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[2011] ZAFSHC 17
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Msimango and Others v National Director of Public Prosecutions and Another, Ex parte: In re National Director of Public Prosecutions v Msimango and Others (1880/2008, 1334/2008) [2011] ZAFSHC 17 (3 February 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 1880/2008
In
the matter of:
SIBUSISO
MSIMANGO
….................................................
First
applicant
(In
his personal capacity and as a Trustee of
the Tabana Trust)
ANDREW
SIFELANE MSIMANGO
…..........................
Second
applicant
(In
his personal capacity and as a Trustee of
the Tabana Trust)
McDONALD MSIMANGO
….............................................
Third
applicant
RISE
MSIMANGO
….......................................................
Fourth
applicant
(In
his personal capacity and as a Trustee of
the Tabana Trust
SYLVESTER MAHAMO
….................................................
Fifth
applicant
SICELOSENKOSI
MTHIMKULU
…..................................
Sixth
applicant
MESHACK SITHOLE
…...............................................
Seventh
applicant
MZALA SITHOLE
….......................................................
Eighth
applicant
ADOONS KNIGHT
…........................................................
Ninth
applicant
NDUMISO DUBE
….........................................................
Tenth
applicant
LUCKY SITHOLE
…....................................................
Eleventh
applicant
CHARLES SITHOLE
….................................................
Twelfth
applicant
MOROESI PATIENCE
MSIMANGO
….....................
Thirteenth
applicant
BUYELWA ROSE
SOMHLAHLO
…........................
Fourteenth
applicant
SOLOMON
OSWELL SITHOLE
….............................
Fifteenth
applicant
and
NATIONAL
DIRECTOR OF PUBLIC
….........................
First
respondent
PROSECUTIONS
ADV.
J LUBBE SC NO
…..........................................
Second
respondent
(In his capacity as
curator bonis
)
IN RE:
Case No. : 1334/2008
In the
ex parte
application of:
NATIONAL DIRECTOR
OF PUBLIC
….....................................
Applicant
and
SIBUSISO MSIMANGO
…................................................
First
defendant
(In his personal capacity
and as a Trustee of
the Tabana Trust)
ANDREW SIFELANE
MSIMANGO
….........................
Second
defendant
(In his personal capacity
and as a Trustee of
the Tabana Trust)
McDONALD MSIMANGO
…...........................................
Third
defendant
RISE MSIMANGO
….....................................................
Fourth
defendant
(In his personal capacity
and as a Trustee of
the Tabana Trust)
SYLVESTER MAHAMO
…...............................................
Fifth
defendant
SICELOSENKOSI
MTHIMKULU
….................................
Sixth
defendant
MESHACK SITHOLE
….............................................
Seventh
defendant
MZALA SITHOLE
…......................................................
Eighth
defendant
ADOONS KNIGHT
…......................................................
Ninth
defendant
NDUMISO DUBE
…........................................................
Tenth
defendant
LUCKY SITHOLE
…..................................................
Eleventh
defendant
CHARLES SITHOLE
…................................................
Twelfth
defendant
TABANA TRUST
…........................................................
First
respondent
MOROESI PATIENCE
MSIMANGO
….....................
Second
respondent
BUYELWA ROSE
SOMHLAHLO
….............................
Third
respondent
SOLOMON OSWELL
SITHOLE
….............................
Fourth
respondent
ISRAEL MAIKETSO
MOTLHABANE
…........................
Fifth
respondent
M.D. MOSOKHOTSOANE
…........................................
Sixth
respondent
F.R. NHANTUMBO F.R.
NHANTUMBO
…..............
Seventh
respondent
HEARD ON:
20 MAY 2010
JUDGMENT:
EBRAHIM, J
DELIVERED ON:
3 FEBRUARY 2011
[1] The applicants are to
stand trial in due course on several charges relating to dealing in
unwrought gold, racketeering and money
laundering.
[2] On 20 March 2008, the
respondent launched an application
ex parte
in this Court for
the restraint disclosure and surrender of the applicants’
realizable property as specified in terms of
section 26 of the
Prevention of Organised Crime Act, 21 of 1998 (“POCA”).
In terms of the order sought and granted
the applicants were obliged
to furnish to the curator
bonis
within ten days of the date of
the order, a description as well as the whereabouts of all property
not surrendered as well as of
property belonging to the applicants in
the possession of third parties and particulars of gifts received by
the applicants together
with the names and addresses of the
donor/doneness. This application was referred to by counsel, in
argument, as “the restraint
application”.
[3] At a meeting held
between the legal representatives of the parties to the restraint
application on 16 April 2008 and attended
by the curator
bonus
,
it was agreed that an amount of R160 000,00 would be paid into the
trust account of applicants’ attorney of record so as
to enable
the applicants to obtain legal advice relating to the applicants’
prospects of success in opposing the restraint
application. This
amount was paid to the applicants and the provisional restraint order
confirmed on an unopposed basis on 12 June
2008. The total value of
the applicants’ properties, restrained and thereafter
confiscated and forfeited to the State, was
approximately R5,5
million.
[4] In the meantime, on
15 April 2008, the applicants brought, on an urgent basis, the
present application in terms of section 26(6)
of POCA (“the
release application”) which was argued before me on 20 May
2010, for the release of the following amounts,
for payment of
current and prospective legal and living expenses, from the proceeds
of certain of their properties subject to the
restraint order:
First applicant R375
942.92
Second applicant R289
676.99
Third applicant R201
862.50
Fourth applicant R326
658.30
Seventh applicant R264
081.42
Eighth applicant R264
081.42
Tenth applicant R90
000.00
Eleventh applicant R90
000.00
Thirteenth applicant R90
000.00
Fourteenth applicant R90
000.00
Fifteenth applicant
R90
000.00
TOTAL
R2 172 303.55
These amounts are
specified in annexures “B”, “C”, “D”,
“E” and “F”
to the Notice of Motion.
[5] It is common cause
that only the stated eleven applicants have proceeded with the
release application for the stated amounts,
the claim for living
expenses having been abandoned. It is not disputed in oral argument
before me that the purpose of applicants’
claim is to meet
legal expenses in respect of proceedings instituted against them in
terms of Chapter 5 of POCA, which embodies
a mechanism for the
confiscation by the State of proceeds derived from criminal activity,
and/or any criminal proceedings to which
such proceedings relate.
[6] The respondents
opposed the release application and filed answering papers on 26 May
2008. Applicants replied on 4 June 2008
and on 24 April 2009, filed
an interlocutory application, in which they sought to supplement
their replying papers. Respondents
responded by filing a rejoinder
affidavit.
[7] The first respondent
resists this application on three principal grounds:
7.1 The underlying
rationale for the release of funds fell away when on 16 April 2008
the second respondent agreed to pay and thereafter
made payment of
R160 000,00 into applicants’ attorney’s trust account for
legal expenses to be incurred in respect
of their opposition of the
rule
nisi
in the restraint application. No reference is made
in the founding affidavits to obtain funding so as to place the
applicants in
a financial position to instruct legal representatives
to advise them on the merits and demerits of charges they face in the
criminal
proceedings. On the contrary, it was argued, the expenses
referred to as being the very purpose and essence of the release
application
is to be found repeatedly referred to in the founding
affidavit as those which would enable the applicants to pay
attorneys’
and counsel’s fees for advice on the merits of
the restraint application which, it is alleged by applicants, is of a
complex
nature. The release application is, accordingly, on this
ground alone fatally flawed and falls to be dismissed.
7.2 The jurisdictional
requirement relating to all disclosure in terms of subsection 26(2)
of POCA must exist at the time the release
application is brought;
that means that the basis for such an application and the requirement
of full disclosure of assets as a
necessary prerequisite for the
granting of the relief sought, must be met in the founding papers and
not in the replying affidavits.
7.3 The applicants have
failed to make full disclosure of how the property subject to the
restraint application was acquired and
paid for and did not disclose
the origin of the money with which the property was bought. The
respondents have on these grounds
denied that applicants have made
full disclosure of their interest in the property.
[8] Section 34 of the
Constitution of the Republic of South Africa Act 108 of 1996
guarantees every citizen the right to have any
dispute which can be
resolved by the application of law decided in a fair public hearing
before a court of law. Section 26 of POCA
gives effect to this right
through the provision of a mechanism by which a needy litigant,
facing a criminal trial within the framework
of the machinery
provided for in Chapter 5 of POCA, can obtain a court order for the
payment of reasonable legal expenses. The
need for such expenses to
be provided for, is regarded as a fair trial requirement for, of all
the rights that an accused person
has, it has been held that the
right to legal representation is the most persuasive because it
affects his ability to assert any
other rights he may have by a
person trained and qualified to do so.
See section
35(3)(d)(f)(g) of the Constitution of the Republic of South Africa
Act 108 of 1996.
[9] The test, off course,
for the grant of an order in terms of section 26(6) is full
disclosure by the applicant, to the court’s
satisfaction, of
his/her interest in the property subject to the restraint and a
failure on his/her part to meet the expenses for
which the order is
sought out of his/her own pocket / unrestrained property. Should the
court be satisfied in this regard, the
section allows the court a
discretionary power: it may make such provisions as it thinks fit for
the applicants reasonable expenses.
[10] As a court of first
instance, this court will, in the exercise of the discretion vested
in it by subsection 26(6), have of
necessity to take a robust
approach based on the particular facts put up by the applicants in
order to arrive at a determination
which is fair and just. This
involves the balancing of the competing right of the respondents to
enforce the restraint in order
to preserve the assets under restraint
so that alleged ill-gotten gains are not used or retained by the
applicants and of the right
of the applicants not to be prejudiced in
the conduct of their defence due to a failure to meet legal expenses.
The applicant does
not bear an onus to justify his claim to
reasonable legal expenses.
[11] It is well
documented in case law in the various divisions of the High Court in
this country that a person requiring the exercise
of that discretion
in their favour, should place before the court sufficient evidence of
factors in its founding papers guaranteed
to influence the court in
exercising that discretion. These factors have been usefully set out
in the decision
FRASER v ABSA BANK LTD (NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS AS
AMICUS CURIAE
)
[2006] ZACC 24
;
2007 (3) SA 484
(CC) at 510 in par. [72]:
“
[72]
..........
Circumstances to be
considered in the case of legal expenses would include:
(a)
the seriousness and complexity of the
charges against the defendant or of the civil proceedings in which he
or she may be involved;
(b)
the
conduct of the defendant, preceding, and in, the s 26(6) application
proceedings (including whether a full disclosure of all
his or her
interests in the restraint property has taken place and whether the
defendant is attempting to benefit from a restraint
order, or has
acted fraudulently);
(c)
the
value of his or her assets;
(d)
the
number and amount of known creditors' claims; and
(e)
the history of the specific claim of
the creditor who seeks intervention.”
But it is wise to keep in
mind that additional factors may have to be considered in different
circumstances affecting the exercise
of the discretion which arises
in different cases. Because such an application constitutes civil
proceedings any question of fact
must be determined on a balance of
probabilities.
[12] I did not understand
respondents to argue that the amount of the funds claimed, as set out
in applicants’ founding papers,
was not reasonable or to
dispute that applicants do not have the funds to meet such expenses
out of unrestrained property. Mr.
Fischer, respondents’
counsel, was not able to draw my attention to any specific evidence
to the contrary.
[13] I turn to deal with
the issues before me.
13.1 On my reading and
interpretation of subsection 26(6) of POCA no distinction is made in
the Act between the applicants’
constitutionally entrenched
right to have legal representation in connection with the proceedings
instituted against them for a
restraint order or the criminal
proceedings to which that order relates. The Act empowers this court
with the statutory authority
to make an order for the applicants’
reasonable legal expenses in connection with either court proceeding,
be it civil or
criminal. Whilst it is true that the applicants have
restricted the basis of their application for funding in their
founding papers
to a claim in respect of the restraint proceedings,
that that claim has been extinguished by their acceptance of the sum
of R160
000,00 and no mention is made of the forthcoming criminal
trial, the evidence provided of the amount of the legal expenses
claimed
has not been challenged at all by the respondents.
Respondents have not categorically denied that the figures provided
represent
a reasonable claim for prospective legal expenses in
connection with the forthcoming criminal trial. That, in my view, is
the essence
of the matter. Had this been the gravamen of the first
respondent’s objection, I might have viewed its arguments in a
stronger
light and as being more persuasive in an attempt to find
favour with this court on this particular aspect of these
proceedings.
To my mind the “issue” raised by the
respondents is a non-issue; created by the respondents where no such
issue exists.
The respondents are not entitled to exploit a lacuna in
applicants’ case of the nature complained of and I find that
they
have signally failed to make out a case for dismissal of the
release application on this ground.
It is trite that an
applicant for relief in motion proceedings must make out a case for
that relief in his founding papers.
No case for the relief sought
will be allowed to be made in reply absent the making out of a case
in the original application.
See:
TITTY'S BAR AND BOTTLE STORE (PTY) LTD v ABC GARAGE
(PTY) LTD AND OTHERS
1974 (4) SA 362
(T);
SHAKOT
INVESTMENTS (PTY) LTD v TOWN COUNCIL OF THE BOROUGH OF STANGER
1976 (2) SA 701
(D);
PUNTAS’ TRUSTEE v LAHANAS
1924 WLD 67
at 68.
Mr. Van Amstel SC, for
the applicants, sought leave to file a supplementary replying
affidavit on the basis that applicants’
replying affidavit had
been drafted by junior counsel representing the applicants at the
time and that important matter, not necessarily
new matter, but
matter which served to embellish upon facts already placed before the
court in the founding papers and which was
necessitated by disputes
of fact raised as a result of allegations in the respondents’
answering papers had been omitted
in reply.
Mr. Fischer opposed this
application on the basis that it was sought thereby to cure a fatal
defect in the founding papers
viz
a
failure to fully and properly disclose the applicants’ interest
in the property subject to the restraint. He contended that
such a
defect should not be permitted by this court to be cured by the
filing of a fourth set of affidavits. The rule of practice
that an
applicant must, generally speaking, stand or fall by his founding
papers, is not one cast in stone but has been bent from
time to time,
because of the existence of a judicial discretion which permits the
filing of further affidavits so as to give effect
to a salutary
practice and fundamental consideration in the administration of
justice, that a matter should be adjudicated upon
all the facts
relevant to the issues in dispute. Despite the cogency of this rule
of practice, it has been frequently stated that
it does not operate
to preclude the introduction of further affidavits when
considerations of fairness and justice to both parties
dictate that
this should be done. The rule remains subject to the discretionary
power of the court and the mere fact that the matter
sought to be
introduced in the new affidavits should properly have been included
in the founding affidavit and not in reply, does
not negative the
existence of that discretionary power -
TRANSVAAL
RACING CLUB v JOCKEY CLUB OF SOUTH AFRICA
1958
(3) SA 599
(W);
DAWOOD v MAHOMED
1979
(2) SA 361
(D).
In
JAMES
BROWN & HAMER (PTY) LTD (PREVIOUSLY NAMED GILBERT HAMER & CO
LTD) v SIMMONS,
NO
1963 (4) SA 656
(A) at
660 Ogilvie Thompson JA said:
“
It is in the
interests of the administration of justice that the wellknown and
well established general rules regarding the number
of sets and the
proper sequence of affidavits in motion proceedings should ordinarily
be observed. That is not to say that those
general rules must always
be rigidly applied: some flexibility, controlled by the presiding
Judge exercising his discretion in
relation to the facts of the case
before him, must necessarily also be permitted. Where, as in the
present case, an affidavit is
tendered in motion proceedings both
late and out of its ordinary sequence, the party tendering it is
seeking not a right, but an
indulgence from the Court: he must both
advance his explanation of why the affidavit is out of time and
satisfy the Court that,
although the affidavit is late, it should,
having regard to all the circumstances of the case, nevertheless be
received. Attempted
definition of the ambit of a discretion is
neither easy nor desirable.”
See further:
COHEN,
NO v NEL AND ANOTHER
1975 (3) SA 963
(W);
PAT HINDE & SONS MOTORS (BRAKPAN) (PTY)
LTD v CARRIM AND OTHERS
1976 (4) SA 58
(T).
I am mindful that the
discretion should be judicially exercised in the sense that the
presence of
mala fides
or culpable remissness as to the cause
or reason for the failure of the facts or information in question not
being placed before
me in the ordinary way, should incline me to
refuse to admit the supplementary replying papers. I think it is
clear on the evidence
before me that no such
mala fides
or
culpable remissness is to be found in the reasons for the applicants’
failure to produce the evidence it now seeks to
admit, timeously. A
careful and close reading of the applicants’ case has revealed
that the junior counsel who drafted the
replying affidavit saw fit to
deal with the numerous disputes of fact raised in the respondents’
answering papers with the
minimum of effort and the replying
affidavit contains a litany of bald and bland allegations with no
fleshing out where it is clear
that amplification and detail are
required. That remissness on his/her part has not been shown to have
been induced by
mala fides
or culpable laxity and could
possibly be due to inexperience in the drafting of affidavits or of
motion proceedings in general.
It is however not for this court to
speculate on those reasons, save to make a finding which negatives
mala fides
, based on the facts and not on probabilities and I
make that finding on the factual evidence before me.
See:
ADMINISTRATOR,
TRANSVAAL, AND OTHERS v THELETSANE AND OTHERS
[1990] ZASCA 156
;
1991 (2) SA 192
(A) at 196 J - 197 D.
The explanation advanced
by Mr. Van Amstel for the failure to properly reply in the first
instance, is to my mind reasonable and
sound. The supplementary
replying affidavit contains evidence which is material and relevant
and ought to have been dealt with
in reply. I do not find that the
evidence is of such a calibre that it ought to have been included in
the founding papers. It is
clear to me that the applicants have made
full disclosure in their founding papers of all of their interest in
the property under
restraint. Furthermore they have disclosed to the
Asset Forfeiture Unit, conducting investigations on behalf of the
first respondent,
that all manner of applicants’ assets, be it
immovable property, cash money, investments, savings or motor
vehicles have
been disclosed. Even contractual rights to the use of
property where property is held through agents or nominees has been
disclosed.
The need for the supplementary affidavit did not arise as
a result of the applicants’ failure to make proper and full
disclosure
in their founding papers.
In addition, the
respondents have not raised any counter-argument to the explanation
advanced by Mr. Van Amstel, they neither accept
the explanation nor
deny it. In the circumstances it is clear to me that those advising
the applicants at the time of the drafting
of the replying affidavit
failed to fully appreciate how far they should go and what
particularity was required. But I do not find
that their conduct can
be stigmatised as
mala fide
and of such a nature and degree so
as to disentitle the applicants from now being afforded an
opportunity to remedy the defect,
especially if the consequence of
the remissness can be corrected without causing prejudice to the
respondents. The respondents
have filed a rejoinder affidavit, so no
real prejudice has been occasioned to them and none was brought to my
attention by Mr.
Fischer. As the degree of culpability is not so
great, such as to force me to refuse to exercise my discretion on
this ground alone
in applicants’ favour I am inclined to grant
the relief sought by the applicants. To do otherwise, would result in
me being
distracted by technicalities which would have the effect of
diverting me from ascertaining the full set of facts and adjudicating
the real issues between the parties based on all the material and
relevant evidence.
[14] Mr. Van Amstel has
requested that, in the event that I am disposed to exercising my
discretion in applicants’ favour,
I make an order for payment
of the sum of R1 445 382,64.
After hearing argument on
20 May 2010, I accordingly granted an order in the following terms:
1. Leave is granted to
the first, second, third and fourth applicants to each file a
supplementary replying affidavit;
2. The said applicants
pay the costs of the application for such leave, on an unopposed
basis;
3. The second respondent
is his capacity as
curator bonis
of the applicants estates, is
authorised, permitted and directed by the above honourable Court to
forthwith release the amount
of
R1 445 382.64
of the liquid
funds under his control in respect of an interim contribution towards
the first, second, third, fourth, seventh,
eight, tenth, eleventh,
thirteenth, fourteenth and fifteenth applicants’ reasonable
current and prospective legal expenses
of an application in
connection with any proceedings instituted against him/her in terms
of chapter 5 of the
Prevention Of Organised Crime Act, no 12 of 1998
and/or any criminal proceedings to which such proceedings relate
payable to the trust account of the said Applicant’s Attorneys
of Record.
4. Leave is granted to
each of the said applicants to approach the above Honourable Court on
the same papers, duly amplified for
further or additional liquid
funds or additional realisable property of the said applicants’
individual estates to be released
from time to time for additional
legal expenses, should and when the need arises.
5. No orders of costs is
made in respect of the proceedings relating to paragraphs 3 and 4
above.
_____________
S. EBRAHIM, J
On
behalf of applicants: Adv. Ploos van Amstel SC
Instructed
by:
Peyper
Sesele Attorneys
BLOEMFONTEIN
On
behalf of respondents: Adv. P.U. Fisher
Instructed
by:
S.
Chetty
Office
of the State Attorney
BLOEMFONTEIN
(Ref.
Mr. Johan Slabbert)
/sp