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[2007] ZASCA 23
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Janse van Rensburg and Others v National Director of Public Prosecutions (75/06) [2007] ZASCA 23; [2007] SCA 23 (RSA) (23 March 2007)
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THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Not reportable
CASE
NO
: 75/06
In the matter between :
PAUL ABRAHAM JANSE VAN
RENSBURG
......................
1
st
Appellant
WILLEM JACOBUS JANSE VAN
RENSBURG
......................
2
nd
Appellant
LEON LODEWIKUS OLIVER
......................
3
rd
Appellant
MELISSA DE BRUTO
......................
4
th
Appellant
INVICTA KONSTRUKSIE CC
......................
5
th
Appellant
LAMSO CONSTRUCTION CC
......................
6
th
Appellant
ANNAMARIE OLIVER
......................
7
th
Appellant
PAUL ABRAHAM JANSE VAN
RENSBURG
......................
8
th
Appellant
WILLEM JACOBUS JANSE VAN
RENSBURG
......................
9
th
Appellant
WILLEM JACOBUS JANSE VAN
RENSBURG
......................
10
th
Appellant
and
THE NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS
......................
Respondent
___________________________________________________________________
Before: STREICHER, HEHER,
COMBRINCK JJA, SNYDERS & MUSI AJJA
Heard: 20 FEBRUARY 2007
Delivered: 23 MARCH 2007
Summary:
Section
26
of the
Prevention of Organised Crime Act 121 of 1998
– no
facts alleged from which reasonable grounds for believing that a
confiscation order might be made appear - case for relief
to be made
out in founding affidavits – respondent not called upon to deal
with facts contained in attachments not referred
to and not relied
upon in the founding affidavit.
Neutral citation: This
judgment may be referred to as
Janse
van Rensburg v NDPP
[2007]
SCA 23 (RSA)
___________________________________________________________________
J U D G M E N T
___________________________________________________________________
STREICHER JA
STREICHER JA:
[1] The appellants appeal against a
restraint order in terms of s 26 of the Prevention of Organised Crime
Act 121 of 1998 (POCA) granted
against them in the Transvaal
Provincial Division upon an application by the respondent. Leave to
appeal to this court was granted
by the court below.
[2] In terms of s 26 read with s 25
of POCA a competent High Court may upon an application by the
National Director of Public Prosecutions
(the respondent) make a
restraint order prohibiting any person from dealing in such
realisable property as may be specified in the
order and which is
held by the person against whom the order is being made, when that
court is satisfied that a person 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.
A confiscation order means an order in terms of s 18. The section
provides that whenever a defendant is convicted
of an offence and the
court convicting him upon enquiry finds that he has derived a benefit
from that offence, or from any other
offence of which he has been
convicted at the same trial and from any criminal activity which the
court finds to be sufficiently
related to those offences, the court
may make an order against the defendant for the payment to the State
of any amount it considers
appropriate.
[3] Upon the application of the
respondent for a restraint order against the first to fourth
appellants the court below was satisfied
that the first to fourth
appellants were to be charged with fraud alternatively theft and that
a case had been made out from which
it appeared that there were
reasonable grounds for believing that they might be convicted and
that a confiscation order might be
made against them. The court below
therefore confirmed a rule nisi in terms of which a provisional
restraint order had been granted
and granted the restraint order. The
order was granted in respect of all realisable property
1
held by the first to fourth
appellants, excluding such realisable property as the
curator
bonis
appointed in
terms of the order might certify in writing to be in excess of R19
181 330.20
2
and ‘expenses related to
restrained assets which would ordinarily be carried by the estate’.
The appellants contend that
the court below erred in finding that
there were reasonable grounds for believing that a confiscation order
might be made against
them, more particularly in finding that there
were reasonable grounds for believing that any of the first to fourth
appellants might
be convicted of the offences of fraud or theft.
[4] In the application for the
restraint order the first to fourth appellants were cited as
defendants and the fifth to tenth appellants,
being persons who may
be affected by the restraint order, as respondents. The first
appellant, P A Janse van Rensburg and the second
appellant, W J Janse
Van Rensburg, each hold a 50% member’s interest in the first
respondent, Invicta Konstruksie CC. The third
appellant, L L Olivier,
holds a 20% member’s interest and the seventh appellant, A
Olivier, who is married in community of
property to the third
appellant, holds an 80% member’s interest in the sixth
appellant, Lamso Construction CC. The fourth appellant
is married to
the first appellant. The first and second appellants, in their
capacities as trustees of the Nicpaul Trust, are cited
as the eighth
and ninth appellants respectively and the second appellant in his
capacity as trustee of the Willem Jacobus Janse van
Rensburg Trust is
cited as the tenth appellant.
[5] In regard to the contention that
there are reasonable grounds for believing that the first to fourth
appellants may be convicted
of fraud or theft, the respondent relies
on an affidavit by Skuto David Mfopha a special investigator in its
employ attached to the
Directorate of Special Operations (DSO). The
DSO instituted an investigation in order to investigate suspected
fraudulent conduct
in respect of tenders issued and awarded by the
Gauteng Department of Education (GDE) and that investigation gave
rise to these proceedings.
[6] The offences of fraud
alternatively theft with which the first to fourth appellants were
charged were allegedly perpetrated in
connection with tenders
submitted by and awarded to six close corporations namely Johannes
Maja CC, Mathekga & Olivier CC, Thandi
NG CC, T N T Trading 60 CC
(trading as Techni Paint), Micromath Trading 112 CC and Ali Builders
CC. In the light of the conclusions
to which I have come I will,
unless indicated otherwise, set out the facts as alleged by the
respondent.
[7] Johannes Maja Construction CC was
registered in the names of Johannes Maja and his wife Disego Julia
Moseri. Each of them held
a 50% member’s interest in the close
corporation. The registration was attended to by the third appellant
who had encouraged
Maja to register a close corporation. The third
appellant accompanied Maja and Moseri to a bank where they opened a
bank account
for the close corporation. Although they were the only
signatories on the account the third appellant kept the cheque book
and controlled
the account. The third appellant assisted them to
complete the tender documents. Tenders were awarded to the close
corporation. An
allegation that Maja and Moseri had not benefited
financially from the tenders is disputed by the appellants.
[8] Mathekga and Olivier Construction
CC is a close corporation in which Jeffrey Phuti Mathekga held 80%
and the third appellant 20%
of the members’ interest. The third
appellant suggested to Mathekga that a close corporation be formed
and that they should
share the profits of the undertaking in the
ratio 80/20. The third appellant provided the funds initially
required and he was responsible
for managing the close corporation
while Mathekga was going to be in charge of the employees on the
sites where work had to be done.
They opened a bank account in
respect of which they were to be co-signatories but the third
appellant controlled the chequebook in
respect of the account. The
third appellant completed tender documents and arranged for Mathekga
to sign them but at times signed
such documents on behalf of
Mathekga. A tender or tenders in respect of two projects at the
Moretele School were awarded to the close
corporation. One project
was for renovations in the amount of R1 091 139 and the
other for the erection of a palisade fence
in the amount of R165 834.
According to Mathekga money was paid into the close corporation’s
bank account but he has no
knowledge as to how the money was
utilised. He was at times asked to sign cheques which were blank or
had the figures inserted concealed.
[9] Encouraged by the first and
fourth appellants to start her own business, Thandi Nokulunga Nkosi
acquired a close corporation and
changed its name to Thandi NG
Construction CC. She did so with the financial assistance of the
first and the fourth appellants. A
bank account was opened on behalf
of the close corporation and Nkosi, the only member of the close
corporation, was also the only
signatory on the account. With the
assistance of the first appellant Nkosi submitted a tender by the
close corporation for the renovation
of Tenekolonga Primary School in
Katlehong. The tender was awarded to the close corporation and the
security required by the GDE,
being 2% of the tender value, was
provided by the fifth appellant. The fifth appellant did part of the
work for which it submitted
an invoice to the GDE. As a result
R220 000 was paid into the close corporation’s bank
account. An amount of R200 000
was thereupon transferred to the
bank account of the fifth appellant. Notwithstanding the allegation
by the respondent that Nkosi
was the only signatory on the close
corporation’s bank account the respondent alleges that it was
the first appellant who transferred
the amount to the fifth
appellant’s bank account. The relationship between Nkosi and
the first appellant was thereafter terminated
due to the fact that
Nkosi was not actively involved in the work. Nkosi thereupon entered
into an agreement with one Lunga in terms
of which it was agreed that
Lunga would complete the work and that payment for the work would be
shared between Lunga and Nkosi on
an equal basis.
[10] Techni Paint is the name under
which T N T Trading 60 CC traded. Each of the fourth appellant and
Thomas Mtsweni held a 50% interest
in the close corporation. Although
it is alleged that Mtsweni was not advised of the interest he held in
the close corporation it
is clear that he knew that he and the fourth
appellant were co-owners of Techni Paint and that their purpose was
to obtain tenders
from the GDE. The fourth appellant tendered for
work on behalf of Techni Paint and a tender in an amount of
R945 864,84 for
work in respect of the Monde Primary School was
awarded to it. Techni Paint used the equipment, material and staff
supplied by the
fifth appellant to execute the work. Again an
allegation that Mtsweni did not benefit from the awarding of the
tender is disputed
by the appellants.
[11] Micromath Trading 112 CC is a
close corporation in which Kgosi Jack Kgare holds a 75% member’s
interest and Catherine M
E van Nieuwenhuizen a 25% interest. Kgare,
an employee of the fifth appellant, must have signed the necessary
documents when he,
at the request of the first appellant, during
2000, accompanied Van Nieuwenhuizen to the registrar of companies but
he does not know
that he became a member of the close corporation.
The close corporation obtained a tender to renovate Bhukuleni
Secondary School
in Soweto. The first appellant promised him a bonus
in respect of the work that was being done at the school. He had no
control over
the close corporation and did not know that it had a
bank account.
[12] Ali Building Construction CC is
a close corporation in which Alpheus Legutso (later called Lehutso)
holds a 100% member’s
interest. According to the respondent the
first appellant registered this close corporation in Lehutso’s
name without Lehutso
being aware thereof. Lehutso eventually got
control of the close corporation. Tenders in an amount of R3 767 700
were awarded to
the close corporation but it is not stated when that
happened.
[13] Mfopha explained the tendering
process that was employed, as follows: An invitation to tender was
advertised in newspapers whereupon
tenders were submitted. Upon
receipt of tenders they were taken to a compliance office where they
were checked for compliance with
the requirements set out in the
tender documents. Thereafter the tenders were submitted to a tender
committee. Only tenders within
10% of the estimated cost of the
project were considered. They were evaluated in terms of criteria
based on price, technical competence
and a preference point system in
accordance with the Preferential Procurement Policy Framework
(‘PPPF’) introduced in
terms of the
Preferential
Procurement Policy Framework Act 5 of 2000
and its regulations. In
terms of the PPPF a company that was wholly or partly owned by black
people or which had appointed a female
or a disabled person as a
shareholder scored additional points on the basis of their status as
‘Historically Disadvantaged
Individuals’ (‘HDI’s).
It was standard procedure that in all tender documentation submitted
to the GDE the tendering
company should declare all partners,
proprietors and shareholders by name, identity number, home address,
citizenship, previously
disadvantaged individual (‘PDI’)
status, shareholding percentage and date of acquisition, time devoted
to the entity,
interests in other entities and length of service of
individuals. The price tendered was allocated 90% of the total score
and preference
points made up the balance. Only the tender with the
highest score could be selected. The tender committee’s
selection was
then submitted for approval to the GDE’s
Acquisition Council headed by the Chief Executive Officer of the GDE.
[14] The names of the members of the
close corporations and the amount allegedly involved in respect of
each close corporation are
set out by Mfopha in a table called
Schedule A, as follows:
COLUMN
1
COLUMN
2
COLUMN
3
Name
of the CLOSE CORPORATION
Owner(s)
Amount
involved
Johannes
Maja Close Corporation
Johannes
Maja & Disego Moseri
4 324 983.28
Mathekga
& Olivier Close Corporation
Jeffrey
Mathekga & Leon Olivier
1 742 650.62
Thandi
NG Close Corporation
Thandi
Nkosi
883 094.00
Techni-Paint
Close Corporation
Melissa
De Bruto & Mtsweni
7 613 166.30
Micro
Maths Trading 112 Close Corporation
Cathrine
Niewenhezen & Kgoshi Kgare
849 736.00
Ali
Builders Close Corporation
Alpheus
Lehutso
3 767 700.00
Total
19 181 330.20
[15] Numerous documents comprising
475 pages, including extracts from the record of the investigation
conducted by the respondent
were attached to Mfopha’s
affidavit. He concluded:
‘
55 Throughout the investigation, I have
established that the First Respondent through the Defendants employed
a number of people,
most of whom were African, and most of whom were
current or previous employees of First Respondent.
The Defendants would facilitate the creation of a close corporation
in which some of their African employees would be the sole
members
or would hold at least a 50% member’s interest.
The Defendants would then use the status of the black owned
companies to secure tenders with the GDE.
The First Respondent would in turn perform the work as per the
tender specifications and payment from the GDE would then be made
to
“the black owned entity which they had formed”.
The Defendants would then withdraw the money from the bank account
of the respective close corporations.
I respectfully submit that there are reasonable
grounds to conclude that
FRAUD
has been committed by the Defendants in that
3
:
They did have
de
facto
control of the entities listed
in Column 1 of Schedule A, which were used to apply for certain
tenders from the said GDE; and/or
The Defendants had financial control and/or control of the bank
accounts and/or access to the bank accounts and/or access to
the
finances that were paid by GDE to the entities mentioned in Column
3 of Schedule A which were owned by their black employees;
and/or
That the entities mentioned in Column 1 of Schedule A were owned
and/or controlled wholly or in part by persons mentioned in
Column
2 of Schedule A; and/or
That the monies paid by GDE would be used to the benefit of persons
mentioned in Column 2 of Schedule A; and/or
That the money paid to the GDE as security for the tenders awarded,
to at least one of the entities mentioned in Column 1 of
Schedule A
were monies paid by the Defendants; and/or
The Defendants through the tenders submitted to the GDE stated that
the entities mentioned in Column 1 of Schedule A were the
owners of
resources such as machinery and trucks, financial independence and
operational structures in order to perform the work
that they were
tendering for.
The Defendants through the tenders submitted to the GDE stated that
the entities mentioned in Column 1 of Schedule A implied
that they
had staff, financial independence and independent operational
structures in order to perform the work that they were
tendering
for.’
[16] In order to satisfy the
requirements of
s 25(1)(b)(ii)
it was necessary for the
respondent to allege facts from which it appeared that there were
reasonable grounds for believing that
the first to fourth appellants
might be convicted of the offences of fraud or theft and that a
confiscation order might be made against
them. ‘Fraud consists
in unlawfully making, with intent to defraud, a misrepresentation
which causes actual prejudice or which
is potentially prejudicial to
another.’
4
It is not contended that a case had
been made out in respect of theft and nothing further need be said in
this regard. In regard to
the charge of fraud, and in the light of
the conclusion that I have reached, only the question of
misrepresentation needs be addressed.
[17] Paragraphs 58.1 and 58.3 are
contradictory. Mfopha probably intended to say that the first to
fourth appellants misrepresented
the ownership and control of the
entities mentioned in Column 2 of Schedule A. However, no factual
basis for that conclusion is to
be found in his affidavit. That the
first to fourth appellants used the close corporations concerned in
order to secure work from
the GDE is clear but it does not follow
that they misrepresented the ownership and control of the
corporations to the GDE.
[18] The mere fact that the first to
fourth appellants had financial control and/or control of the bank
accounts of the close corporations
and that they had access to the
funds that were paid by the GDE to the entities concerned, as alleged
in paragraph 58.2, did not
constitute a fraud. Mfopha probably
intended to allege that the first to fourth appellants misrepresented
to the GDE that the people
mentioned in column 2 had such control and
access. Again no factual basis for that conlusion is to be found in
the founding papers.
[19] In paragraph 58.4 it is alleged
that the first to fourth appellants committed a fraud in that ‘the
monies paid by GDE would
be used to the benefit of persons mentioned
in Column 2 of Schedule A’. Mfopha probably intended to say
that the first to fourth
appellants committed a fraud in that they
misrepresented that the monies paid by the GDE would be used for the
benefit of those persons.
Again no factual basis for that conclusion
is to be found in Mfopha’s affidavit. Nowhere in the affidavit
does he say when,
where, how and to whom this alleged
misrepresentation or the misrepresentations alleged in paragraphs
58.1, 58.2 and 58.3 were made.
[20] In paragraph 58.5 it is alleged
that defendants committed a fraud in that ‘the money paid to
the GDE as security for the
tenders awarded, to at least one of the
entities mentioned in Column 1 of Schedule A were monies paid by the
Defendants’. No
basis for an allegation that such action would
have been fraudulent is to be found in Mfopha’s affidavit.
[21] The misrepresentations alleged
in paragraphs 58.6 and 58.7 are not relied upon in a provisional
charge sheet served on the appellants.
In argument before us counsel
for the respondent nevertheless relied upon them. In paragraph 58.6
Mfopha alleges that express representations
were made by the
appellants in tender documents submitted to the GDE ‘that the
entities mentioned in Column 1 of Schedule A
were the owners of
resources such as machinery and trucks, financial independence and
operational structures in order to perform
the work that they were
tendering for’. In paragraph 58.7 he probably intended to
allege that the appellants by implication
misrepresented in the
tenders to the GDE that the entities mentioned in Column 1 of
Schedule A ‘had staff, financial independence
and independent
operational structures in order to perform the work that they were
tendering for’.
[22] However, although there are a
number of tender documents among the 475 pages attached to Mfopha’s
affidavit, neither the
tender documents in which these
representations are alleged to have been made nor the passages in
these tender documents relied upon
by the respondent, are referred to
in the affidavit. With two exceptions the tender documents attached
to the affidavit are attachments
to other documents and are not
referred to in the affidavit. One of the exceptions is a tender
document attached as an example of
a tender document. The other
exception is a tender document which is attached in support of the
allegation that ‘Techni Paint
submitted a tender to the GDE and
gave out that it is a registered close corporation’. Like the
other alleged misrepresentations
no basis for the representations
alleged in paragraphs 58.6 and 58.7 are therefore to be found in the
affidavit.
[23] The respondent submits that a
basis for Mfopha’s conclusion of fraud appears from passages in
the 475 pages annexed to
his affidavit. However, an applicant for
relief has to make out a case for the relief he is seeking in his
founding affidavits ie
he should, in his founding affidavits, set out
the facts relied upon by him. A respondent is not called upon to deal
with facts contained
in attachments to the founding affidavits not
referred to and not relied upon in the founding affidavits. For this
reason an applicant
cannot be allowed to rely on such facts. In this
regard I fully agree with the following statement by Joffe J in
Swissborough Diamond
Mines (Pty) Ltd v Government of the Republic of South Africa
1999 (2) SA 279
(T) at 324F-G:
‘
Regard being
had to the function of affidavits, it is not open to an applicant or
a respondent to merely annexe to its affidavit documentation
and to
request the Court to have regard to it. What is required is the
identification of the portions thereof on which reliance is
placed
and an indication of the case which is sought to be made out on the
strength thereof. If this were not so the essence of our
established
practice would be destroyed. A party would not know what case must be
met. See
Lipschitz and Schwartz NNO v
Markowitz
1976
(3) SA 772
(W) at 775H and
Port Nolloth
Municipality v Xahalisa and Others ; Luwalala and Others v Port
Nolloth Municipality
1991
(3) SA 98
(C) at 111B-C.’
In
Lipschitz
and Schwartz NNO
at
775H-776 Coetzee J said:
‘
A litigant
cannot, as it were, throw a mass of material contained in the record
of an enquiry at the Court and his opponent, and merely
invite them
to read it so as to discover for themselves some cause of action
which might lurk therein, without identifying it. If
this were
permissible, the essence of our established practice which is
designed and which still evolves as a means of accurately
identifying
issues and conflicts so that the Court and the litigants should be
properly apprised of the relevant conflicts, would
be destroyed.’
[24] The respondent failed to allege
facts from which it appears that there are reasonable grounds for
believing that the first to
fourth appellants may be convicted of
fraud or theft. The respondent therefore failed to make out a case
that there are reasonable
grounds for believing that a confiscation
order may be made against them. If follows that the appeal should
succeed.
[25] The following order is made:
The appeal is upheld with costs including the costs of
two counsel.
The order of the court a quo is set aside and replaced
with the following order:
‘
The rule nisi is discharged
and the application is dismissed with costs.’
____________________
P E
STREICHER
JUDGE OF
APPEAL
CONCUR
:
HEHER JA)
COMBRINCK JA)
SNYDERS AJA)
MUSI AJA
1
Realisable
property is defined in
s 14
as:
‘
(a) any property held by the defendant
concerned; and
(b) any property held by a person to whom that defendant has
directly or indirectly made any affected gift.’
2
Adjusted
to take into account fluctuations in the value of money as
calculated in terms of
sections 15
and
20
of POCA.
3
I
retained the following incorrect numbering.
4
Jonathan
Burchell
Principles of Criminal Law
3ed p 833.