Nel and Another v National Director of Public Prosecutions and Another (100/04) [2004] ZANCHC 11 (20 March 2004)

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[2004] ZANCHC 11
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Nel and Another v National Director of Public Prosecutions and Another (100/04) [2004] ZANCHC 11 (20 March 2004)

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IN
DIE HOOGGEREGSHOF VAN SUID-AFRIKA
IN
THE HIGH COURT OF SOUTH AFRICA
(Noord-Kaapse
Afdeling / Northern Cape Division)
Saakno:
/ Case number:
100/04
Datum
verhoor: / Date heard:
11/2/2004
Datum gelewer: /
Date delivered:
In
die matter of:
NEL,
OLOFF HUMBOLDT
1
st
Applicant
DU
TOIT, GIDEON JOHANNES
2
nd
Applicant
and
NATIONAL
DIRECTOR OF 1
st
Respondent
PUBLIC
PROSECUTIONS
FOSTER, DEREK
ARTHUR
2
nd
Respondent
Coram:
Lacock J
JUDGEMENT
LACOCK
J:
On 11 February
2004 I made the following order in this matter:
“
D
AT
die tweede respondent ‘n kontant bedrag van R36 000,00 plaas in
die trustrekening van GF Pieterse Ceronio & Derks,
prokureurs te Hartswater, voor of op 13 Februarie 2004 om deur hulle
gebruik te word vir die geregskostes in die strafsaak
van
die Staat teen die eerste en tweede applikante, sowel as die
koste van die saak van die eerste respondent teen die applikante
onder saaknommer 863/2002 in hierdie Hof.
1.2 DAT die
tweede respondent gemagtig word om skriftelike toestemming te verleen
aan die applikante voor of op 13 Februarie 2004
om ‘n tweede
verband te registreer ten gunste van Paulus Retief Derks oor alle
onroerende eiendomme geregistreer in die applikante
se name vir ‘n
bedrag van R100 000,00 ter versekering van geregskostes aan hom
verskuldig of verskuldig te word deur die applikante
in verband met
die aansoek van die eerste respondent teen die applikante onder
saaknommer 863/02 in hierdie Hof asook vir die hangende
strafsaak.
1.3 DAT die
opbrengste van die borgkwitansies in die naam van Paulus Retief Derks
in die bedrag van R75 000,00 deur die voormelde
Derks gebruik mag
word vir die betaling van die applikante se geregskostes in verband
met die aansoek van die eerste respondent teen
die applikante onder
saaknommer 863/2002 in hierdie Hof asook vir die hangende strafsaak.
2. DAT alle
regskoste reeds aangegaan deur die applikante onder saaknommer 863/02
en enige verdere kostes aangegaan kragtens hierdie
aansoek sowel as
koste aangegaan en aangegaan te word in die strafsaak tussen die
Staat en die applikante, moet takseer word op die
Hooggeregshofskaal
soos tussen party en party (ten aansien van alle siviele verrigtinge)
en ingevolge die riglyne van sodanige professionele
liggaam wat
gemoeid en/of bevoeg is om fooie t.a.v. strafregtelike verrigtinge te
takseer.
2.1 Alle gelde
kragtens hierdie bevel betaal aan prokureurs Paul Retief Derks, sal
in trust gehou word en slegs aangewend word vir
die betaling van die
regskoste van die appikante na taksasie daarvan.
2.2 Enige
oorskot van gelde wat mag bestaan na betaling van die voormelde
getakseerde regskostes van die applikante, moet aan die
tweede
respondent oorbetaal word vir die voordeel van die boedel van die
eerste applikant.
3. DAT
die eerste respondent die applikante se koste van hierdie aansoek
betaal.
”
Since the matter
was one of urgency, and since I was satisfied what my judgement
should be, I delivered my judgement forthwith and
indicated that my
reasons would follow in due course. These are my reasons.
On 11 September
2002
Van
der Walt J
granted
a provisional restraint order in terms of sec 26 (1) of the
Prevention of
Organised
Crime Act, no 121 of 1998, (the Act) on the
ex
parte
application of the National Director of Public Prosecutions (the
NDPP) against the two applicants in the present matter, as well
as
four others under case no 863/02.
The rule
nisi
thus issued was confirmed by
Kgomo
JP
on 27 November 2002.
In terms of the
aforesaid order, the applicants hereto were
inter
alia
ordered to disclose and surrender all their realisable property as
defined in sections 12 and 14 of the Act; were prohibited
from
dealing in any manner with their property, except as required or
permitted by the order; and were to surrender all their
property
into the custody of the curator, Mr Derek Foster of Price
Waterhouse Coopers (the second respondent hereto) appointed
as such
in terms of sec 28 (1) (a) of the Act. The said curator was
amongst others authorised to take the property of the applicants
into his possession and control, to take care of such property and
to administer same.
The aforesaid
action was taken against the applicants by the NDPP on the strength
of the provisions of sec 25 (1) of the Act.
The applicants were
charged with fraud, alternatively theft, in that they allegedly
defrauded a company where they were employed,
Senwes (Pty) Ltd,
over a period of more than one year in an amount of approximately
R1.75 million. It was further alleged that
there were reasonable
grounds for believing that the applicants may be convicted on the
offences as charged, and that they benefited
from those offences.
Therefore, so it was alleged, there were reasonable grounds for
believing that a confiscation order may
be made against the
applicants in terms of the applicable provisions of the Act,
following upon the successful prosecution and
conviction of the
applicants.
The applicants
filed a notice to oppose the confirmation of the aforesaid rule
nisi
,
as well as opposing affidavits, but the matter did not proceed to
Court for argument as the rule was confirmed by consent.
What is of
particular relevance for purposes of the present application, is par
1.11 of the restraint order, reading,
“
The
curator is authorised to release such of the property to which the
order relates as may be required for:
Defendants’
reasonable living expenses, including the living expenses of his
(sic!) family or household;
Defendants’
reasonable legal expenses in connection with these proceedings;
Provided that
Defendants have disclosed under oath to the satisfaction of this
Honourable Court.
All
of their interests in the property to which the order relates;
That
they cannot meet such expenses out of such of their property as is
not subject to this order.”
The Court was
entitled to make the aforesaid order in terms of sec 26 (6) of the
Act. This section provides,
“
Without
derogating from the generality of the powers conferred by subsections
(1), a restraint order may make such provision as the
High Court may
think fit-
for
the reasonable living expenses of a person against whom the
restraint order is being made and his or her family or household;
and
for
the reasonable legal expenses of such person in connection with any
proceedings instituted against him or her in terms of this
Chapter
or any criminal proceedings to which such proceedings may relate,
if
the court is satisfied that the person whose expenses must be
provided for has disclosed under oath all his or her interests in
property subject to a restraint order and that the person cannot meet
the expenses concerned out of his or her unrestrained property.”
It will be
observed that in par 1.11 of the restraint order provision is only
made for the applicants’ reasonable legal expenses
“in
connection with these proceedings”
(viz the application for a restraint order) and not for their legal
expenses in regard to
“any
criminal proceedings to which such proceedings may relate”
as envisaged in sec 26 (6) of the Act.
This omission in
the restraint order prompted the present application.
The applicants
applied for the following relief:
Dat
daar afgesien word ooreenkomstig die bepalings van hofreël6 (12)
van die vorms en betekening wat die reels voorskryf en
dat die
bogemelde aansoek op ‘n dringende basis afgehandel word.
Dat
die tweede respondent gelas word om ‘n kontant bedrag van R36
000.00 te plaas in die trustrekening van GF Pieterse Ceronio
&
Derks, prokureurs te Harswater, voor of op 13 Februarie 2004 om deur
hulle gebruik te word vir die geregskostes in die Strafsaak
van die
Staat teen die eerste en tweede applikant, sowel as die koste van
die saak van die eerste respondent teen die applikante
onder
saaknommer 863/2002 in die bogemelde Agbare Hof.
Dat
die tweede respondent gemagtig en gelas word om skriftelike
toestemming te verleen aan die applikante voor of op 13 Februarie
2004 om ‘n tweede verband te registreer ten gunste van Paulus
Retief Derks oor alle onroerende eiendomme geregistreer in die
applikante se name vir ‘n bedrag van R100 000.00 ter versekering
van geregskostes aan hom verskuldig of verskuldig te word deur
die
applikante in verband met die aansoek van die eerste respondent teen
die applikante onder saaknommer 863/02 in die bogemelde
Agbare Hof
asook vir die hangende strafsaak.
Dat
die opbrengste van die borgkwitansies in die naam van Paulus Retief
Derks in die bedrag van R75 000.00 deur die voormelde Derks
gebruik
mag word vir die betaling van die applikante se geregskostes in
verband met die aansoek van die eerste respondent teen
die
applikante onder saaknommer 863/2002 in die bogemelde Agbare Hof
asook vir die hangende strafsaak.
Dat
die koste van hierdie aansoek betaal word deur die eerste
respondent.”
The application
was opposed by the NDPP as first respondent. The curator appointed
under case no 863/02, second respondent, filed
an affidavit
explaining his reasons for refusing to make funds available to the
applicants for payment of their legal expenses
in respect of the
pending criminal trial.
In their
supporting affidavits the applicants alleged that they have engaged
the services of an attorney, Mr Paulus Retief Derks
(Derks) and adv
Nel of the Bloemfontein Bar to represent them in the criminal trial
which was enrolled from 9 to 27 February
2004 in this Division
of the High Court.
The applicants
have demonstrated in their supporting affidavits that they have
disclosed all their property subject to the restraint
order, and
that they are unable to meet the legal expenses out of their
unrestrained property.
First and
foremost Adv Henriques, appearing on behalf of the NDPP, submitted
that I should not entertain the application as one
of urgency since
the applicants unreasonably delayed the bringing of the application.
The reasons
advanced for the urgency of the matter are the following:
The criminal trial
was to commence on Monday 9 February 2004. Although the legal
representatives of the applicants were instructed
and ready to
proceed with the trial, they were not prepared to act on behalf of
the applicants unless and until their fees were secured.
Attorney
Derks was in constant contact with the curator since approximately
May 2003, during which time numerous requests were directed
to the
curator to make funds available for the criminal trial of the
applicants.
Despite a number
of written communications addressed to the curator and various verbal
requests, it was not until the end of January
2004 that the curator
and Adv Volmink of the office of the NDPP, indicated to the attorney
for the applicants that they were unable
to assist the applicants.
Since the criminal trial was at that time to start within days from
the time communication broke down,
the applicants had no choice but
to urgently approach this Court for relief.
Even if it can be
said that the applicants should have approached this Court at an
earlier date, one can appreciate the predicament
in which the
applicants found themselves: They had no funds, except as indicated
herein, to pay their legal representatives for
the criminal trial,
and were unable to fund an application like the present one. It is
therefore understandable that the attorney
opted to rather embark on
negotiating an agreement with the respondents instead of bringing a
Court application.
The application
was initially set down for hearing on 5 February 2004. but was
postponed on that date to 11 February 2004. This
was done to enable
the respondents to file answering affidavits. This had been done.
Any prejudice the respondents may have suffered
was thereby
obviated.
To my mind it
would be in the interest of justice not to further delay the
commencement and disposal of the criminal trial.
By reason of the
aforesaid considerations I was satisfied that justice required of me
to exercise my discretion in favour of the
applicants and to dispose
of the application in terms of Uniform Rule 6 (12).
The second
respondent raised the point in his affidavit that he was not cited
in his official capacity, and was therefore not a
party to the
proceedings in his official capacity as curator in the estates of
the applicants.
Mr Haddad on
behalf of the applicants conceded this oversight and moved for an
amendment of the citation of the second respondent
to read
“Derek
Arthur Foster, Nomine Officio”
.
Since it was
undoubtedly clear that the second respondent was joined in the
application in his official capacity as curator and
not in his
personal capacity, I granted the amendment.
Mr Botha who
represented the second respondent, did not object to the granting of
the amendment.
The first
respondent did not object to the citation of the second respondent,
but in fact admitted the allegation of the first applicant
that the
second respondent was appointed as curator
bonis
in terms of the Court order under case no 863/02. The second
respondent clearly accepted that the second respondent was joined
as
a party to these proceedings in his aforesaid official capacity.
The first
respondent raised one further preliminary point in the answering
affidavit of deponent Rabaji reading,
“
Moreover,
the Applicants have not sought any order for the variation of the
order granted on the 27
th
November 2002 to make provision for the endorsement against the
property by the Registrar of Deeds. In fact the Applicants have
not
even joined the Registrar in these proceedings even though he is an
affected party. Further legal argument will be addressed
at the
hearing of the matter.”
In argument Ms
Henriques and Mr Botha informed me that the endorsement referred to
in par 5 of the order under case no 863/02 had
been effected against
the title deeds of the immovable properties of the first applicant.
The wording of the endorsement, so I
was informed, echoes the order
which reads,
IMMOVABLE
PROPERTY
The Registrar
of Deeds, Kimberley, is directed to endorse the title deeds of the
immovable property specified in the Schedule of Known
Assets and any
other property that is not so specified but which is subject to this
order, with the following restrictions, namely,
that the property
shall not without the consent of this Court:
be
mortgaged or otherwise encumbered;
be
attached or sold in execution; or
vest
in the Master of the High Court, or the trustee of the insolvent
estate, if the estate of the owner should be sequestrated.”
In my view the
wording of this paragraph of the order is crystal clear: No
mortgage bond may be registered against the title deeds
of the
properties unless authorised by an order of this Court.
The submission of
Ms Henriques that, unless the order is varied, this Court is
precluded from authorising the registration of a
mortgage bond
against the relevant properties, escaped me. The order in its
present form clearly authorises this Court in so many
words to
authorise the Registrar to register a mortgage bond. This is
exactly what the applicants requested this Court to do.
I accordingly
concluded that no variation of par 5 of the restraint order was
required before the relief requested in par 2.2 of
the Notice of
Motion could be granted.
Ms Henriques did
not support the allegation that the Registrar of Deeds should have
been joined as a party to these proceedings.
The registrar has in
any event no direct and substantial interest in these proceedings.
See
PE
Bosman Transport Works Committee & Others v Piet Bosman
Transport (Pty) Ltd
1980 (4) SA 801
(T) at 804 B; Segal &
Another v Segil
1992 (3) SA 136
(C) at 140 F to 141 E
.
In par 18 of her
answering affidavit, deponent Rabaji set out the grounds upon which
the NDPP opposed the application:
“
The
First Respondent opposes this application on the following basis:-
The
Applicants have not disclosed under oath all their interest in
the property and neither have they submitted to the Court
a full
statement of their assets and liabilities;
Secondly,
having regard to the affidavit of DEREK FOSTER filed in this
application, there is not sufficient realisable assets
in the
respective estates from which to make legal expenses available to
the Applicants.”
It is apparent
from the contents of her affidavit that deponent Rabaji had no
first-hand knowledge of the correctness or otherwise
of the
aforesaid factual averments, and that she relied exclusively on the
evidence in the affidavit of the second respondent in
regard hereto.
In regard to the
first ground referred to above, Ms Henriques relied on the following
allegations:
If
one has regard to the founding affidavit filed in support of the
restraint application, it is clear that the approximate benefits
which the First and Second Applicants received are the sum of R1.7
million. The First Respondent goes further to say that this
is not
the total benefit which the Applicants are alleged to have
received.
Moreover,
both Applicants have an interest in Vaalharts Fruit & Veggie CC
which is the Sixth Respondent in the restraint application.
I annex
hereto marked
‘JGR2’
and
‘JGR3’
affidavits filed by the First and second Applicants with the curator
bonis in terms or which they have purported to make full disclosure
of their assets and liabilities.
It
is further clear that none of their interests in the Sixth
Respondent have been disclosed.
Moreover,
neither of the Applicants have to date made full disclosure in
writing exactly what income they have derived from the
farming
activities and what their liabilities have been in that regard.
Both Applicants merely make bald allegations regarding
their income
but have not provided any supporting documentation to substantiate
these allegations.
It
is clear the Applicants have not made a full disclosure to the above
Honourable Court and have not taken the Court into their
confidence
in making a full disclosure of what amounts they have been able to
acquire from property that is not subject to the
restraint
application.
Moreover,
having regard to the affidavit of the First Applicant, neither of
the Applicants have disclosed where they obtained the
monies to pay
for their bail nor have they disclosed fully to this above
Honourable Court what benefits affected parties derived
from their
alleged unlawful activities, namely the Third to Sixth Respondent in
the restraint application.”
The averment in
par 19, is completely unsubstantiated by any evidence and is not
corroborated by the second respondent. In the
restraint application
Ms Rabaji averred that the actual loss suffered by Senwes as a
result of the applicants’ alleged unlawful
conduct
“amounted
to at least R1 751 894.17”
.
No evidence was submitted indicating that this amount was not the
total benefit allegedly received by the applicants.
The averments in
paragraphs 20 and 21, to the effect that the applicants failed to
disclose their interest in Vaalharts Fruit &
Veggie CC, are
simply not correct. The NDPP knew all along and was fully aware of
the fact that the applicants were members of
the aforesaid close
corporation. This close corporation was in fact one of the
respondents in the restraint application for the
very reason that
the applicants as members had an interest therein. The second
respondent too was fully aware of the applicants’
interest in this
close corporation. All assets of the close corporation had been in
the possession and under the control of the
second respondent. It
appears from a statement of affairs of the close corporation
prepared by the second respondent that the
only assets of the close
corporation, being two Landcruiser vehicles, had been conditionally
released to the applicants for their
personal use.
The affidavits
referred to in par 20 are not, as alleged, affidavits purporting to
make full disclosure of their assets by the applicants,
but are both
affidavits in terms whereof additional assets were disclosed to the
second respondent.
The averments in
par 22 are not correct. Only the second applicant was allowed by
the curator to continue his farming activities.
In his affidavit,
the second respondent had the following to say in regard hereto:
“
Toe
ek met die tweede applikant ooreengekom het dat hy kan boer om vir
hom ‘inkomste te verdien, is daar verder met hom ooreengekom
dat hy
weekliks finansiële state aan my beskikbaar moet stel. Ek heg
hierby aan ‘n afskrif van ‘n staat gebaseer op inligting
deur
tweede applikant aan my verskaf gemerk DF6.”
Annexure DF6
contains a detailed analysis of income and expenditure under a
variety of sub-headings.
I had no idea to
what property Ms Rabaji referred in par 23. Nowhere in his
affidavit did the second respondent make mention or
refer to
property not disclosed by the applicants, let alone from which
property they derived an income. No detail or particulars
of such
property were supplied by Ms Rabaji.
The averments in
par 24 of Ms Rabaji’s affidavit do not support the above quoted
ground of opposition. The applicants were not
required in terms of
the restraint order to disclose the source of any funds or moneys
they had prior to the issue of the order.
It is common cause that
the funds used for payment of their bail, had been disclosed to the
second respondent. What is required
of an applicant as a
prerequisite for the exercise of its discretion by a Court in terms
of sec 26 (6) of the Act, is a disclosure
of
“all
his or her interests in property subject to a restraint order.”
The second
respondent however, declared under oath that the first applicant
disclosed under oath that the amount of R50 000.00 paid
in respect of
his bail was derived from prior farming activities. The second
applicant did not disclose the source of the amount
of R25 000.00
paid in respect of his bail.
In par 11 of his
founding affidavit the first applicant averred that
“
Die
tweede respondent het aan prokureur Paul Derks te kenne gegee dat hy
tevrede is dat beide ek en die tweede applikant ‘n volledige
openbaring aan hom gemaak het van ons bates en dat ons niks van hom
probeer wegsteek het nie.”
The second
respondent replied to these allegations:
“
Ek
verwys die hof na my getuienis met betrekking tot die fondse wat
aangewend is om die borgtog van die applikant te betaal. Die
applikante het nie in hul eedsverklarings openbaar dat die borggeld
aan Derks betaal is wat beheer daarvan geneem het deur die
borgkwitansie
in sy naam te laat uitreik nie.”
The word
“ander”
refers to what was said in the preceding paragraph, viz,
“
Die inhoud
van die paragraaf word erken, sover my kennis strek is die ander
bates en laste van die applikant openbaar.”
What the second
respondent failed to realise and failed to disclose in his affidavit
was that the funds for payment of the bail were
paid prior to the
granting of the provisional restraint order. The funds for the
payment of the bail was however duly disclosed
to the second
respondent .
Ms Henriques,
properly so in my view, conceded that the second respondent had
intimate knowledge of the affairs of the applicants,
and that I
should prefer his word to the effect that the applicants made full
disclosure of their interests in property subject
to the restraint
order, to that of Ms Rabaji.
In regard to the
second ground of opposition referred to above Ms Henriques was again
constraint to concede that the statement that
“there
is not (sic!) sufficient realisable assets in the respective estates
from which to make legal expenses available to the
applicants”
,
was not correct.
The sum required
by the attorney acting for the applicants in respect of legal fees
and disbursements for the restraint proceedings,
as well as the
criminal trial amounts to R221 894.14. A detailed breakdown of
this amount had been given, and I do not deem it
necessary to repeat
same herein, since the reasonableness of the amount was not disputed
by the respondents.
The Court has
authorised the second respondent in the restraint order to release
such property to which the order relates as may be
required for the
applicants’ legal expenses in connection with those proceedings,
but to date of the hearing of this application,
the second respondent
has – despite various demands thereto – refused and or failed to
release any funds or property for that
purpose to the applicants.
Hence the inclusion of an amount in respect of such fees and
disbursements in the amount of R221 894.14.
It was common
cause that the second respondent had a cash amount of at least R36
000.00 available on trust in the estate of the
first applicant which
amount could immediately be made available to the applicants or
their attorney for legal expenses.
It was
furthermore common cause that the bail funds of R75 0000.00 was also
available and could be released to the applicants for
legal
expenses.
Included under
the assets of the first applicant subject to the restraint order,
are two immovable properties worth R677 000.00
encumbered by a first
mortgage bond of approximately R371 000.00.
The total value of
the first applicant’s property under the control of the second
responded amounted to approximately R967 000.00,
and that of the
second respondent to approximately R78 700.00.
“
Realisable
property”
is defined as follows in sec 14 of the Act:
Subject
to the provisions of subsection (2), the following property shall be
realisable in terms of this Chapter, namely-
any
property held by the defendant concerned; and
Any
property held by a person to whom that defendant has directly or
indirectly made any affected gift.
Property
shall not be realisable property if a declaration of forfeiture is
in force in respect thereof.
The respondents do
not deny that all property of the applicants in the custody and under
the control of the second respondent is realisable
property as
defined in sec 14 of the Act and subject to the restraint order.
There were
therefore sufficient assets available in the estates of the
applicants to meet their demands for legal expenses.
The second
respondent raised two further points that need to be addressed.
Firstly, the
second respondent contended that, should funds or assets be released
to the applicants for defrayment of their legal
expenses, this will
probably have a detrimental effect on the creditors of the
applicants. The correctness of this contention is
beyond doubt.
In my view
however, the aforesaid consideration – valid as it is – cannot
be regarded as an impediment whereby the Court’s
discretion to
grant relief under sec 26 (6) of the Act, is fettered. If this was
the intention of the Legislature, I would have
expected an express
provision to this effect, or at least a clear indication of such an
intention in the Act itself. I could find
none.
The interests of
creditors are certainly one of the factors to be taken into
consideration when a Court has to exercise its aforesaid
discretion
under sec 26 (6). What other factors are to be considered and what
weight is to be attached thereto will depend on
the particular
circumstances of each case.
Secondly, the
second respondent contended that, should the relief as prayed for in
the Notice of Motion be granted the legal expenses
of both
applicants will be recovered almost exclusively from the estate of
the first applicant.
This contention
is undoubtedly correct. However, the attorney for the applicants
averred that, whether the legal representatives
act for one or both
applicants, will hardly make any difference to their fees, since
they charge on an hourly or daily rate. The
first applicant is, for
reasons not known to me, content with this arrangement, and is
prepared and willing to carry the heavier
financial load.
It is not quite
correct that the first applicant will bear all expenses. The second
applicant contributed R25 000.00 to the
bail money.
According to the
second respondent there is no cash available in the estate of the
second applicant. The second applicant owns
no immovable property.
The only manner in which funds can be made available from the estate
of the second applicant would be to
convert assets into cash. This
appeared to me to be an unpractical and time consuming route to
follow.
It was common
cause that the applicants are not able to meet the legal expenses
concerned out of their unrestrained property.
By reason of the
aforesaid, I concluded that the applicants met the statutory
requirements laid down in sec 26 (6) of the Act.
What I had to
consider was whether this was a proper case for exercising my
discretion under sec 26 (6) of the Act in favour of
the applicants.
I found in favour of the applicants for the following reasons:
The very fact
that the Legislature made provision in the Act for the granting of
such an order, is an indication that the Legislature
itself realised
the harsh consequences a restraint – or preservation order may
have on a person whose assets become subject to
the order, and who
has to face criminal prosecution for the very alleged acts that gave
rise to the granting of the order.
The effect of the
restraint order was that the applicants were virtually stripped of
all their assets and financial means. The
implementation of the
relevant provisions of the Act violated a fundamental constitutional
right of the applicants, as enshrined
in the Bill of Rights, and
more particular, in sec 25 (1) of the Constitution of 1996, viz the
right not to be deprived of property
except in terms of law of
general application. The restraint order, besides the violation of
their constitutional rights, effectively
deprived the applicants of
their common law use and enjoyment of their property for their
personal advantage and interests.
I realise that the
relevant provisions of the Act as presently applied, passed
constitutional muster but this does not detract from
the reality that
restraint – and/or preservation orders may cause enormous hardships
to suspected perpetrators of organised crime
at a time before being
convicted of any crime.
See
Mohamed
NO v NDPP
2002 (4) SA 366
(W) at 374 C; NDPP v Prophet,
2003 (6) SA
154
(C) at 167 G
.
The applicants
are at present the victims of a restraint order issued against them,
and are about to face a number of criminal charges
brought against
them. They have a constitutional right to a fair trial (sec 35 (3)
of the Constitution) which includes the right
to choose, and be
represented by, a legal representative. It is common cause that
they do not have the means, or unrestrained
property available, to
afford legal representation for the criminal trial. To deny them
the right to tap into their assets to
pay for legal representation
is practically tantamount to denying them the right to legal
representation of their choice.
The applicants
have not been convicted of any crime yet, and it cannot be assumed
that a conviction will necessarily follow. They
have a fundamental
right to defend themselves. Fairness and justice demand that they
be afforded the opportunity to exercise this
right. This they
cannot do without the necessary means.
Although the
second respondent did not explicitly oppose the application, he
expressed himself in no uncertain terms, that he is
not supporting
the application. The second respondent’s concern, as alluded to
above, is the prejudice that may be caused to
creditors if the
relief prayed for is granted. This is a valid concern and needed to
be considered.
It appears from
his affidavit that the second respondent was under the impression
that a confiscation order had already been issued,
and that he was
instructed or authorized to distribute the assets of the applicants
amongst creditors. I quote but a few averments
from his affidavit:
In
aggenome dat daar nie genoegsame kontant is in die boedel van die
eerste en tweede applikante om die bedrag waarop die
applikante
aanspraak maak, te betaal nie, sal die dividend betaalbaar aan
die applikante se skuldeisers pro rata verminder.
Ek kan nie die
bedrag waarmee die dividende sal verminder bereken nie omdat ek
nie weet watter bydrae tot die strafregtelike
verrigtinge deur
die applikante benodig word nie.
Na
my mening en ek is so geadviseer het die skuldeisers waarna ek
verwys in die state van bates en laste hierby aangeheg as ‘DF1’,
‘DF2’ en ‘DF3’ ‘n direkte en substansiële belang in
hierdie aansoek aangesien die betaling van fondse aan die applikante
om hul regskostes voortspruitende uit die aansoek en die
strafregtelike verrigtinge waarop hulle teregstaan, ‘n wesentlike
invloed
sal uitoefen op die bedrae wat aan die skuldeisers betaal
sal word.
Ek
is van mening dat as kurator bonis ek die ter saaklike regsbeginsels
wat van toepassing is met betrekking tot die betaling van
skuldeisers behoorlik in ag moet neem wanneer ek ‘n verdeling
maak.”
The second
respondent was not instructed nor authorised per the restraint order,
to liquidate – and/or distribute the assets of
the applicants. He
was merely authorised to take into custody and to administer the
assets. Only in the event of a successful prosecution
of the
applicants and the making of a confiscation order may the second
respondent be authorised to liquidate and distribute the
assets.
(
NDPP
v Mohamed NO
2003 (4) SA 1
(CC) at 18 A to B
)
Should the applicants be acquitted in the criminal matter, the
restraint order will of necessity be rescinded and the property
restored to the applicants. In my view it will be presumptuous to
accept that the applicants will be convicted in the criminal matter.
Having weighed up
the prejudice creditors may suffer against the rights of the
applicants, as well as the hardships that may be
caused to them
should relief be refused, I concluded that in this matter, the
interests of creditors should yield to that of the
applicants. If,
in the event of a liquidation and distribution of the applicants’
assets, a shortfall should occur, creditors
will not be deprived of
their ordinary civil procedural rights of collecting their dues;
whereas the applicants have only one chance
in a criminal trial to
defend themselves.
What needed
further consideration was whether it was competent for me to make an
order in the format as requested in the notice
of motion.
In my view the
wording of sec 26 (6) is wide enough to embrace all reasonable means
a Court may deem expedient to give effect to
the intention of the
Legislature.
The payment of
available cash in the estate of the applicants to themselves or
their attorneys, will certainly qualify as a means
of providing for
their legal expenses. So too will the making available of bail
funds, qualify as such. And I can think of no
reason why the
provision of security by means of a bond over the immovable property
of the applicants should not qualify as a means
of providing for
their legal expenses.
What is of
importance is to make provision for legal expenses, and not so much
the means whereby such provisions are made.
The attorney for
the applicants was quite prepared to have the greater portion of his
fees secured by the bail funds, as well as a
second bond registered
over the immovable properties of the first applicant.
That brings me to
the question of costs. Ms Henriques argued that it was not
unreasonable for the first respondent to oppose the
application
since the first respondent has a legal duty to protect assets
subject to a restraint order in the interest of creditors
who were
victims of organised crime.
In my view this is
not the test. If it was the only reason for opposing the
application, the first respondent could have filed an
affidavit
setting out all relevant facts, and left the matter in the hands of
the Court. The first respondent however, actively
opposed the
application by instructing counsel and by having the matter argued in
Court.
Despite various
requests on behalf of the applicants, the first respondent refused to
agree to a compromise to assist the applicants.
The applicants had
no choice but to approach this Court for relief. They were
successful and I could find no reason why the cost
order should not
follow the result of the application. (Mr Haddad did not ask for
costs against the second respondent).
By reason of the
aforesaid, I made the order referred to hereinbefore.
_______________
HJ Lacock
JUDGE
For
the Applicants:
Mr
Haddad
(instructed
by Elliot Maris & Wilmans)
For
the 1
st
Respondent:
Adv
Henriques
(instructed
by Towell & Groenewald)
For
the 2
nd
Respondent:
Mr
Botha