Mulaudzi v Old Mutual Life Insurance Company (South Africa) Limited and Others, National Director of Public Prosecutions and Another v Mulaudzi (98/2016, 210/2015) [2017] ZASCA 88; [2017] 3 All SA 520 (SCA); 2017 (6) SA 90 (SCA) (6 June 2017)

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[2017] ZASCA 88
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Mulaudzi v Old Mutual Life Insurance Company (South Africa) Limited and Others, National Director of Public Prosecutions and Another v Mulaudzi (98/2016, 210/2015) [2017] ZASCA 88; [2017] 3 All SA 520 (SCA); 2017 (6) SA 90 (SCA) (6 June 2017)

THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 95/2016
In the
matter between:
MATTHEWS
TUWANI MULAUDZI
APPELLANT
and
OLD
MUTUAL LIFE ASSURANCE COMPANY
(SOUTH
AFRICA)
LIMITED

FIRST RESPONDENT
MMI
GROUP
LIMITED

SECOND RESPONDENT
ABSA
BANK
LIMITED

THIRD RESPONDENT
and in
the matter between
Case
no: 210/2015
THE
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
FIRST
APPELLANT
OLD
MUTUAL LIFE ASSURANCE COMPANY
(SOUTH
AFRICA)
LIMITED

SECOND APPELLANT
and
MATTHEWS
TUWANI
MULAUDZI                                                               RESPONDENT
Neutral
citation:
Mulaudzi
v Old Mutual Life Assurance Company (South Africa) Limited
(95/2016)
[2017] ZASCA 88
(6 June 2017)
Bench:
Ponnan, Cachalia, Theron and Mathopo
JJA and Mbatha AJA
Heard:
12 May 2017
Delivered:
6 June 2017
Summary:
First appeal – appeal lapsing on
account of failure to timeously prosecute it – application for
condonation. Second
appeal – discharge of provisional restraint
order – failure on the part of presiding judge to bring an open
and impartial
mind to bear – proceedings before the high court
on the return day set aside – provisional restraint order
revived.
Both appeals – sequestration - substitution of
insolvent by trustees on appeal – leave to intervene by
insolvent.
ORDER
On
appeal from
:
Gauteng
Local Division of the High Court, Pretoria (De Vos J sitting as court
of first instance) (the first appeal):
and
On
appeal from
: Western Cape Division of
the High Court, Cape Town (Hlophe JP sitting as court of first
instance) (the second appeal):
(1)
In the first appeal under SCA case number 095/16:
(a)
The application for the substitution of the trustees is granted. Mr
Mulaudzi is to pay the
costs of that application.
(b)
The application by Mr Mulaudzi for leave to intervene is granted.
(c)
The application by Mr Mulaudzi for the joinder of Nedbank Limited is
dismissed. Mr
Mulaudzi is to pay the costs of that application.
(d)
The application for condonation and for the reinstatement of the
appeal is dismissed with
costs, such costs, which are to include the
costs of the appeal (inclusive of the costs occasioned by the
application by Mr Mulaudzi
for leave to intervene) and the wasted
costs of the hearing before this court on 4 May 2016, shall be paid
by Mr Mulaudzi (in his
personal capacity) and his insolvent estate
jointly and severally, the one paying the other to be absolved.
(2)
In the second appeal under SCA case number 210/15:
(a)
The application for the substitution of the trustees is granted.
(b)
The application by Mr Mulaudzi for leave to intervene is granted.
(c)
The application by Mr Mulaudzi for the joinder of Nedbank Limited is
dismissed.
(d)
The appeal succeeds with costs, including the costs of the
application for leave to intervene
by Mr Mulaudzi and the wasted
costs of the hearing before this court on 4 May 2016.
(e)
The order of the court below is set aside and substituted with:
‘
The
rule nisi issued on 28 August 2014 is hereby extended until
discharged or confirmed.’
(f)
The costs of (a), (b), (c) and (d) above shall be paid by Mr and Ms
Mulaudzi, their
insolvent estate and the three close corporations
namely, Mulaudzi and Associates CC, Luvhomba Legal Edge CC and
Luvhomba Financial
Services CC, jointly and severally, the one paying
the other to be absolved.
(3)
In both appeals, the orders above relating to costs are to include
the costs of two counsel.
JUDGMENT
Ponnan
JA (Cachalia, Theron and Mathopo JJA and Mbatha AJA concurring):
[1] On 26
May 2009 Mr Matthews Mulaudzi invested R 33.5 million in a Fairbairn
Capital Investment Frontiers Policy with number 15715207
(the
policy). The policy, which was underwritten by Old Mutual Life
Assurance Company (South Africa) Limited (Old Mutual), was
a
five-year fixed bond policy with a maturity date of 2 June 2014. On
24 March 2011 Mr Mr Mulaudzi concluded a written deed of
cession with
Nedbank Financial Planning, a division of Nedbank Limited (Nedbank),
in terms of which he ceded ‘all rights,
title and interest in
and to all and any claims which exist in his favour now owing to him
in the Insurance Policy.’ On 13
April 2011 Nedbank notified Old
Mutual of the cession and requested the latter to ‘send us
confirmation that the policy has
now been endorsed with this cession
in favour of [Nedbank]’. Due to an error on the part of an
employee, Old Mutual did not
substitute Nedbank as the owner of the
policy in the place of Mr Mulaudzi on its computer system. In the
result Mr Mulaudzi continued
to be reflected as the owner of the
policy and to receive automatically generated quarterly statements
and notifications in respect
of the policy from Old Mutual.
[2] On 9
August 2012 Mr Mulaudzi informed Nedbank in writing that he wanted to
cancel the cession and to have his investment documents
returned.
Nedbank declined to cancel the cession. On 2 June 2014 Mr Mulaudzi
submitted a disinvestment application form to Old
Mutual in respect
of the policy in terms of which he sought payment of the full
disinvestment value of the policy. On 6 June 2014
Old Mutual paid the
full maturity value of the policy, namely R 48 163 098.55,
into an Absa Bank Limited (Absa) account
nominated by Mr Mulaudzi.
Old Mutual did so in the mistaken belief that Mr Mulaudzi was still
the owner of the policy. On 28 July
2014 Nedbank sought payment of
the proceeds of the policy from Old Mutual on the basis of the
cession concluded on 24 March 2011
between it and Mr. Mulaudzi. Old
Mutual then realised that it had effected payment to Mr Mulaudzi in
error. On 8 August 2014, Old
Mutual paid Nedbank the full maturity
value of the policy as it was obliged to in terms of the cession. Old
Mutual thereafter sought
repayment from Mr Mulaudzi, who refused.
[3] On 15
August 2014 Old Mutual reported the matter to the South African
Police Services (SAPS) pursuant to the provisions of s
34(1)
(b)
of the Prevention and Combating of Corrupt Activities Act 12 of 2004
(POCA). On 28 August 2014 the National Director of Public

Prosecutions (the NDPP) applied
ex parte
to the Western Cape
Division of the High Court, Cape Town for a provisional restraint
order in terms of s 26 of POCA. The application
cited Mr Mulaudzi,
his wife, Ms Violet Mabontsi Mulaudzi (Ms Mulaudzi), as the second
respondent, and three close corporations
of which he is a member,
namely, Mulaudzi and Associates CC, Luvhomba Legal Edge CC and
Luvhomba Financial Services CC (the three
CCs), as the third, fourth
and fifth respondents, respectively. The application succeeded before
Weinkove AJ, who issued a rule
nisi returnable on 27 November 2014.
The provisional order is a lengthy one. Its detailed provisions are
not material for present
purposes. It is sufficient to state that the
order placed under restraint, and appointed a curator bonis to take
charge of, property,
save for such property as the curator may
certify to be in excess of R 48 163 098-55. The assets
subject to restraint
included those then known to the NDPP. They
included four investments made by Mr Mulaudzi using the proceeds of
the policy, being
two Old Mutual investment policies of R 1 million
each, an investment with Momentum Group Limited of R 6 372 474
and
a R 10 million investment with Absa (the four
investments).
[4] On 17
September 2014 Mr Mulaudzi and the other respondents anticipated the
return day on 24 hours’ notice to the NDPP
in terms of s
26(3)
(c)
of POCA. They sought the discharge of the rule nisi,
alternatively, a variation of the provisional restraint order to
inter alia
exclude from its ambit the four investments. The
application came before Hlophe JP on 18 September 2014, who
discharged the provisional
restraint order. The learned Judge
President also dismissed an application by Old Mutual to intervene in
the application. On 21
October 2014 and, pursuant to requests
therefor by both the NDPP and Old Mutual, Hlophe JP furnished reasons
for his orders.
[5] On 11
November 2014 both the NDPP and Old Mutual applied for leave to
appeal the judgment. One of the grounds raised was that
they
reasonably apprehended that Hlophe JP was biased. As a result Hlophe
JP allocated the applications for leave to appeal to
Dolamo J, who,
after hearing argument, delivered a written judgment on 16 March 2015
granting leave to both the NDPP, as the first
appellant, and Old
Mutual, as the second appellant, to appeal to this court. Mr Mulaudzi
was cited as the first respondent, Ms
Malaudzi, as the second, and
the three CCs, as the third to fifth respondents.
[6] In
the meanwhile, on 3 October 2014, Old Mutual launched an urgent
application out of the North Gauteng Division of the High
Court,
Pretoria against Mr Mulaudzi (as the first respondent), the MMI Group
Limited (formerly Momentum) (MMI) and Absa, as the
second and third
respondents respectively. Relief was sought in two parts. Under Part
A, it sought an order ‘prohibiting
the First Respondent [Mr
Mulaudzi] from dealing in any manner with the [four investments] or
any part thereof remaining to his
credit, pending the determination
of the relief sought in Part B’. In terms of Part B, it sought
payment from Mr Mulaudzi
in the sum of R48 163 098.55,
together with interest and costs on the attorney and client scale. No
substantive relief
was sought against MMI and ABSA. Both were ‘cited
merely for the purposes of ensuring compliance with the terms of any
interim
order that may be granted in [the] proceedings.’
[7] Mr
Mulaudzi filed his answering affidavit to that application on 22
October 2014 and Old Mutual filed its replying affidavit
on 30
October 2014. The parties agreed to deal with both Parts A and B when
the matter came before De Vos J on 4 November 2014.
He delivered his
judgment on 17 November 2014 ordering Mr Mulaudzi ‘to make
payment . . . in the amount of R48 163 098.55,
together
with interest thereon calculated at the prescribed rate as from the
date of service of the Notice of Motion’ and
costs (including
those consequent upon the employment of two counsel) as prayed on the
punitive scale. Pending payment, the learned
judge directed that the
four investments be held in trust.
[8] Mr
Mulaudzi sought and obtained leave from De Vos J to appeal to this
court. Old Mutual, who was cited as the first respondent,
opposed the
appeal. The MMI Group and Absa, who were cited as the second and
third respondents took no part in the appeal. Mr Mulaudzi
delivered
his notice of appeal on 3 March 2015. His appeal lapsed on 4 June
2015 on account of his failure to timeously file the
record of appeal
with the registrar of this Court. Some eight months later, on 9
February 2016, Mr Mulaudzi delivered the record
together with an
application for condonation and reinstatement of the lapsed appeal.
[9] With
the leave of the President of this Court, Mr Mulaudzi’s appeal
against the judgment of De Vos J, under SCA case number
095/16 (the
first appeal), was set down for hearing together with the appeal by
the NDPP and Old Mutual against the judgment of
Hlophe JP, under SCA
case number 210/15 (the second appeal). On 4 May 2016, when both
matters were called in this court, we were
informed by counsel, who
then represented Mr Mulaudzi that he was ill and in support thereof a
medical certificate was handed up
from the bar. In any event,
according to counsel for the NDPP, an internet search by him the
previous afternoon revealed that Mr
Mulaudzi’s estate had been
provisionally sequestrated. In the result both matters had to be
adjourned sine die.
[10] It
subsequently emerged that the joint estate of the Mulaudzis was
provisionally sequestrated on 2 December 2015 and finally

sequestrated on 27 May 2016. After an application for leave to appeal
that order was dismissed by the high court, a petition to
this court
met the same fate on 9 November 2016. An application to the
Constitutional Court was also dismissed on 30 January 2017.
On 3
March 2017 a further application to the President of this court for a
reconsideration of the dismissal of Mr Mulaudzi’s
petition also
failed.
[11] On 2
December 2016 both the NDPP and Old Mutual duly gave notice to the
Master of the High Court (the Master) in terms of s
75(1) of the
Insolvency Act 24 of 1936 (the
Insolvency Act) of their
intention to
proceed with the second appeal. On 20 February 2017, the Master
appointed Christopher Peter van Zyl, Selby Musawenkosi
Ntsibande and
Oscar Jabulani Sithole as the co-trustees of the joint estate of the
Mulaudzis.
[12] On
24 February 2017 Old Mutual applied to join of the trustees as the
sixth, seventh and eight respondents respectively (the
Old Mutual
joinder application). In support of the Old Mutual joinder
application it was stated:
‘
37.
As the joint trustees to the insolvent estate . . . have now been
appointed, they are necessary
parties in these proceedings in their
capacities as such joint trustees.
38.
In appeal proceedings other than appeal proceedings concerning a
restraint order or preservation
of property order made in terms of
the POCA, an application for the substitution of the insolvent
parties with the trustee(s) of
their joint estate, as the respondents
in the appeal, would follow. However, in
National Director of
Public Prosecutions v Ishwarlall Ramlutchman
[2016] ZASCA 202
at
paragraphs 16 to 18 this Court held that an insolvent retained the
right to participate in confiscation proceedings under
s 18
of POCA
in his personal capacity, notwithstanding the fact that his insolvent
estate vests in the Master or the trustee(s) of the
estate. There is
no reason to think a different principle applies to restraint
proceedings under
s 26
of POCA, which are a precursor to confiscation
proceedings.’
[13] Mr
Mulaudzi opposed the Old Mutual joinder application. He contended
that Mr Sithole ‘and his joint trustee were illegally,

irregularly and fraudulently appointed due to what I term “inside
job” at the Master’s Office.’  He
stated that
he had laid a complaint with the Master and opened a case of
extortion, bribery, fraud and corruption against Mr Sithole.
On 3
March 2017 the Mulaudzis instituted review proceedings against the
Master and the trustees. The review application sought
to set aside
the appointment of the trustees, the first meeting of creditors and
the decisions taken at that meeting. On 18 April
2017, and in
circumstances that remain unexplained, the Malaudzis obtained an
order out of the Gauteng Division of the High Court
(per Mothle J) on
an urgent basis, interdicting, inter alia, the Master and the
trustees ‘or any other person acting on their
behalf from
proceeding with the creditors’ meeting of the 11 April 2017 or
any other special or general meeting or any other
processes. . .’.
[14] On
24 April 2017, the trustees launched an urgent application for the
reconsideration and variation of that order. Despite
opposition from
the Mulaudzis, the application succeeded before Vally J on 5 May
2017. He set aside the order issued by Mothle
J, struck the
Mulaudzis’ interdict application from the court roll due to
lack of urgency and ordered the costs to be borne
by their insolvent
estate. Thereupon, the second meeting of creditors proceeded on 9 May
2017. Mr Mulaudzi was in attendance. The
creditors adopted
resolutions, inter alia: (a) authorising the trustees to engage the
services of attorney and counsel for the
purposes of taking any legal
action that may be considered necessary in the interest of the
estate; and (b) ratifying and confirming
any actions previously taken
by the trustees.
[15] In a
related development, on 10 May 2017, the trustees gave notice of
their intention to be substituted for: (a) the Mulaudzis,
as
respondents in the second appeal; and (b) Mr Mulaudzi, as the
applicants in the application for condonation and reinstatement
of
the lapsed first appeal.
[16]
In terms of
s 20(1)
of the
Insolvency Act, the
effect of the
sequestration of the estate of an insolvent shall be to divest the
insolvent of his estate and to vest it in the
Master until a trustee
has been appointed, and, upon the appointment of a trustee, to vest
the estate in the trustee.
[1]
One of the
consequences of this is that ‘. . . the person to deal with
that estate, to administer it, to sue in respect of
it, and to defend
actions concerning it, is the trustee, and not the insolvent’.
[2]
For this
reason alone, the trustees are therefore necessary parties in both
matters. And, as the trustees correctly point out, their
appointment
remains valid until set aside by the Master or the Court hearing the
review application. Until then, the trustees must
continue to perform
their duties in terms of the
Insolvency Act. It
follows that the
review application has no bearing on these matters. The trustees
remain trustees until such time as a court removes
them from office.
In such event, the Master retains control of the estate and may
appoint new trustees.
[17]
The real issue therefore was whether the Mulaudzis should also be
entitled to participate in the proceedings in this court
(which they
would be if the trustees were to have been joined) or whether they
must seek and obtain this court’s leave to
participate
(something they would have to do if the proper course is for the
trustees to be substituted for them). In
Aboo
v Firstrand Bank Ltd
,
[3]
Streicher JA
observed: ‘. . . after the sequestration of the appellant, the
right that he acquired to appeal against the judgment
of De Jager AJ
no longer vested in him but vested first in the Master and upon the
appointment of a trustee in his estate. The
appellant therefore had
no right to proceed with the appeal to the court a quo and with a
further appeal to this court.’
[18]
The Mulaudzis have a reversionary interest in the insolvent estate.
As Innes CJ pointed out in
Mears
:
[4]
‘
Now,
no doubt the general rule is that an unrehabilitated insolvent
cannot, over the head of his trustee, bring actions connected
with
his estate . . . The reason of the rule is that his estate has been
taken out of him and vested in his trustee; and that therefore
the
person to deal with that estate, to administer it, to sue in respect
of it, and to defend actions concerning it, is the trustee,
and not
the insolvent. But from the fact that the insolvent is under this
disability, it does not follow that he has no rights
whatever
regarding the estate. In my opinion he has a very real reversionary
interest in it. The law provides that if there is
any residue after
paying the debts it is to be handed to the insolvent. Not only so,
but it is to his interest that as many assets
as possible shall be
brought into the estate, and the debts reduced to their proper
limits. He has an interest in seeing that that
is done. An asset may
suddenly become valuable which has been considered worthless, or he
may have a legacy left to him which may
enable him to clear off all
his liabilities. Apart from that it is to the interests of the
insolvent that his assets should be
increased and his liabilities
reduced, because in that way the stigma of insolvency rests less
heavily upon him; and when he applies
for his rehabilitation he is in
a better position than if he had a very large margin of unpaid debts.
Therefore from whatever standpoint
we regard it the insolvent has a
very real interest in the administration of his estate.
As
I have said, generally the trustee is the person to take action in
matters connected with the estate; but if the trustee will
not do so,
or whether bona fide or mala fide does not see his way to take
action, is the insolvent on that ground to be without
remedy? I
should say upon general principles he ought not to be; the law should
provide some remedy.’
[5]
[19]
And, as Jansen JA pointed out in
Sassoon
Confirming and Acceptance CO (Pty) Ltd v Barclays National Bank
Ltd
:
[6]
‘
.
. . Any residual right the insolvent may have to the estate, must
necessarily be subject to the due exercise of the trustee’s

powers during his regime. Should there in fact be a residue, the
insolvent will, in effect, be a successor to the trustee –
and,
therefore, subject to judgments given against the trustee as
representing the estate, which judgments will then be
res
judicata
against the insolvent.’
Thus: (a)
upon the sequestration, the trustees had to take the place of the
Mulaudzis in the litigation; and (b) the Mulaudzis could
take steps
only if the trustees decided not to take steps in the litigation. It
follows, that the proper course was for the trustees
to be
substituted for: the Mulaudzis in the second appeal; and Mr Mulaudzi
in the application for condonation and the reinstatement
of the first
appeal.
[20]
Save for a narrow point (to which I shall latterly turn) sought to be
advanced in the second appeal, the trustees formally
stated that they
would abide the decision of this court in both matters. In the
result, the Mulaudzis were entitled to take steps
which, if
successful, would enhance the value of the estate, whether by
increasing the assets in the estate in the second appeal
or reducing
the liabilities in the estate in the first appeal. The Mulaudzis were
thus entitled to intervene in both matters.
[7]
[21] One
further interlocutory application remains: On 2 May 2017 Mr Mulaudzi
filed an urgent application with the registrar of
this court giving
notice that he would be seeking an order that Nedbank be joined as a
party to both matters. Mr Mulaudzi persisted
in that application from
the Bar. In support of the application Mr Mulaudzi stated:
‘
32.
In brief, I had a banking relationship with Nedbank since time
immemorial. I also had various
investments with Nedbank, one for
R25 000 000.00 and the other for R35 000 000.00.
Nedbank also financed my
properties and various other movable and
immovable assets. When the bank-client relationship got sour, Nedbank
recalled all the
overdraft facilities. They then refused to release
all other monies, as annexure MTM3 will show, held in the investments
accounts
until the dispute, in their words, is resolved in a court of
law.
33.
Nedbank then issued summonses against me and the rest of the legal
entities under my control.
I defended these vexatious actions. I
lodged a counter-claim in the amount of R25 000 000.00.
These matters are still
pending before the North Gauteng High Court .
. . .
34.
As the above honourable court will observe, these are purely civil
disputes between the
bank its client. To be accused of theft and
stealing my own monies, boggles my mind, moreso when Nedbank refused
to release my
monies upon closure of my accounts.’
[22]
Assuming in Mr Mulaudzi’s favour (without deciding) that the
application is properly before this court, the question
that it
raises is whether Nedbank is a necessary party in either or both
matters? The relief sought by the NDPP and Old Mutual
in the second
appeal is the reinstatement of the order made under
s 26
of POCA,
restraining the Mulaudzis and the three CCs from dealing with certain
property. On the other hand, the relief sought by
Mr Mulaudzi in the
first appeal is the reinstatement of his lapsed appeal and, if
reinstatement is granted, the upholding of his
appeal and the setting
aside of the orders made by De Vos J.
[23]
Joinder is required, only if the party has a direct and substantial
interest which may be affected prejudicially by the judgment
of the
court in the proceedings concerned.
[8]
Nedbank does
not have any such interest in either matter. When Nedbank claimed
repayment of the proceeds of the policy from Old
Mutual, which the
latter had previously paid to Mr Mulaudzi, Old Mutual paid Nedbank in
full. Nedbank therefore has no interest
in the outcome of either
matter before us. Such other asserted legal disputes as may exist
between Mr Mulaudzi (as a client) and
Nedbank (as his banker) bear no
connection to the matters before us. It is thus plain that Mr
Mulaudzi’s application for
the joinder of Nedbank as a party to
both matters before this court had to fail.
[24] I
now turn to consider whether Mr Mulaudzi’s appeal against the
judgment of De Vos J (the first appeal), which lapsed
on 3 June 2015,
should be condoned and revived. The appeal lapsed on account of Mr
Mulaudzi’s failure to lodge the appeal
record with the
registrar of this court within three months of his notice of appeal,
as required by
rule 8(1)
of this court. The record was eventually
lodged more than eight months later, on 9 February 2016.
[25]
In
Uitenhage
Transitional Local Council v South African Revenue Service
[9]
it was
pointed out:
‘
One
would have hoped that the many admonitions concerning what is
required of an applicant in a condonation application would be
trite
knowledge among practitioners who are entrusted with the preparation
of appeals to this Court: condonation is not to be had
merely for the
asking; a full, detailed and accurate account of the causes of the
delay and their effects must be furnished so
as to enable the Court
to understand clearly the reasons and to assess the responsibility.
It must be obvious that if the non-compliance
is time-related then
the date, duration and extent of any obstacle on which reliance is
placed must be spelled out.’
[26]
What calls for an explanation is not only the delay in the timeous
prosecution of the appeal, but also the delay in seeking
condonation.
An appellant should, whenever he realises that he has not complied
with a rule of this court, apply for condonation
without delay.
[10]
A full,
detailed and accurate account of the causes of the delay and their
effects must be furnished so as to enable the Court to
understand
clearly the reasons and to assess the responsibility.
[11]
Factors
which usually weigh with this court in considering an application for
condonation include the degree of non-compliance,
the explanation
therefor, the importance of the case, a respondent’s interest
in the finality of the judgment of the court
below, the convenience
of this court and the avoidance of unnecessary delay in the
administration of justice.
[12]
[27] I
shall assume in Mr Mulaudzi’s favour that the matter is of
substantial importance to him. I, however, cannot be as
charitable to
him in respect of the remaining factors. The explanation proffered by
Mr Mulaudzi for his delay of almost eight months
to file the appeal
record was an alleged lack of funds. In that regard he stated:
‘
15.
Because the order by His Lordship Mr Justice de Vos differed with
that of Hlophe JP, De Vos J
had no alternative but to grant me leave
to appeal his decision to the above court. This judgment is before
this honourable court.
16.
In the meantime, the NPA successfully appealed against the decision
of Hlophe JP to the
above honourable court.
17.
The result of all these cases is that they are both pending before
the above honourable
court and the parties agreed that the matters be
heard on the same day, in the interest of justice.
18.
In the meantime, my family life has literally come to a standstill.
My businesses have also
come to a halt. I am being sued by all and
sundry for lack of payments of rental and for goods and services that
my companies have
obtained and received.
19.
These financial constraints has led to the delay in paying my
attorneys and counsel, as
I did not have money to put my attorney in
funds to cover their and counsel’s fees.
20.
It has also transpired that, when I spoke a[t] Colleen Gardner, a
director at Appeal Document
Services, that they also were struggling
to get the clear and legible records and thus the records would not
have been made available
within the prescribed three months period in
any event.
21.
In the process, my appeal lapsed on 03 June 2015 as the records could
not be filed on time.
22.
I can confirm I was only able to pay for the records, albeit not in
full and the records
were only delivered to me on Friday, the 05
th
February 2016.
23.
At all material times, respondents’ attorneys were kept abreast
of all these developments
and progress relating to the appeal
records.’
[28] In
answer to those allegations, Old Mutual’s attorney stated:
‘
6.
On 4 June 2015 the Registrar of this court consequently advised the
parties that the
appeal had lapsed.
7.
Old Mutual thereupon took steps to execute the judgment . . . . In
this regard,
on 18 June 2015 the Sheriff served a Writ of Execution .
. . on Mr Mulaudzi. The Sheriff thereafter issued a
Nulla Bona
return . . . .
8.
On 30 June 2015 Mr Mulaudzi served on my correspondent in Pretoria a
notice of
motion and supporting affidavit, by means of which he
sought condonation for the late filing of the appeal record and
re-instatement
of the lapsed appeal. . . .
9.
On 29 July 2015 Old Mutual attempted to file in this court its
opposing papers
in the application . . . It was however advised by
the Registrar that no such application had been lodged . . .  The
Registrar
therefore refused to accept Old Mutual’s answering
papers.
10.
I consequently instructed the Sheriff, Goodwood, to proceed with the
attachment of two Old
Mutual policies held by Mr Mulaudzi. On 16
September 2015 the Sheriff duly served a warrant of execution against
property on Old
Mutual attaching the two policies.
11.
On 7 October 2015 Mr Mulaudzi again re-served the application
reinstatement of the lapsed
appeal on my Pretoria correspondent, yet
once again the application was not lodged with the Registrar of this
court in accordance
with
Rule 12(1).
20
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12.
On 22 October 2015 Mr Mulaudzi addressed an e-mail to me in which he
advised that the appeal
record along with the application for
condonation and reinstatement are “almost ready to be lodged
with the Registrar of
the SCA”.
. . .
15.
On 10 November 2015, in an email addressed to me, Mr Mulaudzi said
that he had been in contact
with the Registrar of this court and
would be “filing our heads (in both cases – 139/2015 and
210/2015) along with
the records of Appeal, our condonation and
reinstatement as agreed with the Registrar as both matters will be
heard on the same
day. We await finalisation of the appeal record
herein.”
16.
On the same day Mr Mulaudzi sent an email to the Sheriff of Goodwood,
stating that as “there
is an appeal pending” in both this
court and the Constitutional Court the Sheriff ought not to proceed
with the execution
of the order of the court a quo, as instructed by
me.
17.
Despite Mr Mulaudzi’s assurances that the filing of the
application papers and the
appeal record was imminent, I heard
nothing further from him for several months. On 29 January 2016 the
Sheriff, Goodwood forwarded
to me an email he had received from Mr
Mulaudzi relating to the appeal record, in which once again Mr
Mulaudzi said “the
appeal records have just been finalised and
are ready to be lodged with the Registrar”.
18.
Late on 29 January 2016 Mr Mulaudzi sent me an email . . . saying he
had been advised by
Appeal Document Services CC that ‘the
long-outstanding appeal records have now been finalised, are now
ready and we shall
be filing them on Monday 01
st
February
2016, along with the Condonation and re-instatement applications,
which were served on your correspondent in Pretoria’.
19.
Neither the appeal record nor the condonation application was filed
on 1 February 2016.
20.
On 2 February 2016 Mr Mulaudzi addressed an e-mail to the Registrar
of this court, which
was also copied to me, informing the Registrar
that he had been advised by Appeal Document Services CC of a delay in
finalising
the appeal record and saying that it would be lodged by
close of business the following day . . . As things turned out the
record
was only served on my correspondent in Bloemfontein [on] 9
February 2016 . . . .
21.
On 10 February 2016 Mr Mulaudzi sent me an email . . .  stating
that his appeal record
and condonation application had been accepted
by the Registrar of this court and that he ha[d]
until 22
March 2016 to file his heads of argument. He also said that he had
written to the president of this court requesting that
his intended
appeal against the judgment and orders of the North Gauteng Division
of the High Court be heard together with the
pending appeals by the
National Director of Public Prosecutions and Old Mutual against the
judgment and orders of the Western Cape
Division of the High Court in
case number 15403/14, something to which Old Mutual is opposed
because it will result in a delay
in the hearing of the latter
appeals.
22.
I point out that none of the facts concerning the events described
above were placed before
this court by Mr Mulaudzi in his affidavit
filed in support of his condonation application.
. . . .
48.1.
In the restraint proceedings referred to above, Mr Mulaudzi placed
before court a personal balance sheet
dated 31 July 2014 . . . in
which he claimed to own assets worth R105 255 878.74. He has not
explained the dramatic deterioration
in his financial position, save
to place the blame for all his financial woes on the provisional
restraint order granted by Weinkove
AJ on 28 August 2014.
48.2.
Yet the provisional restraint order granted on 28 August 2014 was
discharged and all his property restored
by the order Hlophe JP made
on 18 September 2014, less than a month later.
48.3.
Moreover, when the restraint order was discharged on 18 September
2014, the
curator bonis
appointed to administer his estate
while it was subject to the restraint order paid over to him R9 759
781.57. This was the early
realisation value of a long-term
investment Mr Mulaudzi took out with Absa Wealth Ltd using R10
million of the R48 163 098.55 he
criminally obtained from Old Mutual.
48.4.
What is more, Mr Mulaudzi received R17 612 128 from MMI on 24 July
2014 in the form of a loan secured against
a R25 million investment
he acquired on 18 June 2014, also using the proceeds of the R48 163
098.55 received from Old Mutual on
6 June 2014.
48.5
Apart from the remainder of the R25 million MMI investment, which is
valued at approximately R6 million,
and the R2 million Mr Mulaudzi
re-invested with Old Mutual, the whereabouts of balance of the
proceeds of the R48 163 098.55 he
received from Old Mutual on 6 June
2014 remains entirely unexplained.
49.
In this context, Mr Mulaudzi’s vague and unsubstantiated
protestations of a lack of
funds ring hollow and fall to be
rejected.’
[29] Mr
Mulaudzi’s response (in his replying affidavit) was:
‘
18.
As indicated above, after the rule nisi was discharged in the Western
Cape, I received an amount
of R9 million from the curator. All this
amount went into paying for stock that had been ordered from and in
China, which stock
was at the Durban harbour for more than 3 weeks
after all my bank accounts were frozen following the restraint order.
This stock
accumulated a lot of storage costs to a point it became
uneconomical to pay for the demurrage costs.
19.
Whilst the remainder of the stock arrived at the Durban harbour, the
entire consignment
was auctioned by the South African Revenue
Services as I failed to clear and pay for customs and related
charges.
20.
I may hasten to add that the amount of R17 million which I had taken
as loan from Momentum
has also gone into store rollout. At the time
the restraint order was granted, I had signed no less than 26 leases
for the rollout
of the corporate stores and these funds went into
shop fitting, equipment costs, branding and marketing costs. As I
depose to this
affidavit, these stores have since closed down
following the order of 4 November 2014.’
[30] It
will be immediately apparent that there are huge gaps in Mr
Mulaudzi’s version. He furnishes no explanation regarding
the
steps he took from the time the appeal lapsed on 3 June 2015 until he
received the record on 5 February 2016.  His founding
affidavit
is silent as to the source of his funding to pay for the record or
why he was not able to access those funds eight months
earlier. What
is more, he responds in the vaguest of terms, without any documentary
proof, to the facts put forward by Old Mutual
in its opposing
affidavit.
[31]
Given the nature of the transactions, it was imperative for documents
to have been annexed to his affidavit evidencing proof
of the: (i)
purchase of stock from China – such as invoices, consignment
notes and forex transfers; (ii) customs and related
charges –
such as consignment and clearing notes, assessments by the South
African Revenue Services and correspondence from
his clearing agent;
and (iii) contemplated rollout of 20 plus stores – such as
lease agreements and agreements for shop fitting
and marketing.
Surely, it ought to have been a relatively simple exercise for Mr
Mulaudzi to have adduced proof of those claimed
disbursements. It is
thus difficult to accept his mere assertion that he had spent some
R26 million on legitimate business transactions.
[32]
Although Mr Mulaudzi studiously refrains from furnishing the relevant
dates, as best as one can discern, it appears that he
frittered away
a substantial sum between 18 September 2014 (when the rule nisi was
discharged by Hlophe JP) and 17 November 2014
(when judgment was
entered against him by De Vos J). Accordingly, the questions that
remain are: What was the nature, name of supplier,
cost and date of
purchase of the stock from China? What was the quantum of the
storage, demurrage and customs related charges;
when was it incurred
and when did it fall due for payment? What stores were being rolled
out and why? What shop fitting, equipment,
branding and marketing was
undertaken? What were the associated costs in relation to each? To
whom and when were such costs payable?
[33]
Mr Mulaudzi’s application demonstrates an obvious lack of
attention to matters that plainly called for an explanation
and
evidences a failure to fully and candidly enlighten the court, as an
applicant in a matter such as this was obliged to do.
[13]
I thus find
it impossible to hold that the delay in bringing this application has
been explained in a manner that is remotely satisfactory.
[34]
In applications of this sort the prospects of success are in general
an important, although not decisive, consideration. As
was stated in
Rennie
v Kamby Farms (Pty) Ltd
,
[14]
it is
advisable, where application for condonation is made, that the
application should set forth briefly and succinctly such

essential information as may enable the court to assess an
applicant's prospects of success. This was not done in the present
case: indeed, the application does not contain even a bare averment
that the appeal enjoys any prospect of success.
[15]
It has been
pointed out
[16]
that the
court is bound to make an assessment of an applicant's prospects of
success as one of the factors relevant to the exercise
of its
discretion, unless the cumulative effect of the other relevant
factors in the case is such as to render the application
for
condonation obviously unworthy of consideration.
[35]
In my view, the circumstances of the present case are such that we
may well have been entitled to refuse the application for

condonation irrespective of the prospects of success. This court has
often said that in cases of flagrant breaches of the rules,

especially where there is no acceptable explanation therefor, the
indulgence of condonation may be refused whatever the merits
of the
appeal.
[17]
Here, the delay is so unreasonable and the explanation offered so
unacceptable and wanting that we may well have been justified
in
adopting that course. However, and not without some hesitation, I
shall nonetheless briefly touch on Mr Mulaudzi’s prospects
of
success.
[36] In
finding for Old Mutual, De Vos J held:
‘
35.
. . . On the only available evidence before Court, the First
Respondent was not entitled to the
proceeds of the policy and any
appropriation thereof constituted a fraud. On the evidence there can
be no doubt that he was fully
aware of the fact that he had effected
such outright cession to Nedbank and that he was not entitled to the
proceeds himself. He
acted solely on the wrong information supplied
to him by the Applicant. Being aware of the incorrectness of the
facts contained
in the quarterly statements pertaining to the absence
of a cession supplied by Old Mutual, he was fully aware of the fact
that
he had effected such outright cession to Nedbank and that he was
not entitled to the proceeds himself . . . When he became aware
of
Old Mutual’s mistake he tried to obtain a re-cession of the
policy to himself which was not accepted by Nedbank. The amount

involved was a large amount. There could not have been an innocent
mistake on the part of the First Respondent. He applied for
the money
to be released on him on the 2
nd
June 2014. When he completed the form he must have known that he is
not entitled to the proceeds of the policy. After receiving
the said
money he immediately started appropriating this money as if he was
the legal owner thereof. The SCA in the case of
Nissan
South Africa (Pty) Ltd v Marnitz
2005 (1) SA 441
(SCA) in paragraph 25 rightly held that the
appropriation of an amount to which a person was not entitled by
using it for his own
purposes well knowing that it was not due to
him, constituted theft. In the present case the First Respondent
fraudulently failed
to disclose to Old Mutual that he had effected
such outright cession and fraudulently represented to the Applicant
in the application
form that he was the owner of, and entitled to,
the proceeds of the policy. This clearly constituted fraud on his
part. The only
inference that can be drawn is that the First
Respondent wilfully, with the necessary intent, misrepresented to Old
Mutual that
he was entitled to the proceeds of the Policy when he
knew that he has ceded his right to title and interest in and to the
policy
to NFP and that such cession was still binding on the parties
thereto.’
[37] I
can find no fault with the reasoning of De Vos J. The evidence shows
that Mr Mulaudzi well knew that he had ceded his right,
title and
interest in and to the policy to Nedbank and that the cession
remained binding on him. Thus, when he submitted the disinvestment

application form to Old Mutual he dishonestly held out that he was
the owner of, and entitled to, the proceeds of the policy. In
doing
so, he acted with the intention of inducing Old Mutual to pay to him
the R48 163 098.55, which it did. The thrust
of Mr
Mulaudzi’s argument on appeal was that having failed before
Hlophe JP, it was impermissible for Old Mutual to have
instituted
further proceedings against him in the Gauteng High Court. Instead,
so the argument went, the only avenue available
to Old Mutual, was to
seek to appeal (as it did) the judgment of Hlophe JP. Accordingly, so
contended Mr Mulaudzi: first, the judgment
of Hlophe JP meant that
the
lis
between Old Mutual and him was
res judicata
;
and, second, in rejecting the findings of and failing to follow the
judgment of Hlophe JP, De Vos J improperly sat as a court
of appeal.
Mr Mulaudzi raised both of these contentions before De Vos J, who
rejected them.
[38]
The requirements for the defence of
res
judicata
are
that there must be: (i) concluded litigation; (ii) between the same
parties; (iii) in relation to the same thing; and (iv) based
on the
same cause of action. In the present matter none of these
requirements was met. As to (i): the POCA restraint proceedings
are
still not concluded due to the appeals by the NDPP and Old Mutual. As
to (ii): the parties to the POCA restraint proceedings
were the NDPP
as applicant, the Mulaudzis and the three CCs as respondents. Old
Mutual applied for leave to intervene in that matter,
but its
application was refused. The parties to the present matter in the
court a quo were Old Mutual, as applicant and Mr Mulaudzi,
the MMI
Group Ltd and Absa, as respondents. As to (iii): the relief sought in
the restraint proceedings was an order in terms of
s 26
of POCA
preventing Mr Mulaudzi and the other respondents from dealing with
their property, pending the conclusion of criminal proceedings
to be
instituted against Mr Mulaudzi and, in the event of his conviction,
the making in those criminal proceedings of a confiscation
order in
terms of
s 18
of POCA. The relief sought in the present matter was an
interim interdict
pendente
lite
relating to specific investments and thereafter a final order
directing Mr Mulaudzi to pay Old Mutual R48 163 098.55.
As
to (iv): the NDPP’s cause of action in the POCA restraint
proceedings was based on the requirements for a restraint order
set
out in
s 25(1)
(b)
of POCA, which provides that such an order may be made if the court
is satisfied that a person [i.e. Mr Mulaudzi] is to be charged
with
an offence and it appears to the court that there are reasonable
grounds for believing that a confiscation order may be made
against
such person. In terms of
s 18(1)
(a)
of POCA, whenever a defendant is convicted of an offence the court
convicting the defendant may, on the application of the public

prosecutor, enquire into any benefit which the defendant may have
derived from the offence and, if the court finds that the defendant

has so benefited, it may, in addition to any punishment which it may
impose in respect of the offence, make an order against the
defendant
for the payment to the State of any amount it considers appropriate.
The question for decision in the POCA restraint
proceedings was
therefore whether there was evidence that might reasonably support a
conviction and a consequent confiscation order
(even if all the
evidence had not been placed before it [the court] and whether that
evidence might reasonably be believed).
[18]
[39]
There is, moreover, a fundamental legal difficulty with Mr Mulaudzi’s
reliance on
res
judicata
in
the present matter. It is that, as this court held in
National
Director of Public Prosecutions v Rebuzzi
[19]
and the
Constitutional Court held in
Fraser
v Absa Bank Ltd (National Director of Public Prosecutions as Amicus
Curiae)
,
[20]
s 30(5)
and
31
(1) of POCA recognise that a POCA confiscation order (to which a
POCA restraint order is directed) may co-exist with a claim by the

victim against the defendant or a judgment in the victim’s
favour against the defendant. Where, following the making of a

confiscation order, the defendant’s property has not yet been
realised to satisfy the order,
s 30(5)
expressly authorises the High
Court to suspend the realisation until the victim’s claim or
judgment has been met; and where
the property has been realised,
s
31(1)
enables the High Court to direct that the victim’s claim
be paid before any remaining proceeds of the realisation are used
to
satisfy the confiscation order.
[40]
Insofar as the contention that De Vos J was bound by the reasoning
and conclusions of Hlophe JP is concerned, De Vos J held,
quite
correctly that they constitute the opinion of another court which is
neither relevant nor admissible in the proceedings before
him. The
rule to this effect enunciated in
Hollington
v Hewthorn & Co Ltd
[21]
has been
adopted by this court in
Hassim
(also known as Essack) v Incorporated Law of Society of Natal
[22]
and the
Constitutional Court in
Prophet
v National Director of Public Prosecutions.
[23]
In any
event, as appears from the following passage of the judgment of De
Vos J, the learned judge did have regard to the judgment
of Hlophe JP
but considered it to be unpersuasive:
‘
Even
if it was permissible to have regard to such court’s reasoning,
it would at most have persuasive value but only to the
extent that it
was correct on the evidence and in law, as appears from the
reasoning. The only part of the judgment of Hlophe JP
that is
conceivably of relevance is paragraph 10 thereof . . . It is to be
noted, that this paragraph, with respect, reflects conclusions

without any analysis of neither the evidence, nor of the so-called
‘defence’ advanced by the respondent in those proceedings

. . . In my view it is important to note that there is no mention in
the written reasons aforesaid of the Nedbank affidavit evidence
or of
the actual outright cession or of the email communication and attempt
by first respondent [Mulaudzi] to buy back the policy
and/or obtain
the release of the policy from the cession. It follows necessarily
that either this evidence was not before him,
or if it was, he
clearly had no regard thereto. In my view, on either approach, the
Hlophe JP judgment or written reasons thereto
can accordingly, have
no persuasive value and cannot affect the conclusion arrived at.’
[41]
Thus, in addition to the unreasonable delay and woefully inadequate
explanation, the contemplated appeal is devoid of merit.
Moreover, to
tolerate the type of conduct encountered here would be prejudicial to
a party in the position of Old Mutual, the administration
of justice,
the integrity of any appeal process and to the functioning of our
highest courts of appeal.
[24]
It follows
that the application for condonation must fail.
[42]
I turn to the second appeal: The logically anterior enquiry is the
allegation that Hlophe JP did not bring an impartial and
open mind to
bear on the matter. It is no small matter that one of the litigants
who raises that assertion is the NDPP. The NDPP
is an officer of the
court and thus no ordinary litigant. The NDPP assured us, and it must
be accepted, that the allegation is
not lightly made. In any event,
‘the law will not lightly suppose the possibility of bias in a
judge. But, there is also
the simple fact that bias is such an
insidious thing that even though a person may in good faith believe
that he was acting impartially,
his mind may unconsciously be
affected by it.’
[25]
It is thus
our duty to examine the allegation.
[43] On
20 April 2015 and, after leave to appeal had been granted by Dolamo J
against the order of Hlophe JP, Old Mutual’s
attorney wrote to
the latter:
‘
In
paragraph 13 of the written judgment of His Lordship Mr Justice
Dolamo, a copy of which is attached for ease of reference, his

Lordship said the following, amongst other things: “. . . The
allegation of an apprehension of bias only arose in the application

for leave to appeal. This does not afford the Judge President an
opportunity to present his version, creating an unsatisfactory
state
of affairs. . .”.
We are
instructed to respectfully invite you to make a statement of the
facts you consider necessary for the proper adjudication
of the
reasonable apprehension of bias grounds of appeal raised by the NDPP
and [Old Mutual], i.e. a statement like the one by
the Justices of
the Constitutional Court which is quoted in
President of the
Republic of South Africa and Others v South African Rugby Football
Union and Others
[1999] ZACC 9
;
1999 (4) SA 147
(CC) para 23.’
[44] In
the application for leave to appeal, it had been stated:
‘
25.
The applicant for intervention reasonably apprehends that the Judge
President failed to bring
an impartial mind to bear upon the
adjudication of the matter for the following reasons:
25.1.
As they were entitled to do, on 17 September 2014 the defendant and
respondents brought an application to
anticipate the return day of a
rule
nisi
on 24 hours’ notice to the NDPP.
25.2.
Although the judges assigned to hear urgent applications on 18
September 2014 were His Lordship Mr Justice
Saldanha and His Lordship
Mr Acting Justice Bremridge, on 17 September 2014 the Judge President
decided that he himself should
hear the application on 18 September
2014.
25.3.
The attorney of record for the defendant and the respondents, Mr
Barnabus Xulu, is the Judge President’s
personal attorney in
matters relating to a complaint of misconduct made against him by
judges of the Constitutional Court.
25.4.
On the morning of 18 September 2014 the parties’ legal
representatives met with the Judge President
in his chambers. During
that meeting the Judge President was advised of the applicant for
intervention’s intention to bring,
that morning, its
application for leave to intervene in the restraint proceedings and
of the NDPP’s intention to file, that
morning, his replying
papers in response to the defendant’s application to anticipate
the return day of the rule
nisi
.
25.5.
The NDPP’s replying papers, which comprised 97 pages and
contained evidence which undermined the defendant’s
defence
that there were no reasonable grounds to believe that he might be
convicted, including an affidavit from a Nedbank official
(Frans
Lukas Jooste) showing Nedbank had remained the cessionary of the
policy, were handed to the Judge President during the meeting
in
chambers.
25.6.
The Judge President arrived in court shortly after the conclusion of
the meeting in his chambers.
25.7.
When the matter was called, the papers in the application for leave
to intervene were handed to the Judge
President from the Bar.
25.8.
The Judge President immediately heard argument on the application for
intervention and, having done so,
immediately dismissed the
application for intervention with costs without furnishing reasons.
25.9.
The Judge President then immediately heard argument on the
anticipated return day of the rule
nisi
and, having done so,
immediately discharged the rule
nisi
with costs without
furnishing reasons.
25.10.
The Judge President could have, but did not, reserve judgment on the
application for leave to intervene and on the
anticipated return day
of the rule
nisi
, in order to read the application papers of
the applicant for intervention and the replying papers of the NDPP
including the affidavit
from Nedbank.
25.11.
The written reasons for his decision which the Judge President gave
on 21 October 2014 are based on the defendant’s
version and do
not address the evidence put up by the NDPP and the applicant for
intervention, especially the refutation in the
NDPP’s replying
papers of the defences put up by the defendant in his answering
papers.
25.12.
The applicant for intervention consequently reasonably apprehends
that the Judge President was influenced by his relationship
with Mr
Xulu to hear the matter himself and to discharge the rule
nisi
forthwith.’
[45]
Although Hlophe JP did file a written response, he did not take issue
with the factual matrix raised by Old Mutual. Instead
he asserted:
‘
Under
the specific facts of the case, a reasonable person familiar with the
legal system and the referral rules would not harbour
a reasonable
apprehension of bias. A judge is not compelled automatically to
accept as true the allegations made by the party seeking
recusal. I
am also fortified in my belief that the objective circumstances do
not create an appearance of partiality. I reject
the notion that
required recusal can be based on an unsupported, irrational, or
highly tenuous speculation. I do accept that where
the appearance of
partiality exists, recusal is required regardless of the judge’s
own inner conviction that he or she can
decide the case fairly
despite the circumstances. It would indeed be an absurd, unjust and
perverse ruling to hold that Mr Xulu
may not instruct an independent
advocate to appear before me simply because he happens to represent
me in pending litigation in
totally unrelated matters.’
[46]
It is settled law that not only actual bias but also the appearance
of bias disqualifies a judicial officer from presiding
(or continuing
to preside) over judicial proceedings. The disqualification is
so complete that continuing to preside after
recusal should have
occurred renders the further proceedings a nullity.
[26]
The general
principles are well-established. They are now enshrined in s 165(2)
of the Constitution, which provides ‘the courts
are independent
and subject only to the Constitution and the law, which they must
apply impartially and without fear, favour or
prejudice’. Thus,
a judicial officer who sits on a case in which he or she should not
be sitting, because seen objectively,
either he or she is either
actually biased or there exists a reasonable apprehension that he or
she might be biased, acts in a
manner that is inconsistent with the
Constitution.
[27]
[47]
S
v Le Grange
[28]
put the
position thus:
‘
[14]
A cornerstone of our legal system is the impartial adjudication
of disputes which come before
our courts and tribunals. What the
law requires is not only that a judicial officer must conduct the
trial open-mindedly, impartially
and fairly, but that such conduct
must be “manifest to all those who are concerned in the trial
and its outcome . . . .”
The right to a fair trial is now
entrenched in our Constitution . . . . The fairness of a trial would
clearly be under threat if
a court does not apply the law and assess
the facts of the case impartially and without fear, favour or
prejudice. The requirement
that justice must not only be done, but
also be seen to be done has been recognised as lying at the heart of
the right to a fair
trial . . . .
. . .
[21]      It
must never be forgotten that an impartial judge is a fundamental
prerequisite for a fair trial.
The integrity of the justice
system is anchored in the impartiality of the judiciary. As a matter
of policy it is important
that the public should have confidence
in the courts. Upon this social order and security depend.
Fairness and impartiality
must be both subjectively present and
objectively demonstrated to the informed and reasonable observer.
Impartiality can be described
– perhaps somewhat inexactly –
as a state of mind in which the adjudicator is disinterested in
the outcome, and
is open to persuasion by the evidence and
submissions. In contrast, bias denotes a state of mind that is in
some way predisposed
to a particular result, or that is closed with
regard to particular issues.  Bias in the sense of judicial bias
has been said
to mean ‘’a departure from the standard of
even-handed justice which the law requires from those who occupy
judicial
office”. In common usage bias describes “a
leaning, inclination, bent or predisposition towards one side or
another
or a particular result. In its application to legal
proceedings, it represents a predisposition to decide an issue or
cause in
a certain way that does not leave the judicial mind
perfectly open to conviction. Bias is a condition or state of mind
which sways
judgment and renders a judicial officer unable to
exercise his or her functions impartially in a particular case.”
. . .
[27] Notwithstanding that a judge's
own insights into human nature will play a role in credibility
findings or factual determinations,
judges must make those
determinations only after being open to, and giving proper
consideration to the views of all the parties
before them. “The
reasonable person, through whose eyes the apprehension of bias is
assessed, expects judges to undertake
an open-minded, carefully
considered, and dispassionately deliberate investigation of the
complicated reality of each case before
them.”  In the end
the only guarantee of impartiality on the part of the courts is
conspicuous impartiality.’
[Footnotes omitted.]
[48]
An apprehension of bias may arise from an association or interest a
judicial officer has with or in one of the litigants or
in the
outcome of the case. It may also arise from conduct or utterances by
a judicial officer prior to or during proceedings.
There is as well
what has been described as ‘prejudgment’, which means
that a decision may have been made or an opinion
formed, most often
unfavourable, about a person or issue before knowing or examining all
the facts.’
[29]
In all these
situations, the judicial officer must ordinarily recuse himself or
herself.
[30]
The test for
recusal adopted by the Constitutional Court is whether there is a
reasonable apprehension of bias in the mind of a
reasonable litigant
in possession of all the relevant facts, that a judicial officer
might not bring an impartial and unprejudiced
mind to bear on the
resolution of the dispute before the court.
[31]
In
SARFU
II
para 48 the Constitutional Court formulated the approach to an
application for recusal as follows:
‘
It
follows from the foregoing that the correct approach to this
application for the recusal of members of this Court is objective
and
the onus of establishing it rests upon the applicant. The question is
whether a reasonable, objective and informed person would
on the
correct facts reasonably apprehend that the Judge has not or will not
bring an impartial mind to bear on the adjudication
of the case, that
is a mind open to persuasion by the evidence and the submissions of
counsel. The reasonableness of the apprehension
must be assessed in
the light of the oath of office taken by the Judges to administer
justice without fear or favour; and their
ability to carry out that
oath by reason of their training and experience. It must be assumed
that they can disabuse their minds
of any irrelevant personal beliefs
or predispositions. They must take into account the fact that they
have a duty to sit in any
case in which they are not obliged to
recuse themselves. At the same time, it must never be forgotten that
an impartial Judge is
a fundamental prerequisite for a fair trial and
a judicial officer should not hesitate to recuse herself or himself
if there are
reasonable grounds on the part of a litigant for
apprehending that the judicial officer, for whatever reasons, was not
or will
not be impartial.’ [Footnotes omitted.]
[49]
The application of these well-established principles to the present
matter raises the question whether Hlophe JP should have
heard a
matter in which one of the parties, Mr Mulaudzi, was represented by
his personal attorney. The attorney, Mr Barnabus Xulu,
currently
represents Hlophe JP in disciplinary proceedings pending before the
Judicial Service Commission (JSC) regarding allegations
that he
approached two Justices of the Constitutional Court in an attempt to
improperly influence that court’s pending judgment
in a case
involving the President of the Country. The proceedings are yet to be
finalised and have generated much public debate
and controversy.
[32]
[50]
It must be accepted, I believe, that the long-standing professional
relationship between the Judge President and his personal
attorney,
who has represented him in various judicial and quasi-judicial
tribunals since approximately 2009, and who continues
to do so, in
grave disciplinary proceedings, gives rise to the reasonable
apprehension that in the light of the particular nature
of that
relationship, the Judge President would not bring an impartial mind
to bear on the adjudication of a matter brought before
him by his
attorney. It is noteworthy in this regard that s 5.2. of the ‘Norms
and Standards for the Performance of Judicial
Functions’ issued
by the Chief Justice in terms of
s 8
of the
Superior Courts Act 10 of
2013
stipulates that the allocation of cases by the Head of Court
must as far as possible be ‘effected in a transparent and open

manner’. In
S
v Dube
[33]
it was held
that it was not proper for a Judge to sit in a matter in which his
wife, a State Advocate, represented the State. This
court there
stated:
‘
It
is not possible to define or list factors that may give rise to
apprehension of bias – the question of what is proper will

depend on the circumstances of each case.
In
situations where the judge has a relationship with a party or a legal
representative appearing before him or her, it is always
appropriate
for the judge to consider the degree of intimacy between himself or
herself and the person concerned. The more intimate
the relationship,
the greater the need of recusal.’
[51]
R
v Bow Street Metropolitan Stipendiary Magistrate and others, ex parte
Pinochet Ugarte
(No 2)
[34]
concerned an
application by Senator Pinochet, the former head of Chile, to set
aside an order made for his arrest on various crimes
against humanity
(whilst head of state), on international warrants issued by Spanish
judicial authorities. The question before
the House of Lords was
whether Senator Pinochet was entitled to immunity. The majority, Lord
Nicholls and Lord Steyn (who each
delivered speeches), with whom Lord
Hoffman agreed, held that Senator Pinochet was not entitled to
immunity. Before the hearing
of the appeal, Amnesty International
(AI) sought and obtained leave to intervene. It subsequently emerged
that Lord Hoffmann was
a Director and Chairperson of Amnesty
International Charity Limited (AICL), a registered charity
incorporated to undertake those
aspects of the work of Amnesty
International Limited (AIL), which are charitable under UK law. In
considering whether Lord Hoffman
should have recused himself, Lord
Browne-Wilkinson stated:
‘
My
Lords, in my judgment, although the cases have all dealt with
automatic disqualification on the grounds of pecuniary interest,

there is no good reason in principle for so limiting automatic
disqualification. The rationale of the whole rule is that a man

cannot be a judge in his own cause. In civil litigation the matters
in issue will normally have an economic impact; therefore a
judge is
automatically disqualified if he stands to make a financial gain as a
consequence of his own decision of the case. But
if, as in the
present case, the matter at issue does not relate to money or
economic advantage but is concerned with the promotion
of a cause in
which the judge is involved together with one of the parties. Thus in
my opinion if Lord Hoffmann had been a member
of AI he would have
been automatically disqualified because of his non-pecuniary interest
in establishing that Senator Pinochet
was not entitled to immunity.
Indeed, so much I understood to have been conceded by Mr Duffy.
Can it
make any difference that, instead of being a direct member of AI,
Lord Hoffmann is a director of AICL that is of a company
which is
wholly controlled by AI and is carrying on much of its work? Surely
not. The substance of the matter is that AI, AIL and
AICL are all
various parts of an entity or movement working in different fields
towards the same goals. If the absolute impartiality
of the judiciary
is to be maintained, there must be a rule which automatically
disqualifies a judge who is involved, whether personally
or as a
director of a company, in promoting the same causes in the same
organisation as is a party to the suit. There is no room
for fine
distinctions if Lord Hewart’s famous dictum is to be observed:
it is “of fundamental importance that justice
should not only
be done, but should manifestly and undoubtedly be seen to be done”
(see
R v Sussex Justices, ex parte McCarthy
[1924] 1 KB 256
at
259,
[1923] All ER Rep 233
at 234).’
[52]
The issue which confronts us has arisen more directly in other
countries. In the United States of America, Federal Judges are
bound
by the Code of Conduct for United States Judges, described as ‘A
set of ethical principles and guidelines adopted by
the Judicial
Conference of the United States’.
[35]
The
Committee on Codes of Conduct issues Advisory Opinions amplifying the
Code of Conduct. Advisory Opinion 99 concerns ‘Disqualification

where counsel is involved in a separate class action in which the
judge or a relative is a class member’. It states inter
alia
that:
‘
Under
Canon 3C(1) of the Code of Conduct for United States Judges, judges
should recuse, subject to remittal, in cases in which
one of the
parties is represented by a lawyer who is a member of a firm that
currently represents the judge in an unrelated matter.
. . .
The
question addressed here is whether, and to what extent, that general
advice should apply to cases in which the representation
of the judge
or the judge’s relative in an unrelated matter consists of
representation in a
Rule 23(b)
(3) class action.
The
Committee is of the view that there is no absolute requirement of
recusal in cases in which the judge or the judge’s relatives

are represented in the unrelated matter solely in their capacity as
class members. In some instances, the relationship between
the judge
(or the judge’s relatives) and the attorney for the class may
be quite similar to the relationship between attorney
and client in a
conventional setting and, in such cases, recusal would be required.
However, where the class action is a large
one, in which the judge
(or the judge’s relatives) are not lead plaintiffs or named
plaintiffs, have had no role in selecting
the attorney for the class,
have not had – and do not expect to have – personal
contact with the attorney, and have
no reasonable expectation of a
substantial personal recovery, the case for recusal is not nearly as
strong. In that setting, the
Committee is of the view that the mere
fact that the judge, or a relative of the judge, is represented as a
class member by the
same attorney or firm that is appearing before
the judge does not give rise to a reasonable question as to the
judge’s impartiality
and therefore does not require recusal
under Canon 3C(1).’
[53]
Advisory Opinion 102 deals with ‘Disqualification issues
relating to a judge being sued in an official capacity, including

representation by Department of Justice’. It states:
‘
When
judges are sued in an official capacity, it is not uncommon for
representation to be provided by an attorney from the Department
of
Justice (“DOJ”), which includes members of the local U.S.
Attorney’s staff. In the event a DOJ attorney is
assigned to
represent a judge, it is not necessary for the judge to recuse in
unrelated litigation in which other DOJ attorneys
appear. It may even
be unnecessary to recuse from cases handled by the same attorney
assigned to represent the judge, depending
upon the nature of the
representation and the judge’s relationship with the attorney.
. . .
Although
disqualification is not routinely required from unrelated matters
handled by a government attorney assigned to represent
a judge, it
may be appropriate in some instances. This situation may arise
because of the nature of the claims (such as those involving
personal
liability and not subject to absolute immunity or because of the
attorney-client relationship necessary to mount a proper
defence).’
[54] What
emerges clearly from the Advisory Opinions is that subject to
exceptions which are not relevant here, a Judge may not
sit in a
matter in which lawyers who are currently representing that Judge
also represents one of the parties. A review of the
practice in the
various States of the USA concludes that in general:
‘
A
judge is disqualified from the case if one of the attorneys is also
representing the judge either in personal matters, including

litigation and disciplinary proceedings, or in lawsuits in which the
judge is involved in an official capacity’.
[36]
[55]
In his response to the request from Old Mutual for the statement of
facts, Hlophe JP called in aid the case of
Fletcher
v Conoco Pipe Line
,
[37]
a decision
of the Court of Appeals for the Eighth Circuit. In that case, the
appellants (the Fletchers) submitted an affidavit by
an attorney, Mr
Baldwin. In a summary judgment application, the judge refused an
application by Conoco to strike out Baldwin’s
affidavit. He
also made an order precluding several of the Fletchers’
witnesses, including Baldwin, from testifying at the
trial. He
granted summary judgment in favour of Conoco. Subsequently, the
Fletchers submitted an affidavit stating that Baldwin
and the judge
were close friends, and that the judge was a client of Baldwin’s
law firm. They contended that the judge should
have recused himself.
The Court of Appeals held that the evidence established, at best,
merely a social relationship between Baldwin
(a witness) and the
judge. Baldwin had not represented the Fletchers in the litigation.
The court held: ‘It strains credulity
that Baldwin would not
have fully disclosed to the Fletchers and their trial counsel his
relationship with Judge Whipple well in
advance of summary
judgment’;
[38]
and, the
Judge granted summary judgment against the Fletchers, ‘a
decision contrary to the expectation of a reasonable person,
if Judge
Whipple had been biased in favour of Baldwin.’
[39]
[56] The
key features of
Fletcher
differ fundamentally from the present
in the following respects: first, the attorney was not personally
involved in the litigation
in question; second, there appears to have
been evidence only that the attorney’s firm had represented the
judge in other
matters, but no evidence that the attorney had
personally done so; third, the judge gave a judgment against the
party in whose
favour he was allegedly biased; and fourth, that party
(the party in whose favour he was allegedly biased) then complained
that
the judge should have recused himself. In those circumstances,
it is hardly surprising that the court rejected the non-recusal
complaint.
[57]
In the United Kingdom, in
Taylor
v Lawrence
,
[40]
the trial
judge had disclosed that the solicitors for the claimants had also
drafted and kept his will for him. He had not disclosed
that he and
his wife were to meet representatives of the claimants’
solicitors to execute a codicil and have it witnessed
immediately
after hearing the closing submissions and the day before he was to
give judgment. Woolf LCJ, on behalf of the Court
of Appeal, endorsed
the statement of Peter Gibson LJ that ‘The use by a judge of
the services of a firm of solicitors for
his personal purposes, such
as for drafting his will, would not, I think, give rise to any
expectation, or even any suspicion,
in the fair-minded and informed
observer that the judge in his judicial capacity would, by reason of
that connection over his will,
be untrue to his judicial oath and
favour another client of those solicitors.’
[41]
Woolf LCJ
further held: ‘We regard it as unthinkable that an informed
observer would regard it as conceivable that a judge
would be
influenced to favour a party in litigation with whom he has no
relationship merely because that party happens to be represented
by a
firm of solicitors who are acting for the judge in a purely personal
matter in connection with a will.’
[42]
That case,
however, differs from the present matter in that the representation
was of a limited kind and took place within a non-litigious
and
non-contentious context. As Peter Gibson LJ pointed out: ‘The
witnessing of the signature of the testator on a testamentary

document as the informed observer would know, is a mere ministerial
task’.
[43]
[58]
In Australia, the Supreme Court of Western Australia’s ‘Guide
to Judicial Conduct’ stipulates that ‘[f]riendship
or
past professional association with counsel or solicitor is not
generally to be regarded as a sufficient reason for
disqualification.’
[44]
The Canadian
Judicial Council’s
Ethical
Principles for Judges
,
contains the following principles under the heading ‘Conflicts
of Interest’:
‘
1.
Judges should disqualify themselves in any case in which they believe
they will be
unable to judge impartially.
2.
Judges should disqualify themselves in any case in which they believe
that a
reasonable, fair minded and informed person would have a
reasoned suspicion of conflict between a judge’s personal
interest
. . . and a judge’s duty.
3.
Disqualification is not appropriate if: (a) the matter giving rise to
the perception
of a possibility of conflict is trifling or would not
support a plausible argument in favour of disqualification, or (b) no
other
tribunal can be constituted to deal with the case or, because
of urgent circumstances, failure to act could lead to a miscarriage

of justice.’
[45]
[59] The
proper test for recusal where the judge is currently represented by
an attorney who represents a party to litigation before
him requires
consideration of factors such as: (a) whether the matter in which the
judge is represented involved the judge
in his or her personal
capacity; (b) whether the attorney is personally representing the
judge, or only a member of a firm of which
another member is
representing the judge; (c) whether the attorney is personally
representing a party to the litigation, or only
a member of a firm of
which another member is representing the party; (d) the nature of the
representation - whether it involves
litigation and, if so: (i)
whether the litigation is of a contentious nature; and (ii) whether
the case is a substantial matter.
All of these factors weigh heavily
in favour of a conclusion that in circumstances such as the present
matter, it may be inappropriate
for a Judge to allocate the matter to
himself, and then hear it.
[60]
Here, the apprehension of bias is not limited to the fact of the
relationship between Hlophe JP and the attorney. The apprehension
is
strengthened by the following additional considerations: Hlophe JP
was not one of the duty judges, but allocated the matter
to himself.
He then proceeded to dismiss Old Mutual’s application for leave
to intervene on the turn, in circumstances where
he had not afforded
himself sufficient time to read and properly consider the papers
before coming into court. He thereafter proceeded
to discharge the
rule
nisi
granted in favour of the NDPP, also on the turn, in
circumstances where he had not had the opportunity of first reading
the replying
affidavit, which was filed shortly before the hearing.
When he subsequently gave reasons for his order, he did not refer to
the
material evidence in the NDPP’s replying affidavit, which
pertinently contradicted Mr Mulaudzi’s defence.
[61]
What is more, in a matter that was neither easy nor clear, those
reasons, when they were eventually delivered only ran to some
six
pages.  That fortifies the view, so it was submitted, that
Hlophe JP, whether consciously or subconsciously, was partial
to Mr
Mulaudzi’s cause. It is so that where the offending conduct
sustains the inference that the presiding judge was not
open-minded,
impartial or fair during the hearing, this court will intervene and
grant appropriate relief, including declaring
the proceedings invalid
without considering the merits.
[46]
Here,
however, it was submitted that an examination of the reasons
furnished, fortifies the inference that the Learned Judge President

was prejudiced against Old Mutual and the NDPP and prejudged the case
against them. It is accordingly necessary to consider those
reasons
to determine whether this submission is well grounded.
[62] The
reasons advanced by Hlophe JP for discharging the provisional
restraint order are to be found in a single paragraph, which
reads:
‘
10.
There are no reasonable prospects of a successful prosecution in the
matter. This is due to the
fact that the respondent committed no
criminal offence in gaining access to these funds. The Fairbairn
Capital under policy no
15715207 was an investment to which he was
entitled. At the time the respondent requested that the value of the
investment be made
available to him he was fully entitled to do so
and was entitled to the proceeds. Prior to making the funds
available, Old Mutual
had verified that he was indeed entitled to
realise the investment. Having legitimately obtained the
R48 163 089.55 to
which he was entitled, he was at liberty
to apply it in the manner that he saw fit in meeting his financial
commitments and furthering
his business interests. In the absence of
any misrepresentation the evidence cannot sustain a fraud conviction.
There had also
been no unlawful contrectatio by Defendant in that the
funds were paid over to him on the basis of Fairbairn Capital/Old
Mutual’s
authority and their indication that he was entitled to
the funds. In the absence of an unlawful contrectatio the evidence
cannot
sustain a conviction of theft. There could be an argument for
civil litigation in due course, but if he were to be brought to a

criminal trial on these facts, the likelihood would be that of an
acquittal. One needs to bear in mind that Courts cannot be used
as a
debt collection agent to hold otherwise would be debtors. That would
amount to an abuse of the court process.’
[63]
In reasoning in this manner, the Learned Judge President misdirected
himself. This is apparent from
NDPP
v Rautenbach
,
[47]
where Nugent
JA pointed out:
‘
[25]
A Court from which such an order is sought is called upon to assess
what might occur in the future.
Where it is ”satisfied that a
person is to be charged with an offence” and that there are
”reasonable grounds
for believing that a confiscation order may
be made against such person”
(s 25(1))
it has a discretion to
make a restraint order.
. . .
[27]
. . . 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 (
National
Director of
Public Prosecutions v Basson
2002 (1) SA 419
(SCA)
(2001 (2)
SACR 712)
in para [19]) 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.
Clearly 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. Moreover, once the criteria
laid down in the Act have
been met, and the Court is properly seized of its discretion, it is
not open to the Court to then frustrate
those criteria when it
purports to exercise its discretion (cf
Kyriacou,
fn 6, in
paras [9] and [10]). The misdirection by the Court
a quo
pervaded all its reasoning and was instrumental to the conclusion to
which it came and I have approached the matter afresh.’
[64] The
Learned Judge President could only have reached the conclusion that
there were no reasonable prospects of a successful
prosecution in the
matter if he disbelieved the evidence of the NDPP. But, the evidence
showed that Mr Mulaudzi was not entitled
to the proceeds of the
policy because of the outright cession he had entered into with
Nedbank. The indisputable effect of the
cession was that Mr Mulaudzi
had lost all of his rights under the policy, which were transferred
to Nedbank. Nothing remained vested
in him. Thus, on the test in
Rautenbach
there was no basis on which Hlophe JP could
properly make a finding that Mr Mulaudzi was entitled to the
investment. In any event,
as held in
Rautenbach
, the court was
‘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 . . . and
whether that evidence might reasonably be believed.’
[65]
Likewise, Hlophe JP’s finding that Mr Mulaudzi had ‘committed
no criminal offence in gaining access to these funds’
and that
‘there had also been no unlawful contrectatio’, is
equally untenable. In
Nissan
SA (Pty) Ltd v Marnitz NO & others
[48]
at 24A-D,
Streicher JA stated:
‘
Where
A hands over money to B mistakenly believing that the money is due to
B, B, if he is aware of the mistake, is not entitled
to appropriate
the money. Ownership of the money does not pass from A to B. Should B
in these circumstances appropriate the money
such appropriation would
constitute theft (
R
v Oelsen
1950 (2) PH H198; and
S
v Graham
1975
(3) SA 569
(A) at 573E-H).’
[66] In
dismissing Old Mutual’s application for leave to intervene,
Hlophe JP held that although ‘Old Mutual has been
involved in
the restraint proceedings since their inception’; it had chosen
‘not to be a party [to those] proceedings
until much later’.
This statement is factually incorrect as the affidavit filed in
support of the application for intervention
stated clearly that: (i)
Old Mutual was the party that had suffered patrimonial loss as a
result of Mr Mulaudzi’s conduct;
(ii) Old Mutual had instructed
its legal representatives to institute civil recovery proceedings
against Mr Mulaudzi; and (iii)
if a confiscation order is made
against Mr Mulaudzi in terms of POCA, Old Mutual intends approaching
the court in terms of ss 30(5)
and 31 of POCA for an order directing
that payment of its claim against Mr Mulaudzi be made from the
proceeds of the assets under
restraint before any of those proceeds
are used to pay the confiscation order sought by the NDPP.
[67]
The principles governing applications for intervention by unsecured
creditors like Old Mutual in restraint proceedings have
been set out
in
Fraser
v Absa Bank Ltd (NDPP as amicus curiae)
.
[49]
Hlophe JP
appears to have thought that it was incumbent on Old Mutual to have
applied for leave to intervene at the inception of
the restraint
proceedings on 28 August 2014 or at any rate far sooner than it did
on 18 September 2014 (on the anticipated return
day). This is however
inconsistent with the principle expressed in
Fraser
para 74 that ‘any creditor who wishes to intervene has to
approach the court as soon as it becomes aware of s 26(6)
proceedings.’
In the present case Mr Mulaudzi and the other
respondents applied for an order discharging the rule
nisi
and setting aside the provisional restraint order, alternatively, for
the restraint order to be varied. Mr Mulaudzi and the other

respondents only took these steps on 17 September 2014, when they
served their notice in terms of s 26(3)(
c
)
of POCA on the NDPP’s attorney. Old Mutual then acted quite
promptly. It immediately prepared its application for intervention

and delivered and moved it at the commencement of the proceedings on
the following day, 18 September 2014 at 10 am. On Old Mutual’s

showing, it was a worthy creditor with an interest in the
confirmation of a provisional restraint order or its variation. It
was
the victim of the alleged criminal offence giving rise to the
restraint proceedings, which concerned a very substantial sum of
money.
[68]
It is so that some of the individual factors raised, would not in and
of themselves, be a sufficient indication that the NDPP
and Old
Mutual did not have a fair hearing. Taken cumulatively though, I have
no doubt that their complaint that they reasonably
apprehended that
the Judge President did not bring an open and impartial mind to bear
on the adjudication of the matter, is justified.
It follows that the
order of the Western Cape High Court, per Hlophe JP, of 18 September
2014 refusing Old Mutual leave to intervene
and discharging the
provisional POCA restraint order made by Weinkove AJ on 28 August
2014, falls to be set aside. And, as the
proceedings before Hlophe JP
amount to a nullity, the matter must be remitted to the High Court
(differently constituted) to enable
it to properly adjudicate the
matter.
[50]
[69] That
result, according to the trustees, means that s 35(3) of POCA finds
application (the narrow point alluded to earlier to
which the
trustees restricted themselves). Section 35, headed ‘Effect of
sequestration of estates on realisable property’,
provides:
‘
(1)
When the estate of a person who holds realisable property is
sequestrated – (a) the property for the time being subject
to a
restraint order made before the date of sequestration; and
(b) the
proceeds of any realisable property realised by virtue of section 30
and for the time being in the hands of a
curator bonis
appointed under this Chapter, shall not vest in the Master of the
High Court or trustee concerned, as the case may be. (3) Where
the
estate of an insolvent has been sequestrated, the powers conferred
upon a High Court by sections 26 to 31 and 33(2) or upon
a
curator
bonis
appointed under this Chapter, shall not be exercised- (a)
in respect of any property which forms part of that estate; or (b) in

respect of any property which the trustee concerned is entitled to
claim from the insolvent under section 23 of the Insolvency
Act,
1936. (4) Nothing in the
Insolvency Act, 1936
, shall be construed as
prohibiting any High Court or
curator bonis
appointed under
this Chapter from exercising any power contemplated in subsection (3)
in respect of any property or proceeds mentioned
in subsection (1).’
[70] On
behalf of the trustees it was submitted:
‘
The
effect of the discharge of the order by Hlophe JP was that the
property of the insolvent was not under restraint when the
sequestration
order was granted. There are no assets under the
control of the
curator
bonis
at the moment (nor were they under such control when the
sequestration order was granted).’
Accordingly,
so the submission went:
‘
The
effect of
section 35(3)
is to protect the property in the estate from
the operation of a subsequently granted POCA order – this
accords with the
principle of a
concursus
creditorum
.
The fact that there was a discharge restraint order at the time of
the grant of the sequestration order cannot operate to the
benefit of
one party (the NDPP) to the disadvantage of the
concursus
.
The assets in the estate of the insolvent all vested in the Master
(and now in the trustees) as a result of the sequestration
order when
it was granted.’
[71]
In support of that submission reliance was sought to be placed on
Rautenbach
para
12 and the authorities there cited. In my view, on this aspect, there
are two features that distinguish
Rautenbach
from
this matter. First,
Rautenbach
,
was concerned with the contention that the lodging of an application
for leave to appeal against the discharge of a provisional
restraint
order had the effect of reviving the provisional order. In that
regard
Rule 49(11)
was invoked by the appellant there.
[51]
In rejecting
that contention, Nugent JA stated:
‘
[12]
That is to misconstrue the true nature of the orders. As pointed out
by Goldblatt J in
Chrome
Circuit Audiotronics (Pty) Ltd v Recoton European Holdings Inc and
Another
2000 (2) SA 188
(W) E at 190B-E, orders of this kind are not
independent of one another. An interim order that is made
ex
parte
is
by its nature provisional – it is “conditional upon
confirmation by the same Court (albeit not the same Judge) in
the
same proceedings after having heard the other side” (per Harms
JA in
MV
Snow Delta: Serva Ship Ltd v Discount Tonnage Ltd
2000
(4) SA 746
(SCA) in para [6]), which is why a litigant who secures
such an order is not better positioned when the order is reconsidered
on
the return day (
Pretoria
Portland Cement Co Ltd and Another v Competition Commission and
Others
2003
(2) SA 385
(SCA) in para [45]). It follows that when an appeal is
sought to be brought against the discharge of such an order there is
nothing
to revive for it is as if no order were made in the first
place.
[13]
The appellant submitted that even if that is so in relation to
ordinary civil practice a distinction
should be made in relation to
an order of the kind that is now before us, otherwise the purpose and
intent of the Act will be undermined.
I see no grounds upon which to
make that distinction. The reason for permitting restraint orders to
be sought
ex parte
is not to ease the burden upon the
appellant by ensuring that he can obtain such order without
opposition: It is to ensure that
the property concerned is not
disposed of or concealed in anticipation of such proceedings. The Act
contemplates that such an order
is only provisional until it is
confirmed on the return day (s 26(3) (
a
)) and in that respect
it is no different to an order made in ordinary civil proceedings. If
that means that property will not be
under restraint where a court
erroneously refuses to make such an order (either provisionally at
the outset or finally on the return
day) – and in my view it
does – that is the inevitable consequence of insisting upon an
order of a court before property
is placed under restraint.’
[72]
The second distinguishing feature between
Rautenbach
and
this case is that the proceedings before Hlophe JP amount to a
nullity. In that respect, the High Court cannot be said to have
acted
at all. This court’s order setting aside the order of Hlophe JP
will accordingly operate
ex
tunc
,
i.e. the restraint order will be revived with effect from 18
September 2014.
[52]
In the
circumstances, ss 35(1), (3) and (4) of POCA, read with the decision
of this court in
Bester
NO and Another v National Director of Public Prosecutions
,
In
re
National
Director of Public Prosecutions v Kleinhans
[53]
(a case
dealing with the comparable provisions of s 36 of POCA relating to
the liquidation of corporate entities), have the effect
that assets
which are under the control of the
curator
bonis
by virtue of a restraint order on the date of the sequestration of a
person’s estate are excluded from the insolvent estate.
In this
case the provisional restraint order was made on 28 August 2014, a
date before the sequestration application was issued
on 28 April 2015
and the Mulaudzis’ estate was provisionally sequestrated on 2
December 2015. As a result, the Mulaudzis’
insolvent estate
will be subject to the restraint order.
[73]
Costs remain. In each of the appeals there were three interlocutory
applications: first, the substitution application by the
trustees;
second, the application by Mr Mulaudzi for leave to intervene; and,
third, Mr Mulaudzi’s application for the joinder
of Nedbank.
In
the first appeal:
Mr Mulaudzi’s opposition to the first application was both
unreasonable and unjustified and, in consequence, he must be held

liable for those costs in his personal capacity.
[54]
Insofar as
the second application is concerned – the application, which
was made from the bar to which Old Mutual, the NDPP
and the trustees’
consented, occupied very little, if any, additional time during the
course of the hearing of the matter.
Accordingly, those costs should
be costs in the cause because it is simply not possible to
distinguish them from the costs of the
appeal itself. The costs of
the third application, which was entirely devoid of any merit, should
be paid by Mr Mulaudzi (from
his personal estate). That leaves the
application for condonation and the reinstatement of the lapsed
appeal. The costs thereof
are to be borne by the insolvent estate and
Mr Mulaudzi, jointly and severally, the one paying the other to be
absolved.
In
the second appeal:
The
costs of the first application fall to be borne by the insolvent
estate (i.e. the trustees in their capacities as such),
by Mr and Mrs
Mulaudzi (in their personal capacity, i.e. as co-owners of those
assets in their joint estate, which fall outside
of their insolvent
estate or which may later accrue to them personally) and by the three
CCs, jointly and severally, the one paying
the others to be absolved.
The insolvent estate is so liable because the substitution of the
trustees was necessitated by the sequestration
of the Mulaudzis’
joint estate. The Mulaudzis and the three CCs are so liable because
(represented by Mr Mulaudzi)
[55]
they opposed
the substitution. For the same reasons as in the first appeal, the
costs of the second application shall be costs in
the cause. As with
the first appeal, the costs of the third application must be paid by
the unsuccessful applicants, namely the
Mulaudzis (from their
personal estates) and the three CCs, jointly and severally, the one
paying the others to be absolved. The
costs of the second appeal,
which succeeds, must also follow the result. As the appeal succeeds,
those costs must be borne by the
insolvent estate, the Mulaudzis
(from their personal estate) and the three CCs, jointly and
severally, the one paying the others
to be absolved. The trustees are
liable because they sought to exclude the assets in the insolvent
estate from the operation of
the restraint order. Accordingly, the
insolvent estate would have benefited if the appeal had been
dismissed. The Mulaudzis and
the three CCs should be so liable
because they opposed the second appeal and their reversionary
interest in the insolvent estate
stood to benefit should the appeal
have been dismissed. That leaves the wasted costs of the hearing
before this court on 4 May
2016: those must be borne by the insolvent
estate and Mr Mulaudzi jointly and severally. The insolvent estate is
held liable on
the basis that the sequestration of the joint estate
of Mr and Ms Mulaudzi was one of the reasons that the appeal could
not proceed
on that day. Mr Mulaudzi’s indisposition was
another of the reasons why the hearing could not proceed. In any
event he was
remiss in not informing the parties or the court well
before the date of the hearing that his (and his wife’s) joint
estate
had been provisionally sequestrated on 2 December 2015. Hence,
his liability.
[74] In
the result, the following orders are made -
(1)
In the first appeal under SCA case number 095/16:
(a)
The application for the substitution of the trustees is granted. Mr
Mulaudzi is to pay the
costs of that application.
(b)
The application by Mr Mulaudzi for leave to intervene is granted.
(c)
The application by Mr Mulaudzi for the joinder of Nedbank Limited is
dismissed. Mr
Mulaudzi is to pay the costs of that application.
(d)
The application for condonation and for the reinstatement of the
appeal is dismissed with
costs, such costs, which are to include the
costs of the appeal (inclusive of the costs occasioned by the
application by Mr Mulaudzi
for leave to intervene) and the wasted
costs of the hearing before this court on 4 May 2016, shall be paid
by Mr Mulaudzi (in his
personal capacity) and his insolvent estate
jointly and severally, the one paying the other to be absolved.
(2)
In the second appeal under SCA case number 210/15:
(a)
The application for the substitution of the trustees is granted.
(b)
The application by Mr Mulaudzi for leave to intervene is granted.
(c)
The application by Mr Mulaudzi for the joinder of Nedbank Limited is
dismissed.
(d)
The appeal succeeds with costs, including the costs of the
application for leave to intervene
by Mr Mulaudzi and the wasted
costs of the hearing before this court on 4 May 2016.
(e)
The order of the court below is set aside and substituted with:
‘
The
rule nisi issued on 28 August 2014 is hereby extended until
discharged or confirmed.’
(f)
The costs of (a), (b), (c) and (d) above shall be paid by Mr and Ms
Mulaudzi, their
insolvent estate and the three close corporations
namely, Mulaudzi and Associates CC, Luvhomba Legal Edge CC and
Luvhomba Financial
Services CC, jointly and severally, the one paying
the other to be absolved.
(3)
In both appeals, the orders above relating to costs are to include
the costs of two counsel.
_________________
V
M Ponnan
Judge
of Appeal
APPEARANCES:
1.
Case no: 95/2016
For
Appellant:

M T Mulaudzi (in person)
For the
trustees:

S Olivier S C
Instructed
by:
Ashersons
Attorneys, Cape Town
Webbers,
Bloemfontein
For First
Respondent:

A Breitenbach SC (with him H Cronje)
Instructed
by:
MacGregor
Stanford Kruger Inc., Cape Town
Phatshoane
Henney, Bloemfontein
2.
Case no: 210/2015
For First
Appellant:

G M Budlender SC (with him T Mosikili)
Instructed
by:
The
State Attorney, Cape Town
The
State Attorney, Bloemfontein
For
Second Appellant:
A Breitenbach
SC (with him H Cronje)
Instructed
by:
MacGregor
Stanford Kruger Inc., Cape Town
Phatshoane
Henney, Bloemfontein
For First
to Fifth Respondent:       M T Mulaudzi
(in person)
For the
trustees:

S Olivier S C
Instructed
by:
Ashersons
Attorneys, Cape Town
Webbers,
Bloemfontein
[1]
Aboo
v Firstrand Bank Ltd
(319/2004)
[2005] ZASCA 25
(29 March 2005)
para
12.
[2]
Mears
v Rissik, MacKenzie NO and Mears’ Trustee
1905
TS 303
at 305.
[3]
Aboo
v Firstrand Bank Ltd
para
12.
[4]
Mears
supra
at 305.
[5]
See
also
Nieuwoudt
v The Master & others NNO
1988 (4) SA 513
(A) at 524G-526E
and
530B-D.
[6]
Sassoon
Confirming and Acceptance CO (Pty) Ltd v Barclays National Bank Ltd
1974
(1) SA 641
(A) at 647H-648.
[7]
To
the extent that the contrary view was expressed in
National
Director of Public Prosecutions v Ishwarlall Ramlutchman
[206] ZASCA 20;
2017 (1) SACR 343
(SCA) paras 16-18, it is clearly
wrong and should not be followed.
[8]
See
Judicial
Service Commission & another v Cape Bar Council & another
[2012]
ZASCA 115
;
2013
(1)
SA 170
(SCA) para 12, where Brand JA stated: ‘It has by now
become settled law that the joinder of a party is only required as a

matter of necessity – as opposed to a matter of convenience –
if that party has a direct and substantial interest
which may be
affected prejudicially by the judgment of the court in the
proceedings concerned . . . .’
[9]
Uitenhage
Transitional Local Council v South African Revenue Service
[2003]
ZASCA 76
;
2004 (1) SA 292
(SCA) para 6.
[10]
Commissioner
for Inland Revenue v Burger
1956
(4) SA 446
(A) at 449G-H.
[11]
Uitenhage
Transitional Local Council
para
6.
[12]
Dengetenge
Holdings (Pty) Ltd v Southern Sphere Mining and Development Company
Ltd & others
[2013]
ZASCA 5
;
[2013] 2 All SA 251
(SCA) para 11.
[13]
Dengetenge
Holdings (Pty) Ltd v Southern Sphere Mining and Development Company
Ltd
supra para 16.
[14]
Rennie
v Kamby Farms (Pty) Ltd
[1988]
ZASCA 171
;
1989 (2) SA 124
(A) at 131E.
[15]
Moraliswani
v Mamili
[1989]
ZASCA 54
;
1989 (4) SA 1
(A) at 10E.
[16]
Finbro
Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontein &
others
[1985]
ZASCA 71
;
1985 (4) SA 773
(A)
at
789C.
[17]
See
inter alia
Blumenthal
v Thomson NO & another
[1993]
ZASCA 190
;
1994 (2) SA 118
(A) at 121I;
Ferreira
v Ntshingila
[1989] ZASCA 149
;
1990 (4) SA 271
(A) at 281J-282A;
Moraliswani
v Mamili
supra at 10F;
Rennie
v Kamby Farms (Pty) Ltd
[1988]
ZASCA 171
;
1989
(2) SA 124
(A) at 131H-132A;
P
E Bosman Transport Works Committee & others v Piet Bosman
Transport (Pty) Ltd
1980
(4) SA 794
(A)
at
799;
Mbutuma
v Xhosa Development Corporation Ltd
1978
(1) SA 681
(A)
at
687A.
[18]
National
Director of Public Prosecutions v Rautenbach and another
[2004]
ZASCA 102
;
2005
(4) SA 603
(SCA) paras 25 and 27.
[19]
National
Director of Public Prosecutions v Rebuzzi
[2001]
ZASCA 127:
It
was there held: ‘In my view, ss 30(5) and 31(1) make it clear
that the Legislature did not intend a confiscation order
to be
withheld merely because an identifiable victim has an
equivalent claim for recovery of his loss. Not only do those

sections recognise that a confiscation order might co-exist with a
claim by the victim (which would hardly have been provided
for if
the legislature intended that to be avoided) but they provide the
means to avoid the claims competing for the defendant's
property.
Where the defendant's property has not yet been realised s
30(5) expressly authorises the High Court to suspend
the realisation
until the victim's claim or judgment has been met, and where the
property has been realised s 31(1) enables the
High Court to direct
the manner in which the proceeds are to be distributed. There is no
reason to think that a court that is
called upon to give such
directions will not recognise the claim of a victim and order
that it be paid before any moneys
accrue to the State bearing
in mind that s 31(1) expressly provides that it does not have a
preferential claim. Thus the making
of a confiscation order need not
deprive the victim of the means of recovering his loss, nor is there
reason to think that it
will ordinarily do so.’
[20]
Fraser
v Absa Bank Ltd (National Director of Public Prosecutions as Amicus
Curiae) [
2006]
ZACC 24
;
2007 (3) SA 484
(CC) para 58.4.
[21]
Hollington
v Hewthorn & Co Ltd
[1943]
KB 587
(CA) ([1943] 2 All ER 35 (CA).
[22]
Hassim
(also known as Essack) v Incorporated Law of Society of Natal
1977
(2) SA 757
(A) 764E-765G.
[23]
Prophet
v National Director of Public Prosecutions
[2006]
ZACC 17
;
2007 (6) SA 169
(CC) para 42.
[24]
The
Commissioner for the South African Revenue Service v van der Merwe
[2015]
ZASCA 86
;
2016 (1) SA 599
(SCA) para 18.
[25]
See
S v
Le
Grange
2009
(2) SA 434
(SCA) para 25-26.
Le
Grange
added:
‘
Benjamin
Cardozo recognised this when he stated:
“
We
are reminded by William James in a telling page of his lectures on
Pragmatism that every one of us has in truth an underlying

philosophy of life, even those of us to whom the names and notions
of philosophy are unknown or anathema. There is in each of
us a
stream of tendency, whether you choose to call it philosophy or not,
which gives coherence and direction to thought
and action.
Judges cannot escape that current any more than other mortals. All
their lives, forces which they do not recognise
and cannot name,
have been tugging at them – inherited instincts, traditional
beliefs, acquired convictions; and the resultant
is an outlook on
life, a conception of social needs, a sense in James's phrase of
“the total push and pressure of the cosmos”,
which, when
reasons are nicely balanced, must determine where choice shall fall.
In this mental background every problem finds
its setting. We may
try to see things as objectively as we please. None the less, we can
never see them with any eyes except
our own.”
Cardozo,
while affirming the importance of judicial impartiality, recognised
that true objectivity was impossible because judges,
like other
humans, operate from their own perspectives. As the Canadian
Judicial Council noted in
Commentaries on Judicial Conduct
(1991) at 12, “(t)here is no human being who is not the
product of every social experience, every process of education,
and
every human contact”. What is possible and desirable,
they note, is impartiality:
“
.
. . the wisdom required of a judge is to recognise, consciously
allow for, and perhaps to question, all the baggage of past

attitudes and sympathies that fellow citizens are free to carry,
untested, to the grave.
True
impartiality does not require that the judge have no sympathies
or opinions; it requires that the judge nevertheless
be free to
entertain and act upon different points of view with an open mind”.’
[26]
Take
and Save Trading CC & others v Standard Bank of SA Ltd
[2004]
ZASCA 1
;
2004
(4) SA 1
(SCA)
para
5.
[27]
President
of the Republic of South Africa & others v South African Rugby
Football Union & others
[1999]
ZACC 11
;
1999
(4) SA 147
(CC) (SARFU II) para 30;
S
v Basson
[2005]
ZACC 10
;
2007
(3) SA 582
(CC) (Basson II) para 27.
[28]
S
v
Le
Grange & others
2009
(2) SA 434
SCA.
[29]
C
Okpaluba & L Juma ‘Apprehension of Bias and the Spectacle
of the Fair-Minded Observer: A Survey of Recent Commonwealth
and
South African Decisions on Prejudgment’ (2014) 28
Speculum
Juris
2 at 19.
[30]
Bernert
v Absa Bank Ltd
[2010]
ZACC 28
;
2011
(3) SA 92
(CC) para 28; see also
Stainbank
v
South
African Apartheid Museum at Freedom Park & another
[2011]
ZACC 20;
2011
(10) BCLR 1058 (CC).
[31]
SARFU
II
at paras 36-39.
[32]
See
Nkabinde
& another v Judicial Service Commission & others
[2016]
ZASCA 12; 2016 (4) SA 1 (SCA).
[33]
S
v Dube & others
[2009]
ZASCA 28
;
2009 (2) SACR 99
(SCA) para 14.
[34]
R
v Bow Street Metropolitan Stipendiary Magistrate & others, ex
parte Pinochet Ugarte
(No
2) [1999] 1 All ER 577.
[35]
http://www.uscourts.gov/rules-policies/records-and-archives-rules-committees/committee-reports
.
This website contains the Code of Conduct and the Advisory Opinions.
[36]
C
Gray “Disqualification: Judge’s Attorney Appears in a
Case” in Judicial Conduct Reporter published by American

Judicature Society Centre for Judicial Ethics (2002) Vol 24, No 3 at
page 9.
[37]
Fletcher
v Conoco Pipe Line Company
323 F.3
rd
661,665 (8
th
Circuit, 2003).
[38]
Para
15.
[39]
Para
18.
[40]
[2002]
EWCA Civ 90, [2002] 2 All ER 353, [2002] 3 WLR 640,[2003] QB 528.
[41]
Peter
Gibson LJ at para 22 quoted by Woolf LCJ at para 67 and endorsed at
para 68.
[42]
Para
73.
[43]
Peter
Gibson LJ at para 23 quoted by Woolf LCJ at para 67.
[44]
Supreme
Court of Western Australia’s “Guide to Judicial Conduct”
(Second Edition, 2007) page 14.
[45]
Liszkay
v Robinson
2003 BCCA 506
para 52.
[46]
S
v Tyebela
1989
(2) SA 22 (A)
at
30C.
[47]
National
Director of Public Prosecutions v Rautenbach & another
[2004]
ZASCA 102
;
2005 (4) SA 603
(SCA) paras 25-27.
[48]
Nissan
South Africa (Pty) Ltd v Marnitz NO & others (Stand 186 (Pty)
Ltd Intervening)
[2006] 4 All SA 120 (SCA).
[49]
In
Fraser
v Absa Bank Ltd (NDPP as amicus curiae)
[2006] ZACC 24
;
2007 (3) SA 484
(CC para 58 reads: ‘The NDPP has illustrated
in its submissions the circumstances under which, and the reasons
why, a creditor
would wish to intervene. The purpose of a creditor's
intervention would probably be to influence the Court in the
exercise of
its discretion, for example to persuade it not to make
an allowance for the defendant's legal expenses, or to limit
the
allowance to preserve as much of the defendant's estate as
possible for the creditor's ultimate benefit. There are a variety of

circumstances in which a creditor may participate in the
distribution of a defendant's estate subject to a restraint order.
They include the following:
1.   The
purpose of a restraint order is to preserve the defendant's assets
pending the ultimate determination
of the NDPP's application for a
confiscation order in terms of s 18 of POCA. The Court may
ultimately not make a confiscation
order, because the defendant is
acquitted, because the NDPP does not meet the requirements of a
confiscation order, or because
the Court decides in the
exercise of its discretion not to make one. The restraint order must
then be rescinded in terms
of s 26(10)
(b)
, read with s
17.  The defendant's assets would be returned to him or her,
and are again available to creditors for
execution of their claims.
The s 26(6) discretion may not be exercised on the basis that a
confiscation order will inevitably
be made.
2.   If
a prosecutor applies for a confiscation order in terms of s 18(1) of
POCA and discharges the requirements
for such an order, the Court
still retains discretion. It 'may' make a confiscation order for
'any amount it considers appropriate'.
It may in other words decline
to make a confiscation order at all, or make one for an amount
less than the value of the
defendant's assets subject to restraint.
In either event, the effect is that all or some of the defendant's
assets are returned
to him or her and again become available to
creditors for the execution of their claims. The Court may even in a
worthy case
deliberately make a confiscation order in a reduced
amount to ensure that the claim of a worthy creditor is not
defeated.
3.   The
value of the defendant's property may in any event be more than the
amount required to satisfy the confiscation
order against him or
her. In terms of s 31(1) the excess is then restored to the
defendant and again becomes available to creditors
for execution of
their claims.
4.   When
a confiscation order is made, the defendant's assets under restraint
are realised in terms of s 30 and
the proceeds are distributed in
terms of s 31. The first charge on the proceeds is 'such payment as
the High Court may direct'.
The payment must be made from the
proceeds even before the confiscation order is paid. The section
does not restrict the High
Court in the exercise of its power.
Section 31(2) makes it clear that it is not restricted to the
payment of claims that enjoy
priority in terms of s 20(4). The High
Court may accordingly, in an appropriate case, direct that a
worthy creditor's claim
be paid before the proceeds are used to
satisfy the confiscation order.’
[50]
See
s19
(c)
or
(d)
of the
Superior Courts Act 10 of 2013
, which provides: ‘The
Supreme Court of Appeal or a Division exercising appeal jurisdiction
may, in addition to any power
as may specifically be provided for in
any other law- . . . (c) remit the case to the court of first
instance, or to the court
whose decision is the subject of the
appeal, for further hearing, with such instructions as regards the
taking of further evidence
or otherwise as the Supreme Court of
Appeal or the Division deems necessary; or (d) confirm, amend or set
aside the decision
which is the subject of the appeal and render any
decision which the circumstances may require.’
[51]
Rule
49(11)
provides: ‘Where an appeal has been noted or an
application for leave to appeal against or to rescind, correct,
review
or vary an order of a court has been made, the operation and
execution of the order in question shall be suspended, pending the

decision of such appeal or application, unless the court which gave
such order, on the application of a party, otherwise directs.’
[52]
General
Accident Versekerings- maatskappy Suid-Afrika Bpk v Bailey NO
1988 (4) SA 353
(A) 358H-359A and
MV
Snow Delta: Discount Tonnage Ltd v Serva Ship
Ltd
1998 (3) SA 636
(C) 643G-644A (cf. MV
Snow
Delta: Serva Ship Ltd v Discount Tonnage Ltd
2000 (4) SA 746
(SCA) para 7 (at 7521).
[53]
Bester
NO and Another v National Director of Public Prosecutions
,
In
re
National
Director of Public Prosecutions v Kleinhans and Others
[2012] 2 All SA 453
(SCA) para 6 put it thus:
‘
I
see no ambiguity in the wording of these provisions. Given their
plain meaning and read in context, their operation is governed
by
two jurisdictional facts envisaged in both subsecs (1) and (2) –
ie the ‘making’ of an order for the winding-up
of a
company and the grant of a restraint order in respect of its
realisable property. The sequence in which these two events
occur is
crucial.
Section 36(1)
presents no controversy. Read with the
definition of ‘relevant time’ set out in subsec (4)(a),
it expressly excludes
assets under restraint from a company’s
estate where the restraint order preceded the presentation to court
of such company’s
winding-up application.’
[54]
There
are a number of instances where orders for costs have issued against
insolvent litigants. See inter alia
Nieuwoudt
v The Master & others
NNO
1988
(4) SA 513
(A); De Beer v Olivier en ‘n Ander
1966 (1) SA 684
(O) and
De
Polo & another v Dreyer & others
1991
(2) SA 164 (W).
[55]
Manong
& Associates (Pty) Ltd v Minister of Public Works & another
[2009]
ZASCA 110
;
2010
(2) SA 167
(SCA).