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2024
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[2024] ZAFSHC 177
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National Director of Public Prosecutions v Dynlog Rental (Pty) Ltd t/a Dynamic Truck Rental and Others (A63/2023) [2024] ZAFSHC 177 (6 June 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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Policy
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to
Magistrates:
NO
Case
no: A63/2023
In
the appeal between:
NATIONAL
DIRECTOR OF PUBLIC PROSECUSIONS
Appellant
And
DYNLOG
RENTAL (PTY) LTD
1
st
Respondent
t/a
DYNAMIC TRUCK RENTAL
PHILIPPUS
CHRISTOFFEL
WILLEM
2
nd
Respondent
VAN
DER BERG
BERNADETTE
VAN DER BERG
3
rd
Respondent
CORAM:
CJ MUSI, JP et
REINDERS, J et MOLITSOANE, J
HEARD
ON:
25 MARCH 2024
DELIVERED
ON:
06
JUNE 2024
JUDGMENT
BY:
CJ
MUSI, JP
[1]
This
is an appeal
against
a
judgment
of
a
single Judge
of
this Division. The
Judge dismissed a restraint
application brought
by the appellant in terms s 26 read withs 25 of the Prevention of
Organized Crime Act 121 of 1998 (POCA). The
appeal is with the leave
of the court a quo.
[2]
The appellant is the
National Director of Public Prosecutions. The first respondent is
Dynlog Rental (Pty) Ltd, trading as Dynamic
Truck Rental, a company
incorporated in terms of the laws of the Republic of South Africa.
The second and third respondents are
married to each other and were
both Directors and shareholders of the first respondent during the
relevant period. The second respondent
resigned as a director of the
first respondent on 22 December 2020.
[3]
The second and third
respondents (cited as the first and second defendants in the court a
quo) are also trustees and beneficiaries
of the Dynamic Trust and the
Philberg Family Trust. These trusts were cited as the first and
second respondents in the court a
quo. Sedprop Development (Pty) Ltd,
a company incorporated in terms of the laws of South Africa, was
cited as the third respondent
in the court a quo. These entities were
cited as respondents since they may hold realizable property which
may be the subject matter
of a restraint order.
[4]
The facts are mainly
common ground. First respondent was registered with the South African
Revenue Services (SARS) for Value Added
Tax (VAT), Pay As You Earn
(PAYE), Unemployment Insurance Fund (UIF), and the Skills Development
Levy (SDL) purposes. It failed
to make the requisite payments to
SAAS.
[5]
On 26 June 2018, SARS
issued a final demand against the first respondent for the payment of
the following arrears: R667 550.76 for
VAT; R1 441 148.02 for PAYE;
R223 332.69
for
UIF
and
R190 922.31
for
SDL.
On
31
August
2020 SAAS sent a
letter of demand to the first respondent for outstanding VAT
amounting to R839 564.51.
[6]
After
noticing that the first respondent had not complied with its tax
obligations, SAAS
conducted
criminal
investigations
with
regard
to
outstanding
PAYE
payments for the period February 2017 to February 2020. SAAS
discovered that during this period, the first respondent had
submitted EMP 201 returns without making any payments in terms of the
EMP 201 declarations.
[1]
On 19
June 2020 SAAS contacted the third respondent regarding the
outstanding debt and she advised that the first defendant had
suffered a loss of R48m and that its external accountant, Mr. Herman
Geyer (Geyer), was dealing with the matter. She further advised
that
the first respondent requested a compromise against the loss
suffered, but the request had been denied by SAAS.
[7]
On 17 August 2018 a
final demand was sent to the first defendant for overdue PAYE
amounting to R4 092 739.26. On 31 August 2020
the first respondent's
VAT account was in arrears to the amount of A839 564.51. On 4
December 2020 the first defendant paid A200
000 towards the PAYE. The
total due to SAAS for withheld taxes was A2 953 492.67 excluding
interest and penalties.
[8]
The second and third
respondents, in their personal capacities, are tax compliant and do
not owe SAAS. They stated that the first
respondent had been
experiencing financial difficulties since 2017 and had been operating
on an overdraft facility. It had a monthly
turnover of approximately
A8m and a wage bill
of A1,5m. The second and third respondents as well as the trusts
advanced funds to the first respondent in order
to keep it afloat.
The advent of the Covid 19 pandemic was the final straw that broke
the camel's back because most of the first
respondent's client were
unable to pay it.
[9]
Many logistic
companies in Bloemfontein closed permanently and this had a
devastating effect on the first respondent, who had been
a logistics
company. During 2020, SAAS entered into a deferred payment agreement
with the first respondent. The first respondent
admitted that it did
not comply with its obligations in respect of VAT, PAYE, UIF and the
SDL. The first respondent has ceased
its operations permanently. The
respondents were charged and appeared
in court on 1
September
2021
for the first
time
and this application
was lodged on 9 September 2022. Although the application was brought
on an ex parte basis, the respondents
got wind thereof and opposed
it. The matter was postponed and enrolled as an opposed application
for a final restraint order.
[10]
The respondents further stated that the first respondent employed
Mrs. Weihman as a financial and HR administrator
who was responsible
for the submission of all the relevant taxes to SAAS. It also
employed Mr. Geyer to oversee Mrs. Weihman. They
state that unbeknown
to them, the latter did not fulfil her duties diligently.
[11]
In the court a quo
and in this court, the respondents argued that:
a)
the restraint
application is an abuse of POCA;
b)
the provisions of
POCA are used in terrorem (to scare) and to intimidate the
respondents;
c)
the provisions of
POCA are used in fraus legis (to circumvent the law) and should not
be applicable to a matter of this nature;
d)
the charges of theft
and those under the provisions of the Tax Administration Act are bad
in law; and
e)
the timing of the
application is peculiar having regard to the fact that it was lodged
more than 12 months after a decision to prosecute
the defendants was
taken.
[12]
The court a quo
agreed with the respondents on most of the bases on which the
application was resisted. It correctly found that
the fact that a
charge sheet had been issued and served does not on its own 'fulfil
the requirement that someone will be convicted'.
[13]
In terms of s 26 of
POCA a High Court may make a restraint order prohibiting any person
from dealing in any manner with any property
to which the order
relates. Section 25(1}(a) provides that:
'A
High Court may
exercise the powers conferred on it by section 26(1)
(a)
when-
(i)
a prosecution for an
offence has been institution against the defendant concerned;
(ii)
either a confiscation
order has been made against that defendant or it appears to the court
that there are reasonable grounds for
believing that a confiscation
order may be made against that defendant; and
(iii)
the proceedings
against that defendant have not been concluded;
...
'
[14]
It
is common cause that a prosecution had been instituted against the
respondents and that the proceedings against them have not
been
concluded. The only issue is whether there are reasonable grounds for
believing that a confiscation order may be made against
any or all of
the respondents. The appellant does not have to prove as a fact that
a confiscation order will be made. The evidence
must, however, be of
such a nature that it satisfies a court that there are reasonable
grounds for believing that the court that
convicts the person
concerned may make a confiscation order.
[2]
[15]
The respondents
argued that POCA should not be used to recover money owed to SARS,
and that assets confiscated under POCA should
go to the State and not
to SARS. What the State ultimately does with confiscated assets is
irrelevant. If it decides to give the
realized assets or a portion
thereof to SARS as the victim of the particular crime it is free to
do so. In terms of s 30(4) of
POCA the court considering a
confiscation order may allow a person who has suffered damages to or
loss of property or injury as
a result of an offence which was
committed by the defendant an opportunity to make representations in
connection with the realization
of the property. SARS, as an entity
who suffered loss, may therefore be allowed to make representations
with regard to any realizable
property which is the subject of a
confiscation order.
[16]
The respondents
asserted that POCA was enacted to combat the crimes mentioned in its
preamble. Its preamble states that POCA was
enacted to:
'To
introduce measures
to
combat organized
crime,
money laundering
and
criminal gang activities; to prohibit certain activities relating to
racketeering activities; to provide
for the prohibition
of money laundering and for an obligation to report certain
information; to criminalise certain activities associated
with gangs;
to provide for the recovery of proceeds of unlawful activity; for the
civil forfeiture of criminal property that has
been used to commit an
offence, property that is the proceeds
of unlawful activity
or property that
is
owned or
controlled by, or on behalf of, an entity involved in terrorist and
related activities.
.
.'
[17]
The
respondents argued that none of the above mentioned crimes are
applicable to them. In
Cook
Properties
it
was found that POCA applies to evasion of personal income tax by an
individual.
[3]
The court put it
thus:
'We
cannot agree
with this construction,
which
radically truncates the scope of the Act. It leaves out portions of
the long title, as well as the 9th paragraph of the preamble.
These
show that the statute is designed to reach far beyond 'organized
crime, money laundering and criminal gang activities'
.
The Act
clearly applies to cases of individual wrongdoing.'
[18]
Tax evasion and the
non-compliance with one's tax obligations and duties has serious
negative economic, social and developmental
consequences for our
country. The country is dependent on its tax revenue to fulfil its
constitutional obligations to those who
are entitled thereto. Tax
evasion and non-compliance limits the government's
ability to stimulate
and grow the economy and to fulfil its social mandate. The theft of
tax payers' money entrusted to an employer
to pay over to SAAS is
also very serious because of the trust relationship between the
employers and their employees. I can conceive
of no reason why POCA
should be inapposite.
[19]
The
court a quo found that the s 163 of the Tax Administration Act
[4]
(TAA) differs slightly from POCA because the TAA is designed to
recover debts owed to SAAS
whilst
POCA
deals
with
asset
forfeiture.
It
then
concluded
that
on
the
facts of this matter there was no justification to utilize POCA. The
fact that SAAS can apply for a preservation order in terms
of s 163
of the TAA is no bar against the appellant applying for a restraint
order in terms of POCA when it alleges that a tax
payer committed a
crime and there is reasonable ground for believing that a
confiscation order may be granted after conviction.
Section 163 does
not deal with criminal conduct whilst a conviction and the
possibility of a confiscation order being made are
requirements for a
restraint order in terms of POCA. There is sufficient
justification,
in this matter, to utilize POCA.
[20]
The
court a quo stated that the charges that the respondents
are
called upon to meet must be clear. It found that there are
fundamental
defects
in the charge sheet. This is so, opined the court a quo, because s
234(2)(k) of the TAA was not yet in existence during
the relevant
period and s 234(2)(p) of the TAA was repealed by the
Tax
Administration Laws Amendment Act.
[5
]
It concluded that the negligent manner in which the charge sheet was
drawn is indicative of a weak case. The charge sheet is an
example of
how a charge sheet not be drafted. The theft of PAYE charges are, for
example, formulated as follows:
'THAT
the accused are guilty of the offenses of THEFT
...
BECAUSE on or during
the dates as in column 2 of Schedule
"A",
and at or near
BLOEMFONTEIN and within the Free State Regional Division, the accused
unlawfully and willfully Employee tax as in
column 3 of Schedule "A",
payable to the South African Revenue Service (SARS) stole.'
[21]
The
allegations with regard to the theft of UIF charges are also
inadequate to sustain theft convictions. They inter alia, allege
that
the 'accused unlawfully and willfully [stole] UIF contributions as
payable to SARS'.
In
the absence of main counts, reference is made to the alternative
counts to counts 75 to 111. The sloppiness in drafting the charge
sheet is not indicative of a weak case. The charges relating to
respondent's failure to comply with the provisions of the Income
Tax
Act (ITA)
[6]
are not mentioned
by the court a quo. There are also charges relating to non-payment
of
UIF and the SOL. The first respondent, at least, admitted that it did
not comply with the provisions of the ITA
[7]
,
the
Skills Development Levy Act
[8]
and the Unemployment Contributions Act
[9]
.
A
badly drafted charge sheet can always be amended before or during the
trial. The badly drafted charge sheet is not indicative
of a weak
case. It is, rather, a display of prosecutorial ineptitude.
[22]
Furthermore,
the court a quo stated that
Grayston
[10]
held
that VAT and PAYE are incapable of being stolen.
Grayston
held
that VAT is incapable of being stolen by a vendor. It, however,
expressly found that PAYE is on a different footing. It said
the
following:
'In
order to be
convicted of theft on this ground, [theft of credit] aside from
demonstrating that PAYE was not paid over to SARS on
due date (which
was conceded),
the
State would have to prove that initially an amount was received
from the employee
(via the deduction entry made) for which it was obliged to account to
SAAS and that there was a fraudulent omission
to do so, or a failure
to make a proper entry in respect of the PAYE
mount deducted from
the employees'
salaries
.
'
[23]
Grayston
therefore
found that PAYE is capable of being stolen. By parity of reasoning
UIF contributions
would
be in the same category. We do not have to decide whether
Grayston
was
correctly decided. There being no other authority on this point the
trial court is bound, by the stare decisis doctrine, to
follow
Grayston.
The
first respondent admits that it withheld the employees' money but
states that it did not ring fence the money and utilized it
for other
purposes. It submitted
EMP
201
[11]
returns stating how
much of the employees'
money
it withheld but failed to pay it over to SAAS. The non-compliance
with the provisions mentioned in paragraph 21 above are
serious
offences. The court a quo did not consider that the first respondent
may be convicted of the statutory offences. It also
incorrectly found
that
Grayston
is
authority for the proposition that PAYE cannot be stolen by the
withholding agent, being the employer.
[24]
The court a quo held
the delay in bringing the restraint application against the
appellant. The only time limitation in s 25 of
POCA is that the
proceedings against the accused should not have been concluded. The
proceedings against these accused are not
yet concluded. In fact,
they have not pleaded to the charges. The court a quo took an
irrelevant consideration
into
account.
[25]
The
respondent's contentions that the provisions of POCA are used to
intimidate the respondents or to circumvent the law are without
merit. The applicant conducts criminal proceedings on behalf of the
State.
[12]
It has the right to
apply for a restraint order when all the requirements for such an
order are present. The fact that SAAS could
utilize its
administrative remedies to recover debts is no bar against the NPA
using civil remedies against errant tax payers who
commit crimes. As
long as there is a proper basis for instituting criminal proceedings
and there are reasonable grounds for believing
that a confiscation
order may be made against the respondents, then the appellant's
conduct cannot be faulted. There is no indication
that the NPA
offered or proposed to withdraw the charges if the money is paid.
Even after conviction the guilty respondents will
still be under a
duty to pay the debt owed to the State. It cannot be correct to say,
without more, that the NPA is intimidating
the respondents or
circumventing the law when it is in fact harnessing the law to
address criminal conduct.
[26]
In the preamble to
the charge sheet it is stated that the second and third respondents
are described in the VAT registration application
(VAT 101) as
representative persons who are responsible for the performance of the
duties of
the
employer.
The
duties
of
the first
respondent,
as the employer,
cannot, without more,
be imputed on its directors. The first respondent was responsible for
the payment of the employees' remuneration
and withholding of their
money in order to fulfil their tax obligations.
[27]
It
is the employer's duty to pay a skills development levy equal to 1%
of the employer's payroll.
[13]
In
terms of the UICA an 'employer' is an employer as defined in
paragraph 1 of the Fourth Schedule to the ITA. 'Employer' is defined
in paragraph 1 of the Fourth Schedule of the ITA 'as any person
(excluding any person not acting as a principal, but including
any
person acting in a fiduciary capacity or in his capacity as a trustee
in an insolvent
estate,
an executive or an administrator of a benefit fund, pension fund,
pension preservation fund, provident fund, provident preservation
fund, retirement annuity fund or any other fund) who pays or is
liable to pay to any person any amount by way of remuneration,
and
any person responsible for the payment of any amount by way of
remuneration to any person under the provisions of any law or
out of
public funds... '
[28]
The
second and third respondents were not employers as defined in all the
relevant Acts. The employees' money was paid to and withheld
by the
first respondent. It had a duty to pay the monies to SAAS and not the
second and third respondents. There is no legal basis
on which the
second and third respondents can be held liable for the acts of the
first respondent. There is no allegation that
they conducted the
business of the first respondent recklessly. The fact that they are
representatives of the first respondent
on the VAT 101 application
form does not destroy the separate legal personality of the first
respondent.
Only
the first respondent can be held liable for its own duties and
obligations in terms of the tax Acts. SAAS may have other remedies
against the second and third respondents, if it can prove the
required jurisdictional facts.
[14]
[29]
The appellant argued
that the second and third respondents received a benefit from the
unlawful activities of the first respondent.
It could not produce
sufficient evidence to sustain this submission. The second and third
respondents received salaries from the
first respondent. On one
occasion the third respondent paid R3000 to a church as tithes. This,
contrary to what the appellant argued,
does not show that the second
and third respondents used the first respondent as their alter ego.
There is also no
evidence that any of the shareholders were enriched by the unlawful
activities of the first respondent. The uncontroverted
evidence is
that the shareholders (second and third respondents) advanced money
to the first respondent in an unsuccessful attempt
to keep it afloat.
They did not benefit, they lost money.
[30]
In my view there are
reasonable grounds for believing that the first respondent may be
convicted and that a confiscation order may
be made against it.
[31]
I disagree with the
respondents that these proceedings were an abuse of the court
process. There is therefore no need to make a
punitive costs order.
Whether the evidence against the second and third respondents will
establish their guilt is for the trial
court to decide. Both parties
were partially successful. Each party ought to carry its own costs.
[32]
The first respondent
only owns one vehicle that is fully paid. The other vehicles are
subject to finance agreements with financing
companies. These
companies' rights should be catered for.
[33]
I therefore make the
following order:
1.
The appeal is
partially upheld, with no order as to costs.
2.
The order of the
court a quo is set aside and replaced with the following:
(i)
The application in respect
of the second and third defendants is dismissed'.
(ii)
The following order
is issued against the first defendant:
1
Pending a further
order of this court, and in terms of
section 26
of the
Prevention of
Organised Crime Act 121 of 1998
, as amended
(POCA),
the
following final order is hereby issued with immediate effect:
THE
PROPERTY TO BE DISCLOSED AND SURRENDERED (THE PROPERTY)
1.1
This order relates to
realisable property as defined in
sections 12
and
14
of POCA limited
to an equity of
R5
000 000
and
extends to:
1.1.1
the property
specified in this paragraph, in so far as it remains property held by
the first defendant.
Movable
Property
Registration Number
Engine Number
Make
Series
HCB […]
PF6[…]
NISSAN
A450
FYN […]
J08[…]
HINO
SUPER F
FXX […]
J08[…]
HINO
SUPER F
FYN […]
J08[…]
HINO
SUPER F
FGC […]
N04[…]
HINO
300
FGC […]
N04[…]
HINO
300
FGC […]
N04[…]
HINO
300
FGJ […]
N04[…]
HINO
300
OBJ […]
V02[…]
VOLKSWAGEN
LT
FYN […]
6M6[…]
MITSUBISHI
FUSO
FYN […]
4P1[…]
MITSUBISHI FUSO
CANTER
HBP […]
796[…]
TATANOVUS
V3TXFTMSA
FTK […]
QD 3[…]
NISSAN
YLO2A25U
FZF [...]
GH1[…]
UDTRUCKS
P9156
FYZ
[…]
6HK[…]
ISUZU
F-SERIES
Bank
Accounts
a)
Standard Bank account
number 370[…].
b)
FNB account number
621[…].
1.1.2
All other property
held by the first defendant at the time of the granting of this order
or subsequently, whether in its name or
not, including all property
held for or on behalf of the first defendant and by any person or
entity and further including the
shareholding of the first defendant
in any company.
1.1.3
Any property held by
any legal representative on behalf of first defendant, in trust or in
any other way whether received from the
first defendant or a third
party on behalf of the first defendant before or after the granting
of this order.
1.1.4
All property that
would be realisable property, if transferred to the first defendant,
after the granting of this order.
1.1.5
All other affected
gifts received by any person or entity at any time before or after
the granting of this order or any property
held by any person or
entity who received such gift, to the value thereof, whether or not
in the name of first defendant, persons
or entities.
RESTRAINT
1.2
Subject to paragraph
2 below, the first defendant and any other persons with knowledge of
this order are hereby prohibited from
dealing in any manner with the
property, except as required or permitted by this order
.
EXECUTION
OF THE ORDER
1.3
This order will be
executed under the supervision and control of the curator bonis.
Representatives of the Applicant may accompany
the curator bonis to
represent the Applicant's interest in the execution of this order.
THE
CURATOR BONIS
1.4
In terms of
section
28(1)(a)
of POCA, Kenosi Moroka
(Moroka)
of Moroka Attorneys
a
firm of attorneys, is hereby appointed as curator bonis subject to
the applicable provisions of the
Administration of Estates Act 66 of
1965
, as well as the supervision of the Master of the High Court.
1.5
After obtaining
letters of curatorship in terms of
section 32(1)
of POCA, the curator
bonis is hereby authorised and required to take the property included
in paragraph 1.1 into his possession
or under his control, to take
care of such property and to administer it, whether the property is
situated inside or outside the
Republic of South Africa.
1.6
He shall have such
powers, duties and authority as provided for or implied in POCA and
such further powers as are specified or implied
in this order.
1.7
The curator bonis
will also be entitled to pay expenses related to restrained assets
which would ordinarily be carried by the estate
out of the restrained
assets. If no liquid assets are available to the curator bonis to pay
these expenses, the curator bonis will
have the power to sell assets
under restraint to properly administer the assets under his control.
The owner of the relevant restrained
property must be consulted as to
which assets under restraint should be sold.
1.8
The curator bonis
will further be entitled to deal with any funds in any bank accounts
forming part of the property and is accordingly
authorised to hold
the necessary signing powers on such accounts and to give directions
to any banking institutions, and other
persons in control of any of
those funds regarding the use of such funds.
1.9
The curator bonis
shall have the power and authority to act in any capacity required to
locate any of the property, to take the
property into his possession,
to bring the property within the jurisdiction of this honourable
court, to exercise effective control
of the property, to take care of
the property or to administer the property.
1.10
These
powers
of
the
curator
bonis
extend
to
property wherever it
may be situated in the world.
1.11
This order will thus
operate as a power of attorney for the curator bonis to deal with all
the property in terms of this order as
if he himself were its owner
or holder.
1.12
The curator bonis
shall have the power and authority, with regard to the shareholdings
held by first defendant in any company, to
act as shareholder in the
place and stead of the first defendant.
1.13
The curator bonis
may, where it is expedient for the effective execution of this order,
authorise, in writing any person who, in
his view, is capable of
acting on his behalf, to exercise on his behalf any of the powers,
duties and authority conferred on him,
and may engage such agents,
sub-contractors or service providers as he deems necessary.
1.14
The curator bonis is
hereby authorised to take all reasonable and lawful steps to discover
any fact relating to any of the property,
and to locate such property
with a view of achieving the objects of this order, read in the
context of POCA and, in particular,
section 33(1)
, including:
1.14.1
To inspect or
temporarily remove and retain, copy and analyse all documents held
by, or any data stored on any computer software
or hardware used by:
•
the
first defendant with a view to tracing further realisable property;
and
•
any
other Respondents insofar as this may reasonably be required to trace
further realisable property.
1.14.2
To make enquiries of
the first defendant as well as its accountant or auditor (if any)
and, pursuant to such enquiries, to inspect
or temporarily remove and
retain, copy, and analyse all relevant documentation
relating to the
affairs of:
•
the
first defendant, with a view to tracing further realisable property;
and
•
any
other Respondents insofar as this may reasonably be required to trace
further realisable property.
1.14.3
To make contact with
all financial institutions here and abroad known to or suspected by
the curator bonis to be holding monies,
interests or assets subject
to this order, and to inform such institutions of the existence of
the terms of this order, and to
make arrangements for the recovery of
such monies, interests and assets.
1.15
The curator bonis is
further authorised to require any person obliged to make disclosure
in terms of this order, to provide such
further and specific
information under oath as the curator bonis considers relevant to any
fact that has been so disclosed or that
should have been disclosed,
which authority shall be exercised with a
view
to
achieving the objects of this order, read in the context of POCA and,
in particular,
section 33(1)
thereof.
1.16
If the curator bonis
or the Applicant, should at any time have reasonable grounds for
believing that any person
(donee)
has
received an affected gift, as defined in
sections 12(1)
and
16
of
POCA, he may apply to this court ex parte and on the same papers,
supplemented so far as need be, for the joinder of the donee
as a
Respondent and for the extension of this order to the donee and to
the affected gift or other property held by the donee to
the value of
such gift, so far as may be appropriate.
1.17
The curator bonis is
authorised to convert any of the property under his control,
including immovable property, into cash with the
mutual consent of
the Applicant; the owner of the property concerned and any other
person or entity who may have a real right therein.
1.18
The
curator
bonis
is
required
and
directed,
by
noon on 04 July 2024
to serve on the Applicant's attorney, and on any other party, at the
address given by such party for the service
of documents, and to file
with the registrar of this court, together with a copy for delivery
to the Master of the High Court,
an interim report in which he shall
set out:
1.18.1
A description and a
sworn valuation (market-value as well as forced-sale-value) of each
item of property
of
which
he
has
taken
possession
of
or control in terms
of this order. Each item shall be allocated a serial number by the
curator and the description will include
its manufacturer's serial
number (if any) and the make, model and year of manufacture of any
vehicle or electronic or photographic
equipment.
1.18.2
In respect of any
item that the curator bonis may have obtained from any person, or
over which he may have assumed control whilst
leaving it in the
possession of a third party, the name and address of the third party,
together with a description of the item
and a statement of the
grounds upon which he took possession or control of it.
1.18.3
The manner in which
he has dealt with or intends to deal with the property taken into his
possession or under his control.
1.18.4
Any other
recommendation that he may see fit to make with regard to any
realisable property of which he has not by then obtained
possession
or control; or in respect of the definition or extension of his
powers and duties; or in respect of any other aspect
of this matter
directed to achieving the objects of
POCA.
1.19
The curator bonis is
further directed to thereafter file quarterly reports to the
Registrar of the Court, the Master of the High
Court, the Applicant
and any interested party. In addition to reporting on the progress in
the case, the quarterly report shall
include a description of any new
assets that were seized or identified and contain the information
referred to in paragraph 1.21
above.
1.20
The curator bonis is
entitled to recover interest not exceeding
the
prime
lending
rate
of
the
major
financial
institutions on expenses and disbursements not paid within 90 days of
approval of the curator's invoice by the Master.
Such expenses and
disbursements are those:
1.20.1
that are not related
to expenses which would in the ordinary course be carried by the
estate of the first defendant; and
1.20.2
that were incurred by
the curator bonis in the execution of his duties, as approved by the
Master.
1.21
The expenditure
incurred by the curator bonis, that is, expenses and disbursements
incurred by him in the execution of his duties,
as approved by the
Master of the High Court, shall be paid as follows:
1.21.1
from the restrained
estate prior to the confiscation order being made, alternatively
1.21.2
from excess
realisable property that does not form part of the final confiscation
order, alternatively
1.21.3
if no such excess
realisable property exists, from the realisable property that is to
be used to pay the confiscation order that
is made i.e. "the
confiscated proceeds" referred to in
s28(3)(c)(i)
alternatively
1.21.4
if no confiscation
order is finally made, from realisable property held under restraint
in terms of this order alternatively
1.21.5
if no confiscation
order is finally made, and no or insufficient realisable property
exists, by the State limited to the value of
the outstanding
difference.
SURRENDER
OF ASSETS
By
First Defendant
1.22
The first defendant
is hereby ordered in terms of
section 28(1)(b)
of POCA to surrender
all the property into the custody
of
the
curator
bonis
forthwith
after
the
curator bonis has
identified himself
by
displaying
a copy
of
this order.
By
third parties
1.23
Any third party who
may be in possession of any of the property is hereby ordered in
terms of
section 28(1)(b)
of POCA to surrender all such property into
the custody of the curator bonis forthwith after the sheriff has
served on them a copy
of this order and an affidavit by the curator
bonis setting out the grounds on which he believes that the third
party is in possession
or control of such property.
1.24
After serving this
order and the affidavit referred to in the previous paragraph on the
third party, the sheriff is required to
deliver the original
affidavit and his return of service to the Applicant's attorney, and
the latter is required to file the original
affidavit and return of
service with the registrar of this court forthwith.
1.25
Any other third party
who is in possession or control of any of the property and who in any
other way receives notice or acquires
knowledge of this order is
hereby ordered to surrender such property, within 24 hours after
receiving notice or acquiring knowledge
of this order, to the curator
bonis.
Repatriation
1.26
Any person who, in
terms of this order, is required to surrender any of the property to
the curator bonis, shall, where any such
property is held or is
situated outside of the Republic of South Africa, repatriate the
property concerned in consultation with
the curator bonis in order to
comply with the obligation to surrender.
Release
of property
1.27
The curator bonis
shall have the discretion to release any of the property back into
the custody of the person who held it, under
conditions the curator
bonis deems appropriate for its proper administration and
preservation, and subject to the curator bonis:
1.27.1
retaining sufficient
control over such property; and
1.27.2
ensuring the
preservation of the value and/or physical state of such property.
SEARCH
AND SEIZURE
1.28
If the curator bonis,
after requiring the surrender of property in accordance with this
order, should at any time have reasonable
grounds for believing that
first defendant or third party who has become obliged to surrender
any property in accordance with this
order has failed to do so, the
curator bonis may give any member of the South African Police
Services
(SAPS)
the
particulars of the property concerned, the name of the first
defendant, or third party suspected of being in possession of it,
and
the address at which he suspects the property may be found; and the
member of the SAPS will thereupon be authorised by this
order,
without further enquiry, but subject to the safeguards set out below,
to enter the premises indicated by the curator bonis,
to search for
the property concerned, and, on finding such property, to seize it
and to place it in the custody of the curator
bonis.
SAFEGUARDS
1.29
Before any search or
seizure takes place, the first defendant, or third party whose
premises are to be searched, or from whose possession
property is to
be seized, shall be afforded a reasonable opportunity, under the
supervision of the curator bonis and/or any member
of the SAPS who
may be present, to summon a legal representative to be present during
the search and seizure.
1.30
If it should appear
to the curator bonis, from circumstances of which he shall keep a
contemporaneous note, that the right to summon
a legal representative
is being made the occasion of needless or unreasonable delay, o
that the first
defendant, or third party appears to be using the delay to create an
opportunity to dissipate or conceal or divest
themselves of property
or in any other manner obstruct the curator bonis in carrying out his
functions under this order, the curator
bonis is hereby empowered,
after warning those present that the search is to commence, to
authorise the members of the SAPS to
proceed with the search and
seizure forthwith, whether or not the legal representative
of the first
defendant or third party is then present.
INVENTORY
1.31
A detailed inventory
of all property surrendered by any person, or seized, must be
prepared by the curator bonis at the time of
the surrender or the
seizure. The person from whose possession the property is taken, or
his or her legal representative, must
be afforded an opportunity to
check the inventory and either to sign it as correct or to note any
alleged inaccuracy on it. A copy
of the inventory must be left with
the person from whose possession any property is taken.
1.32
Within 20 days of the
seizure of property under this order, the curator bonis must file
with the Master of the High Court an inventory
of the property placed
under restraint, including its estimated value.
DISCLOSURE
BY DEFENDANT
1.33
In terms of
section
26(7)
of POCA, the first defendant is hereby ordered to disclose to
the curator bonis on affidavit in such form as the curator bonis may
determine forthwith, and in any event by no later than within 10 days
of service of notice of this order, a description and the
whereabouts
of:
1.33.1
all the property (as
defined in
section 1
read with
section 12(2)
of the POCA), which has
not been physically surrendered into the possession or otherwise
placed under the effective control of
the curator bonis immediately
upon the service of this order.
1.33.2
All the property
which, according to the present knowledge of the first defendant is
to be transferred to the first defendant at
any time.
1.33.3
Any and all affected
gifts as defined in
sections 12(1)
and
16
of POCA, made by the first
defendant, together with the name and address of the donee.
1.34
The first defendant
is further ordered to disclose to the curator bonis in an affidavit,
as soon as it come to know of it, the nature
and the whereabouts of
any property which it may hereafter come to learn is to be
transferred to the first defendant at any time.
1.35
The first defendant
is further required, on or before the ]th day of each month, to
provide the curator bonis under oath with monthly
income and
expenditure statements together with supporting documentation.
DISCLOSURE
BY DONEES OF AFFECTED GIFTS AND BENEFICIARIES
1.36
Any person or entity
who is, or who becomes aware of this order and who has received from
the first defendant any affected gift
as defined in sections 12(1)
and 16 of POCA, is hereby ordered in terms of
section 26(7)
of the
POCA to deliver to the curator bonis, within 10 days after coming to
know of this order, an affidavit in which he or she
shall set out:
1.36.1
the nature of
the property
which wholly
or
in part constituted a
gift.
1.36.2
the date on which it
was made over to the donee.
1.36.3
the value of such
property at the date of the gift.
1.36.4
the value of any
consideration given for such property.
1.36.5
whether or not the
donee has retained the property in the form in which he or she
received it.
1.36.6
if not, the manner
and date of its alienation, the nature and value of the consideration
received by the donee, and the proportion
of such consideration that
represented the gift.
1.36.7
the nature and value
of the property which, in terms of
section 20(3)(b)
of POCA, directly
or indirectly represents in the hands of the donee property into
which the gift has been converted, and the proportion
of such
property that currently represents the gift.
INDEMNITY
FROM USE IN CRIMINAL
TRIAL OF DISCLOSURE MADE IN COMPLIANCE WITH THE ORDER
1.37
No disclosure made in
compliance with this order which would tend to expose the person
making the disclosure to a criminal
charge
pertaining
to
said
disclosure,
shall be used in
evidence in the prosecution of an offence
alleged to have been
committed by the person who made the disclosure: provided that this
indemnity shall not extend to any evidence
going beyond the
requirements of this order, and provided further that this indemnity
shall not have the effect of preventing the
use of any evidence
provided by the person making the disclosure referred to above as
evidence in any trial in which the person
making the disclosure is
charged with perjury in respect of the evidence so provided.
LIVING
AND LEGAL EXPENSES
1.38
The court may order
the release of realisable property within the control of the curator
bonis if the first defendant satisfies
the court that:
1.38.1
It has made full
disclosure to the curator bonis under oath of all its interests in
the property subject to the restraint; and
1.38.2
It cannot meet the
expenses concerned out of it.
REFUSAL
OR FAILURE TO COMPLY WITH ORDER, AN OFFENCE
1.39
In terms of
section
75(2)
, read with
section 75(4)
of POCA, any person who intentionally
refuses or fails to comply with this order shall be guilty of an
offence and shall be liable
on conviction to a fine or to a period of
imprisonment of up to 15 years.
SERVICE
2
There is to be
service forthwith by the sheriff on the Second and Third Defendants
on behalf of the First Defendant in their capacity
as the directors
of:
2.1
this order, and
2.2
the notice of motion
and its supporting affidavits and annexures.
NOTICE
TO OTHER PERSONS AFFECTED
3
In terms of
section
26(4)(a)
of POCA, the Applicant is directed forthwith to give notice
of this order, by delivering a copy by hand, facsimile or by
registered
post, to the following persons:
3.1
the curator bonis,
Moroka
3.2
whenever the
Applicant becomes aware that some other person is affected by this
order, such other person.
C.J.
MUSI, JP
I
concur.
C.
REINDERSI, J
I
concur.
P.E.
MOLITSOANE,
J
Appearances:
On
behalf of Appellant:
Adv
S.N. Khumalo
Instructed
by
State
Attorney
BLOEMFONTEIN
On
behalf of 1
st
, 2
nd
&
3
rd
Respondents:
Adv
L.J. Lowies
Instructed
by
Blair
Attorneys
BLOEMFONTEIN
[1]
All
employers who deduct payroll taxes (PAYE, UIF and SDL) from their
employees'
salaries
must submit a EMP 201
return
to SARS on a monthly basis and pay the amount withheld by the
employer
over
to
SARS.
[2]
National
Director of Public Prosecutions v Kyriacou
2004 (1) SA 379
(SCA) at
para
10
.
[3]
National
Director of Public Prosecutions v Cook Properties 2004 (2) SACR 208
(SCA).
[4]
Section
163
of the
Tax Administration Act 28 of 2011
reads as follows: '
Preservation Order -
A
senior SARS Official may, in order to prevent any realizable assets
from being disposed of or removed which may frustrate the
collection
of the full amount of tax that is due or payable or the official on
reasonable grounds is satisfied may be due or
payable, authorize an
ex parte application to the High Court for an order for the
preservation of any assets of a taxpayer or
other person prohibiting
any person, subject to the conditions and exceptions as may be
specified in the
preservation
order, from dealing in any manner with the assets to
which
the order relates'
[5]
See
Section 35 of the Tax Administration Laws Amendment Act 24 of 2020.
[6]
Act
58 of 1962.
[7]
In
terms of paragraph 30(1)(a) of the Fourth Schedule of the ITA any
person who wilfully and without just cause makes or becomes
liable
to make any payment of remuneration and who fails to deduct or
withhold therefrom any amount of employees' tax or to pay
such
amount to the Commissioner as and when required by paragraph 2 shall
be guilty of an offence and liable on conviction to
a fine or to
imprisonment for a period not exceeding 12 months.
[8]
In
terms of s 20(b) of the Skills Development Levies Act, 9 of 1999
(SDLA) any person who fails to pay any levy on the date determined
for payment thereof commits an offence and is liable on conviction
to a fine or imprisonment for a period not exceeding one year.
[9]
Section
17(1)(a) of the Unemployment Insurance Contributions Act, 4 OF 2002
(UICA) provides that a person commits an offence if
that person
fails to pay any amount due in terms of this Act on the day
determined for payment thereof.
[10]
Grayston
Technology Investment (Pty) Ltd and Another v S
(2016) 4 All SA 908
(GJ).
[11]
A
EMP201 is a tax return that is submitted monthly by an employer. All
employers who withhold or deduct taxes from their employees
must
submit an EMP201.
[12]
See
section
20(1)
of
the
National Prosecuting Authority
Act,
32 of 1998.
[13]
Section
3 of the SDLA.
[14]
See
section 163(4)
of the
Companies Act, 71 of 2008
which reads: '(4)
Whenever a court, on application by an interested person, or in any
proceedings in which a company is involved,
finds that the
incorporation of, or any act by or on behalf of, or any use of, that
company constitutes an unconscionable abuse
of the juristic
personality of the company as a separate entity, the court may
declare that the company is to be deemed not to
be a juristic person
in respect of such rights, obligations or liabilities of the
company,
or
of such member
or
shareholder thereof, or of such other person as specified in the
declaration, and the court may give such further order or
orders as
it
may
deem fit in order to give effect to such declaration.' [Sub-s. (4)
deleted by
s. 102
of Act No. 3 of 2011.]