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[2017] ZAKZDHC 5
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Mohan v Director of Public Prosecutions KwaZulu-Natal (3626/2016) [2017] ZAKZDHC 5; 2017 (2) SACR 76 (KZD) (7 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE
NO: 3626/2016
In
the matter between:
VIKASH
MOHAN
Applicant
and
THE
DIRECTOR OF PUBLIC PROSECUTIONS
KWAZULU-NATAL
First
Respondent
THE
COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE
SERVICES
Second
Respondent
THE
HONOURABLE MAGISTRATE: “W” COURT
Third
Respondent
THE
HONOURABLE MAGISTRATE: “Y” COURT
Fourth
Respondent
THE
HONOURABLE MAGISTRATE: “Z” COURT
Fifth
Respondent
RAVLON
LOGISTICS
CC
Sixth
Respondent
RAVENTHRAN
NAIDOO
Seventh
Respondent
KAIROS
HOLDINGS (PTY) LTD
Eighth
Respondent
SARAVAN
DEVRAJ GOVENDER
Ninth
Respondent
MOHAMED
MAJAM
Tenth
Respondent
PROVINCIAL
COMMISSIONER OF
THE
SOUTH AFRICAN POLICE SERVICES
Eleventh
Respondent
THE
PUBLIC PROTECTOR
Twelfth
Respondent
JUDGMENT
CHETTY
J:
[1]
The applicant, who is currently facing criminal charges in three
separate matters in the Regional Court, Durban, secured on
interim
order before Masipa J on 14 June 2016 in which he was granted a
temporary stay of prosecution in respect of case numbers
112/6/2012;
417/11/2012 and 93/12/2012. The matter came before me as an opposed
application, with the applicant seeking confirmation
of the rule.
[2]
In respect of the first prosecution pertaining to an entity known as
Ravlon Logistics it is alleged that the applicant is guilty
of fraud
in that as the bookkeeper of Ravlon, he submitted falsified value
added tax (VAT) returns to the South African Revenue
Service (SARS),
causing a refund of approximately R6,4 million to be paid out to the
vendor. In addition to the above, the
applicant alone is
charged with two counts under the
Prevention of Organised Crime Act
121 of 1998
relating to his purchase of a luxury apartment, which the
State alleges was paid for from the proceeds of the VAT refund
fraudulently
secured on behalf of Ravlon Logistics.
[3]
In respect of the above proceedings under case number 93/12/2012, the
applicant first appeared in court on 22 May 2014, after
which the
matter was adjourned on several occasions thereafter. The proceedings
in the criminal trial eventually commenced on 19
April 2016, with the
evidence of State witnesses having already been led. The matter was
then adjourned to 18 July 2016.
[4]
The second criminal prosecution against the applicant relates to the
entity Dunswart Plant Hire. The applicant, who practised
as a
tax practitioner, is alleged by the State, to have made common
purpose with the tenth respondent in fraudulently submitting
VAT
returns to SARS, with the potential to have caused a refund of
approximately R14 million to the vendor.
[5]
The applicant first appeared in the district court in Durban on 30
June 2014, after which the matter was adjourned on 10 occasions
thereafter. The matter was set down for trial for 4-6 May
2016. On 4 May 2016 the applicant applied for an adjournment
on
the basis that this application had yet to be finalised. The
postponement was refused and the trial was intended to commence
on 5
May 2016. On the latter date, the applicant’s legal
representative took ill and the matter was adjourned to 26
July 2016.
[6]
The third criminal prosecution relates to an entity known as Kairos
Holdings (Pty) Ltd, for whom the applicant rendered services
as a tax
practitioner or bookkeeper. The State alleges that the applicant
submitted fraudulent VAT returns to SARS on behalf of
Kairos
resulting in a refund of approximately R235 million being paid out to
the prejudice of SARS. In this matter, the State
intends to
rely on the evidence of Veni Andrews, who supplied the invoices to
the applicant. Andrews, according to the State,
was acting on
the instructions of a director of Kairos, SD Govender, who is charged
along with the applicant.
[7]
The applicant first appeared in court on 27 February 2014 after which
the matter was adjourned on six occasions, with some of
the
adjournments brought about by a challenge to the reverse onus
provisions in the
Tax Administration Act 28 of 2011
. The trial in
this matter was set to commence on 25 May 2016 but was adjourned as
the State received representations from those
acting on behalf of SD
Govender and Kairos. On 22 June 2016 the matter was eventually
adjourned to 30 September 2016, pending
the outcome of this
application.
[8]
In all three of the criminal prosecutions, the applicant is alleged
to have utilised the e-filing service offered by SARS for
the
submission of VAT refunds.
[9]
The applicant launched this application on 15 April 2016 in which he
sought that the first, third, fourth and fifth respondents
be
interdicted and restrained from commencing with the three criminal
trials against him, pending the completion of investigations
by SARS,
the South African Police Services (SAPS) and the Public Protector. He
further sought that the SAPS appoint a communications
officer to
furnish all interested parties with a “status report of the
respective investigations”. The applicant further
sought that
SARS, SAPS and the Public Protector conclude their investigations in
respect of complaints lodged by him in light of
the report issued by
the Honourable Justice Moosa of the Directorate for Priority Crime
Investigation dated 22 June 2015.
[10]
The essence of the averments contained in the applicant’s
founding affidavit was that he intended to plead not guilty
to the
charges against him and that in response to those charges he had
lodged a complaint with the office of the DPCI Judge who,
on the
applicant’s version, referred the matter to the Head of the
DPCI in terms of
s 17L(5)
of the
South African Police Service Act 68
of 1995
(SAPS Act), which provides for the following:
‘
(5)
The retired judge may upon receipt of a complaint
investigate
such complaint or refer
it to be dealt with by, amongst others, the Secretariat, the
Independent Complaints Directorate, the National Commissioner, the
Head of the Directorate, the relevant Provincial Commissioner, the
National Director of Public Prosecutions, the Inspector-General
of
Intelligence, or any institution mentioned in chapter 9 of the
Constitution of the Republic of South Africa, 1996
.’
(My
emphasis)
[11]
The applicant contends that the criminal proceedings against him
should be temporarily stayed pending the finality of the
investigation of the complaints which he has made to the DPCI Judge.
Consequently, the applicant contends that the matters
pending against
him are not ripe for hearing and should not remain on the roll as
there is no indication as to when investigations
will be completed.
One of the complaints of the applicant was that he was not given the
right to make a warning statement as an
accused person during the
investigation of the case against him. Although the applicant omits
to mention this in his founding affidavit,
it is common cause that
this complaint was subsequently attended to by the SAPS, and
consequently plays no part in this application.
The second complaint
by the applicant and which is the essence of the averments in his
founding affidavit is that the kingpin of
the syndicate who produced
the fraudulent invoices for tax refunds, has not been charged. In
particular the applicant pointed to
Andrews, whom he believed to be a
director of several companies and a wealthy person. Although the
applicant states that he attended
to the VAT submissions on behalf of
SD Govender and Kairos, he does not set out in his affidavit the
relationship between Andrews
and the entities on whose behalf he was
acting. It is also unclear on what basis he billed Andrews and was
paid approximately R300
000 by her for VAT submissions, when his
clients were the eighth and ninth respondents.
[12]
According to the applicant, it makes no sense that he alone is
charged for a criminal offence when he was neither author of
the
invoices supplied by Andrews, nor did he have any knowledge as to the
authenticity of the invoices. According to him he did
not receive any
“undue benefit” for his services rendered, in other
words, he did not profit from the illegal conduct
of Andrews. In
particular he bemoans the fact that Andrews has not been charged nor
have any employees from SARS been charged,
as he holds the view that
the VAT refunds could not have been transacted or approved without
the connivance of employees within
SARS. The applicant firmly
believes that SARS is intent on persecuting him and wishes to conceal
the misdemeanours of its employees
for fear of public embarrassment
particularly in light of the amount of the refunds issued which
amount to in excess of R235 million.
[13]
The applicant further contended that the State together with the SARS
investigators are aware of the true nature of what has
transpired,
but have engaged in an elaborate cover-up as this is a matter of a
complaint driven investigation by SARS, and that
others including
“high-ranking officials of the revenue service”, may be
involved in the corruption. The applicant
alleges that he took
information to the State regarding the involvement of Andrews in the
charges against him however the State
declined to act against her.
[14]
In light of the above, the applicant contends that he has a right to
a fair hearing, entrenched in the Constitution, and he
will be
prejudiced if the criminal trials go ahead without the investigations
referred to above being finalised. He further contends
that he is not
being given an opportunity to prove his innocence. Andrews on the
other hand, is not viewed by the State as a suspect,
which raises a
suspicion of bias in the mind of the applicant on the part of the
SARS investigators.
[15]
According to the applicant, if the investigations mandated by the
DPCI Judge are diligently conducted, it will expose employees
of SARS
and Andrews as being guilty of fraudulent conduct, and he could be
exonerated of the charges against him. He consequently
sought a
temporary stay of the prosecution, which he submitted would not
prejudice the State, as the investigations would serve
to reveal the
true perpetrators.
[16]
In bringing the application for a stay of prosecution, the applicant
recognises that the relief sought is a drastic step but
submits that
the stay of prosecution being sought is only of a temporary nature,
and that if the criminal proceedings against him
were to go ahead, he
would suffer irreparable trial prejudice. He further contends that
his trial preparation is dependent on the
investigations undertaken
by “other government bodies”, and to that extent notes
that he has referred a complaint to
the office of the Public
Protector.
[17]
The applicant further casts a net of suspicion over the prosecutor,
Advocate P Govender, who has been assigned to all three
matters
against him. He contends that the prosecutor has ignored crucial
facts pertaining to the conduct of Andrews as well as
employees of
SARS, and instead he is being persecuted for simply being “a
messenger”. Despite his aspersions, he does
not seek the
prosecutor’s recusal.
[18]
To the extent that the applicant is applying for an interdict, he
contends that there is no alternative remedies available
to him as
his trials were set to commence from April to June 2016, and there is
no guarantee that each of the trials would be adjourned,
as they are
being heard in separate courts. Accordingly the applicant contended
that there are “exceptional and extraordinary
circumstances”
justifying the grant of the relief being sought.
[19]
Despite the application being served on the respondents, and notices
of opposition being filed by the first, second and eleventh
respondents, no opposing affidavits had been filed when the matter
came before Masipa J on 14 June 2016. It is necessary to note
that on
the same day a supplementary affidavit had been filed by the
applicant for the purpose of appraising the Court of the “recent
developments” in the matters pending against him in the
Regional Court. In respect of the prosecutions against him, he states
that the first trial has been adjourned to 18 July 2016; and second
trial has been adjourned to 22 June 2016 and the third to 26
July
2016.
[20]
I am advised that when the matter came before Masipa J, counsel for
the second respondent was present and opposed the grant
of the orders
sought. There is a dispute between the parties as to whether
the presiding judge had been informed that the
criminal proceedings
against the applicant had already commenced in the Regional Court. I
will deal more fully below with
this dispute and its impact on the
outcome of the application. After hearing argument, Masipa J
granted a rule nisi temporarily
staying the prosecutions, pending the
finalisation of the application. No order was made in respect of the
investigations which
the applicant contended were incomplete. The
matter was adjourned sine die with directions for the filing of
affidavits.
[21]
The relief sought by the applicant is opposed by the first, second
and eleventh respondents, all of whom have filed detailed
affidavits
from which a number of disputes emerge. Despite these disputes, for
reasons which are considered below, this matter
can be disposed of
without the referral to oral evidence. When the matter came
before me on the return day, it was argued
as an opposed motion.
Having had sight of the heads of argument filed by the opposing
counsel for the respondents, Mr
Eades
who appeared for the
applicant handed up supplementary heads of argument, which I was not
disposed to consider due to its lateness
and the potential prejudice
to the opposing parties. There is no provision in the rules or
Practice Directives for such submissions
and in my view it gives the
applicant an unfair advantage of attempting to remedy breaches in his
argument which have been alluded
to by the opposing parties. Indeed,
this much is stated by counsel in the opening paragraphs of his
“supplementary heads”.
The essence of what the applicant
now proposes is a variation of the relief sought in his original
notice of motion. Counsel
submitted that what the applicant
does not seek is to dictate to the State or the SAPS how the
investigation against him should
be carried out; how the prosecution
against him should be conducted; that the State should be compelled
to prosecute Andrews or
that the first respondent be compelled to
withdraw the charges against him. To that end, counsel
contended that all that
the applicant was now seeking on the return
day was for an order that the SAPS “
comply with its duty to
investigate his complaints arising from the report of Judge Moosa of
the DPCI
”.
[22]
Both Ms
Hemraj SC,
who appeared for the first and eleventh
respondents, and Ms
Norman SC
who appeared for the second
respondent opposed the last minute variation by the applicant. The
entire tenor of the founding affidavit
seeks to dictate to the State,
SAPS and SARS how to conduct their investigations and who to pursue
as the ‘real’ miscreants
in the massive fraud perpetrated
against SARS. The draft order proposed is that the three
criminal trials in the Regional
Court are postponed pending
compliance by the eleventh respondent with the report of the DPCI
Judge dated 22 June 2015, and that
the applicant is directed to make
available to the eleventh respondent such further information as it
may require, which is in
the applicant’s possession.
[23]
I agree with the views expressed by Ms
Hemraj
and Ms
Norman
that the respondents have been brought to court to answer the case as
set out in the applicant’s founding papers. The
attempt
by the applicant, at the last minute, to deviate from the nub of its
case, cannot be condoned. Consequently, the
matter falls to be
determined on the basis of the affidavits before me.
[24]
Before dealing with the merits of the application, it is pertinent to
deal with the issue of whether the applicant disclosed
to Masipa J
that criminal proceedings had already commenced against him in the
Regional Court in respect of the Ravlon Logistics
matters. The
application was issued on 15 April 2016 and set down for hearing on
14 June 2016. On the day on which it was
to be heard, the applicant
filed a supplementary affidavit in order to bring the Court up to
date with recent developments. I assume
that this would have included
matters having arisen between the date when the application was
launched to the date when it had
been set down for hearing.
[25]
What emerged from the answering affidavits of the first, second and
eleventh
respondents is that the trial against the
applicant in the Ravlon Logistics matter had already commenced before
the Regional Court
from 18-21 April 2016 during which time the viva
voce evidence of six witnesses had been led. These witnesses
had also been
cross-examined by the applicant’s legal
representative, who coincidentally also represents him in these
proceedings. Nowhere
in his supplementary affidavit does the
applicant make any mention of these proceedings. This omission
is conceded by counsel
for the applicant. On the basis of this
non-disclosure, those respondents opposing the application submit
that the application
should be dismissed on this ground alone. The
applicant, in reply, says the following about the non-disclosure:
‘
I
submit that the decision of the magistrate to refuse the postponement
is manifestly incorrect and accords with a gross violation
of my
fundamental right to a fair trial. I submit that the decision
exercise by the magistrate does not encapsulate the recognition
of
the constitution and my rights therein contained. Therefore the trial
which has commenced in W regional court is a regular and
I submit
that I am entitled to a permanent stay of prosecution in this regard,
the merits of which I shall expand on and deal with
in a separate
application.’
[26]
Despite his complaint of a violation of his rights, the applicant
still does not provide any explanation as to why he failed
to bring
to the Court’s attention the proceedings which had already
commenced against him. In dealing with the replying affidavit
filed
on behalf of SARS where the non-disclosure point is raised, the
applicant says the following:
‘
The
contents hereof are denied, at the time of the deposing to the
founding affidavit no trials had commenced. I have indicated
that the
matter is set down for trial in a supplementary affidavit which was
prepared in haste during the course of the hearing
of the
application. Therefore, there is no merit in the submission that
there has been a nondisclosure. The first, second and 11
th
respondents were all represented at the hearing of the application by
the state attorney and by counsel which turned to be partly
an
opposed motion. The second respondent’s counsel raised the
issue therefore there was no nondisclosure. I also repeat the
contents of paragraphs 45, 46 and 47 herein.’
[27]
The stance of the opposing respondents is that the applicant has been
economical with the truth in respect of bringing the
criminal
proceedings to the attention of the Court prior to or on 14 June
2016. Firstly, he is correct in saying that at
the time when he
deposed to his founding affidavit, no proceedings had commenced.
However when the matter came before this Court
on 14 June 2016, he
patently omitted, on affidavit, to make any reference to the
part-heard criminal trial against him in the Regional
Court. His
averment that he raised this matter in his supplementary affidavit is
simply not true. This much has been conceded by
his counsel. There is
also not much to support his contention of the supplementary
affidavit being prepared in haste, as at the
time when the matter
came before Masipa J, the respondents had not filed any answering
papers. In addition the applicant states
unequivocally that the
proceedings in the Regional Court have been adjourned to 18 to 20
July 2016 for trial. He neglected to mention
that the matter was
indeed part-heard, and that the trial had commenced in April 2016.
[28]
At the hearing of this matter, counsels for the respondents were
insistent that Masipa J was unaware that one of the criminal
trials
against the applicant had already commenced in the Regional Court.
Counsel, who appeared for the respondents on the day,
I am advised,
was briefed to resist the granting of the interim order. It would
appear that the counsel had limited information
about the matter.
The respondents at that stage had not filed any opposing affidavits.
Mr
Eades
, while conceding to the omission of this fact from
the applicant’s affidavit, submitted that even if such omission
did occur
that it was not a material non-disclosure and would have
had no bearing on the eventual decision by Masipa J to grant the
order
which she did.
[29]
Ms
Norman
, on behalf of SARS, was taken aback by the
submission, and perhaps rightly so in light of the authorities on the
duty to disclose.
The issue of disclosure, both by litigants as
well as by the legal representatives, who owe a duty at all times to
place the full
facts before a court, is an essential ingredient in a
system designed to achieve a fair and just outcome of a dispute.
In
National Director of Public Prosecutions v Pilane & others
(692/06)
[2006] ZANWHC 68
(16 November 2006) Landman J considered a
matter where it was common cause that the applicant failed to
disclose the fact that
the criminal trial had started and that the
evidence was led during the criminal trial. He found that these were
material facts
which should have been disclosed. The matter has
some parallels to the application before me. The Court went on
to
state the following:
‘
[10]
Mr Pistor SC conceded that the rule requiring the utmost good faith
by a party to
ex parte
applications apply to an
ex
parte
application
contemplated in section 26 (1) of POCA. The rule of practice requires
that:
(a)
all material facts must be disclosed which might influence the court
in coming to a decision;
(b)
the non-disclosure or suppression of facts need not be wilful or
mala fide to incur the penalty of rescission of the order
obtained ex
parte. see also National Director of Public Prosecutions v Basson
2002
(1) SA 419
(SCA)
where
Nugent JA said at 489 H-J:
“
Where
an order is sought ex parte it is well established that the utmost
good faith must be observed. All material facts must be
disclosed
which might influence a court in coming to its decision, and the
withholding or suppression of material facts, by itself,
entitles a
court to set aside an order, even if the non-disclosure or
suppression was not wilful or mala fide (Schlesinger v Schlesinger
1979
(4) SA 342
(W)
at 348E-349B).”
and
(c)
the court, apprised of the true fact, has discretion to set aside the
former order or to preserve it. See De Jager v Heilbron
& Others
1947
(2) SA 415
W;
Venter v Van Graan
1929
TPD 435
; Barclays Bank v Giles
1931
TPD 9
; Hillman Bros v van den Heuvel
1937
WLD 41
and
Schlesinger v Schlesinger
1979
(4) SA 342
W.
[11]
Mr Pistor SC submitted that a court will not discharge a rule nisi
where a reasonable explanation for a non-disclosure of
information in
the founding papers has been given and where it is doubtful if the
court would have refused the application if the
relevant information
had indeed been disclosed.
[12]
Margo J in Cometal-Mometal S A R L v Corlana Enterprises (Pty) Ltd
1981
(2) SA 412
(W)
at 414E-414H referred to certain factors that could be taken into
account by a court in the exercise of its discretion not to
rescind
the order as follows:
“
It
seems to me that, among the factors which the court will take into
account in the exercise of its discretion to grant or deny
relief to
a litigant who has breached the uberrima fides rule, are the extent
to which the rule has been breached, the reasons
for the
non-disclosure, the extent to which the court might have been
influenced by proper disclosure in the ex parte application,
the
consequences, from the point of doing justice between the parties, of
denying relief to the applicant on the ex parte order,
and the
interests of innocent third parties, such as minor children, for whom
protection was sought in the ex parte application.
. .”
Van
Reenen J in M v Rizcun Trader (4); MV Rizcun Trader v Manley
Appledore Shipping Ltd
2000
(3) SA 776
(C)
at 799 E-F referred to this approach with approval.’
[30]
Counsel for the applicant attempted to minimise the extent or impact
of the applicant’s non-disclosure by submitting
that counsel
for the respondents were present at the time when the matter was
called before Masipa J and furthermore the application
had not been
brought ex parte, but on notice. While this is true, in my view this
does not exonerate a litigant, and especially
not the legal
representative, from being anything other than fully candid with the
Court as to the correct state of facts as at
the time when the matter
is argued, even if such disclosure would be adverse to one’s
case. This duty cannot be switched
on and off depending on whether an
application is ex parte. It is an abiding duty worn at all times by
legal practitioners. In
dealing with the aspect of full disclosure
and its consequences, albeit in the context of ex parte applications,
Justice BR Southwood
in
Essential Judicial Reasoning
(2015) at
34 et seq says the following:
‘
In
an
ex parte
application for interim relief the applicant must disclose all
material facts, which could influence court to grant or refuse the
relief sought. Failure to comply with the school can have serious
consequences on the return day.
These
material facts are described by the court in
Schlesinger
v Schlesinger
1979
(4) SA 342
W
348C-350C:
The
next preliminary aspect to be considered is whether there has been
such a serious non-disclosure or misstatement of material
facts as
would entitle a Court of law to set aside the original order,
and whether a Court should do so in the instant case
if this is found
to be so. The enquiry thus falls naturally into two parts namely,
first, whether material facts were undisclosed
and, secondly, whether
a Court should exercise its discretion in favour of the applicant and
set aside the order for leave to sue
by edict granted by F S STEYN J.
Before
dealing with the facts, it would in my opinion be advisable to
examine the principle of full disclosure in
ex parte
applications more closely, and, especially, when a Court should
exercise its discretion in favour of the party who has been guilty
of
non-disclosure or misstatement. Counsel for the applicant (Mr
Kriegler
) has referred me to a number of South African
and English authorities which support the statement found in the
excellent work
of Herbstein and Van Winsen on
The Civil Practice
of the Superior Courts in South Africa
2nd ed at 94, to the
following effect:
“
Although,
on the one hand, the petitioner is entitled to embody in his petition
only sufficient allegations to establish his right,
he must, on the
other, make full disclosure of all material facts, which might
affect the granting or otherwise of an
ex
parte
order.
The
utmost good faith must be observed by litigants making
ex parte
applications in placing material facts before the court; so much so
that if an order has been made upon an
ex parte
application
and it appears that material facts have been kept back, whether
wilfully and
mala fide
or negligently, which
might
have
influenced the decision of the court whether to make an order or not,
the court has a discretion to set the order aside
with costs on
the ground of non-disclosure. It should, however, be noted that the
court has a discretion and is not compelled,
even if the
non-disclosure was material, to dismiss the application or to set
aside the proceedings."
This
synopsis is certainly supported by venerable authority in this
country, such as
In
re The Leydsdorp and Pietersburg (Transvaal) Estates Ltd (in
liquidation)
1903 TS 254
at 257 - 8 (where it was still stated that if in the
opinion of the Court the facts withheld
would
have influenced the Court in its decision, it could be set aside -
subsequently changed to "
might
" - see GREENBERG J in
Phillips
v May
1936 (1) PH C16 (W));
Estate
Logie v Priest
1926 AD 312
at 323;
De
Jager v Heilbron and Others
1947
(2) SA 415
(W)
at
419 - 420;
Barclays
Bank v Giles
1931 TPD 9 at 11;
Spilg
v Walker
1947
(3) SA 495
(E)
.
It appears quite clearly from these authorities that:
(1) in
ex parte
applications all material facts must be disclosed
which
might
influence a Court in coming to a decision;
(2) the
non-disclosure or suppression of facts need not be wilful or
mala
fide
to incur the penalty of rescission; and
(3) the
Court, apprised of the true facts, has a discretion to set
aside the former order or to preserve it.
Although
these broad principles appear well-settled, I have not come across an
authoritative statement as to when a Court will exercise
its
discretion in favour of a party who has been remiss in its duty to
disclose, rather than to set aside the order obtained by
it on
incomplete facts. On the other hand, the circumstances may be so
divergent and variegated that it is impossible to lay
down any
guideline at all. It appears that in former times in English practice
a failure to disclose material facts fully in
ex parte
applications was invariably visited with rescission (see eg the
judgment of KAY J (Chancery Division) in
The Republic of Peru
v Dreyfuss Brothers & Co
(1886) 15 LTR 802
at 803). This
strict approach was subsequently relaxed and now appears to be in
line with the approach in our own Courts (see
Becker v Noel
(1971) 1 WLR 803
per
Lord DENNING MR). The rule was apparently
applied strictly in applications for leave to sue outside the
jurisdiction, even more
than in other
ex parte
applications,
where a rule
nisi
was issued (see
Bloomfield E v
Serenyi
(1945) 2 All ER 646
(CA) at 648D).’
[31]
See also
National Director of Public Prosecutions v Basson &
another
[2002] 2 All SA 255
(A) para 21 which reaffirmed that
‘where an order is sought
ex parte
it is well
established that the utmost good faith must be observed.’ As
set out above, I am not persuaded by the argument
that the
requirement to observe the utmost good faith should only apply to ex
parte applications. In any event, in the matter before
me, at the
time when the supplementary affidavit had been deposed to by the
applicant on 14 June 2016, it was being moved on the
basis that
although the respondents had filed notices to oppose the relief, they
had not complied with the rules to file opposing
affidavits. The
applicant contended that the respondents had no defence to the relief
claimed. As such the only affidavits before
Court were his founding
and supplementary affidavit.
[32]
I am furthermore not in the least persuaded by Mr
Eades
contention that the omission to mention that criminal proceedings had
commenced in the Regional Court was not material. It is unfathomable
that an applicant can come to Court seeking the temporary stay of
criminal proceedings without informing the Court that such
proceedings
had already commenced. If one has regard to the relief
sought in paragraph 1.1 of the notice of motion, the applicant seeks
an
order that the respondents are interdicted and restrained “
from
commencing with the trials against the applicant
”. On a
literal interpretation, this implies that proceedings have not yet
commenced. To the extent that there is a dispute
of fact as to
whether disclosure of the proceedings had been made to Masipa J on 14
June 2016, this dispute in my view can be resolved
on the basis of
the rule in
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty)
Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) in favour of the respondents opposing the
application. The applicant could have easily discharged the burden on
him in relation
to whether such disclosure had been made. He
could have secured a copy of the transcript of the proceedings on 14
June 2016,
which would have settled the debate. He chose not
to.
[33]
In light of the above, I am in agreement with counsel for the
respondents that the application should be dismissed on this
ground
alone. An alternative consideration would be that only the part of
the application pertaing to Ravlon Logistics trial ought
to be
dismissed. The alternative postulated, in my view finds no
application, as the applicant has not sought separate orders
in
respect of each criminal trial facing him. In addition, his founding
affidavit creates the impression that Andrews has a role
to play in
each of the three trials when in actuality she is a witness for the
State only in the Kairos trial. The allegation
of the failure
of the SAPS to investigate the matter in accordance with the DPCI
Judges’ report is one which straddles all
three trials, and
there is no attempt to distinguish the lack of investigation on a
case by case basis. I would therefore
have dismissed the entire
application on this ground.
[34]
For the sake of completeness, I deem it imperative to deal with all
of the arguments raised before me. Apart from questions
of
uberrima
fides
, Ms
Hemraj
disputed that the Court had been informed
on 14 June 2016 of the part-heard trial. The fact that
proceedings in respect of
the trial pertaining to Ravlon Logistics
remains part-heard in the Regional Court raises the question as to
whether this Court
has jurisdiction, or is the proper forum, to hear
this application. It is well established that a bar to criminal
proceedings
is likely to be available to an accused only in a narrow
range of circumstances, where it is established that the accused has
probably
suffered irreparable “trial prejudice” as a
result of any trial related delays. In this regard see
Sanderson v
Attorney-General, Eastern Cape
[1997] ZACC 18
;
1998 (1) SACR 227
(CC) where a
stay of prosecution was sought on the ground that there had been an
unreasonable delay in the prosecution. Of the
relief sought, the
court said the following at para 38:
‘…
the
relief the appellant seeks is radical, both philosophically and
socio-politically. Barring the prosecution before the trial begins
- and consequently without any opportunity to ascertain the real
effect of the delay on the outcome of the case - is far-reaching.
Indeed it prevents the prosecution from presenting society's
complaint against an alleged transgressor of society's rules of
conduct.
That will seldom be warranted in the absence of
significant prejudice to the accused.’
[35]
The principle enunciated by Kriegler J is one of long-standing in our
law. In
Attorney-General of Natal v Johnstone & Co Ltd
1946 AD 256
at 261, Schreiner JA said:
‘
Now
there is no doubt that, in general where it is alleged by the Crown
that a person has committed an offence, the proper way of
deciding on
his guilt is to initiate criminal proceedings against him;
and
where such proceedings have already been commenced,
even if the stage of indictment only has been reached, it seems to me
that a court which is asked to exercise its discretion by
entertaining proceedings for an order expressly or in effect
declaring that the accused is innocent would do well to exercise
great caution before granting such an order. In most types of case
such an order would be entirely out of place.’(My emphasis)
[36]
It has been held that an accused who seeks a permanent stay of
prosecution for reasons associated with an unreasonable delay,
before
the commencement of criminal proceedings must bring such application
before the High Court having jurisdiction. On the other
hand an
“intra-curial” delay occurring after the commencement of
criminal proceedings is a matter falling to be dealt
with
exclusively
by the court seized with the criminal proceedings. See
S v Naidoo
2012 (2) SACR 126
(WCC). In any event, the issue of jurisdiction
was raised by counsel for the respondents, but this argument was
advanced for reasons
that the trial court is better suited to deal
with the applicant’s fair trial concerns rather than a High
Court being asked
to grant what in effect is a prohibitory interdict.
Moreover, it has been held that the lower court has the necessary
jurisdiction
to determine whether or not evidence has been
constitutionally obtained and to determine whether or not to exclude
such evidence
from a particular trial before it. See
Mendes &
another v Kitching NO & another
1995 (2) SACR 634
(E). At the
same time it is worth noting that this Court will not interfere in
incomplete criminal proceedings in the lower courts,
unless the case
is a rare one where a grave injustice might otherwise result or
“where justice might not by other means be
attained”. In
this regard see
Wahlhaus & others v Additional Magistrate,
Johannesburg & another
[1959] 3 All SA 194
(A) where the
court stated that:
‘
The
appellants are alleged to have committed a crime. The normal
method of determining the correctness, or otherwise, of that
allegation is by way of the full investigation of a criminal trial.’
[37]
The applicant placed considerable emphasis on the report on the DPCI
Judge and submitted that until his recommendations to
have the
complaints lodged by the applicant properly investigated, the
criminal prosecutions against him had to be stayed.
The
applicant further contends that the findings of the investigations
would exonerate him from the charges currently facing him.
The
referral of a complaint to the DPCI Judge came about after the
applicant was charged for the submission of fraudulent VAT returns.
The applicant was aggrieved by this as Andrews and other
employees at SARS appeared to have avoided the net of prosecution,
despite his belief that they had orchestrated an elaborate plan to
defraud SARS.
[38]
The DPCI Judge received two complaints from the applicant – the
first pertaining to allegations of improper investigations
against
members of the DPCI and the second of an infringement of his rights
during the course of the investigation by members of
the DPCI. That
has been complied with. What remains and is yet to be complied with,
according to the applicant, is an investigation
by the SAPS into the
selective prosecution against him while the “kingpins in the
syndicate that produced the fraudulent
tax invoices” have not
been charged. The applicant’s focus of attention in this
regard is Andrews and other unnamed
employees of SARS, with whom he
contends she has colluded with.
[39]
It is appropriate to have regard to the wording of the report of the
DPCI Judge. In the section entitled “Action”
the
following is set out:
‘
The
office of the DPCI judge has made a referral of the matter to the
head of the DPCI in terms of section 17L(5) of the SAPS Act.
The
acting head of the DPCI has in terms of the protocol between it and
SARS referred the matter for investigation to SARS.
After
the investigation has been completed by SARS, the matter will be
referred back to the head of the Hawks for such further steps
as may
be necessary depending on the outcome of the SARS investigation.
The
acting head of the Hawks will keep the complainant informed of
further developments in the matter and engage the complainant
made
necessary.’
[40]
The applicant correctly points out that it is an offence for state
entities to refuse to carry out a directive or recommendation
from
the DPCI Judge. The applicant’s founding affidavit is replete
with the averments that if investigations are diligently
conducted by
SARS, it would result in him being exonerated of the charges against
him. Throughout his affidavit he points to Andrews
as being the
mastermind behind the entire episode. He further alleges that he has
all of her emails as well as the attachments
thereto in his
possession. What is clear from the answering affidavit of the first
and eleventh respondents is that the applicant
has not furnished any
of this information to them to consider. In particular, in respect of
the criminal prosecution in the Kairos
matter, the eighth and ninth
respondents, who are co-accused together with the applicant, have
made representations through their
attorneys to the first respondent.
The applicant on the other hand has steadfastly resisted the
opportunity to do the same. Subsequent
to the report of the DPCI
Judge, the eleventh respondent has made its investigators available
to interview the applicant. In particular,
a Colonel Mngwengwe was
assigned to interview the applicant in December 2015. A meeting
between the two did take place, but in
the absence of the applicant’s
legal representative. The meeting ended without an affidavit been
obtained from the applicant.
Thereafter a Colonel Sibiya was deployed
to obtain an affidavit from the applicant. Instead the applicant
indicated that he would
rather deal with Colonel Mngwengwe.
[41]
The point emphasised by counsel for the first and eleventh
respondents is that while the applicant complains that no
investigations
have taken place as recommended by the DPCI Judge, he
has on the contrary stonewalled efforts by the SAPS to interview him
and
to obtain the necessary affidavit. The applicant, it seems,
wishes to dictate who should be assigned to investigate the matter,
how such investigations should be done and that he would be the
arbiter as to whether the investigations had been properly concluded.
The International Association of Prosecutors’ Standards,
referred to in
S v Van der Westhuizen
2011 (2) SACR 26
(SCA),
contains a provision that prosecutors shall perform their duties
fairly, consistently and expeditiously, and in the institution
of
criminal proceedings only proceed when a case is well-founded upon
evidence reasonably believed to be reliable and admissible
and will
not continue with a prosecution in the absence of such evidence. At
the same time, if there is evidence which the prosecutor
knows or
reasonably suspects may be destructive to the State’s case or
which lends support to the defence case, it is his
duty to bring this
evidence to the attention of the accused’s legal
representative.
[42]
In the present matter, the SAPS have made it abundantly clear that
they have properly investigated the matter and will rely
on Andrews
as a witness in the Kairos matter. SAPS find no reason, from
their investigations, to charge Andrews much to the
chagrin of the
applicant. On the other hand, if the prosecution believes that it has
reasonable and probable cause for prosecuting
the applicant and at
trial is unable to discharge the burden of proof, the applicant will
be acquitted. In the course of the trial,
the applicant would have
the opportunity to cross-examine all of the State’s witnesses,
and to call his own, in his defence.
Indeed, in respect of the first
criminal trial, this is precisely what has been done. As such, there
can be no complaint of trial
prejudice or a violation of any of the
applicant’s rights. If upon the conclusion of the criminal
trial, the applicant is
of the view that he has been the victim of a
malicious and unwarranted prosecution; his relief is to lay a civil
suit against the
State. It is highly inappropriate for this Court to
pre-empt the prosecution from bringing proceedings in a criminal
trial against
the applicant, and especially in circumstances where a
significant amount of public money was paid to an individual in
circumstances
where he was not entitled to it.
[43]
Returning to the recommendations suggested by the DPCI Judge, it is
pertinent to point out that there is nothing in the wording
of the
recommendations which may be interpreted (even if one were to be
overly favourable to the applicant) as recommending that
the
prosecution should not proceed against the applicant.
Furthermore, the DPCI have indicated that its investigation is
complete and that it has closed its file, and that the Hawks and SARS
are also not conducting any further investigation. As pointed
out
above, should the State be lacking in evidence to prove its case
against the applicant, the applicant will be exonerated.
[44]
Ms
Norman
submitted further that it would be an infringement
of the doctrine of the separation of powers for the court, or the
DPCI Judge
for that matter, to dictate to the National Prosecuting
Authority (NPA) how to go about the investigation and the prosecution
of
the case. This is precisely what the applicant had set out to do
in his founding affidavit although he attempted, belatedly in his
‘supplementary heads of argument’, to veer from his
stance contending that he did not intend to prescribe to the State
how the prosecution should be conducted or whom it should be
compelled to prosecute. In
R v Director of Public
Prosecutions, Ex parte Manning & another
[2001] QB 330
at
para 23 the court held that:
‘
The
primary decision to prosecute or not to prosecute is entrusted by
Parliament to the Director as head of an independent, professional
prosecuting service, answerable to the Attorney General in his role
as guardian of the public interest, and to no one else.’
[45]
It bears noting that s 179 of the Constitution vests in the
prosecuting authority the power alone to institute criminal
proceedings
on behalf of the State, and to carry out any necessary
functions incidental to the institution of such proceedings.
Section
179(5)(d) provides that the National Director of Prosecutions
(NDPP) may review a decision to prosecute after taking
representations
from amongst other, an accused person. Although
the applicant has provided the DPCI Judge with information he
considers to
be confidential and which he believes will exonerate
him, he has to date not made representations or furnished this
information
to the first respondent or the specialist prosecutor
assigned to all three criminal trials.
[46] I now proceed to consider whether
the interim interdict granted and the final order for a temporary
stay of prosecution are
mandatory interdicts which infringe on the
doctrine of separation of powers, as contended by the respondents. In
Attorney-General v Additional Magistrate, Middledrift, and others
1987 (4) SA 914
(CK) at 918B-C the court stated:
‘
I
do not hesitate to state that judges, for as long as I can recall,
have taken the attitude that in criminal matters they do not
readily
interfere with the prosecution in any fashion that could be
detrimental to the accused. Only when a complete miscarriage
of
justice becomes imminent and due regard is had to the risk of
irreparably prejudicing the accused, do judges risk any action
on
their part which would favour the interests of the prosecution.’
[47]
The applicant has not pointed to any miscarriage of justice
that would befall him in the event of the three criminal trials
proceeding.
He is legally represented in all three trials, and
to the extent that he complains that this is a compliant driven
investigation,
the decision to prosecute is solely that of the
Director of Public Prosecutions, not the SAPS. In any event,
there is nothing
inherently prejudicial or sinister about compliant
driven investigations, especially in a case of alleged tax fraud
where the necessary
expertise to properly investigate such matters
resides with those within the revenue service. In fact the applicant,
according
to the affidavit of Edward Rasiwela, a Deputy Director in
the Office of the DPCI Judge, was informed of the established
practice
in matters of tax fraud where the allegations are first
investigated by SARS and only handed over to the SAPS after SARS has
finalised
its investigations. A letter from Mr Inderparsad of
the Criminal Investigation section of SARS confirms that after
receipt
of the DPCI Judge’s report, no further investigations
were done by SARS as the matter had already been referred to the
NDPP.
Rasiwela confirmed that the DPCI Judge had completed his
investigation into the complaint and considered the matter closed.
[48]
It is becoming increasingly more prevalent for complainants to turn
to private investigative agencies to carry out probes which
the State
cannot undertake because of the lack of necessary or skilled
personnel, or lack of resources. This per se does
not
constitute fair trial prejudice. Where evidence has been
improperly obtained or tainted in some or other way, the
accused will be entitled to object to its admissibility. In the
present matter, the applicant complains of the hand of Andrews
being
instrumental behind the entire fraud perpetrated against SARS,
although the State contends that she is a witness in only
the third
trial. The State has not found her to be implicated in the matter and
therefore has not charged her nor do they intend
using her as a s 204
witness. The applicant will have every opportunity to cross-
examine the State witnesses and raise the
possibility of someone else
being the perpetrator of the fraud against SARS. Section 166(1)
of the Criminal Procedure Act
51 of 1977 (the CPA) provides that an
accused may cross-examine any witness called on behalf of the
prosecution at criminal proceedings
or any co-accused or any witness
called on behalf of such co-accused at criminal proceedings
.
In
Carroll v Carroll
1947 (4) SA 37
(D) at 40,
Henochsberg AJ said:
‘
The
objects sought to be achieved by cross-examination are to impeach the
accuracy, credibility and general value of the evidence
given in
chief; to sift the facts already stated by the witness, to detect and
expose discrepancies or to elicit suppressed facts
which will support
the case of the cross-examining party.’
Wigmore
On Evidence
, 3rd ed vol. V, para 1367, famously proclaimed:
‘
Not
even the abuses, the mishandlings, and the puerilities which are so
often found associated with cross-examination have availed
to nullify
its value. It may be that in more than one sense it takes the
place in our system which torture occupied in the
mediaeval system of
the civilians. Nevertheless, it is beyond any doubt the
greatest legal engine ever invented for the discovering
of truth.’
[49]
The interdict sought by the applicant albeit for a temporary as
opposed to a permanent stay of prosecution, is nonetheless
a drastic
incursion into the powers of the first respondent to prosecute a
complaint on behalf of the public, or in this case,
on behalf of the
state treasury. In support of this argument in
Freedom Under
Law v National Director of Public Prosecutions & others
[2013] 4 All SA 657
(GNP) para 122 it was observed that ‘courts
all over the world are reluctant to interfere with a prosecuting
authority’s
bona fide
exercise of the discretion to
prosecute.’ It added:
‘ …
.In
R (On the Application
of Corner House Research and Others) v Director of the Serious Fraud
Office
, the House of
Lords (
per
Lord Bingham) expressed the need for deference and caution, stating
that courts should disturb the decisions of an independent
prosecutor
only in “highly exceptional cases”. Courts recognise that
at times it will be within neither their constitutional
function nor
practical competence to assess the merits of decisions where the
polycentric character of official decision-making,
including policy
and public interest considerations, mean they are not susceptible or
easily amenable to judicial review. The constitutional
requirement
that the prosecuting authority be independent, and should exercise
its functions without fear, favour or prejudice,
justifies judicial
restraint.’ (Footnotes omitted)
[50]
On appeal in
National Director of Public Prosecutions & others
v Freedom Under Law
2014 (4) SA 298
(SCA) the court was
petitioned to review and set aside the decisions of the NPA and to
direct the NPA to reinstate some withdrawn
criminal charges. On
the issue of separation of powers, the court said the following:
‘
[51]
What remains are issues concerning the appropriate remedy. As we
know, the court a quo did not limit itself to the setting-aside
of
the impugned decisions. In addition, it
(a)
ordered the NDPP to reinstate all the charges against Mdluli and to
ensure that the prosecution of these charges is enrolled and
pursued
without delay; and
(b)
directed the Commissioner of Police to reinstate the
disciplinary proceedings and to take all steps necessary for the
prosecution
and finalisation of these proceedings (paras 241
(e)
and
(f)
).
Both the NDPP and the Commissioner contended that these mandatory
interdicts were inappropriate transgressions of the
separation-of-powers
doctrine. I agree with these contentions. That
doctrine precludes the courts from impermissibly assuming the
functions that fall
within the domain of the executive. In terms of
the Constitution the NDPP is the authority mandated to prosecute
crime, while the
Commissioner is the authority mandated to manage and
control the SAPS. As I see it, the court will only be allowed to
interfere
with this constitutional scheme on rare occasions and
for compelling reasons. Suffice it to say that in my view this
is not
one of those rare occasions, and I can find no compelling
reason why the executive authorities should not be given the
opportunity
to perform their constitutional mandates in a proper way.
…The court below went too far.’
[51]
In light of the authorities cited above, I am of the view that
to grant an order of the nature sought by the applicant, that is,
for
a temporary stay of prosecution in all three criminal trials pending
the finalisation of whatever investigations he believes
are
outstanding (despite the averments by the DPCI and the SAPS to the
contrary) would infringe the doctrine of separation of powers.
If I were to grant such an order, it could have the effect of a never
ending saga in which the applicant could indefinitely frustrate
the
prosecutorial process by adopting the view that no level of
investigating would be sufficient or adequate for him. It
is
for this reason that a criminal trial is the most suitable forum for
the State to adduce all of the evidence available to it,
and for the
applicant to use the arsenal of cross-examination to challenge such
evidence. If at the conclusion of all of
the evidence, the
court arrives at the conclusion that the State has failed to prove
its case, the applicant must be acquitted.
He then has a
further option of whether to institute proceedings for malicious
prosecution, if he believes that he could overcome
the applicable
threshold.
[52]
The eighth and ninth respondents also joined forces with the
applicant, contending that he is justified in asking for a temporary
stay of the prosecution in the Kairos matter, in light of the
incomplete investigations and failure to fully comply with the
recommendations
of the DPCI Judge. Counsel for the eighth and
ninth respondents conceded that his clients had availed themselves of
the opportunity
provided for in the CPA by making representations to
the first respondent to review the decision to prosecute. That
process has
not yet been finalised as no decision has been made.
If a decision is made in their favour, that would be the end of their
concerns and involvement with the applicant as their co-accused.
Their support for the relief sought by the applicant is
entirely
opportunistic. They too take aim at Andrews in their affidavit as
being the culprit behind the entire episode. In
the same vein
as it applies to the applicant, they are free to cross-examine all of
the State witnesses at length if they believe
that charges have been
improperly brought against them.
[53]
The applicant is also seeking an interdict, the requirements for
which are trite. However, even though he seeks a temporary
stay
such an order could be final in effect. As indicated above, I am not
persuaded that his rights to a fair trial are in any
way infringed or
that he will suffer irreparable harm if the trials were to continue.
The applicant is also required to demonstrate
that he had no other
option but to bring this application to protect his rights in the
absence of an alternative remedy.
He fails, in my view on this
score as well, as he could have simply followed the course adopted by
the eighth and ninth respondents
and waited for the outcome of such
representations. A further option available, to the extent that
the applicant believed
that the Hawks have failed or neglected to
comply with the recommendation of the DPCI Judge, was to have applied
for a mandamus
compelling the relevant state entities to comply with
the report. Neither of these options has been pursued in a
matter which
is already seven years old.
[54]
In the result, I am satisfied that that no grounds exist for the
confirmation of the rule nisi granted on 14 June 2016 or for
any of
the ancillary relief sought in the notice of motion. Although
the applicant, on the day of the hearing, sought a diluted
version of
the relief contained in the initial notice of motion, I am of the
view that this was simply a rear-guard attempt to
rescue the
application once it had become apparent from the respondents’
heads of argument of the significant obstacles in
the path of the
applicant. I would therefore dismiss the application.
[55]
The applicant sought costs, jointly and severally
,
against the first, second and
eleventh respondents. It is an
established principle that in constitutional
litigation unsuccessful litigants against the government are
generally not mulcted
in costs; otherwise they would shy away or
become reluctant to enforce their constitutional rights because of
the potential of
an adverse cost order. See eg
Biowatch
Trust v Registrar, Genetic Resources, and others
2009
(6) SA 232
(CC). In this case however, I have accepted the
respondents’ version that the applicant failed to make
disclosure of material
information to the Court on 14 June 2016 of
the one criminal trial which had already commenced, and was
part-heard. His application
was misguided and brought without
considering other options available to him. The relief sought
by the applicant is granted
in exceptional cases, where an injustice
will result. This has not been shown to be the case. I am
of the view that
costs should follow the result.
[56]
I make the following order:
1. The rule issued on 14 June 2016 is
discharged;
2. The application is dismissed.
3. The applicant is directed to pay
the costs of the
first, second and
eleventh respondents in opposing the application, including those
costs occasioned on 14 June 2016, such costs to include the costs
of
two counsel where so employed.
___________
M
R CHETTY
APPEARANCES
For
the Applicant:
Adv. D W Eades
Instructed
by
Azgar Ally Khan &
Associates
[Ref : VM/04-DNB]
For
the First & Eleventh Respondents:
Adv. P D
Hemraj SC
Instructed
by
State Attorney Durban
For
the Second Respondent:
Adv. T V Norman SC and Adv. Nako
Instructed
by
State Attorney Durban
Date
of judgment:
07 February 2017