South African Reserve Bank v Heystek and Others (A248/2010, 21961/08) [2012] ZAGPPHC 301 (7 November 2012)

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[2012] ZAGPPHC 301
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South African Reserve Bank v Heystek and Others (A248/2010, 21961/08) [2012] ZAGPPHC 301 (7 November 2012)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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IN
THE NORTH GAUTENG HIGH COURT PRETORIA
CASE
NO: A248/2010
COURT
A QUO
CASE NO: 21961/08
DATE:07/11/2012
In
the matter between:
THE
SOUTH AFRICAN RESERVE BANK
….....................................
Appellant
And
MAGNUS
REINIER
HEYSTEK
...............................................................
First
Respondent
MINISTER
OF
FINANCE
…...................................................................
Second
Respondent
THE
PRESIDENT OF THE REPUBLIC
OF
SOUTH AFRICA
…............................................................................
Third
Respondent
JUDGMENT
N
F KGOMO, J:
INTRODUCTION
[1]
The first respondent launched an
application in the court a quo to review and set aside a decision
purportedly (according to the
first respondent) taken by the
appellant to declare forfeit to the State an amount of R194 113,66,
standing to the credit of the
first respondent’s bank account
number 62035316084 at the Fourways Mall branch of First Rand Bank
Limited, which forfeiture
order was purportedly made in terms of
Regulation 22B of the Exchange Control Regulations.
[2]
In essence the said application in the
court a quo sought -
2.1
To review and set aside that decision to
declare the amount forfeit to the State; and
2.2
To challenge the constitutionality of
section 9 of the Currency and Exchanges Act, 1933 (Act 9 of 1933) as
amended, as well as the
Exchange Control Regulations promulgated
thereunder.
[3]
The first respondent did not pursue the
constitutional challenge at the hearing of the application.
[4]
The decision which formed the subject
matter of the relief claimed was taken by Mr A D Mminele, the
Executive General Manager: Markets,
which is the competent authority
in the Department of Finance, Republic of South Africa, responsible
for the Exchange Control Department
of the appellant. The Exchange
Control Department is currently known as the Financial Surveillance
Department. Mr A D Mminele will
henceforth be referred to as
“Mminele".
[5]
The court a quo, on the basis of several
grounds of review, found in favour of the first respondent, setting
aside the decision
by Mminele.
[6]
According to the appellant, the court a
quo granted the main relief sought, but not in respect of any
decision taken by the appellant
who was the first respondent in that
applicant, as the notice of motion depicted or set out, but granted
an order reviewing and
setting aside -
"...
the
decision of Mr Mminele representing the first respondent
[the
appellant] ...”
which
according to them was an amended order that was granted without the
first respondent having sought an amendment to the prayers
in the
notice of motion; and further, despite it having been clearly
established in the affidavits that Mminele, who took and when
he took
that decision to declare the amount forfeit, was not acting on behalf
of or as a representative of the appellant when he
so acted; but in
fact acted as a designated functionary of the Minister of Justice.
[7]
That order of the court a quo further
granted an order that the amount of R194 113,66 be returned to the
first respondent with interest
thereon at the rate of 15,5% per annum
from 8 February 2008 to date of return (payment). The court a quo
furthermore ordered the
appellant herein to pay the costs of the
application, including the costs of three (3) counsel. According to
the appellant the
effect of the cost order was that the appellant was
also ordered to pay the costs relating to the first respondent’s
constitutional
challenge which was abandoned at the commencement of
the hearing. According to the appellant further, the costs relating
to the
constitutional challenge were substantial, a large part of the
affidavits in that application being devoted to those issues and

separate heads of argument having had to be prepared in respect
thereof.
[8]
In her judgment delivered on 12 January
2010, the learned Acting Judge Potterill (“Potterill AJ')
apparently based her decision
to review and set aside Mminele’s
forfeiture decision on three grounds, namely -
8.1
Ground 1 - That on 4 February 2004 Mminele received a memorandum and
recommendation from Mr P J Deport and Mr Ellis recommending
the
forfeiture of the money to the State; that he had regard to the
contents of this memorandum as well as
certain
letters annexed thereto in reaching his decision. That however, in
drawing the memorandum and recommendation Messrs Delport
and Ellis
had had regard to a comprehensive report issued by the Registrar of
Stock Exchanges of the Financial Services Board and
normally and in
this case sent to the Registrar of Banks. That this report was not
placed before Mminele. The learned Acting Judge
concluded that
Mminele, being the decision-maker, had not been fully apprised of the
facts; that the written memorandum prepared
by Messrs Delport and
Ellis did not contain a fair and accurate synopsis of the relevant
facts as well as raised grounds for forfeiture
in respect of which
Heystek had not been afforded the opportunity to comment; and that
Mminele had accordingly failed to take certain
relevant
considerations into account which would have enabled him to act with
procedural fairness.
8.2
Ground 2 - The learned Acting Judge found that should she be wrong on
the first ground, then Mminele’s decision should
be set aside
on the grounds that he failed to give reasons for his decision that
the money be forfeited to the State. In keeping
with the provisions
of the Promotion of Administrative Justice Act, 2000 (Act 30 of 2000)
as amended, which stipulates that if
a decision-maker is asked to
furnish reasons for his decision and fails to do so within 90 days,
it is presumed that the decision
was taken without good reason,
Heystek requested reasons by letter dated 25 February 2008 addressed
to the Exchange Control Department
and when by 7 May 2008 no reasons
were forthcoming, the review application was launched - i.e. 18 days
before the expiry of the
requisite 90 day period. The court a quo
accepted that the presumption that Mminele made the decision without
good reason could
have been rebutted had he furnished those reasons
in his answering affidavit, concluding that no reasons were contained
in the
answering affidavit. The learned Acting Judge came to the
conclusion that in his short confirmatory affidavit Mminele was -
only
prepared to state that he considered the memorandum and annexure
...”
as have been prepared by Delport
and Ellis.
8
3 Ground 3 - That the forfeiture decision taken by Mminele on 4
February 2008 and published in the Government Gazette of 8 February

2008 was invalid because a period of more than 36 months had passed
or elapsed since or from the date on which the blocking order
(of the
account in question) was issued until the date on which the
forfeiture decision was made and published. The above is purported
to
be in line or keeping with section 9(2)(g) of the
Currency and
Exchanges Act, read
with the Exchange Control Regulations 22A and 22C
which stipulate that a blocking order issued in respect of an account
must be
cancelled
not later than 36 months from the date of issue of such blocking
order unless the money is in-between forfeited or declared
forfeit
under Regulation 22B. The learned Acting Judge found that the
blocking order issued by Delport had been issued on 4 January
2005
and that the 36 months period had expired on 3 January 2008 without a
forfeiture order having been made. She consequently
further found
that since the blocking order should have been cancelled on 3 January
2005, it was thus not competent to have issued
a forfeiture order on
8 February 2008 when the 36 months had already expired.
[9]
It is against the above judgment that
the appellant is now appealing.
Leave
to appeal the judgment in or to the full bench of this Court was
granted
by
the trial judge on 1 March 2010, costs being costs in the appeal.
ISSUES
TO BE DETERMINED ON APPEAL
[10]
The issues to be determined in this
appeal are ~
10.1
Whether the decision-maker took the relevant facts into account and
his decision to declare the money standing to the credit
of the first
respondent’s banking account in terms of Regulation 22B of the
Exchange Control Regulations was justified on
the grounds of the
facts which he did take into account.
10.2
Whether the decision-maker was called
upon to furnish reasons for his decision, whether he did furnish
reasons for his decision
and whether the court a quo was correct in
concluding that it must be presumed that he had no good reason for
his decision; and
10.3
Whether the forfeiture decision was made
after the expiry of the 36 month period as contemplated in Exchange
Control Regulation
22C(3) read with Regulation 22A(3).
THE
PARTIES
[11]
The appellant, The South African Reserve
Bank, is the central bank of the Republic of South Africa, a juristic
person and statutory
body regulated in terms of the South African
Reserve Bank Act, 1989 (Act 90 of 1989) as amended (“S A
Reserve Bank or appellant’)
and having its principal place of
business within the jurisdiction of the above Honourable Court, at
370 Church Street, Pretoria.
[12]
The first respondent, Magnus Reinier
Heystek is a major male businessman and journalist born on 1 April
1953 and resident as at
the date of the launching of this application
in the court a quo at 711 Sandalford Close, Dainfern, Johannesburg.
[13]
The second and third respondents are The
Minister of Finance. Republic of South Africa and the President of
the Republic of South
Africa respectively. The second respondent was,
according to the first respondent herein and applicant in the court a
quo, joined
to the proceedings by virtue of the provisions of
Regulation 22E(2) of the Regulations (“Regulations”) made
in terms
of section 9 of the Currency and Exchange Act 9 of 1933
(“the Act”) as well as because he/she is the national
executive
authority responsible for the administration of the
Regulations, the constitutionality whereof was challenged before the
challenge
was abandoned on the date of hearing in the court a quo.
[14]
The third respondent is joined in these
proceedings in his/her official capacity and by virtue of the
interest he/she may have in
the constitutional validity of the
Regulations.
[15]
No order of costs were sought against
the second and third respondents. They also have not joined issue in
this application in any
way or at any stage and are not parties to
this appeal per se.
CHRONOLOGY
OF EVENTS AND COMMON CAUSE FACTS
[16]
It is common cause that the Minister of
Finance, Republic of South Africa, has by virtue of the provisions of
Regulation 22E of
the Exchange Control Regulations delegated the
powers and/or functions conferred upon the Treasury by the provisions
of certain
of the Exchange Control Regulations and assigned the
duties imposed thereunder on the Treasury, to the Governor, Deputy
Governor,
Executive General Manager of the South African Reserve Bank
responsible for the Exchange Control Department, the General Manager

and/or Deputy General Manager, Assistant General Manager and/or any
official of the South African Reserve Bank who, in terms of
the
internal rules and regulations of the Exchange Control Department of
the South African Reserve Bank, is authorised to exercise
these
powers.
[17]
Those delegated powers form part of the
papers filed of record in this application as Annexure “PJD 1"
titled “Delegation
of Powers in terms of Exchange Control
Regulation 22E” signed by the Minister of Finance and re-issued
on 13 December 2006.
[18]
During 2002 the Registrar of Stock
Exchanges in the Financial Services Board appointed inspectors in
terms of section 3 of the Inspection
of Financial Institutions Act,
1998 (Act 80 of 1998) as amended, (“Financial Institutions
Act"), to investigate the
affairs of Magnus Heystek
International (Pty) Ltd and other related entities under the control
of the first respondent. A copy
of the inspection report was
furnished to the Registrar of Banks, who stands at the head of the
Bank Supervision Department of
the appellant, in particular to Adv
Michael Blackbeard (“Btackbeard”), an employee in the
office of the Registrar of
Banks. This report or copy thereof is
found at page 5 to 189 of the record of proceedings filed by the
appellant in terms of Rule
53 of the Uniform Rules of Court.
[19]
The Exchange Control Department of the
appellant is a department entirely separate from the office of the
Registrar of Banks but
by reason of the fact that that inspection
report raised possible contraventions of the Exchange Control
Regulations, the report
was referred by the office of the Registrar
of Banks to the Exchange Control Department in October 2002.
[20]
After receiving the inspection report
the Exchange Control Department, also during October 2002, commenced
an investigation into
the affairs of the first respondent and the
companies under his control as identified in the inspection report,
with a view to
identifying possible contraventions of the Exchange
Control Regulations. They sent a letter to the first respondent and
Magnus
Heystek International (Pty) Ltd by registered post on 30 May
2003 regarding this investigation.
[21]
On 4 January 2005 Blackbeard on behalf
of the Registrar of Banks furnished the Manager in the Exchange
Control Department and designated
functionary of the Minister of
Finance, for purposes of applying and administering the Exchange
Control Regulations, Petrus Jacobus
Defport {"Delport”)
with a report by Deloitte & Touche Auditors who had been
appointed as inspectors to determine
whether the first respondent and
the companies controlled by him had carried on the business of a bank
in contravention of the
provisions of the Banks Act, 1990 (Act 94 of
1990) as amended and/or the provisions of the Mutual Banks Act 1993
(Act 124 of 1993)
as amended. The report and its covering memorandum
appear in pages 113 to 189 of the record of proceedings.
[22]
Although the report concludes that on
the available information and records made available to the
inspectors, the first respondent
and the companies investigated did
not accept deposits from the general public as a regular feature of
their business and did not
solicit or advertise for such deposits,
the report also dealt with various transactions which had been dealt
with in the inspection
report issued to the Registrar or Stock
Exchanges and identified possible contraventions of the Exchange
Control Regulations.
[23]
On the basis of the report of the
Registrar of Stock Exchanges of the FSB and the Deloitte & Touche
report as well as the documents
in the possession of the Exchange
Control Department several acts or omissions were suspected, by the
above delegated functionaries,
upon grounds they reckoned to be
reasonable, to have constituted contraventions of the Exchange
Control Regulations as fully set
out hereunder.
[24]
A certain Ms De Flamingh had during
September 2000 and October 2000 deposited an aggregate amount of R460
000 to the credit of a
South African banking account of Mallfour
Property (Pty) Ltd, being a company controlled by the first
respondent. During or about
March 2001, and as a repayment of the
amount received from Ms De Flamingh, the first respondent caused a
sum of US $61 000 to be
transferred from a banking account in the
name of Dainfern Ltd held at Standard Chartered Bank in Jersey, USA
and which fell under
the first respondent’s control, to an
account which had been opened in the names of Ms De Flamingh at HSBC
Bank in Guernsey
outside South Africa. No exemption or permission had
been granted by the Treasury in respect of this transaction. This
constituted
prima facie a contravention of the provisions of Exchange
Control Regulation 3(1 )(c) and/or Regulation 6(2) and/or Regulation
10(1)(c).
[25]
During November 2000 the first
respondent drew two cheques of R100 000 and R350 000 on the South
African banking account of Mallfour
Property (Pty) Ltd in favour of J
Samowitz. Samowitz subsequently repaid the money to the credit of the
banking account of Dainfern
Ltd at Standard Chartered Bank in Jersey,
which bank account, as indicated above, was under the control of the
first respondent.
No exemption or permission was sought from and/or
granted by the Treasury in terms of the Exchange Control Regulations
in respect
of this transaction also. This also prima facie
constituted a contravention of the provisions of Exchange Control
Regulation 3(1
)(c) and/or Regulation 10(1 )(c).
[26]
Dainfern Ltd company was registered by
or at the instance of the first respondent during 1992 in Jersey. It
was controlled by him
and he appeared to be the beneficial
shareholder. It was, as stated above, at Standard Chartered Bank. No
exemption or permission
was granted by the Treasury in terms of the
Exchange Control Regulations in respect of the formation of the
company and the acquisition
of the shares in the foreign company or
in respect of the opening and conduct of the banking account. The
first respondent received
funds into and made payments from this
account. This also constituted a contravention of Exchange Control
Regulation 6(2) and/or
Regulation 7(1).
[27]
During 1999 a sum of £60 000 was
paid to the credit of the banking account of Dainfern Ltd at Standard
Chartered Bank in Jersey,
which account was under the control of the
first respondent. No exemption or permission would have been granted
by the Treasury
in terms of the Exchange Control Regulations in
respect of the receipt of this amount. This also was a contravention
of Exchange
Control Regulation 6(2) and/or Regulation 10(1 )(c)
and/or Regulation 22.
[28]
Because of the abovementioned as well as
other information in the hands of the designated functionaries of the
Minister of Finance
in the Exchange Control Department of the
appellant the conclusion was reached that the first respondent had
contravened and/or
was contravening the Exchange Control Regulations.
[29]
On 4 January 2005 the designated
functionary issued a written order to First National Bank in terms of
Exchange Control Regulation
22A and/or Regulation 22C in terms of
which the bank was prohibited to withdraw or cause to be withdrawn
any money standing to
the credit of the following banking accounts
held at the Fourways Mall branch of First National Bank -
29.1
Account No. …...9753 in the name
of Magnus Heystek International (Pty) Ltd;
29.2
Account No. …....3938 in the name
of Mallfour Property (Pty) Ltd; and
Account
No. ….....3460 in the name of the first respondent.
[30]
This order appears on page 190 of the
record of proceedings. This order was issued in reliance of or
pursuant to the powers granted
them from or through the provisions of
Exchange Control Regulation 22A(1)(b) and Regulation 22C(2)(a).
[31]
The money standing to the credit of the
above accounts was not attached in terms of Regulation 22A(1)(a) or
Regulation 22C(1) as
understood by the first respondent.
[32]
On 4 January 2005 the Manager of the
Exchange Control Department of First National Bank confirmed in
writing that the abovementioned
three accounts had been “blocked’,
meaning, funds in them could not be withdrawn.
[33]
On 5 January 2005 the first respondent
telephoned the Exchange Control Department enquiring about why the
accounts were blocked.
An arrangement was made that he meets the
designated functionary, Delport, at the appellant’s offices in
Pretoria on 6 January
2005. On 6 January 2005 this meeting took place
attended by Delport, the first respondent and one A Malherbe
(“Malherbe”)
of the appellant’s Exchange Control
Department in the Sterling Boardroom at the South African Reserve
Bank in Pretoria. It
lasted from 11 hOO to 12h08 and Malherbe kept
contemporaneous notes of the discussions. Delport also took down
notes. The contemporaneous
notes appear at pages 203 to 217 of the
record and a typed version thereof is annexed to the papers as
Annexure "PJD 3”.
[34]
At this meeting the first respondent’s
request that the money standing to the credit of the account of
Magnus Heystek International
(Pty) Ltd would be transferred to the
applicant’s personal account number 54860053460 which is the
third account that was
blocked and that the restriction placed on the
withdrawal of funds from the company account, Magnus Heystek
International (Pty)
Ltd would be lifted so that the first respondent
could continue to use that company account for business purposes. It
was further
agreed that the order prohibiting the withdrawal of funds
(blocking) from the first respondent’s personal account and
from
the account of Mallfour Property (Pty) Ltd would remain in
force.
[35]
After this meeting and on the afternoon
of the same day, i.e. 6 January 2005, Delport sent an e-mail to
Jennifer Page at First National
Bank in which he informed her that
the amount of R47 554,29 standing to the credit of the account of
Magnus Heystek International
(Pty) Ltd should be transferred to the
applicant’s personal account, further that the order
prohibiting the withdrawal of
funds from the account of Magnus
Heystek International (Pty) Ltd was lifted, and that the order
prohibiting the withdrawal of funds
from the first respondent’s
personal account as well as from the account of Mallfour Property
(Pty) Ltd was to remain in
force.
[36]
On 14
January 2005 the first respondent, on the letterhead of Magnus
Heystek International (Pty) Ltd, sent a letter to Blackbeard
(of the
Registrar of Banks). Because the contents of the letter referred to
exchange control matters, particularly the meeting
on 6 January 2005
between the first respondent, Delport and Malherbe, it was referred
to Delport for attention and further action.
That letter is at pages
234 to 240 of the record.
[37]
On 24 January 2005 Delport received a
letter from the first respondent on a letterhead of Magnus Heystek
International (Pty) Ltd
(pages 241 to 243 of record). In paragraph 7
of this letter the first respondent requests that the amount of about
R234 000 standing
to the credit of his personal banking account at
First National Bank be transferred to a Money Market account which he
held at
the bank, that the Money Market account be blocked and that
the order issued by Delport blocking his personal account be lifted.
[38]
Before Delport could take a decision
over the above request, attorney Mark Korten of the firm of attorneys
Daniel Erasmus Incorporated
sent a letter by e-mail to one Alexander
Ellis ("Ellis"), an assistant general manager in the
Exchange Control Department.
This letter was referred to Delport for
further attention. The latter arranged a meeting with the first
respondent at the appellant’s
Pretoria office for 9 February
2005.
[39]
This meeting (on 9 February 2005) was
attended by Delport, Malherbe, M M Korten and the first respondent.
Malherbe kept contemporaneous
notes of the discussions at the
meeting. They are at pages 218 to 230 of the record. The typed
transcript thereof is annexed to
the papers herein as Annexure “PJD
4”. Delport’s notes of the same meeting are at pages 231
to 233 of the record
and the typed transcript thereof is annexed to
the papers herein as Annexure "PJD 5”.
[40]
At this meeting and in accordance with
the request made by the first respondent, it was agreed between
Delport, the first respondent
and his attorney that the money
standing to the credit of the first respondent’s personal
account and the account of Mallfour
Property (Pty) Ltd in respect of
which a blocking order was issued on 4 January 2005, would be
transferred to the credit of the
first respondent’s Money
Market account at First National Bank with (account) number
62035316084, that Delport cause to be
issued or issue an order
prohibiting the withdrawal of the funds standing to the credit of
that (Money Market) account in terms
of the provisions of Exchange
Control Regulation 22A and/or Regulation 22C, and that the order
previously issued by Delport on
5 January 2005 in respect of the
first respondent’s personal account and the account of Mallfour
Property (Pty) Ltd would
be uplifted.
[41]
Pursuant to this agreement reached at
the meeting of 9 February 2005 Delport sent an e-mail to Jennifer
Page at First National Bank
on the self-same 9 February 2005 which
stated that with effect from 10 February 2005 the blocking orders
previously issued in respect
of the applicant’s personal
account number 54860053460 and the account of Mallfour Property (Pty)
Ltd number 62002673938
be unlifted and instructed that the credit
balance on both accounts must first be transferred to the first
respondent’s Money
Market account with number 62035316084, and
that the Money Market account by “blocked’ in terms of
Exchange Control
Regulation 22A and/or 22C. Accordingly, on 9
February 2005, Delport issued an order to First National Bank in
terms of which the
bank was prohibited from withdrawing or allowing
to be withdrawn or causing to be withdrawn any money standing to the
credit of
the first respondent’s Money Market account number
62035316084.
[42]
Jennifer Page of First National Bank
confirmed to Delport by e-mail on 11 February 2005 that effect had
been given to the instruction
dated 9 February 2005 that the first
respondent’s Money Market account in which there was a credit
of R184 822,76 had been
“blocked’ in terms of Exchange
Regulation 22A and/or 22C.
[43]
On a conspectus of all the information
at the disposal of the Exchange Control Department as supplemented by
the information obtained
through the meetings held with the first
respondent on 6 January 2005 and 9 February 2005 Delport wrote a
letter to the first respondent
during October 2005. On 2 August 2006
Delport received a letter dated 27 July 2006 from one C R van Staden
from the firm of attorneys
Routledge Modise Moss Morris purportedly
writing on behalf of the first respondent, wherein they requested a
meeting with him to
finalise, settle, regularise or resolve the
outstanding issues involving the first respondent. The said Van
Staden had incidentally,
previously been employed as a Deputy General
Manager in the Exchange Control Department. Following upon this
request a meeting
was arranged and held on 16 August 2006 between
Messrs C T Grove and Ellis of the Exchange Control Department,
appellant’s
attorney, Dr D H Botha and Mr Van Staden.
[44]
Following up on this meeting Delport
wrote a letter to Van Staden on 17 August 2006 in which he confirmed
that the meeting of 16
August 2006 resolved that the Exchange Control
Department would await the outcome of the first respondent’s
application for
amnesty relating to the foreign exchange transactions
involving the first respondent and Ms De Flamingh, and that once the
outcome
of the amnesty application(s) was known, a due process would
be followed. Delport explained that by the due process he meant that

the applicant would be given the opportunity to make further
representations before any decision adverse to him would be taken.
[45]
According to Delport he was subsequently
told verbally that the applicant’s amnesty application was
unsuccessful.
CLOSER
SCRUTINY OF ACCOUNTS IN ISSUE
[46]
The manner in which the grounds of
review were formulated, the overall picture given by the founding
answering and replying affidavits,
the correspondence exchanged
between the parties in connection with this matter, the face-to-face
meetings the parties had as well
as the thrusts of argument in court
from both sides necessitate in my considered view and finding, that
the specific accounts in
issue here be paid closer scrutiny or
attention
as this exercise in my further view will go a long way towards
ameliorating and simplifying the decision to be arrived
at herein.
THE
DAINFERN ACCOUNT
[47]
First respondent registered a company
with the name Dainfern in Jersey, USA, during 1992 and opened a bank
account there in the
names of the company at Standard Chartered Bank.
The bank account was at all times under the first respondent’s
control and
he had been the beneficial shareholder of the company at
all times.
[48]
The first respondent does not contest or
deny that the records of the Exchange Control Department do not
disclose any application
in respect of the establishment of or his
interest in the company. Neither did the first respondent’s
attorneys deal with
the above situation which is clearly a
contravention of the Jaw(s) and/or rules in the myriad of
correspondence it handled between
itself and the relevant
authorities.
[49]
It is not in dispute that the above is a
contravention of Regulation 6(2) and/or Regulation 7(1).
[50]
It is also common cause that the first
respondent deposited or caused to be deposited and/or withdrawn
various amounts of money
into or from the above account.
[51]
The first respondent’s defence to
the above contravention is that he was under the impression that the
moneys in this account
was foreign currency which was not obliged to
declare to the Treasury (see para 25.1.4 of his founding affidavit).
In the same
breath, in para 25.2.3 of the same founding affidavit he
contradicts himself by stating that he was under the impression that
where
a South African resident receives money overseas, he has 30
days within which to repatriate the money back to South Africa.
[52]
Suffice to state that he did not
repatriate the money to South Africa or declare his dealing to the
authorities. Consequently, the
contravention of Regulation 6(2) in
respect of this account is not in dispute.
THE
SAMOWITZ TRANSACTION
[53]
On 3 November 2000 the first respondent
drew two cheques of R100 000 and R350 000 on the Mallfour account in
favour of Mr J Samowitz.
The explanation given for this transaction
by the first respondent to the inspectors questioning him about same
was that he had
lent the money to Mr Samowitz and that Mr Samowitz
had paid the money back by depositing it into the Dainfern Ltd
account. His
attorneys also confirmed this as well as stating that
the loan was repaid into the Dainfern account and that money
repatriated
to South Africa soon thereafter. However nowhere or at no
stage is proof of such repatriation shown.
[54]
Accordingly, a contravention of
Regulation 10(1 )(c) involving R450 000 was proven.
[55]
An amount of R126 000 involving the
first respondent and the authorities was also in issue. The first
respondent’s explanation
in respect of this amount was
accepted. As such the above amount does not form part of the
rationale for the decision taken against
the first respondent.
However, the first respondent did not give any explanation for being
in possession of US $2 000 which he
paid in cash to Mr Samowitz after
he had already emigrated to Australia, which transaction is also a
contravention of the Regulations.
THE
DE FLAMINGH TRANSACTION
[56]
On 29 September 2000 and 31 October 2001
Ms De Flamingh (
il
De
Flamingh”) deposited R250 000 and R210 000 respectively into
the first respondent’s Mallfour account. On 16 November
2000 De
Flamingh signed a Fedsure International Service Ltd investment
application form presented to her by the first respondent
in terms of
which she intended to invest a sum of US $61 000 outside South
African. On 31 March 2001 the first respondent sent
a telefax to
Standard Chartered Bank in Jersey instructing them to transfer an
amount of US $61 000 from the Dainfern Ltd account
to the account
which had been opened for De Flamingh at HSBC Bank in Guernsey. In an
e-mail dated 6 August 2001 sent by the first
respondent, he confirmed
to De Flamingh that he had managed to get the sum of US $61 000 to
her off-shore account with a great
struggle and irregularity, more-so
as she was
unable
to obtain a tax clearance and permission to take funds out of South
Africa.
[57]
Up to and until 28 February 2004 when
the first respondent advised De Flamingh by e-mail to apply for
amnesty in respect of this
transaction, the US $61 000 had not yet
been repatriated to South Africa. The above cancels or contradicts
the first respondent’s
attorneys that the first respondent had
agreed with De Flamingh to repatriate the US $61 000 within 30 days
of its receipt into
her off-shore account.
[58]
The above confirms a contravention of
Regulation 10(1 )(c) either directly or as an accomplice of De
Flamingh in the amount of R460
000, which is the Rand equivalent of
US $61 000.
[59]
Furthermore, from the documents
available to the Exchange Control Department, it appears that De
Flamingh paid the sum of R478 000
being the proceeds of an investment
she had realised in Old Mutual Global Technology Fund on 8 December
2000, into the bank account
of Mallfour. On 27 July 2001
Magnus Heystek International by telefax
informed De Flamingh that the sum of R478 000 had not been invested
as they were waiting
for off-sure asset swaps to become available.
The same telefax confirmed that the sum of US $61 000 had been
deposited into De
Flamingh’s off-shore bank account. The sum
total of the above facts is that the US $61 000 (R460 000 in S A
currency) and
the sum of R478 000 also mentioned here are not the
same amounts and do not relate to the same transactions.
[60]
On 13 September 2001 the amount of R478
000 was at the request of De Flamingh paid from the local bank
account of Magnus Heystek
International to investee Bank Ltd.
[61]
The source of the amount of US $61 000
held in the Dainfern Ltd account was not disclosed by the first
respondent or declared in
terms of Regulation 6(2), thereby
constituting a transgression.
THE
APPLICANTS BROTHER
[62]
The first respondent applied for and was
granted permission to borrow a sum of £300 000 from his brother
Wynand Gert Heystek.
An amount of £60 000 was however, not paid
to the first respondent but was paid to the credit of the foreign
banking account
of Dainfern Ltd. The circumstances of this aspect had
not been disclosed and the first respondent did not disclose his
interest
in Dainfern Ltd or his control of this foreign banking
account to the Exchange Control Department.
[63]
For purposes of this appeal however,
this foreign loan transaction was not relied upon in taking the
forfeiture decision taken by
Mminele as recommended to him on 4
February 2008.
[64]
For completeness sake, Mminele approved
the recommendation laid before him by Delport, Ellis and/or other
appropriate functionaries
on 4 February 2008 and then took the
decision that the money standing to the credit of the first
respondent’s Money Market
account at First National Bank be
forfeited to the State. The notice and order of forfeiture was
subsequently published in the
Government Gazette of 6 February 2008
and was sent by post and by facsimile to the first respondent.
[65]
It is also so that the money was
forfeited to the Revenue Fund under the auspices or control of the
Minister of Finance, and not
forfeited to the appellant.
ISSUE
OF DISPUTE OF FACTS
[66]
The parties herein are agreed that
several disputes of fact arose as this matter was set out in the
affidavits in the court a quo.
However, they differ on which approach
to follow in dealing with the disputes of fact.
[67]
The appellant is of the view that in
line with Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634, the disputes should be dealt with by this
Court applying the facts as stated by the respondent together with
those
facts in the appellant’s affidavits which were not
admitted or not denied.
See
also:
TamariHo (Pty) Ltd v B N Aitken
(Pty) Ltd
1982 (1) SA 398
(A) at
430-431.
[68]
It is the appellant’s case that
the court a quo failed to properly apply the above established
principle in certain material
respects and chose rather to rely upon
the first respondent’s (applicants in the court a quo)
allegations and submissions
made on behalf of his behalf rather than
upon allegations made under oath on behalf of the appellants (first
respondent in the
court a quo).
OVERVIEW
OF GROUNDS OF REVIEW
[69]
In Union Finance Holdings Ltd v I S Mirk
Office Machines (Pty) Ltd and Another
2001 (4) SA 842
(W) the court
emphasised the principle laid down or reiterated in numerous other
earlier decisions, that an applicant must set
out its cause of action
as well as evidence upon which it relies upon in its founding
affidavit.
[70]
The grounds of review raised in the
first respondent’s founding affidavit and the supplementary
founding affidavit, excluding
the constitutional grounds in the court
a quo which have been abandoned, were the following:
“
20.2.1
... the forfeiture decision faffs to be reviewed and set aside in
terms of sec. 6(2)(d) alternativefy s. 6(2)(e)(iii), afternativefy
s.
6(2)(f), alternatively s. 6(2)(h) of the Promotion of Administrative
Justice Act 3 of 2000 (‘PAJA’) because in taking
the
forfeiture decision
,
ostensibly
to punish me inter alia
for
alleged contraventions of the Regulations in respect of a transaction
involving Ms De Flamingh
,
the
first respondent failed to have regard to the fact that it had
granted me amnesty ... in respect of that transaction before
it
unlawfully purported to reverse the decision.
20.2.2
The
failure took place more than 36 months after the funds were frozen by
the first respondent, purportedly in terms of Regulation
22A.
20.2.3
That
the decision-maker AD Mminele had failed to furnish reasons for his
decision. ''
[71]
In
Trinity
Broadcasting (Ciskey) v ICA of SA
2004
(3) SA 346
(SCA).
Howie
P dealt with the standard of reviewing administrative actions. At
paras
[19],
[20] and [21] thereof he put it as follows:
[19]
Before dealing with the review grounds in issue, it is appropriate to
refer to the standard of review of administrative action
which must
be applied in deciding this appeal. Section 33(1) of the Constitution
(the Constitution of the Republic of South Africa
Act, 108 of 1996)
affords everyone the right to administrative action that is lawful,
reasonable and procedurally fair. Section
33(3) demands the enactment
of national legislation to give effect, inter alia, to that right.
Such legislation exists in the shape
of the
Promotion of
Administrative Justice Act 3 of 2000
.
Section 6(2)
confers the power
to review administrative action judicially if ...
[the
court then sets out the provisions of
sections 6(2)(f)
and (h) ...]
[20]
In
requiring reasonable administrative action, the Constitution does
not. in my view, intend that such action must, in review proceedings,

be tested against the reasonableness of the merits of the action in
the same way as in an appeal. In other words, it is not required
that
the action must be substantively reasonable, in that sense, in order
to withstand review. Apart from that being too high a
threshold, it
would mean that all administrative action would be liable to
correction on review if objectively assessed as substantively

unreasonable: cf Bel Porto School Governing Body and Others v
Premier. Western Cape, and Another
[2002] ZACC 2
;
2002 (3) SA 265
(CC) at para
[46]
.
As made clear in Bel Porto at para [89], the review threshold is
rationality. Again, the test is an objective one, it being immaterial

if the functionary acted in the belief, in good faith, that the
action
was
rational. Rationality is. as has been shown above, one of the
criteria now laid down in
s 6(2)(f)(ii)
of the
Promotion of
Administrative Justice Act. Reasonableness
can. of course, be a
relevant factor, but only where the question is whether the action is
so unreasonable that no reasonable person
would have resorted to it.
[21]
...”
[72]
The rationality test is set out in
section 6(2)(f)(ii)
of PAJA, as follows:
"6(2)
A court or tribunal has the power to judicially review an
administrative action if
-
(f)
the action itself-
(it)
is not rationally connected to -
(aa)
the purpose for which it
was
taken;
(bb)
the purpose of the empowering provision;
(cc)
the information before the administrator; or
(dd)
the reasons given for it by the administrator'
,
[73]
It is this rationality test with which
we are concerned in our present case. In the application of that
test, the reviewing court
will ask : Is there a rational objective
basis justifying the connection made by the administrative
decision-maker between the
material made available and the conclusion
arrived at?
ALLEGED
FAILURE TO TAKE RELEVANT FACTS INTO ACCOUNT
[74]
After correctly stating the principle
that a decision-taker must be fully apprised of the relevant facts
and the possible alternative
decisions that can be made at the moment
of decision, the court a quo went on to find that the relevant facts
relating to several
of the transactions germane to the decision he
was to take leading to and including the forfeiture decision, were
not placed before
the decision-maker, in this case, Mr A D Mminele
(“Mminele").
[75]
In the appellant's answering affidavit
deposed to by Delport, the relevant facts relating to the
transactions entered into by the
first respondent and which amounted,
according to him, to contraventions of the Exchange Control
Regulations, were set out in detail
in paragraphs 27 to 30. Each of
these four paragraphs commences with the following words:
“
The
following facts appeared from the documents available to the Exchange
Control Department, and which are included in the Record,
and were
taken into account in preparing the memorandum as appears from pages
260 to 265 of the Record the memorandum', and by
Mr AD Mminele in
taking the decision on 4 February 2008 to declare the money forfeit
to the State."
[76]
My understanding of the above scenario
is that Delport clearly alleged in the answering affidavit deposed on
behalf of the appellant
herein, that Mminele had taken the facts set
out in those paragraphs into account when taking his forfeiture
decision on 4 February
2008. Mminele deposed to a confirmatory
affidavit in which he confirmed that he had read the affidavit
deposed to by Delport and
confirmed the allegations and facts made
therein insofar as Delport referred to him.
[77]
The first respondent did not. in his
replying affidavit, deny that the facts as set out in paragraphs 27
to 30 of the answering
affidavit had been taken into account by
Mminele.
[78]
The court a quo found in paragraph 7.3.7
of its judgment that there is a contradiction between the allegations
made by Delport and
Mminele. To arrive at this decision the court a
quo selectively quoted from and relied upon only a part of paragraph
2.2 of Mminele’s
affidavit. It is my considered view and
finding that the court a quo ought to have had regard to the entirety
of paragraphs 27.1.
28.1, 29.1 and 30.1 of the answering affidavit,
as confirmed by Mminele in paragraph 2.2 of his confirmatory
affidavit. It is my
further view and finding that the court a quo
erred in concluding that the only facts which were disclosed to and
known to Mminele
and taken into account by him were those set out in
the summary prepared by Delport and Ellis and the annexures thereto.
[79]
Accordingly, it is my finding that the
court a quo erred in its finding made in paragraph 8.3 of the
judgment that Mminele in his
confirmatory affidavit was only prepared
to state that he considered the memorandum and the annexures thereto
and only confirmed
the denials made by Delport. thereby failing to
have regard to the allegations made by Delport in paragraphs 27.1,
28.1 29.1 and
30.1 of the answering affidavit, which in my considered
view, were expressly and unequivocally confirmed by Mminele in
paragraph
2.1 of his affidavit.
[80]
It is my further finding that the court
a quo erred in its finding in paragraph 7.3.2 of the judgment that
the facts relating to
the Samowitz translation were not brought to
Mminele’s attention, thereby not having been taken into account
by him when
took his decision to declare the money forfeit to the
State. It is my finding that the facts in this case point to
uncontested
allegations existing in paragraph 27.1 of the answering
affidavit, as confirmed by paragraph 2.1 of Mminele's affidavit, that
Mminele
did take into account all the allegations about this account
as set out in paragraphs 27 to 30 of the answering affidavit as also

reiterated in the memorandum. On the Samowitz account alone.
Mminele's forfeiture decision would have been justified.
[81]
For the sake of completeness and
clarity, Mminele's confirmatory affidavit reads as follows,
especially paragraphs 2 and 3 thereof-
“
2
.1
I have read the applicant's founding and supplementary affidavits and
the first respondent’s answering affidavit deposed
to by Petrus
Jacobus Delport. I confirm the allegations made by Delport insofar as
he has referred to me and to this affidavit
and confirm the
correctness of the denials made by him on behalf of the first
respondent.
2.3
I specifically confirm that when I took the decision on 4 February
2008 as is reflected in the Notice published in the Government
Gazette
and
annexed as annexure
F
to
the application. I had regard to and considered the content of the
memorandum and annexures thereto as appears from page 260
of the
record.
3.
I
deny that any valid grounds exist for reviewing and setting aside my
decision that the amount of R194 113-66 standing to the credit
of the
applicant in Money Market account number 62035316084 be forfeited to
the State. I accordingly request that the application
for the relief
relating to that decision be dismissed with costs ”
[82]
In paragraph 7.3.4 of the judgment the
court a quo found that Mminele took into account and relied upon an
Exchange Control Ruling
in relation to the foreign loan the first
respondent had obtained from his brother Wynand Gert Heystek. From
what I have already
stated above and what is contained in paragraphs
27 to 30 of the answering affidavit the court a quo ought to have
found that this
(foreign loan transaction between brother and
brother) was not taken into account against the first respondent when
the forfeiture
decision was arrived at and taken.
[83]
In paragraph 7.3.7 of the judgment the
court a quo held that Delport had put up an untruth or a fact
unbeknown to the first respondent
before the decision-maker in regard
to the application for amnesty which had been made by the first
respondent. The facts in this
matter are that Delport had been
informed that the first respondent’s application for amnesty
had been refused. It is apparent
that the appellant was not aware of
the content of the letter from the Amnesty Unit dated 30 March 2006
before he could see it
attached to t his application as an annexure.
[84]
The abovementioned regardless, Delport
had informed the first respondent at a meeting on 6 January 2005, in
response to a contention
by the first respondent that he had received
amnesty, that the Amnesty Unit was precluded by section 10 of the
amnesty law from
granting amnesty in this instance because he (first
respondent) was already under investigation by the Exchange Control
Department
at the time.
[85]
It is so that the first respondent had
received the letter from the Amnesty Unit during 2006. However, in
his representations made
on 3 December 2007 did not refer to this
document but merely stated that it was in respect of the De Flamingh
transaction -
“
...
in
respect of which
[he]
applied
for amnesty which
was
granted,
but
then
withdrawn for reasons which are as yet not clear."
[86]
The inescapable conclusion that can and
should be reached is that if the grant of amnesty was subsequently
withdrawn, then the logical
conclusion is that that amnesty had in
the end result been refused. Furthermore, amnesty in these
circumstances would have been
in respect of criminal prosecution.
[87]
It is the first respondent’s case
that he, in his capacity as facilitator in respect of a transaction
involving De Flamingh,
applied for amnesty, that this application for
amnesty was approved in October 2004, but was subsequently withdrawn
in March 2006.
The first respondent further contended that the
Amnesty Unit, after having granted amnesty to him, was functus
officio and could
not validly reverse its previous decision. By this
he submitted and contended that the amnesty granted to him in respect
of the
De Flamingh transaction was valid and effective unless and
until reviewed and set aside, and further that the appellant was not

entitled to take into account the De Flamingh transaction in deciding
upon the forfeiture of the funds in the blocked account.
[88]
Ostensibly or apparently, the motivation
for the above view by the first respondent was his contention that
the Amnesty Unit which
granted him amnesty and later withdrew it, was
a unit of the appellant.
See:
Para 9 of first respondent's supplementary affidavit at page 153 of
the record.
[89]
The correct facts is that the Amnesty
Unit is an independent body established in terms of section 22(1) of
the Exchange Control
Amnesty and Amendment of Taxation Laws, 2003
(Act 12 of 2003) as amended (“Amnesty Act’). As an
autonomous body, the
Amnesty Unit would have had a direct and
substantial interest in the question whether the amnesty purportedly
granted to the first
respondent in October 2004 was valid and
effective. This shines the spotlight on the question whether or not
the court a quo was
entitled to adjudicate that issue in the absence
of the Amnesty Unit as a party to the proceedings. This makes me
arrive at a conclusion
that the application in the court a quo should
have been adjudicated on the basis that no valid amnesty existed.
That is also so
stricti iuris. As held in Jacquesson t/ Minister of
Finance
2006 (3) SA 334
(SCA) Exchange Control Regulations do not
contemplate a criminal conviction or criminal prosecution as a
pre-requisite to precede
forfeiture. Amnesty is aimed at
indemnification from criminal prosecution only.
[90]
The Exchange Control Amnesty and
Amendment of Taxation Laws 12 of 2003 {“the Amnesty Acf)
provides in section 8 thereof that
a facilitator who applies for
amnesty must apply jointly with the instance or person he is
facilitating for - in this case, De
Flamingh - on a prescribed form
submitted by that facilitator. In the De Flamingh case the first
respondent (Heystek) applied for
the amnesty as a facilitator on
behalf of De Flamingh but did not do so jointly with De Flamingh.
Worse still, this was not done
on the prescribed form submitted by or
on behalf of De Flamingh.
[91]
Section 9(4) of the Amnesty Act empowers
the Amnesty Unit to grant approval in respect of a facilitator -
.
to
the extent that a facilitator ... complies with section 8
.”
[92]
The first respondent did not comply with
section 8 of the Amnesty Act. Consequently the appellant’s
contention and submission
that the Amnesty Unit therefore
correspondingly lacked the power or jurisdiction to deal with and/or
approve the amnesty application
cannot and was not gainsaid.
[93]
The statutory prescripts herein are
peremptory. Section 10 of the Amnesty Act deals with certain
specified circumstances where an
Amnesty Unit may not grant approval.
Specifically, section 10(3) thereof stipulates that the Amnesty Unit
shall grant approval
in terms of section 9 in respect of a
facilitator -
only
where that facilitator submits the application jointly with the
amnesty seeker as contemplated in section 8(a)."
[94]
It is one of the reasons why I find that
the Amnesty Unit was precluded as a matter of law or stricti iuris,
and also lacked the
authority, to approve the first respondent's
application for amnesty, albeit in that representative capacity.
[95]
The first respondent had placed reliance
on the decision in Oudekraal Estates (Pty) Ltd v City of Cape Town
and Others
2004 (6) SA 222
(SCA) where in paragraph [31] the court
qualified the general statement made in paragraph [26]. Paragraph
[26] is one of those
the first respondent is relying on. The court
found as follows -
“
Thus
the proper enquiry in each case
-
at
least at first - is not whether the initial act was valid but rather
whether its substantive validity
was
a
necessary precondition for the validity of the consequent acts. If
the validity of the consequent acts is dependent on no more
than the
factual existence of the initial act then the consequent act will
have legal effect for so long as the initial act is
not set aside by
a competent court."
“
But
just as some consequences might be dependent for validity upon the
mere factual existence of the contested administrative act
so there
might be consequences that will depend for their legal force upon the
substantial validity of the act in question."
[96]
At paragraphs [36] and [38] the court
went further and held as follows -
“
[36]
It is important to bear in mind (and in this regard we respectfully
differ from the court a quo) that in those cases in which
the
validity of an administrative act may be challenged collaterally
a court
has no discretion to allow or disallow the raising of that defence :
the right to challenge the validity of an administrative
act
collaterally arises because of the validity of the administrative act
constitutes the essential prerequisite for the legal
force of the
action that follows and ex hypothesis the subject may not then be
precluded from challenging its validity."
“
[38]
It will be apparent from that analysis that the substantive validity
or invalidity of an administrative act will seldom have
relevance in
isolation of the consequences that it is said to have produced
-
the
validity of the administrative act might be relevant in relation to
some consequences, or even in relation to some persons
.
and
not in relation to others - and for that reason it will generally be
inappropriate for a court to pronounce by way of declaration
upon the
validity or invalidity of such an act in isolation of particular
consequences that are said to have been produced.''
[97]
It is true no proceedings have been
brought to review and set aside either the grant of the amnesty or
the subsequent declaration
by the Amnesty Unit that the purported
grant of amnesty was unlawful. Nevertheless, it is my considered view
and finding that the
appellant herein was entitled to rely upon the
substantive invalidity of the grant of amnesty to the first
respondent. More-so.
as held in Jacquesson v Minister of Finance
2006
(3) SA 334
(SCA) the grant of amnesty is wholly irrelevant to moneys
that were attached (account blocked) and forfeited to the State.
While
it might be desirable for a criminal conviction to precede a
forfeiture, a valid forfeiture is not dependent upon a criminal
conviction.
[98]
There are pre-set procedures in the
Amnesty Act on how a declined application may be dealt with.
Furthermore, it cannot be disputed
that proceedings before the
Amnesty Unit established in terms of the Amnesty Act are
quasi-judicial in nature. Section 21 of the
Amnesty Act provides that
a person aggrieved by a decision of an Amnesty Unit may lodge an
objection, whereupon and/or whereafter
the matter must then be
referred to a panel for
purposes
of reconsidering the application. Anybody still dissatisfied with the
decision of the panel may the appeal against it to
the Income Tax
Appeal Court.
[99]
It is a well-established principle that
want of jurisdiction in judicial or quasi judicial proceedings has
the effect of nullity
without the necessity of a formal order setting
the proceedings aside.
See:
Vidavsky v Body Corporate of Sunhill
Villas
2005 (5) SA 200
(SCA) at [13] and
[14],
[100]
My assessment of the amnesty issue in
the light of the above authority and the circumstances prevailing in
this matter is that the
Amnesty Unit did not. in March 2006, withdraw
the amnesty it previously purportedly granted to the first
respondent, but had upon
reflection come to realise that the amnesty
purportedly granted to the first respondent was invalid ipso iure and
ab initio, consequently
having been of no force or effect. It is my
further view that the Amnesty Unit may not have found or deemed it
necessary to apply
to a court of law to review and set aside its own
invalid and ineffective or unenforceable grant of approval in respect
of the
first respondent’s amnesty application.
[101]
The Amnesty Unit did advise the first
respondent of his right to object to its declaration that no valid
amnesty had been granted
to him. He did not lodge any objection,
neither did he appeal to the Income Tax Appeal Court.
[102]
The first respondent has also annexed
the letter relating to the amnesty issue to his founding affidavit.
The same letter was one
of the annexures to the memorandum presented
to Mminele to take into account or consideration when he made his
decision whether
to declare the moneys forfeit. Mminele was thus
accordingly aware of the first respondent’s version that his
amnesty was
granted and then withdrawn. Therefore, at the time
Mminele took the decision to declare the amounts in the first
respondent’s
Money Market account, the attitude of the Amnesty
Unit was in front of him - that there was no valid amnesty in place.
[103]
Even if it were to be said that the
proceedings before the Amnesty Unit were not qt/as/'-judicial but
merely administrative, on
the principles laid down in the Oudekraal
Estate's matter above, the decision to approve the first respondent's
application for
amnesty taken in October 2004 would not have had to
depend for its validity merely upon the factual existence of an
application
for amnesty by the first respondent, but upon the
substantive validity of that that application. As stated above in the
Oudekraal
Estate case, since the valid approval of the amnesty
application was dependent for its validity upon the substantive
validity of
the application and not merely upon the factual existence
of the application, the consequential act (i.e. the approval of the
application)
was similarly invalid and did not give rise to any
enforceable legal consequence.
AUDI
ALTERAM PARTEM
PRINCIPLE
[104]
When arguing its case in the court a quo
the first respondent contended that there was no proper observance of
the audi alteram
partem principle or rule in that, although he was
given an opportunity to make representations to Delport. he was not
given that
opportunity to make representations to Mminele, the
ultimate decision-maker.
[105]
In President of the RSA v South African
Rugby Football Union (SARFU)
2000 (1) SA 1
(CC), the court had to do
with a decision by the President of the Republic of South Africa to
appoint a commission of enquiry in
terms of the Commissions Act 1947
(Act 8 of 1947) as amended. At [38] to [41] the court held that:
"[38]
It is clear that under our new constitutional order the exercise of
all public power including the exercise of the President's
powers
under s 84(2). is subject to the provisions of the Constitution,
which is the supreme law. If this is not done
,
the
exercise of the power can be reviewed and set aside by the Court. ...
[39]
The
Judge relied on the discussion of 'unlawful abdication of power' in
Baxter's Administrative Law. Baxter identifies the following
three
ways
[through]
which power can unlawfully be abdicated: when an office-bearer
unlawfully delegates a power conferred upon him or her:
when an
office-bearer acts under dictation: and when an office­bearer
'passes the buck'.
[40]
The
third category, 'passing the buck', contemplates a situation in which
the functionary may refer the decision to someone else.
However, as
Baxter points out. if the final decision is taken by the properly
empowered authority, there is no objection to taking
the advice of
other officials.
[41]
When
contemplating the exercise of presidential powers, there can be no
doubt that it is appropriate and desirable for the President
to
consult with and take the advice of Ministers and advisers. ...
Similarly.
where
the President acts as head of State, it is not inappropriate for him
or her to act upon the advice of the Cabinet and advisers.
What is
important is that the President should take the final decision. '
[106]
It is not a legal requirement for the
proper application of the audi alteram partem principle that the
affected person should be
afforded the opportunity to make
representations directly to the decision-maker. All that is required
is that he be afforded an
opportunity to make representations
directly to the decision-maker should he so wish and the
decision-maker would under those circumstances
be obliged to take his
representations into account. It is my considered view and finding
that the first respondent has indeed
been afforded opportunities to
make representations. The bulgy correspondence as well as the other
face-to-face meetings with the
decision-maker’s lieutenants in
my view adequately bears this out.
See
also:
Radio
Pretoria v Chairman. ICASA and Another
2003
(5) SA 451
(T) at 464-465.
[107]
In Hofmeyr v Minister of Justice and
Another
1992 (3) SA 108
(C) the court formulated the rule regarding
the above as follows at 117F-G:
71
is
well established that a discretionary power vested in one official
must be exercised by that official (or his lawful delegate)
and that,
although where appropriate he may consult others and obtain their
advice, he must exercise it in favour of someone else;
he must not,
in the words of Baxter Administrative Law (at 443), pass the buck' or
act under the dictation of another and, if he
does, the decision
which flows therefrom is unlawful and a nullity."
[108]
The above formulation was confirmed
recently in Minister of Environmental Affairs and Tourism v
Scenematic Fourteen
[2005] ZASCA 11
;
2005 (6) SA 182
(SCA) at paragraph
[20]
.
[109]
Our higher courts have also consistently
ruled that if the functionary relies on the advice of another he must
at least be aware
of the grounds upon which the advice was given. It
does not necessarily mean that the functionary would be expected to
read every
word or every application. He may also not have to rely on
the assistance of others. Merely because he was not acquainted with
every fact on which the advice was based would not mean that he would
have failed properly to exercise his discretion.
[110]
Accordingly, it is my finding that the
forfeiture decision taken by Mminele was justified on the facts known
to Mminele as placed
before him by Delport and others, and taken into
account by him. The court a quos decision to review and set aside the
forfeiture
decision on this ground (i.e. failure to take relevant
facts into account) sound and is not the appropriate one.
ALLEGED
FAILURE TO FURNISH REASONS FOR THE DECISION
[111]
Section 5(1) of the Promotion of
Administrative Justice Act 3 of 2000 (“PAJA") provides
that any person whose rights
have been materially and adversely
affected by an (administrative) action and who has not been given
reasons for the action may,
within 90 days after the date on which
that person became aware of the action, request that the
administrator concerned furnish
written reasons for the action.
Correspondingly, section 5(2) provides that the administrator to whom
the request is made must
within 90 days after receiving the request
give that person adequate reasons in writing. Section 5(3) provides
that if an administrator
fails to furnish adequate reasons for an
administrative action it must, subject to subsection (4) and in the
absence of proof to
the contrary, be presumed in any proceedings for
judicial review that the administrative action was taken without good
reason.
[112]
On 25 February 2008 the first
respondent’s attorney addressed a letter to the Manager of the
Exchange Control Department in
which he advised that the first
respondent reserves the right to take the matter on review. The
letter further stated that -
"We
will shortly be consulting with our client.
In
the interim we would be grateful to receive reasons for rejecting our
client’s submissions and representations”
[113]
The Exchange Control Department
responded by letter dated 5 March 2008 stating that they would revert
once they had had the opportunity
to discuss the contents of the
first respondent’s attorney’s letter with the Executive
General Manager responsible
for the decision, i.e. Mminele.
[114]
it is not clear from the papers when the
Exchange Control Department received the first respondent’s
attorney’s letter
dated 25 February 2008. However, if it is
assumed for purposes of argument that the letter was received on the
same date, i.e.
25 February 2008, then the 90 day period within which
those reasons should have been furnished would have expired on or
about 27
May 2008.
[115]
However, the first respondent launched
the review application on 7 May 2008. well before the 90 days had
elapsed or expired. To
be precise, 21 days before the expiry date of
27 May 2008.
[116]
From the
first respondent’s letter dated 25 February 2008, which is
attached to his founding affidavit as Annexure “H”,
at
page 96 of the papers herein it is clear that the first respondent
was aware that the decision of forfeiture was taken by the
Executive
General Manager of the Exchange Control Department of the appellant.
[117]
The abovementioned fact makes it
difficult for one to understand why in the notice of motion in
respect of the review proceedings
the appellant, and not the specific
administrator who took the decision, was called upon to dispatch such
full reasons as he can
give for making the above decisions. Rule 53(1
)(b) of the Uniform Rules of Court stipulates that the notice of
motion must call
upon the functionary to dispatch the record of the
proceedings sought to be corrected or set aside -
“
...
together
with such reasons as he is by iaw required or desires to give or make
..."
In
this instance, the first respondent chose to call upon the appellant,
which did not take the decision, to furnish only such reasons
as he
can give (my underlining).
[118]
The appellant contends that it furnished
full and comprehensive reasons in its answering affidavit.
[119]
I have initially perused all the papers
filed of record herein, including the answering affidavit and the
confirmatory affidavits
of the various divisions or departments
involved in this matter, which includes that of Mminele. I am
satisfied that the reasons
for the decision taken by Mminele to
declare forfeit the moneys standing to the credit of the first
respondent in the Money Market
account were fully and adequately set
out in the appellant’s answering affidavit and other annexures
annexed thereto.
[120]
In Commissioner, South African Police
Service v Maimela
2003 (5) SA 480
(T) the court on appeal dealt with
a decision given before PAJA came into operation, as well as with the
provisions of the Constitution,
that every person has a right to be
furnished with reasons in writing for an administrative action. The
court specifically held
that the reasons for the various decisions in
that specific case were set out in the answering affidavit in a
clear, intelligible
and informative manner, that what the appellants
stated in the answering affidavit constituted their reasons for the
decisions,
and that the appellants were bound by the reasons given in
the answering affidavit.
[121]
At page 485J to 486 the court put it as
follows -
“
The
adequacy of reasons will depend on a variety of factors, such as the
factual context of the administrative action, the nature
and
complexity of the action, the nature of the proceedings leading up to
the action and the nature of the functionary taking the
action.
Depending on the circumstances, reasons need not always be full
written
reasons; the briefest pro forma reasons
may
suffice.
Whether
brief or lengthy, reasons must, if they are read in their factual
context, be intelligible, and informative. They must be
informative
in the sense that they convey why the decision-taker thinks (or
collectively think) that the administrative action
is justified.”
[122]
At page 487G and further the court
continued as follows -
“
Section
33 of the Constitution (as it read until 30 November 2000)
was
not
explicit as to whether an administrative decision-maker was obliged
to furnish reasons in the absence of
a
request
(see s 5 of PAJA however). When interpreting s 33(c), it must be
borne in mind that the right to be furnished with reasons
is very
wide: it applies to every person whose rights or interests are
affected by any administrative action. In many instances
the persons
affected may not be interested in the reasons. The practical
interpretation of s 33(c) is that reasons must be furnished
to
affected persons who assert the right to be furnished with reasons.
The purpose of s 33(c) is not to oblige administrative
decision-makers to furnish, without a request, reasons for every
single administrative action taken in this country ...
A
person entitled to reasons can, as the respondents did in this case,
request reasons by means of serving a Court application on
the
relevant decision-maker. Such a procedure carries the risk of an
adverse costs order if the reasons are furnished within a
reasonable
time after service of the application. What a reasonable time is will
depend on the facts of each case. It was not argued
for the
respondents that the reasons furnished in the answering affidavits
were not furnished within a reasonable time. There is
no basis for
holding that the reasons in this case were not furnished within a
reasonable time.”
[123]
Similarly, as in the above case, in our
present case, time of furnishing of reasons never arose as an issue.
The appellants also
did not make a serious issue of the fact that the
review proceedings were launched with 21 days still to run before the
period
allowed for them to furnish reasons for Mminele’s
decision could expire.
WHETHER
DECISION REVIEWABLE IF DECISION-MAKER ERRED IN ANY RESPECT IN FACT OR
IN LAW
[124]
It is the appellant’s contention
that the first respondent’s argument in the court a quo, that
if the first respondent
is able to demonstrate that Mminele erred in
any respect whatsoever in fact or in law in the taking of the
decision, then the decision
falls to be reviewed and set aside as a
matter of course, is untenable. The first respondent’s
counsel’s heads of argument
records this aspect as follows at
paragraphs 2.6 and 2.7 of their Practice Notice -
“
2.6
The
appellant has to overcome each ground of review to succeed.
2.7
If any one ground of review is upheld on appeal then the appellant
does not succeed."
[125]
It is my considered view and finding
that the first respondent have set the bar too high. The correct
approach in my view is that
this Court should consider all the
relevant facts which were placed before Mminele and those facts which
he took into account in
reaching his decision, which set out in the
answering affidavit and the confirmatory affidavits, and then
consider, having regard
to any errors or omissions he may have made,
whether the first respondent has succeeded in establishing that he
was not justified
in coming to the decision he did.
[126]
In Minister of Law and Order v Dempsey
1988 (3) SA 19
(AD), the learned judge held as follows at 35C-F -
“
There
is one observation which I wish to make arising from the description
of the grounds for review in the Northwest Township case.
It relates
to what Colman J referred to as 'a failure to direct his thoughts to
the relevant data', and it is this: unless a functionary
is enjoined
by the relevant statute itself to take certain matters into account,
or to exclude them from consideration, it is primarily
his task to
decide what is relevant and what is not, and, also, to determine the
weight to be attached to each relevant factor.
(Johannesburg City
Council v The Administrator, Transvaal
,
and
Mayofis
1971 (1) SA 87
(A) at 99A.) in order not to substitute its
own view for that of the functionary, a Court is, accordingly
,
not
entitled to interfere with the latter's decision merely because a
factor which the Court considers relevant was not taken into
account,
or because insufficient or undue weight was, according to the Court's
objective assessment, accorded to a relevant factor.
A functionary's
decision cannot be impeached on such a ground unless the Court is
satisfied, in all the circumstances of the case,
that he did not
properly apply his mind to the matter."
[127]
The gist of the above quotation is in my
view, of equal application to our present appeal.
[128]
In assessing the merits of the first
respondent’s review of the decision, the first respondent
relied upon as grounds those
that are set out in paragraph 44 of the
founding affidavit and in the supplementary founding affidavit at
paragraphs 6 to 9. It
is in their context that the reasons furnished
by Mminele should be considered. The question of the proportionality
of the amount
forfeited in relation to the amounts involved in the
contraventions is adequately addressed in the answering affidavit.
[129]
Paragraph 44 of the founding affidavit reads as follows -
“
44.
I
have been advised and respectfully submit the forfeiture decision
falls to be set aside on one or more of the following grounds:
44.1
The
forfeiture decision
was
unlawful because I had not contravened any provisions of the
Regulations. Accordingly, the jurisdictional pre-requisite for
the
exercise of any power of forfeiture under Regulation 22B was absent.
44.2
The
forfeiture decision
was,
in any event, ultra vires
Regulation
22B because
44.2.1
the
fund which I held in the FNB account were wholly unrelated to any of
the alleged Exchange Control Regulation contraventions
of which the
first respondent alleges I am guilty, and
44.2.2
the
forfeiture took place more than 36 months after the funds were frozen
... purportedly in terms of Regulation 22A.
44.3
The
forfeiture decision falls to be reviewed and set aside in terms of s.
6(2)(d) alternatively, s. 6(2)(e)(iii). alternatively,
s 6(2)(f),
alternatively
s.
6(2)(h) of the Promotion of Administrative Justice Act 3 of 2000
(PAJA)
because
in taking the forfeiture decision ostensibly to punish me inter alia
for
alleged contraventions of the Regulations in respect of a transaction
involving Ms M T de Flamingh. the first respondent failed
to have
regard to the fact that it had granted me amnesty in terms of the
Exchange Control Amnesty and Amendment of Taxation Laws
Act 12 of
2003 (Amnesty Act’) in respect of that transaction before it
unlawfully purported to reverse the decision.
44.4
For
reasons which are set out in the constitutional challenge to the
Regulations, the particular regulations relied upon by the
first
respondent as the source of my alleged exchange control
contraventions, namely Regulations 3(1 )(c). 6(2). 7(1) and 10(1)(c):

are unconstitutional and invalid. Accordingly, there was no lawful
basis for an order against me in terms of Regulation 22B and
the
forfeiture decision
w/as
ultra vires.
44.5
For the
reasons which are set out in the constitutional challenge to the
Regulations, Regulation 22B is. itself, unconstitutional
and invalid.
So the forfeiture decision purporting to have been taken in terms of
Regulation 22B was ultra vires.
Alternatively,
if Regulation 228 is not itself unconstitutional and invalid, having
regard to what I have set out above, the forfeiture
decision amounts
to a disproportional and arbitrary deprivation of my property and
was
accordingly
inconsistent with section 25(1) of the Constitution, ultra vires
Regulation
228 and invalid.
In
the course of my personal and business activities. I have occasion to
travel outside the country and would like to be able to
draw on my
funds to do so without unconstitutional control or interference from
the first respondent."
[130]
An allegation was made by the appellant,
which was not gainsaid or contradicted convincingly, that in oral
argument in the court
a quo on behalf of the first respondent,
Mminele and the appellant were criticised for not having dealt with
issues raised in argument
but which were not raised in the founding
affidavit. That, in my view, is odd.
[131]
In Minister of Law and Order v Dempsey
(supra) at 37H-J the court stated the following -
"It
cannot be expected of a respondent to deal effectively in an opposing
affidavit with unsubstantiated averments of mala
fides
and the
like without the I specific facts on which they are based being
stated. So much the more can it not be expected of a respondent
to
deal effectively with a founding affidavit in which no averment is
made, save a general one that a detention is unlawful. And
if
Trengove JA is correct, this is indeed what a respondent will be
obliged to do. Unlike other statutory functionaries, he will
in
effect be obliged to disclose the reasons for his decision and be
compelled to cover the whole field of every conceivable ground
for
review, in the knowledge that, should he fail to do so
:
a finding that the onus
has
not been discharged may ensue. Such a state of affairs is quite
untenable."
[132]
In the peculiar circumstances of this
case, when all is considered, it is my considered view and finding
that the court a quo erred
in finding that Mminele had failed to
furnish reasons for his forfeiture decision. I reiterate that such
reasons are contained
or form part of the answering affidavit. The
appellant cannot be penalised for not issuing or executing a
stand-alone document
purporting to be containing reasons for
Mminele’s decision because the first respondent prevented it
from doing so by launching
the review application 21 days before the
expiry of the allowable 90 day period to do so. Furthermore, the
presumption of having
made or taken a decision without good reason
cannot be invoked among others for the above reasons.
[133]
The court a quo correctly found that the
presumption that no good reason existed could properly be rebutted if
reasons were furnished
in the answering affidavit. Consequently its
conclusion at the end of the day that no reasons were contained in
the answering affidavit
does not rhyme with the facts and reality in
this case. It is my finding, as I have already found elsewhere in
this judgment that
what had been stated by Delport, in the answering
affidavit, especially paragraphs 27 to 30 thereof and which was
confirmed by
Mminele in fact constitute the reasons for the latter's
decision.
[134]
If and when those allegations are taken
into account, the reasons for the forfeiture decision become clear or
obvious. It is my
considered view that the conclusions arrived at by
the court a quo were based on fallacious factual bases, arguments as
well as
misinterpretation of the Exchange Control Regulations. What
the first respondent believed did not amount to contravention of the

regulations were in my view and finding actually proven to be so by
the appellant.
FORFEITURE
DECISION MADE OUT OF TIME
[135]
In paragraph 9.1 of its judgment located
at pages 943 to 944 thereof, the court a quo found as follows -
“
9.1
The applicant also reiied on Section 9(2)(g) of the Act that the
first respondent
was
obliged
to return the relevant amount to the applicant within 36 months
unless the amount was forfeited before that date
(sic).
The
forfeiture took place more than 36 months after the funds were frozen
by the first respondent. The applicant contends that the
attachment
or blocking order
was
made
on or prior to 4 January 2005 and the forfeiture was made on 8
February 2008
...”
[136]
The court a quo misconstrued the
prescripts applicable here. Attachment of goods or moneys are
governed by Regulation 22A of the
Exchange Control Regulations. This
regulation was never applicable to this case. Regulation 22C deals
with the issuing of a blocking
order in respect of an account. On a
proper interpretation of Regulation 22C(3)(b) read with Regulation
22A(3), unless the money
standing to the credit of or in an account
that was blocked is declared forfeit within a period of 36 months
after the issuing
of the blocking order, that blocking order should
be uplifted or cancelled or withdrawn and I believe, can ipso iure be
recorded
as having been uplifted.
[137]
It is clear that the court
a quo
regarded 4 January 2005 as the date of the blocking order on or to
the account in issue here, which is the Money Market account.
From
its reasoning my understanding of the court
a
quo's
judgment on this aspect is that it
concluded that the blocking order issued on 4 January 2005 in respect
of the Magnus Heystek International
Account No. 62109939753, the
Mallfour Property (Pty) Ltd account number 62002673938 and the first
respondent’s personal bank
account number 54860053460 other
than the bank account identified in paragraph 1 of the notice of
motion, namely Money Market account
number 62035316084, was an order
which blocked the money in those accounts, and that the very same
money that was blocked on 4
January 2005 was then transferred to the
Money Market account but remained blocked under the original blocking
order of 4 January
2005 as amended by further blocking order that was
made on 9 February 2005 in respect of the Money Market account.
[138]
By virtue of the principles enunciated
by the "Plascon-Evans rule and on a proper interpretation of the
Regulations as well
as the facts set out in the appellant's answering
affidavit, which the first respondent is bound to accept in
accordance with the
"Plascon-Evans" rule, the blocking
order related to the Money Market account was only made on 9 February
2005. I have
set out the entire chronology of events relating to the
blocking of accounts herein in paragraphs 28 to 41 of this judgment
and
will thus not repeat same. The 36 months period attendant or in
relation to the Money Market account ought to have expired on 9

February 2008. The forfeiture order in respect of this account was
made on 8 February 2008 which is prior to the expiry of the
36 months
as set by the regulations.
[139]
There appears to have been a difference
of opinion or misunderstanding of the terms “blocking”
and “freezing”
of funds or accounts. The first respondent
consistently contended that his bank accounts had been frozen. This
comes out clearly,
as an example, from paragraph 34 of his founding
affidavit which reads as follows:
“
34.
On Monday. 3 January 2005 after returning from holiday I tried to use
my credit cards. They were all declined. I then established
that all
my money accounts in South Africa had been frozen. There were
approximately nine of them. A cheque account, a savings
account, two
credit card accounts and three or four company bank accounts."
[140]
When one looks critically at the
appellant’s answering affidavit as read in conjunction with the
first respondent's replying
affidavit, one cannot help it but have a
feeling that the first respondent did not set out an entirely
truthful and complete version
of events in his founding affidavit.
For example, he did not refer therein to the agreement reached on 7
February 2005 that the
money standing to his credit in his personal
and Mallfour Property (Pty) Ltd accounts, in respect of which a
blocking order had
been issued on 4 January 2005. would be
transferred to the credit of his Money Market account, that an order
would be issued prohibiting
the withdrawal of or blocking the Money
Market account and that the order previously issued in respect of his
[first respondent]
personal account and the Mallfour account would be
uplifted. The blocking order in respect of the Money Market account
was issued
for the first time on 9 February 2005.
[141]
The order which was issued by Delport on
9 February 2005 was not an order attaching or blocking any specific
money but was an order
that the Money Market account be “blocked'
irrespective of the amount thereof or therein that was a credit in
that account.
At the time of the blocking of the Money Market
account, the credit balance therein was R184 822,76. In the notice of
motion the
credit in this account is given as R194 113.66. the
increase being ascribed to interest that was added between the date
of blocking
and the date of forfeiture.
[142]
It is thus clear that there was no
blocking of any specific amount of money. The account(s) was [were]
blocked. The forfeiture order
was made in terms of Regulation 22C and
not 22A as contended by the first respondent. The effect of such an
order was that there
was a prohibition against the withdrawal of any
or all of the money standing to the credit of the account,
irrespective of what
the amount might be.
[143]
In the court a quo the first respondent
played “shifty foot work" when he somersaulted from the
allegations in his founding
affidavit or what could be understood
about what was contained therein, when in the oral arguments it was
submitted on his behalf
that in fact it was money which was blocked
and not the account. I cannot disagree with the appellant’s
submission and contention
that this was an opportunistic submission
that was made in an attempt to weave out of nothing an argument that
the blocking order
in respect of the money was made on 4 January 2005
and thus had to be cancelled on 4 January 2008 if a forfeiture order
had not
been made in between.
[144]
In S J Coetzee Inc and Others v Louw
N.O. and Others
2002 (5) SA 602
(T) at [15] and [16], the court
accepted that the common law position is that when a customer of a
bank deposits money in the bank,
a relationship of debtor and
creditor comes into being between the bank and the account holder.
[145]
In Standard Bank of SA Ltd v Oneanate
Investments (Pty) Ltd
1995 (4) SA 510
(CPD) it was held among others
that the relationship between a banker and a customer is a
contractual one and the reciprocal rights
and duties included in the
contract are to a great extend based upon custom and usage.
[146]
At 531J of this case the court held as
follows:
"In
a current account where the account reflects a credit balance
,
the
customer is the creditor and the bank his debtor. The customer does
not own the cash in the bank. What flows from this is that
whenever
the bank is required by its customer to pay money to that customer
or, on his instruction, to a third party, the bank
pays out with its
own money and not with the money of the customer The bank then
recovers the money paid out by debiting the customer's
account. For
the sake of completeness, it should be noted that, although the money
deposited in the bank ceases to be the customer's
money, he
nevertheless has a 'special property or interest' in the money
reflected in his bank account"
See
also:
Absa Bank Beperk v Jansen van
Rensburg
2002 (3) SA 701
(HHA) at
709A-B.
S
i/
Graham
1975 (3) SA 569
(AD) at 577C-F.
[147]
That is the reason why in the S J
Coetzee Inc v Louw N O. case {supra) it was said that in other words
the bank simply borrows the
money so deposited and becomes the owner
thereof.
[148]
I therefore find that on a proper
interpretation of the Regulations, an order issued in terms of
Regulation 22C(2)(a) is an order
which relates to an account and not
the specific money in that account. This is in contrast with an
attachment order made in terms
of Regulation 22A(1)(a) or 22C(1)
which constitutes an attachment of specific amounts of money.
Regulation 22A(3) which is also
applicable mutatis mutandis to money
attached or a blocking order made in terms of Regulation 22C provides
separately for the return
of money attached and the cancellation of a
blocking order relating to an account. The issue of the validity of
Regulation 22C(1)
as read with
section 9(2)(g)
of the
Currency and
Exchanges Act 9 of 1933
also came up for decision in South African
Reserve Bank v Khumato
2010 (5) SA 449
(SCA). The court a quo therein
ruled them invalid because they failed to incorporate specific time
limits on the duration of attachment
as set out in the Act. On
appeal, the SCA held that had it been the legislature’s
intention to have spelled out in the regulations
what was a
relatively complicated formulation of the different time periods that
pertain to the duration of attachments in s. 9(2)(g)
of the Act, it
would have done so. It further held that it appeared that the
legislature had intended only to prescribe a limit
to the duration of
an attachment and not also the content of the regulations. Regulation
22C(1) had to be read in the light of
the purpose of section 9(2) of
the Act, including the limit to the duration of attachment of goods
and money. The court ruled that
the court a quo had erred in finding
that Regulation 22C(1) was invalid.
[149]
In the light of the above it is my considered view and finding that
the issue of the forfeiture order issued by Mminele on
8 February was
not ultra vires and/or invalid. It is my further finding that this
forfeiture was not made out of time in relation
to the 36 month
period set out in the prescripts.
[150]
The appellant contends that the court a
quo granted an order that was not sought in the notice of motion
without any amendment of
the latter having been sought and granted.
The first respondent on the other hand contends that the
decision-maker, Mminele. was
an employee and official of the South
African Reserve Bank {the appellant) and made the decision in issue
herein in his capacity
as such, albeit under delegated authority. The
first respondent however concedes that -
"...
15.3
While it may perhaps have been more correct to have referred to 'the
decision of Mr Mminele. the Executive General Manager
responsible for
the Exchange Control Department of the first respondent, acting as a
designated functionary of the second respondent
",
he
still contends that the description used by the court
a
quo
is clear and innocuous enough.
[151]
The review and setting aside order
sought in paragraph 1 of the notice of motion was directed at a
decision allegedly or purportedly
made by the appellant.
[152]
After the appellant had delivered the
record as well as its answering affidavit, it ought to have been
clear or rather was clear
to the first respondent that the forfeiture
decision which was being assailed was a decision taken by Mminele.
not by the appellant,
and that in taking that decision, Mminele had
acted, not as a representative of the appellant, but as a designated
and authorised
functionary of the Minister of Finance. The proper
approach in such circumstances in my view should have been to amend
the prayers
in the notice of motion so that they reflect the correct
position.
[153]
Furthermore, from the record and the
answering affidavit it was clear that the money forfeited was not
going to the appellant, but
to the National or Consolidated Revenue
Fund which is under the control or auspices of the Minister of
Finance.
[154]
The order granted by the court a quo was
for an order reviewing and setting aside the decision of Mr Mminele
representing the first
respondent.
[155]
It is common cause that Mminele never
took the decision as a representative of the appellant (first
respondent in the court a quo).
The relief claimed should have been
against Mminele. The problem is he was not cited as a party in this
application. Although the
Minister of Finance was cited as a party
herein, i.e. as the second respondent, no specific relief was sought
from it. As correctly
conceded by the first respondent, the papers
would have been in order if Mminele was cited in his capacity as a
designated and
authorised functionary of the Minister of Finance
under whom the Treasury resorts.
[156]
It is my considered view and finding
that the court a quo erred in granting this order under these
circumstances where it is common
cause that the appellant was not at
the time and had never been in possession of the amount declared
forfeit, and where it was
common cause that the amount
after
the publication of the forfeiture notice was or was to be disposed of
by being deposited to or in the National or Consolidated
Revenue Fund
which is within the Treasury, which in turn is under the control of
the Minister of Finance.
[157]
Correspondingly, the order by the court
a quo's order that the appellant pay back to the first respondent the
amount forfeited in
the sum of R194 113.66 with interest thereon at
the rate of 15,5% from the date of forfeiture, i.e. 8 February 2008
is also invalid.
As decided among others in the Oudekraal Estates
(Pty) Ltd v City of Cape Town and Others case (supra), a forfeiture
decision,
until set aside, remains valid. Furthermore, as a matter of
law. mora interest can only be claimed from the date on which the
decision
to forfeit the funds is set aside, which would be the date
of judgment. The setting aside of the forfeiture decision in this
case
was not and could not have been retrospective to 8 February
2008.
COSTS
[158]
The court a quo ordered the appellant to
pay the costs of the application, including the costs of three
counsel. From a perusal
of the affidavits and the annexures thereto,
it is clear that a large portion of the papers in this application
was devoted to
the constitutional challenge which the first
respondent only abandoned at the commencement of the hearing herein
or in any event,
after heads of argument had already been served and
filed.
[159]
The court a quo granted a cost order
against the first respondent in favour of the second respondent
(Minister of Finance) whose
interest only lay in the constitutional
challenge to the Exchange Control Regulation irrespective of the
outcome of the application.
The first respondent is now also
submitting that that court should have ordered the first respondent
to pay the appellant’s
costs thereat relating to the
constitutional issues.
[160]
When one looks at the rationale for the
court a quo's cost order in favour of the second respondent, one
would be hard-pressed to
disagree with the appellant's submission.
[161]
What complicates the issue further is
the fact that, whereas the engagement of three counsel may have been
warranted in relation
to the substantial, complex and far-reaching
constitutional issues raised in the application, one would have
expected that after
the constitutional challenge was abandoned, there
would have been no justification for the employment of three counsel.
[162]
It is so that during argument counsel
for the first respondent intimated that they would not be averse to
the order in the court
a quo granting costs of three counsel in
favour of the first respondent being amended to read including the
costs of two counsel
[163]
It is a fact that as at the time heads
of argument were settled in respect of this matter, three counsel
would still have been justified,
more-so that the appellant submitted
that it had reserved and retained a third and separate counsel to
come and argue the constitutional
challenge. This aspect needs to be
taken into account when a ruling is made at the end.
CONCLUSION
[164]
The court a quo's decision to review,
set aside the decision made or taken by Mminele to declare forfeit to
the fiscus the amount
of R194 113,66 standing to the credit of the
first respondent’s Money Market Bank account number 62035316084
was based on
the trial judge therein having been persuaded that,
among others, -
The
decision-maker, Mminele, was not apprised or sufficiently apprised of
all the relevant facts before he took the decision;
The
decision Mminele took to declare the money forfeit to the State was
taken outside the time parameters of the Exchange Control

Regulations;
When
taking that decision Mminele failed or neglected to furnish reasons -
be they sufficient or acceptable in the circumstances
- for his
decision; and
The
funds declared forfeit were not derived from or during
contravention(s) of the Exchange Control Regulations.
[165]
The other grounds upon which the court a
quo based its decision were that he was first granted amnesty for the
De Flamingh contravention,
which amnesty was later withdrawn for
unacceptable or unlawful reasons or grounds; that should the first
respondent's application
for review not be granted, it would amount
to serious injustice and undue harshness for him. which aspects are
some of the safeguards
embedded in and protectable under our
Constitution, as well as the fact that no nexus existed between the
money forfeited and the
other grounds.
[166]
It is my considered view and finding
that the appellant has adequately and convincingly demonstrate or
proved to this Court of appeal;
that the first respondent did
contravene various Exchange Control Regulations in his dealings with
or in several of his internal
and off-shore bank accounts.
[167]
The appellant has also convinced this
Court that when the decision-maker (Mminele) took the decision he was
fully apprised of the
facts that were germane to the taking of such a
decision; that decision was taken well within the 36-month deadline
within which
it was supposed to be taken, failing which the account
in issue would have had to be unblocked; and that Mminele's reasons
for
taking the decision were adequately set out in the appellant s
answering affidavit as further elucidated in his confirmatory
affidavit.
[168]
The appellant has also in my view and
finding proved that the account in issue in the forfeiture order -
the Money Market account
of the first respondent - was only blocked
in terms of Regulation 22C on 9 February 2005, thereby rendering the
forfeiture order
dated 8 February 2008 well within the 36-month time
limit permitted by the regulations.
[169]
The appellant has also successfully
demonstrated that the forfeiture order in issue here was restricted
to the blocking of the account
itself irrespective of the amounts
that may have been therein as these two aspects are. as shown above,
governed by different provisions
of the regulations.
[170]
The appellant has in my further view,
also proved that the order of the court a quo deviated from what was
sought in the notice
of motion and that that occurred without any
application to amend the prayers sought being made and granted by the
court a quo.
The appellant was also ordered in the court a quo's
judgment to return the forfeited moneys to the first respondent
despite a well
known fact or a fact that ought to have been well
known to the first respondent that the funds were forfeited to and
paid into
the Consolidated or National Revenue Fund which is in the
Treasury under the Minister of Finance, who. although cited by the
first
respondent as the second respondent, was never asked to do
anything.
[171]
In the circumstances, it is my further
considered view and finding that the appellant should succeed with
its appeal against the
whole of the judgment and order granted or
issued by the court a quo in its favour and against the appellant on
12 January 2010.
[172]
Where criminal sanctions are envisaged
for a contravention of the Act or Regulations, mens rea is a
pre-requisite. However ordinary
contravention of the Regulations or
any failure to comply with any provisions of Regulation 22 does not
require mens rea. As held
in Oilwell (Pty) Ltd v Protec International
Ltd and Others
2011 (4) SA 394
(SCA) -
"It
is therefore unlikely that any of the relevant parties had mens rea
and.
consequently, committed any crime, because the criminalisation of
contraventions of. or failures to comply with
,
any
provision of the Regulations in reg 22 requires mens rea, as
was
held
by Rumpff CJ in S v De Blom
1977
(3) SA 513
(A)
...
However this does not mean that a contravention of the Regulations
requires mens rea: it means only that in its absence the
relevant
parties may not be punished 'criminally'."
ORDER
[173]
The following order is made:
173.1
The appeal is upheld;
173.2
The order issued or granted by Potterill
AJ in the court a quo on 12 January 2010 is hereby set aside and
substituted with the following
order -
173.2.1
"The
application is dismissed with costs
,
such
costs to include the costs of three (3) counsel.'
N.
F. KGOMO
JUDGE
OF THE NORTH AND SOUTH GAUTENG HIGH COURT, PRETORIA
I
agree:
G.
WEBSTER
JUDGE
OF THE NORTH AND SOUTH GAUTENG HIGH COURT, PRETORIA
I
agree:
A.
M. PHATUDI
JUDGE
OFYHE-NORTH AND SOUTH GAUTENG HIGH COURT, PRETORIA
COUNSEL
FOR THE APPELLANT:ADV N G D MARITZ SC
ASSISTED
BY: ADV K W LUDERITZ SC
COUNSEL
FOR THE FIRST RESPONDENT: ADV ANDRE GAUTCHI SC
ASSISTED
BY ADV N KONSTANTIN IDES SC
ADV
D LUNDSTROM
DATE
OF ARGUMENT: 13 JUNE 2012
DATE
OF JUDGMENT: July 2012