IN THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION, BLOEMFONTEIN
In the matter between
THE NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS
and
IQBAL MEER SHARMA
NULANE INVESTMENTS 204 (PTY) LTD
ISLANDSITE INVESTMENTS 180 (PTY) LTD
(In Business Rescue)
KURT ROBERT KNOOP N.O .
JOHAN LOUIS KLOPPER N.O.
(4th and 5th Defendants cited in their capacities as
business rescue practitioners of 3rd Defendant)
ISSAR GLOBAL LIMITED
ISSAR CAPITAL (PTY) LTD
TARINA PATEL-SHARMA
Coram: Van Rhyn J
Reportable / Not reportable
Case no: 2427/2021
APPLICANT
FIRST DEFENDANT
SECOND DEFENDANT
THIRD DEFENDANT
FOURTH DEFENDANT
FIFTH DEFENDANT
FIRST RESPONDENT
SECOND RESPONDENT
THIRD RESPONDENT
Heard: 3 October 2024
Delivered: This judgment was handed down electronically by circulation to the
parties' representatives by email and released to SAFLII. The date and time for hand
down is deemed to be at 15h00 on 27 December 2024.
2
Summary: Provisional restraint order in terms of s 26 of Prevention of Organised
Crime Act 121 of 1998 (POCA) - return day - points of law raised - proper
interpretation of s 17(a) of POCA. Third Defendant charged and tried in criminal trial
of offences -discharge of all accused granted by trial court-leave to appeal by NDPP
to Supreme Court of Appeal. Interpretation of provision that criminal proceedings
have been 'concluded'. Common law principle that noting of appeal suspends
operation of order. Point of law dismissed.
ORDER
1. The legal point raised by the Third to Fifth Defendants is dismissed with costs,
which costs shall include Applicant's counsel fees on Scale C as provided for in
Rule 67A read with Rule 69.
JUDGMENT
[1] On 2 June 2021 the National Director of Public Prosecutions, the applicant,
obtained a provisional restraint order pursuant to th_e provisions of s 26 of the Prevention
of Organised Crime Act 121 of 1998 ("POCA") provisionally restraining the assets of the
accused in the criminal proceedings, including those of the third defendant. It is not
material to repeat the contents of the order. The third defendant is lslandsite Investments,
a company in business rescue governed by Chapter 6 of the Companies Act, 71 of 2008.
The fourth and fifth respondents are the duly appointed business rescue practitioners of
lslandsite (the BRPs). The other parties were not involved in the hearing of this matter.
3
[2] The provisional restraining order was granted in the usual format coupled with a
rule nisi, returnable on 5 August 2021, initially, calling upon the defendants and
respondents to show cause why the order, issued with immediate effect, should not be
made final. The return date has been extended over a number of postponements and at
the hearing of this application the return date was extended, by agreement between the
parties, to 5 February 2025. lslandsite and the BRPs oppose the confirmation of the
provisional restraint order. Answering affidavits and heads of argument were filed by
lslandsite and the BRPs. A point in limine ensued as to whether the directors of lslandsite
and their attorneys or the BRPs, who were appointed prior to the provisional restraint
order being made have locus standi to oppose the provisional order. The said dispute
. was decided in favour of the applicant and the BRPs.1
[3] lslandsite as well as \he other accused in the criminal proceedings were charged
and tried in this court for offences which underpinned the restraint application. On 21 April
2023 Gusha AJ found lslandsite (as well as the other accused) not guilty. Gusha AJ
dismissed the applicant's application (the State in the criminal proceedings) for leave to
appeal. An application by the applicant for leave to appeal against the order of Gusha AJ
is pending in the Supreme Court of Appeal. The Supreme Court of Appeal has directed
that the pending application will be the subject of an oral hearing and has required the
parties to be prepared to address the merits of the appeal, if called upon to do so. From
the court roll dated 3 December 2024, it appears that the application for leave to appeal
will be heard by the Supreme Court of Appeal on 7 March 2025.
[4] The applicant, lslandsite and the BRPs have agreed that this matter will only
proceed on the points of law raised by lslandsite and the BRPs. lslandsite and the BRPs
contend that the restraint proceedings against lslandsite have been concluded because
of the acquittal of lslandsite by Gusha AJ. The applicant argues otherwise based upon
the principle that there is a pending application for leave to appeal. The applicant
therefore seeks the dismissal of the points of law raised by lslandsite and the BRPs and
confirmation of the provisional restraint order, alternatively that the confirmation of the
restraint order be postponed pending the outcome of the proceedings in the Supreme
Court of Appeal.
1 lslandsite Investments 180 (Pty) Ltd v National Director of Pubic Prosecutions 2024 (5) SA 20 (SCA).
4
[5] This judgment turns on the interpretation of the s 17(a) of POCA. lslandsite and
the BRPs contend that on a proper interpretation of s17(a) of POCA:
(a) The restraint proceedings against them have been concluded due to the court
having found the defendants in the criminal matter not guilty of the offences which
underpin the restraint order; and
(b) The fact that the applicant has applied for leave to appeal against the finding of
not guilty against the defendants does not change that the criminal proceedings have
been concluded.
[6] With reference to the principles applicable to statutory interpretation that' ... the
proper approach is the objective process of attributing meaning to words used in
legislation ... '2 it is argued by lslandsite and the BRPs that the language used, the context
in which the provision appears and the purpose to which it is directed, leads to the
conclusion that in framing s17(a) of POCA, the Legislature decided to provide that
proceedings 'shall be concluded' when the defendant is 'acquitted or found not guilty'.
The Legislature did not provide that the proceedings would only be concluded after the
acquittal of the accused was confirmed by a court on appeal. If the Legislature intended
proceedings to only conclude after the determination of a review or an appeal against an
acquittal of finding of not guilty, it would have been stated as much, given that such a
condition or requirement was specifically included ins 17(c) of POCA.
[7] In Section 24 of POCA, which deals with the effect of a restraint order pending an
appeal against ~uch an order, the Legislature provides specifically that the order remain
in force pending an appeal. On behalf of lslandsite and the BRPs it is contended that this
lends further support for the argument that the proceedings have been concluded when
lslandsite and the other accused were acquitted and found to be not guilty of the charges
levelled against them in the criminal proceedings.
[8] The applicant argues that the contention on behalf of lslandsite and the BRPs is
fundamentally misconceived, for at least, three reasons:
It is based on an interpretation of s 17(a) of POCA that is:
(a) inconsistent with the common law;
(b) contrary to authority in the Constitutional Court; and
2 Road Traffic Management Corporation v Waymark lnfotech (Pty) Ltd 2019 (5) SA 29 (CC) para 29.
5
(c) inconsistent with the fundamental principles of interpretation.
[9] Mr Budlender SC, counsel on behalf of the applicant argued that if Parliament
intended, in enacting s 17 of POCA, to amend the well-established common law and to
provide that the order of acquittal will remain in force notwithstanding a pending appeal,
it would have said so. The attempt by lslandsite and the BRPs to distinguish the decision
in Falk v National Director of Public Prosecutions3 (Falk v NDPP) cannot succeed on the
basis that it is a final and definitive order by a court that determines whether s 17(a) or
(b) is satisfied, not an order by a court of first instance whose order is the subject of a
pending appeal.
[1 O] The purpose of a provisional restraint order is evidently to preserve certain assets
identified at the time of the grant of the rule nisi so that it may in due course be realised
in satisfaction of a confiscation order and to prevent the dissipation or concealment of the
property of persons against whom criminal proceedings are pending or about to be
instituted. Chapter 5 of POCA creates remedies which are directed at combatting
organised crime, money laundering and criminal gang activity. The preamble of the Act
records that 'it is usually very difficult to prove the direct involvement of organised crime leaders
in particular cases, because they do not perform the actual criminal activities themselves'. This
caused the need to criminalise the management of, and related conduct in connection
with enterprises which are involved in a pattern of racketeering activity. This includes the
planned, ongoing or repeated participation in or the involvement in any offence referred
to in Schedule 1 of POCA. 4
[11] A confiscation order under Chapter 5 is a civil judgment and the rules of evidence
applicable to civil proceedings apply to such proceedings. The restraint and confiscation
order provisions exist to provide for a civil remedy of preservation and seizure, and
forfeiture of property which is derived from unlawful activities or is concerned in the
commission or suspected commission of an offence. It is thus designed to prevent
convicted criminals from profiting from their crime. Section 25 of POCA provides that the
court may grant a restraint order when it is satisfied that the person who is to be subject
to it, is to be charged with an offence and there are reasonable grounds for believing that
a confiscation order may be made against such person. The procedure by which a
3 Falk v National Director of Public Prosecutions3 2012 (1) SACR 265 (CC).
4 Section 1 of POCA.
6
confiscation order may be obtained may only be initiated upon conviction of an accused
person. It follows that the right created by the grant of a confiscation order is a right
emanating solely from the provisions of Chapter 5 of POCA. Therefore, the procedures
for enforcing that right, the constraints and procedural protections relating thereto and the
discharge of a confiscation order, must be viewed in that context. The confiscation order
proceedings are wholly separate from the criminal proceedings conducted against the
defendant.
[12] The court adjudicating the application for a restraint order is not required to be
satisfied of the guilt of an accused before a restraint order is granted. In National Director
of Public Prosecutions v RebuzzfJ it was held that what is required is that there should be
reasonable grounds for believing that the defendant may be convicted. An applicant for
a restraint order is only required to set out evidence which satisfies a court that there are
reasonable grounds for believing that the court that convicts the person concerned may
make an order of confiscation.6
[13] On the return day of the rule nisi the court must consider whether the provisional
restraint order should be confirmed or not. Section 17 of POCA provides as follows:
'17. Conclusion of proceedings against defendant
For the purposes of this Chapter, the proceedings contemplated in terms of this Chapter against
a defendant shall be concluded when-
(a) the defendant is acquitted or found not guilty of an offence;
(b) subject to section 18(2), the court convicting the defendant of an offence, sentences the
defendant without making a confiscation order against him _or her;
(c) the conviction in respect of an offence is set aside on review or appeal; or
(d) the defendant satisfies the confiscation order made against him or her.
[14] Common law is non-enacted law. The common law today derives its authority from
the Constitution.7 At common law the general rule is that the execution of a judgment is
automatically suspended pending the noting of an appeal with the consequence that until
5 National Director of Public Prosecutions v Rebuzzi 2002 (1) SACR 128 (SCA) at para 20.
6 National Director of Public Prosecutio,ns v Kyriacou 2003 (2) SACR 524 (SCA).
7 Pharmaceutical Manufacturers Association of SA: In re Ex parte President of the Republic of South
Africa 2000 (2) SA 674 (CC) para 44.
7
the finalisation of the appeal, the judgment cannot be carried into effect.8 In South Cape
Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd 1977 (3) SA 534 (A)
Corbett JA held that: 'Whatever the true position may have been in the Dutch Courts, and more
particularly the Court of Holland, ... it is today the accepted common-law rule of practice in our
Courts that generally the execution of a judgment is automatically suspended upon the noting of
an appeal, with the result that, pending the appeal, the judgment cannot be carried out and no
effect can be given thereto, except with the leave of the Court which granted the judgment. '9 The
foundation of the common-law rule is to prevent irreparable damage from being done to
the intending appellant, whether the damage be done by a levy under a writ, or by the
execution of the judgment in any other manner appropriate to the nature of the judgment
appealed from.
[15] It is a fundamental presumption, in the interpretation of statues, that a statute is
not to be interpreted as altering the common law unless it explicitly provides as much or
no other conclusion can be reached. In Casserley v Stubbs 1916 TPD 310 the operation
of the presumption in respect of alterations to the common law is explained as follows: 'It
is a well-known canon of construction that we cannot infer that a statute intends to alter the common law.
The statue must either explicitly say that it is the intention of the legislature to alter the common law, or the
inference from the Ordinance must be such that we can come to no other conclusion than that the
legislature did have such intention.'10
[16] In Natal Joint Municipal Pension Fund v Endumeni Municipality11, Wallis JA in a
unanimous judgment of the Supreme Court of Appeal stated the principles pertaining to
interpretation as follows:
'Interpretation is the process of attributing meaning to the words used in a document, be it
legislation, some other statutory instrument, or contract, having regard to the context provided by
reading the particular provision or provisions in the light of the document as a whole and the
circumstances attendant upon its coming into existence. Whatever the nature of the document,
consideration must be given to the language used in the light of the ordinary rules of grammar and
syntax; the context in which the provision appears; the apparent purpose to which it is directed and
the material known to those responsible for its production. Where more than one meaning is
8 Gentiruco AG v Firestone SA (Pty) Ltd 1972 (1) SA 589 (A) at 667; Schoeman v Nedbank Ltd 1989 (4)
SA 812 (W) at 815D-816C .
9 South Cape Corporation (Pfy) Ltd v Engineering Management Services (Ply) Ltd 1977 (3) SA 534 (A)
at 544H-545A.
1° Casserley v Stubbs 1916 TPD 310 at 312.
11 Nata/Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) paras [18]-[19] at
603E-605B .
8
possible each possibility must be weighed in the light of all these factors. The process is objective,
not subjective. A sensible meaning is to be preferred to one that leads to insensible or
unbusinesslike results or undermines the apparent purpose of the document. Judges must be alert
to, and guard against, the temptation to substitute what they regard as reasonable, sensible or
businesslike for the words actually used. To do so in regard to a statute or statutory_ in.strument is
to cross the divide between interpretation and legislation; in a contractual context it is to make a
contract for the parties other than the one they in fact made. The 'inevitable point of departure is
the language of the provision itself, read in context and having regard to the purpose of the
provision and the background to the preparation and production of the document.'
[17] The Constitutional Court in Coo/ Ideas 1186CC v Hubbard and Another12
expressed the fundamental test of statutory interpretation in these terms:
' ... the words in a statute must be given their ordinary grammatical meaning, unless to do so
would result in an absurdity. There are three important riders to this general principle, namely:
(a} that statutory provi~ions should always be interpreted purposively;
(b} the relevant statutory provision must be properly contextualized; and
(c} all statutes must be construed consistently with the Constitution, that is, where reasonably
possible, legislative provisions ought to be interpreted to preserve their constitutional validity. This
proviso to the general principle is closely r~lated to the purposive approach referred to in (a).'
[18] It is apposite to first consider the context within which POCA was promulgated.
The primary purpose of Chapter 5 of POCA is not punitive, but to ensure that no person
benefits from his or her wrongdoing. Its secondary purpose is to promote general crime
deterrence and prevention by depriving people of 'ill-gotten gains'.13 In National Director
of Public Prosecutions v Swart14 it was held that:
'The purpose of POCA is to counteract organised crime and criminal gang activities. It is the
culmination of a protracted process of law reform aimed at attempting to ensure that criminals do
not benefit from their crimes. Chapter 6 thereof (comprising s 37 to s 62) is focused on property
that either has been used to commit an offence or which constitutes the proceeds of crime, rather
than on the wrongdoers themselves. It provides for forfeiture of the proceeds of and
12 Coo/ Ideas 1186CC v Hubbard and Another 2014 (4) SA 474 (CC) at 484 -485 para [28].
13 S v Shaik and Others [2008] ZACC 7; 2008 (5) SA 354 (CC) at paras 50-8; Falk v NDPP at para 15.
14 National Director of Public Prosecutions v Swart 2005 (2) SACR 186 (SEC LD ).
9
instrumentalities used in crime, but is not conviction-based and may be invoked even where there
is no prosecution. '15
[19] Where a prosecution for an offence has been instituted against the defendant or
the court is satisfied that a person is to be charged with an offence, the National Director
of Public Prosecutions is required in an application for a restraint order, in either event,
to demonstrate that there are reasonable grounds for believing that a confiscation order
may be made against that defendant. The nature and the tenor of the evidence disclosed
by the applicant, in the matter at hand, evidently demonstrated that there are reasonable
grounds for believing both that the defendants may be convicted and that a confiscation
order may be made, resulting in the order made by Naidoo J on 2 June 2021. Mr Bham
SC, counsel on behalf of lslandsite and the BRPs argued that where the trial court has
found an accused (defendant) not guilty in the criminal proceedings it has established,
on a standard of proof higher than that prescribed in Chapter 5 of POCA, and in effect
beyond reasonable doubt, that there is no reasonable possibility of a conviction against
the defendant.
[20] lslandsite and the BRPs therefore contend that having regard to the lowest
threshold of proof (a belief based on reasonable grounds) for granting a restraint order,
it would result in POCA having unconstitutional application when innocent persons are
deprived of their property if s 17 of POCA is interpreted to mean that the provisional
restraint order is to be confirmed or extended pending the hearing of the appeal in the
criminal matter. On behalf of lslandsite and the BRPs it is contended that the context of
POCA is essentially civil proceedings which prohibits a person, pre-conviction, from
dealing with his or her property.
[21] It is trite that the State can only appeal on a question of law and not on any
incorrect factual findings of a trial court in criminal proceedings.16 In enacting s 17 of
POCA the Legislature did not provide that the proceedings contemplated against a
defendant shall be concluded when a defendant is acquitted or found not guilty of an
offence notwithstanding a pending appeal by the prosecution. The common law ·rule that
an order of a court is suspended pending the outcome of an appeal is thus left in place.
In contrast the Legislature provided in s 24A of POCA that: 'A restraint order and an order
15 National Director of Public Prosecutions v Swart at 188f-g.
16 S v Basson 2003 (2) SACR 373 (SCA).
10
authorising the seizure of the property concerned or other ancillary order which is in force at the time of
any decision by the court in relation to the making of a confiscation order, shall remain in force pending the
outcome of any appeal against the decision concerned'. (emphasis added)
[22] Evidently, being aware of the common law rule that an appeal suspends the
operation of the order, the Legislature intended that the restraint order would remain in·
force notwithstanding a pending appeal against the order. The purpose is obviously to
ensure that the accused's assets could not be disposed of or dissipated or concealed
pending the outcome of the appeal. Section 24A was inserted later by the POCA
Amendment Act. In Falk v NDPP the issue was the interpretation of and the relationship
between POCA and the International Co-operation in Criminal Matters Act 121 of 1998,
which provides for the enforcement in South Africa of restraint orders that have been
issued in the course of criminal proceedings in foreign states and whether the
proceedings had concluded in terms of s 17(b) of POCA.
[23] A restraint order granted in the course of criminal proceedings against Mr Falk by
a court in Hamburg, Germany was registered in South Africa by the Registrar of the High
Court. The High Court subsequently issued an order interdicting the applicants from
dealing with assets in South Africa. The Constitutional Court adjudicated the question
whether the proceedings against the applicants were concluded in terms of s 17(b) of
POCA and reasoned that, when the decision of the Hamburg Regional Court was taken
on appeal to the Federal Court, the German proceedings were clearly not concluded. The
reason being that a confiscation order could still be made. It was held that: 'This necessarily
flows from the nature of the appeal' .17 The court therefore held that s 17 (b) of POCA, which
states that proceedings are concluded when the court convicting the defendant of an
offence sentences the defendant without making a confiscation order does not assist the
applicants on the basis thats 17(b) could not apply only to a court of first instance. Section
13(1) of POCA allows for an appeal by the NDPP. With reference to s 24A that a restraint
order or ancillary order, which is in force at the time of any decision by the court in relation
to the making of a confiscation order, 'shall remain in force pending the outcome of any
appeal against the decision concerned', it was held that the argument that the
proceedings have been concluded, notwithstanding an appeal, would elevate form above
substance. This is an approach that our courts have not endorsed.
17 Falk v NDPP at [67].
11
[24] I agree with the submission on behalf of the applicant that the attempt by Island site
and the BRPs to distinguish the decision in Falk v NDPP cannot succeed. Section 17(a)
like s 17 (b) is not satisfied when a court of first instance makes an order contemplated in
the subsection. It does not apply only to a court of first instance. Therefore, if an appeal
is pending, the provisions of s 17(a) are not triggered. The word 'acquitted' refers to a
final order of acquittal, not an order which is subject to a pending appeal.
[25] In essence this matter concerns the interpretation of the word 'concluded' in s17
of POCA. The dictionary meaning of the word 'conclude' is inter alia: to bring to a close
or end, to finish, to terminate or make and end, to settle or arrange finally, resolve.18 For
obvious reasons the parties are seeking different outcomes in the interpretation of the
word 'concluded' as used in s 17 of POCA. The applicant's preferred outcome is
confirmation of the rule nisi and the continued restraint over the properties of lslandsite
(and other defendants) pending the outcome of the appeal in the Supreme Court of
Appeal. lslandsite and the BRPs, on the other hand, want the discharge of the restraint
order and the restoration of the restrained properties. Having regard to the language used
and in the light of the ordinary rules of grammar and syntax, I am not convinced that the
word 'concluded' in s17 of POCA exclude a final determination of the criminal matter on
appeal.
[26] Whilst the impact of POCA appears severe because the legislation intercepts the
property rights of individuals who may be, when the criminal proceedings have been
concluded, found to be innocent of any complicity of the alleged crime, the Constitutional
Court has found the provisions of POCA not only to be consistent with the Constitution,
but to be a "friend" to its aims. In National Director of Public Prosecutions v Elran 19 it was
held that the purpose of a restraint order is to preserve sufficient property to satisfy a
reasonably anticipated confiscation order and the person whose property is subject to a
restraint order is precluded from dealing with the property in any manner other than
permitted by the court. It is clear that the effect of POCA leads to a 'draconian intrusion'
into the rights of those people who are affected by POCA orders. To find that lslandsite
and the BRPs are correct in their interpretation of s 17 of POCA, in that the proceedings
18 The New Shorter Oxford English Dictionary Vol 1 A-M (1993 Edition) p 469.
1~ National Director of Public Prosecutions v Elran 2013 (1) SACR 429 (CC) at [23].
12
against lslandsite have been concluded, prior to the hearing of the application for leave
to appeal in the Supreme Court of Appeal, would defeat the purpose of POCA.
[27] Having regard to the language used, the context in which the provision appears
and the purpose to which it is directed, namely a mechanism for ensuring that the assets
of offenders are preserved until a final decision has been made whether the accused are
guilty, leads to a finding that it would not be in the interest of justice to set aside the
restraint order pending the appeal by the applicant in the criminal matter. The purpose
would be defeated if the applicants ultimately succeed with the pending appeal, and the
defendants are, prior to the hearing of the appeal, enabled to dissipate the assets forming
the subject of the restraint order. Such an interpretation of s 17 of POCA would not be
sensible and would make travesty of the system of appeals which is designed to ensure
that justice is done and that the law takes it course.
[28] In the result, I am of the view that, the points of law raised by lslandsite and the
BRPs are without substance. The provisional restraint order has been extended, by
agreement between the parties pending the adjudication of this matter, to the pre-trial roll
of 5 February 2025.
[29] The purpose of an award of costs to a successful party is to indemnify such party
for the expense to which he or her has been put through having been unjustly compelled
to initiate or defend litigation, or in this matter the adjudication of points of law raised by
islandsite and the BRPs. The issue whether to award costs is primarily based on two
basic rules namely: That the award of costs is a matter of judicial discretion by the court
and that the successful party should as a general rule be awarded costs. There is no
reason why costs should not follow the event.
[30) ORDER:
In the result the following order is made :
1. The legal point raised by the Third to Fifth Defendants is dismissed with costs,
which costs shall include Applicant's counsel fees on Scale C as provided for in
Rule 67A read with Rule 69.
Appearances
For the Appellant:
Instructed by:
For the Third to Fifth Respondents:
Instructed by:
G BUDLENDER SC
K KOLLAPEN
THE STATE ATTORNEY
BLOEMFOINTEIN
AEBHAMSC
TSCOTT
MCINTYRE VAN DER POST
BLOEMFONTEIN
13