decisions of the Minister,
the Director-General and
the Magistrate. Regrettably the court based
its conclusion on a faulty premise. It held that the appellant was
non-suited because
it was a foreign company which had no presence in
this country and relied for its conclusion on the decisions in
Lawyers for Human Rights & another v Minister of Home Affairs
& another
[2004] ZACC 12
;
2004 (4) SA 125
(CC) and
Kaunda & others v
President of the Republic of South Africa
& others
2005 (4) SA 235
(CC) para 36. The court’s reliance on these
cases was misplaced. Counsel for the appellant argued, correctly in
my view,
that these cases do not deal with standing, but rather with
the definition of the class of beneficiaries of the rights in the
Bill
of Rights. I do not think that the rulings in these cases
constitute a bar to a foreign litigant who has a protectable interest
in this country, seeking to protect that interest before a South
African court. The appellant in this case sought to protect allegedly
confidential information from compelled disclosure in the
jurisdiction where the third party, namely Brinks, who holds it
happens
to be and where the compulsion is sought. According to the
appellant the subpoena to compel Brinks will lead to the release of
information about itself in breach of obligations of confidentiality
Brinks owes towards it. The appellant sought to prevent this
outcome
by seeking relief against the South African state organs who will
exercise this coercive power.
[15] The appellant’s major
difficulty lies in whether it proved the confidentiality to which it
laid claim in relation to
the documents in Brinks’ possession.
Although, as I have indicated, the high court dealt with this issue
in its consideration
of the merits, it ought properly to have been
considered as an issue pertaining to standing. The assertion of
confidentiality by
the appellant in this case is unsubstantiated and
amounts to no more than a bald claim to confidentiality. The
appellant failed
to indicate which documents contained confidential
information, the nature of such information and the legal basis on
which it
asserted such right to confidentiality. One needs only have
regard to the documents referred to in the founding affidavit to see
that they are by their nature not confidential. They include
shippers’ letters of instruction, shippers’ invoices to
consignees, various SARS and customs documents, as well as airline
waybills.
[16] It has not been shown that
Brinks had a contractual obligation to preserve confidentiality in
these documents and their contents.
On the contrary, Brinks was quite
prepared to surrender the documents to the South African authorities.
Although Brinks deposed
to an affidavit in other related proceedings
stating that it ‘accepts that the information and documentation
it receives
from its customers are of a confidential nature and,
subject to valid legal process requiring the contrary, it treats it
as such’
this does not provide proof that the documents in
issue in this case are of a confidential nature. Brinks’
ipse
dixit
does not assist. I am not aware of any general duty of
confidentiality in law between a principal and a courier or a
consignor
and a consignee and no evidence in that regard has been
adduced in the present matter.
[17] Despite the weaknesses in
the appellant’s case on the question of confidentiality,
counsel pressed on and submitted that
the appellant’s standing
had been admitted by the respondents. That, submitted counsel,
rendered it unnecessary to provide
any further proof in regard to
confidentiality.
[18] The above point however
flounders when tested against the respondents’ deposition in
the answering affidavit. The respondents
denied that the documents
are ‘relevant to the [appellant’s] proprietary rights and
that disclosure to the Belgian
authorities would infringe the
[appellant’s rights]’. Confidentiality, which was the
proprietary right the appellant
sought to protect, was placed in
issue by way of an express and repeated denial that the documents or
their contents were confidential.
All that was accepted was that if
confidentiality had been shown there would be standing in respect of
those confidential documents.
[19] In light of the view taken
in relation to the question of standing it is unnecessary to deal
with the merits. In the result
the appeal is dismissed with costs,
including the costs of two counsel.
____________________
K K MTHIYANE
DEPUTY PRESIDENT
APPEARANCES
For Appellant: GJ Marcus SC (with
him A Stein)
Instructed by:
Edward Nathan Sonnenberg Inc,
Johannesburg
McIntyre & van der Post,
Bloemfontein
For 1
st
to 4
th
Respondents: AP Laka SC (with him M Sello)
Instructed by:
The State Attorney, Pretoria
The State Attorney, Bloemfontein