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[2005] ZACC 15
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Phillips and Others v National Director of Public Prosecutions (CCT 55/04) [2005] ZACC 15; 2006 (2) BCLR 274 (CC); 2006 (1) SA 505 (CC); 2006 (1) SACR 78 (CC) (7 October 2005)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 55/04
ANDREW LIONEL PHILLIPS First Applicant
LADDIES LARK (PTY) LTD Second Applicant
JANVEST CC Third Applicant
APVEST CC Fourth Applicant
MAYVEST CC Fifth Applicant
JUNVEST CC Sixth Applicant
AUGVEST CC Seventh Applicant
DECVEST CC Eighth Applicant
PORTION 1 OF 247 EDENBURG CC Ninth Applicant
SUSHIMI INVESTMENTS CC Tenth Applicant
SWINGING TRADING TWISTER CC Eleventh Applicant
FEBVEST CC Twelfth Applicant
D MORNINGSIDE INVESTMENTS (PTY) LTD Thirteenth Applicant
STEPHEN WERNER CC Fourteenth Applicant
MOONLITE IMPORT & EXPORT CC Fifteenth Applicant
DOC PROPERTY INVESTMENTS CC Sixteenth Applicant
versus
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
Heard
on : 12 May 2005
Decided
on : 7 October 2005
JUDGMENT
SKWEYIYA
J:
This case concerns the nature of a restraint order under section
26
1
of the Prevention of Organised Crime Act 121 of 1998 (the Act) and
the circumstances in which it may be varied or rescinded by
the
court that granted it. It comes to this Court by way of an
application for leave to appeal brought by Mr Andrew Lionel

Phillips and 15 other applicants against the judgment and order of
the Supreme Court of Appeal (SCA). The SCA reversed the decision
of the Johannesburg High Court (the High Court) granting the
applicants an order rescinding the restraint order made under

section 26(1) and (3) of the Act that had been obtained by the
National Director of Public Prosecutions (NDPP) against the assets
of the applicants.
The primary issue in the case is whether the High Court had the
power to rescind the order it had made in terms of section 26
of
the Act on grounds other than those specified by the Act.
2
The SCA and the High Court differed on this question, with the SCA
holding that the High Court did not have such power.
Litigation
between the parties started as far back as the year 2000. I
therefore consider it necessary to give a brief description
of the
parties to the litigation and the relevant background. I also set
out in some detail the facts giving rise to the High
Court
application to have the restraint order rescinded and the treatment
of that application in the High Court and in the SCA.
Parties
to the litigation
The
first applicant is Mr Phillips. The second and thirteenth
applicants are companies with limited liability, incorporated in
terms of the Companies Act.
3
The third to twelfth and fourteenth to sixteenth applicants are
close corporations duly registered and incorporated in accordance
with the provisions of the Close Corporations Act.
4
Mr Phillips is either the sole shareholder or sole member of the
second to sixteenth applicants. He is in effective control
of the
assets of the other applicants.
The
respondent is the NDPP who in terms of section 179(1) and (2) of
the Constitution
5
is head of the prosecuting authority in the country. He has the
power to institute criminal proceedings on behalf of the state
and
to carry out any necessary functions incidental to instituting
criminal proceedings.
Relevant
background to the litigation
Mr
Phillips owned and operated a business known as The Ranch which
provided a venue and facilities for paying male customers to
have
sexual intercourse with female prostitutes who were not employees.
This business was conducted on premises at 54 Autumn
Road, Rivonia,
Sandton, owned by the sixteenth applicant. Another business, The
Titty Twister, owned by the eleventh applicant
was operated on the
same premises in tandem with The Ranch. It presented striptease
shows. The second applicant (Laddies Lark
(Pty) Ltd) and the
eleventh applicant (Swinging Trading Twister Close Corporation)
were intimately engaged in the operation of
the business of The
Ranch and The Titty Twister respectively.
On
2 February 2000 law enforcement officers raided and searched the
premises on which the two businesses were conducted. Following
this raid, on 4 February 2000, the NDPP launched proceedings in
respect of the immovable property on which the two businesses
were
conducted, together with the buildings thereon, and obtained a
preservation of property order in terms of section 38 of
the Act,
6
prohibiting any person from dealing with them. A curator bonis, Mr
Reynolds, was appointed in terms of section 42 of the Act.
7
The NDPP has given notice of its intention to apply for a
forfeiture order of the property in terms of section 48 of the
Act.
8
Mr
Phillips continued running the businesses on the immovable property
despite the existence of two court orders, and the fact
that he was
charged with various offences. He faces several charges in terms
of the Sexual Offences Act,
9
including the keeping of a brothel,
10
procuring or attempting to procure females to have unlawful sexual
intercourse,
11
and living off the proceeds of prostitution.
12
He is also facing charges in terms of the Aliens Control Act
13
relating to the employment of illegal aliens,
14
authorising illegal aliens to conduct business as prostitutes or
striptease dancers,
15
and aiding and abetting illegal aliens to remain in this country.
16
The trial on these charges has commenced but has not yet been
completed.
On
22 December 2000 the NDPP applied ex parte to the High Court in
terms of section 26 of the Act for a restraint order against
Mr
Phillips and the other applicants, other than the sixteenth
applicant, the owner of the property at 54 Autumn Road, Rivonia.

The application did not relate to this property but rather to the
businesses of The Ranch and The Titty Twister as conducted
by Mr
Phillips and the eleventh applicant.
17
The High Court granted a provisional restraint order on 22 December
2000 which was made final on 31 July 2001.
18
The applicants appealed unsuccessfully to the SCA against this
order.
19
The order was in respect of all property under the control of Mr
Phillips whether in his name or not. The restraint order was
made
in anticipation of the trial court making a confiscation order in
terms of section 18 of the Act
20
in the event of Mr Phillips being convicted in his criminal trial.
The purpose of the confiscation would be to deprive Mr Phillips
of
any benefits which may have been derived by him from the offences
upon which he might be convicted or any other criminal activity
which the trial court might find to be sufficiently related to
those offences.
Court
proceedings and orders obtained against the curator bonis
Mr van den Heever was appointed as the curator bonis under section
28 of the Act
21
in respect of the assets subject to the restraint order. He was
authorised to take possession of the property, care for it and
administer it.
22
He duly took charge of the property and not surprisingly, caused
the businesses of The Ranch and The Titty Twister to stop

operating. The businesses stopped generating income resulting in
there being no funds to pay various charges accruing in respect
of
rates, electricity, water and other related charges. In the time
that followed the properties began to deteriorate and arrear
charges accumulated which prompted the applicants to launch a
number of applications directed at the curator bonis.
A
court order was obtained by the applicants on 23 August 2002
declaring the curator to be responsible for the payment of all
arrear and future charges in relation to the properties. Following
this, an order was obtained on 21 November 2002 compelling
the
curator to restore the properties to the condition in which they
had been on 22 December 2000 (the date on which the provisional
restraint order in terms of section 26(1) was made by the High
Court). The curator attempted to obtain the necessary funds which
would enable him to maintain the properties by letting them out,
but on 6 March 2003 an urgent interdict was obtained by the
applicants preventing the curator from letting the properties. The
curator failed to restore the properties to the condition
in which
they had been on 22 December 2000 as directed by the court, and the
applicants launched court proceedings to have the
curator found to
be guilty of contempt of court for failing to comply with the order
of 23 August 2002 declaring him to be responsible
for payment of
charges on the properties.
The
application by the applicants was however dismissed by the High
Court on 19 March 2003. The curator, in an attempt to ensure
that
the properties were properly maintained and the charges on the
properties were paid, attempted to use some of the applicants’
funds in accounts held at financial institutions, but was prevented
from doing so because of yet another court order obtained
by
the applicants on 23 June 2003 directing that the curator restore
the credit balances in the applicants’ accounts.
The
applicants have relentlessly challenged every aspect of the
restraint order, including its nature and everything done under
it
by the curator bonis. They have made every effort to regain
possession and control of the properties affected by the order.
In the proceedings which give rise to the present application, the
applicants applied to the High Court to rescind the restraint
order.
23
The
High Court application
The
main case made out on the papers in that application is that the
restraint order should be rescinded because it is impossible
for
the curator bonis to discharge his duties under it. The contention
is that the preservatory purpose of the restraint order
is not
being served as a result of the deterioration of the immovable
properties owned by the applicants and the accumulation
of
municipal charges, in the form of rates in respect of the immovable
properties. This is primarily due to the failure of the
curator to
have the restraint order implemented. The attitude adopted by him
and the NDPP is that he (the curator) is not obliged
to pay
municipal charges in respect of the properties or to incur the cost
of restoring, maintaining and securing them unless
there were
realisable funds from the properties to do so. According to the
applicants, far from preserving the properties, the
effect of the
order has in fact been to reduce the value of the properties and
thus undermine the prospect of full value being
realised in the
event of conviction and a confiscation order being made in terms of
section 18 of the Act.
Although
the restraint order was one granted in terms of section 26(1) and
(3) of the Act, the applicants chose not to make out
a case for the
rescission of the order based on the grounds of rescission
contemplated in section 26(10)(a) of the Act nor to
seek relief
under any of the provisions of the Act. They sought to make out
their cause of action for rescission of the order
on the basis of
the inherent jurisdiction of the High Court, which is now
entrenched by section 173 of the Constitution,
24
to protect and regulate its own process, and to develop the common
law by taking into account the interests of justice.
The
NDPP contended that the only grounds upon which the order could be
rescinded were those set out in section 26(10) of the Act
and
therefore maintained that, as no such case had been made out on the
applicants’ papers, the application had to fail.
The
High Court took the view that the proper approach to the matter was
to determine whether it had common law powers to rescind
or vary
its own order and, if it had the power and discretion to do so,
then to determine whether the legislature intended to
limit that
power to cases of hardship as provided for under section
26(10)(a).
25
On this approach, it classified the restraint order as “purely
interlocutory” akin to an “anti-dissipation order”
26
and concluded that the restraint order was an interim order that
was capable of being varied or rescinded by the court in the
exercise of its inherent jurisdiction on good cause shown.
27
It accordingly held that upon a proper construction, section
26(10)(a) does not take away the inherent power of the High Court
to vary or rescind its order under the common law.
It
reasoned that section 26(10)(a) is in effect a standing provision,
the sole purpose of which is to enlarge the number of people
who
may seek the variation or rescission of a restraint order made
under section 26 of the Act; that the sole requirement for
standing
under section 26(10)(a) is hardship resulting from the order and
that a person, like Mr Phillips, who suffers hardship,
may
therefore invoke the provisions of section 26(10)(a); that however,
section 26(10)(a) does not prevent the court from rescinding
a
restraint order on common law grounds at the instance of a person
suffering hardship. It found that the grounds set out in
section
26(10)(a) were not exhaustive of the grounds upon which the High
Court could vary or rescind a restraint order granted
under the
Act.
28
It
accordingly concluded that a restraint order can be varied or
rescinded if good cause is shown and that good cause includes,
among other things, the impossibility of performance by a curator
bonis appointed under the Act. It granted the order sought
by Mr
Phillips and the other applicants and rescinded the restraint order
that it had previously made.
The
NDPP appealed against that decision to the SCA.
In
the SCA
In the SCA,
29
both the applicants and the NDPP in essence repeated the arguments
that they had advanced in the High Court.
The
SCA upheld the appeal and reversed the decision of the High Court.
It held that a restraint order may not be varied or rescinded
except in the narrow circumstances contemplated in section 26(10)
of the Act. In reaching this conclusion, it relied on its
earlier
decision in
Phillips
SCA I
30
where it had accepted that although a restraint order was only of
interim operation, pending the conclusion of criminal proceedings,
because it could only be varied or rescinded in the limited
circumstances referred to in section 25(2) and section 26(10), it
was sufficiently final in effect to render it capable of appeal.
31
The SCA reasoned that the restraint order is not one that may be
granted at common law. It is authorised by the Act and so is
the
power to vary or rescind it. If there had been no provision for
its variation or rescission in the Act, the order would
stand until
set aside either because the person was not charged,
32
or when the proceedings against the person/s concerned were
concluded.
33
It
held that the solution to the problems experienced by the
applicants in the present case could be found in section 28 of the
Act
34
which permits the variation or rescission of the order by which the
curator bonis is appointed. The curator could have been
given
power to let the properties, or some of them, so as to generate
funds to meet his obligations under the order.
The
SCA thus reversed the decision of the High Court and held that a
court which grants a restraint order in terms of section
26(1) of
the Act has no inherent jurisdiction to rescind that order; that in
general, its power to do so is circumscribed by
the Act and, aside
from the common law grounds, is limited to the grounds set forth in
section 25(2)
35
and section 26(10)
36
of the Act.
37
Application
for leave to appeal to this Court
The
applicants seek leave to appeal to this Court on the basis that the
High Court decision was correct and that both the first
and the
second SCA judgments were incorrect.
Applications
for leave to appeal to this Court are governed by section 167(6) of
the Constitution which provides for appeals from
any other court
“when it is in the interests of justice and with leave of the
Constitutional Court.” Rule 19(6)(a) of the
rules of this Court
provides that “[t]he Court shall decide whether or not to grant
the appellant leave to appeal.”
It
has been held in several decisions of this Court that the decision
whether to grant or refuse leave to appeal is a matter for
the
discretion of the Court,
38
and that it will be granted if the applicant raises a
constitutional matter and it is in the interests of justice to
grant
leave to appeal.
Has
a constitutional matter been raised?
The
NDPP has argued that no constitutional issue is raised by this
matter. This is clearly incorrect. The contention by the
applicants raises a constitutional issue of importance which
relates to the nature and ambit of the powers of superior courts,
in particular the scope of their inherent power. In
Bannatyne v
Bannatyne (Commission for Gender Equality, as Amicus Curiae)
39
this Court held that any issue as to the nature and ambit of the
powers of the high court necessarily raises a constitutional
issue.
40
A finding that the application raises a constitutional issue is not
however decisive. Leave to appeal may be refused if it is
not in
the interests of justice that this Court hear the appeal.
41
Is
it in the interests of justice to grant leave to appeal?
The
applicants have advanced two reasons as to why they should be
granted leave to appeal. Firstly, they contend that their

prospects of success in the appeal are good; and secondly, that the
nature of the constitutional issues raised by them is substantial.

I now consider these two reasons.
The
applicants raise two constitutional arguments in this Court: first,
they argue that the interpretation of section 26(10) of
the Act is
inconsistent with the spirit, purport and objects of the
Constitution and is accordingly incorrect;
42
second, they argue that even if that interpretation is correct, the
High Court nevertheless had the jurisdiction to rescind the
restraint order on the basis of its inherent common law power to
regulate its process, as confirmed in section 173 of the
Constitution.
I will deal with each of these arguments separately.
The
proper interpretation of section 26(10)
Both
in their heads of argument and before this Court, counsel for the
applicants submitted that section 26(10)(a) is capable
of two
possible constructions, with one being constitutionally compliant
and the other not. They contend that the section is
capable of a
construction that allows the High Court, in the exercise of its
inherent power, to set aside a restraint order made
under the Act
on common law grounds, and indeed this was the interpretation
adopted by the High Court. The High Court took the
view that it
was empowered under common law (without the need to refer to
section 173 of the Constitution) to set aside the restraint
order
on grounds other than those listed in the Act. This is the
interpretation favoured by the applicants who contend that
it is in
line with and does not do violence to the inherent power vested in
the high courts by section 173 of the Constitution.
The
second interpretation is one which holds that the grounds for
rescission provided by the Act constitute a closed list and
that a
high court is not empowered to rescind a restraint order on grounds
other than those specified in the Act. This is the
interpretation
which was adopted by the SCA which, it is contended, is not one
that advances the values enshrined in the Bill
of Rights.
I
do not think that section 26(10) is capable of the construction
proffered by the applicants. It is not only about standing;
43
it carefully regulates the substantive circumstances in which
rescission of a restraint order made under the Act may be sought.

It may be that on the construction adopted by the SCA it is
inconsistent with the Constitution, but that case has not been made
on the applicants’ papers and cannot be decided here. I cannot
therefore, in these proceedings, fault the approach of the
SCA to
section 26(10) of the Act and, given that there is no
constitutional challenge to section 26(10), the SCA interpretation
must stand.
The
constitutional complaints that are made by the applicants in this
Court were not made in the SCA. The case in the High Court
and in
the SCA was neither expressly pleaded nor argued as a
constitutional matter. They did not allege that the continued

operation of the restraint order violated their constitutional
rights or that any restrictions on the court’s powers to rescind
that order violated those rights. It follows that the NDPP was not
afforded an opportunity to deal with the allegation that
the
continued operation of the restraint order deprived the applicants
of their properties, in circumstances where such deprivation
could
not be justified under section 36 of the Constitution.
44
It is impermissible for a party to rely on a constitutional
complaint that was not pleaded. In
Prince v President, Cape Law
Society, and Others
,
45
Ngcobo J stated:
“
Parties who challenge the
constitutionality of a provision in a statute must raise the
constitutionality of the provisions sought
to be challenged at the
time they institute legal proceedings. In addition, a party must
place before the Court information relevant
to the determination of
the constitutionality of the impugned provisions. Similarly, a
party seeking to justify a limitation of
a constitutional right must
place before the Court information relevant to the issue of
justification. I would emphasise that
all this information must be
placed before the Court of first instance. The placing of the
relevant information is necessary to
warn the other party of the
case it will have to meet, so as [to] allow it the opportunity to
present factual material and legal
argument to meet that case. It
is not sufficient for a party to raise the constitutionality of a
statute only in the heads of
argument, without laying a proper
foundation for such a challenge in the papers or the pleadings. The
other party must be left
in no doubt as to the nature of the case it
has to meet and the relief that is sought. Nor can parties hope to
supplement and
make their case on appeal.”
46
[footnote omitted.]
Accuracy
in pleadings in matters where parties place reliance on the
Constitution in asserting their rights is of the utmost importance.
In
Shaik v Minister of Justice and Constitutional Development
and Others
,
47
Ackermann J said:
“
The minds of litigants (and
in particular practitioners) in the High Courts are focused on the
need for specificity by the provisions
of Uniform Rule 16A(1). The
purpose of the Rule is to bring to the attention of persons (who may
be affected by or have a legitimate
interest in the case) the
particularity of the constitutional challenge, in order that they
may take steps to protect their interests.
This is especially
important in those cases where a party may wish to justify a
limitation of a chap 2 right and adduce evidence
in support thereof.
It constitutes sound discipline
in constitutional litigation to require accuracy in the
identification of statutory provisions that
are attacked on the
ground of their constitutional invalidity. This is not an
inflexible approach. The circumstances of a particular
case might
dictate otherwise. It is, however, an important consideration in
deciding where the interests of justice lie.”
48
[footnote omitted.]
The
constitutionality of the Act has not been attacked. Moreover, the
applicants in their heads of argument, and in oral argument
conceded that the grant of restraint orders in circumstances
contemplated by section 25 of the Act is constitutionally
acceptable
and, by implication, that there was sufficient reason
for the deprivation of property that attached to the granting of
the restraint
order.
Their
argument in this Court was that they invoked the Constitution as an
interpretive tool in respect of section 26(10) of the
Act.
49
There was thus no direct challenge to any of the provisions of the
Act.
It
is not ordinarily permissible to attack statutes collaterally. The
constitutional challenge should be explicit, with due notice
to all
affected. This requirement ensures that the correct order is made;
that all interested parties have an opportunity to
make
representations; that the relevant evidence can, if necessary, be
led
50
and that the requirements of the separation of powers are
respected.
51
This
is not to say that circumstances could never exist where the
interests of justice required that a constitutional matter be
raised for the first time on appeal before this Court. They would,
however, be rare and the circumstances would have to be

exceptional. The present case by no means fulfils these criteria.
In any event, the applicants in this case did not seek to
launch a
direct constitutional challenge to section 26(10).
A
further consideration to be taken into account is that the
applicants had already applied to and obtained from the SCA an

order to the effect that a section 26 restraint order is final in
nature and therefore only appealable. It was only when this
no
longer suited them that they approached the High Court for an order
that the section 26 order was interim in nature and could
therefore
be varied or rescinded by the court that granted it. It is not in
the interests of justice that the type of situation
be allowed,
whereby a litigant is permitted to pick and choose his remedies as
it suits him. An order given by a court on an
issue must be
considered definitive, unless that ruling is challenged directly.
To permit a litigant to behave in this manner
would undermine the
finality of a court’s ruling.
The
High Court’s inherent jurisdiction to rescind the order
Section
173 of the Constitution provides:
“
The Constitutional Court,
Supreme Court of Appeal and High Courts have the inherent power to
protect and regulate their own process,
and to develop the common
law, taking into account the interests of justice.”
The Constitution requires that judicial authority must vest in the
courts which must be independent and subject only to the

Constitution and the law. Therefore courts derive their power from
the Constitution itself. They do not enjoy original jurisdiction
conferred by a source other than the Constitution. Moreover, in
procedural matters, section 171 makes plain that “[a]ll courts
function in terms of national legislation and their rules and
procedures must be provided for in national legislation.” On
the
other hand section 173 of the Constitution preserves the inherent
power of the courts to protect and regulate their own process
in
the interests of justice. In
S v Pennington and Another
,
52
this Court held that:
“
It is a power which has to
be exercised with caution. It is not necessary to decide whether it
is subject to the same constraints
as the ‘inherent reservoir of
power to regulate its procedures in the interests of the proper
administration of justice’
53
which vested in the Appellate Division prior to the passing of the
1996 Constitution.
54
Even if it is subject to such constraints, the present situation,
in which there is a vacuum because the legislation and rules
contemplated by the Constitution have not been passed, is an
extraordinary one in which it would be appropriate to exercise the
power.”
55
In
Parbhoo and Others v Getz NO and Another
56
too, this Court turned to its “inherent power” to meet an
“extraordinary” procedural situation pending enactment of
relevant
legislation and promulgation of rules of procedure. In
both cases the points are made that ordinarily the power in section
173
to protect and regulate relates to the process of court and
arises when there is a legislative lacuna in the process. The
power
must be exercised sparingly having taken into account
interests of justice in a manner consistent with the Constitution.
It
may be that the High Court could legitimately claim inherent power
of holding the scales of justice where no specific law directly
provides for a given situation or where there is a need to
supplement an otherwise limited statutory procedure such as the one
in section 26 of the Act. This can wait for a decision in the
future when such a case presents itself.
In
the present matter the applicants made no attempt whatsoever to
bring their case within the provisions of the Act, which they
could
have done. The effect of the High Court order rescinding the
restraint order was to ignore the statutory provisions of
an Act of
Parliament.
57
Whatever
the true meaning and ambit of section 173, I do not think that an
Act of Parliament can simply be ignored and reliance
placed
directly on a provision in the Constitution, nor is it permissible
to side-step an Act of Parliament by resorting to the
common law.
58
I
doubt that the inherent jurisdiction of the court under section 173
is such that it empowers a judge of the high court to make
orders
which negate the unambiguous expression of the legislative will.
Moreover, the power that a court has to use its inherent
power is a
special and extraordinary power which should be exercised sparingly
and only in clear cases. The present case is
not such a case.
The
applicants argued in this Court that it was essential that the
restraint order be rescinded to avoid substantial deterioration
in
the value of their properties. As the SCA held, however, this is
not correct. It is clear that any harm that has occurred
has
arisen from what the SCA described as a “woeful lack of
co-operation” between the applicants and the curator bonis which
has prevented the curator bonis from carrying out his tasks. It is
clear that the root cause of the difficulties of which the
applicants complain lies in the absence of funds to maintain the
properties and pay any debts due in respect of the properties.
The
SCA reasoned that were the curator’s powers to be amended in
terms of section 28 of the Act
59
to include a power to lease the properties, or at least some of
them, sufficient funds could be generated to cover the costs
of
maintenance.
In
this Court, the applicants sought to argue that the problem could
not be resolved in the manner suggested by the SCA. In making
this
argument, they pointed to the terms of the restraint order
60
itself which prohibits any person from “dealing in” the
properties subject to the restraint. In my view, although it may
be that the restraint order could be read in the wide fashion
proposed by the applicants, it is capable of a narrower meaning
which would avoid disabling the curator in the manner contended for
by the applicants. A narrower meaning of the restraint order
is
possible. The prohibition on people dealing in the property should
be read to refer to selling or encumbering the property.
Such a
meaning would ensure that the purposes of the Act, which include
the need to preserve property subject to a restraint
order, are not
defeated. If such a meaning is adopted, then the powers of the
curator could be amended as suggested by the SCA
or in any other
suitable manner to ensure that the properties are used in an
appropriate manner to guarantee income to cover
maintenance and
other costs of upkeep of the properties. In the circumstances, the
applicants’ argument that the powers of
the curator bonis could
not be amended must fail.
A
final comment should be made. Given the limited powers of
variation and rescission provided for in section 26(10) of the Act,
courts making restraint orders should take care to ensure that
their terms are sufficiently flexible to ensure that the
preservation
of properties subject to restraint orders is not
imperilled by the terms of the restraint order. The NDPP, too, in
formulating
draft orders should bear these considerations in mind.
It
is not necessary to consider in what circumstances the High Court
has powers under section 173 additional to those provided
for in a
statute because it is clear that a litigant should not rely on it
without first exhausting the remedies under the statute
which has
not happened in the present case.
However,
I would prefer not to decide these issues but to decide the matter
on the basis that, even assuming in favour of the
applicants that
the High Court has such jurisdiction, the applicants have not made
out a case on the facts
61
for the relief they seek. In the circumstances the applicants have
no prospects of success and the application should be dismissed.
Costs
There
is no reason to make any order as to costs.
Order
The
application for leave to appeal is dismissed.
Langa
CJ, Moseneke DCJ, Mokgoro J, O’Regan J, Sachs J, Van der
Westhuizen J and Yacoob J concur in the judgment of Skweyiya J.
For the applicant: M Smithers SC and M Chaskalson instructed by
Shannon Little Attorneys, Johannesburg.
For the respondent: MJD Wallis SC and A Cockrell instructed by the
State Attorney, Johannesburg.
1
Section 26(1) provides:
“
The National Director may by way of an ex parte
application apply to a competent High Court for an order prohibiting
any person,
subject to such conditions and exceptions as may be
specified in the order, from dealing in any manner with any property
to which
the order relates.”
2
Section 26(10)(a) provides that a restraint order granted in terms
of section 26(1) may be set aside in certain specified
circumstances.
It states as follows:
“
A High
Court which made a restraint order―
(a) may on application by a person affected by that
order vary or rescind the restraint order or an o
rder
authorising the seizure of the property concerned or other ancillary
order if it is satisfied―
(i) that the operation of the order concerned will
deprive the applicant of the means to provide for his or her
reasonable living
expenses and cause undue hardship for the
applicant; and
(ii) that the hardship that the applicant will suffer
as a result of the order outweighs the risk that the property
concerned may
be destroyed, lost, damaged, concealed or
transferred”.
3
Act 61 of
1973.
4
Act 69
of 1984.
5
Section 179 provides in relevant part that:
“
(1) There is a single national prosecuting authority
in the Republic
,
structured in terms of an Act of Parliament, and consisting of―
(a) a National Director of Public Prosecutions, who is
the head of the prosecuting authority, and is appointed by the
President,
as head of the national executive; and
(b) Directors of Public Prosecutions and prosecutors as
determined by an Act of Parliament.
(2) The prosecuting authority has the power to
institute criminal proceedings on behalf of the state, and to carry
out any necessary
functions incidental to instituting criminal
proceedings.”
6
Section 38(1) provides:
“
The National Director may by way of an ex parte
application apply to a High Court for an order prohibiting any
person, subject to
such conditions and exceptions as may be
specified in the order, from dealing in any manner with any
property.”
7
Section 42 provides:
“
Appointment of curator bonis in respect of property
subject to preservation of property order.—(1) Where a High Court
has made
a preservation of property order, the High Court shall, if
it deems it appropriate, at the time of the making of the order or
at
a later time—
(a) appoint a curator bonis to do, subject to the
directions of that High Court, any one or more of the following on
behalf of
the person against whom the preservation of property order
has been made, namely—
(i) to assume control over the property:
(ii) to take care of the said property;
(iii) to administer the said property and to do any act
necessary for that purpose; and
(iv) where the said property is a business or
undertaking, to carry on, with due regard to any law which may be
applicable, the
business or undertaking; and
(b) order any person holding property subject to the
preservation of property order to surrender forthwith, or within
such period
as that Court may determine, any such property into the
custody of the curator bonis.”
8
Section 48 provides:
“
Application for forfeiture order.—(1) If a
preservation of property order is in force the National Director may
apply to a High
Court for an order forfeiting to the State all or
any of the property that is subject to the preservation of property
order.”
9
Act 23 of 1957.
10
Id, section 2 read with sections 1, 3 and 22.
11
Id, section 10(a) read with sections 1 and 22.
12
Id, section 20(1)(a) read with sections 1 and 22.
13
Act 96 of 1991. (This Act has since been repealed in its entirety
by
section 54
of the
Immigration Act 13 of 2002
).
14
Id,
section 32(1)(a)
read with
sections 1
and
58
.
15
">
15
Id,
section 32(1)(c)
read with
sections 1
and
58
.
16
Id,
section 57(a)
read with
sections 1
and
58
.
17
">
17
It is argued by the respondent that the property
at 54 Autumn Road is not subject to the restraint order since the
order did not
include the sixteenth applicant which is the
registered owner of that property. Counsel for the applicant
contended, on the other
hand, that since para 1.1(b) of the
restraint order extended to “all other property held by the first
respondent, whether in
his name or not”, the property held by the
sixteenth applicant was subject to the restraint order. I have
great doubts as to
whether a restraint order can operate against
property in circumstances where the registered owner of that
property has not been
cited in the proceedings involving the
restraint order, but that is not a matter that needs to be decided
in these proceedings.
18
National Director of Public Prosecutions v Phillips and Others
2002 (4) SA 60
(W). The relevant part of the order provides:
“
1.1 The property to be disclosed and surrendered
(the property)
This order relates to realisable property as defined in
ss 12 and 14 of the Act and extends to
(a) the property specified in the schedule of assets
attached hereto marked annexure A;
(b) all other property held by the first [applicant]
whether in his name or not;
(c) all property which, if transferred to first
[applicant], or to any third person on behalf of first
[applicant],would be realisable
property.
Provided that the following property, although bound to
be disclosed and restrained, is excluded from the surrender
provisions of
this order: such clothing, bedding, ordinary household
furniture, kitchen and laundry appliances and utensils and other
articles
(other than luxuries) as the curator bonis may consider to
be reasonably needed for the day-to-day use of the first respondent

or pending the return day of this order.
1.2 Restraint
Subject to para 2 below the [applicants] and any other
person with knowledge of this order are hereby prohibited from
dealing in
any manner with the property, except as required or
permitted by this order.”
(For
the full text of the order see para 1 of the judgment of the High
Court)
19
Phillips and Others v National Director of Public Prosecutions
2003 (6) SA 447
(SCA) (I shall refer to this decision as
Phillips
SCA I).
20
Section 18 provides:
“
Confiscation orders.—(1) Whenever a defendant is
convicted of an offence the court convicting the defendant may, on
the application
of the public prosecutor, enquire into any benefit
which the defendant may have derived from—
(a) that offence;
(b) any other offence of which the defendant has been
convicted at the same trial; and
(c) any criminal activity which the court finds to be
sufficiently related to those offences,
and, if the court finds that the defendant has so
benefited, the court may, in addition to any punishment which it may
impose in
respect of the offence, make an order against the
defendant for the payment to the State of any amount it considers
appropriate
and the court may make any further orders as it may deem
fit to ensure the effectiveness and fairness of that order.”
21
Section 28 provides:
“
Appointment of curator bonis in respect of property
subject to restraint order.—(1) Where a High Court has made a
restraint order,
that court may at any time—
(a) appoint a curator bonis to do, subject to the
directions of that court, any one or more of the following on behalf
of the person
against whom the restraint order has been made,
namely—
(i) to perform any particular act in respect of any of
or all the property to which the restraint order relates;
(ii) to take care of the said property;
(iii) to administer the said property; and
(iv) where the said property is a business or
undertaking, to carry on, with due regard to any law which may be
applicable, the
business or undertaking;
(b) order the person against whom the restraint order
has been made to surrender forthwith, or within such period as that
court
may determine, any property in respect of which a curator
bonis has been appointed under paragraph (a), into the custody of
that
curator bonis.”
22
The relevant part of the order relating to the curator bonis
provides:
“
1.3 The curator bonis
(a) In terms of s 28(1) of the Act, Theodor van den
Heever, a partner at Deloitte & Touche is hereby appointed as
curator bonis.
(b) After obtaining letters of curatorship in terms of
s 32(1) of the Act, the curator bonis is hereby authorised and
required to
take the property included in para 1.1 of this order,
into his possession or under his control, take care of such property
and
administer it. He shall have such powers, duties and authority
as are provided for in the Act and such further powers as are
specified
in this order as set out in the paragraphs below:
(i) The curator shall have the power and authority to
act as shareholder, director or member, as the case may be, or in
such other
capacity as may be required in order for the curator
bonis to exercise effective control of the assets of the first
respondent,
in the place and stead of the first respondent, with
regard to :
(aa) the shareholdings or interests of the first
respondent in the second to 15
th
respondents, or any
other shareholdings or interests held by the first respondent;
(bb) his functions, privileges or duties as director or
member as the case may be of the second to twelfth respondents.”
(For
the full text of the order see n 18 above at para 1.)
23
Andrew Lionel Phillips and Others v National Director of Public
Prosecutions
Case No. 03/15171, 12 December 2003, as yet
unreported at para 1.
24
Section 173 provides:
“
The Constitutional Court, Supreme Court of Appeal
and High Courts have the inherent power to protect and regulate
their own process,
and to develop the common law, taking into
account the interests of justice.”
25
Above n 2. See also n 23 at para 53.
26
Above n 23 at para 37.
27
Id at paras 60 - 64.
28
Id at paras 67 - 68.
29
National Director of Public Prosecutions v Phillips and Others
2005 (5) SA 265
(SCA) (
Phillips
SCA II).
30
Above n 19.
31
Id at paras 18 - 22.
32
Section 25(2) of the Act provides:
“
Where the High Court has made a restraint order
under subsection (1)(b), that court shall rescind the restraint
order if the relevant
person is not charged within such period as
the court may consider reasonable.”
33
Section 26(10)(b) of the Act provides:
“
A High Cour
t
which made a restraint order―
(b) shall rescind the restraint order when the
proceedings against the defendant concerned are concluded.”
34
Above n 21. See also n 29 at para 53.
35
Above n 32.
36
Above n 2 and n 33.
37
Above n 29 at para 25.
38
In
Radio Pretoria v Chairperson, Independent Communications
Authority of South Africa and Another
[2004] ZACC 24
;
2005 (4) SA 319
(CC);
2005
(3) BCLR 231
(CC) at para 19, this Court said:
“
The
requirements for an application as the present one for leave to
appeal to this Court are now well settled in several decisions
of
this Court. The application must raise a constitutional matter, in
other words an issue which involves the interpretation,
protection
or enforcement of the Constitution. Further, it must be in the
interests of justice to grant leave to appeal. Whether
it is in the
interests of justice to grant the application involves a careful and
balanced weighing-up of all relevant factors.
The considerations
could be varied and are often case specific but informed by the
broad requirement of whether by hearing the
case the interests of
justice will be advanced.” [footnotes omitted.]
39
[2002] ZACC 31
;
2003 (2) SA 363
(CC);
2003 (2) BCLR 111
(CC).
40
Id at para 17. See also
S v Basson
[2004] ZACC 13
;
2005 (1) SA 171
(CC) at
paras 103 - 111
[2004] ZACC 13
; ;
2004 (6) BCLR 620
(CC) at paras 103 - 110.
41
S v Boesak
[2000] ZACC 25
;
2001 (1) SA 912
(CC);
2001 (1) BCLR 36
(CC) at
para 12,
National Education Health and Allied Workers Union v
University of Cape Town and Others
2003 (3) SA 1
(CC);
2003 (2)
BCLR 154
(CC) at para 25.
42
See
Bato Star Fishing (Pty) Ltd v Minister of Environmental
Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC);
2004 (7) BCLR 687
(CC)
at paras 72 and 91,
Investigating Directorate: Serious Economic
Offences and Others v Hyundai Motor Distributors (Pty) Ltd and
Others: In re: Hyundai
Motor Distributors (Pty) Ltd and Others v
Smit NO and Others
[2000] ZACC 12
;
2001 (1) SA 545
(CC);
2000 (10) BCLR 1079
(CC) at paras 21 - 26,
National Director of Public Prosecutions
and Another v Mohamed NO and Others
[2003] ZACC 4
;
2003 (4) SA 1
(CC);
2003 (5)
BCLR 476
(CC) at para 35.
43
See above para 20.
44
Section 36 provides:
“
Limitation of Rights.
―(1)
The rights in the Bill of Rights may be limited only in terms of law
of general application to the extent that the limitation
is
reasonable and justifiable in an open and democratic society based
on human dignity, equality and freedom, taking into account
all
relevant factors, including―
(a) the nature of the right;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the relation between the limitation and its
purpose; and
(e) less restrictive means to achieve the purpose.
(2)
Except as provided in subsection (1) or in any other provision of
the Constitution, no law may limit any right entrenched in
the Bill
of Rights.”
45
[2000] ZACC 28
;
2001 (2) SA 388
(CC);
2001 (2) BCLR 133
(CC).
46
Id at para 22.
47
[2003] ZACC 24
;
2004 (3) SA 599
(CC);
2004 (4) BCLR 333
(CC).
48
Id at paras 24 - 25.
49
They seek to rely on section 25(1) of the
Constitution which provides:
“
No one may be deprived of property except in terms
of law of general application, and no law may permit arbitrary
deprivation of
property.”
They
contend that the continued operation of the restraint order amounts
to arbitrary deprivation of property within the meaning
of section
25(1) of the Constitution. They argue that the interpretation
placed on section 26(10) of the Act by the SCA leads
to a result
that violates section 25 of the Constitution.
50
Above n 47 at paras 23 - 25.
51
Daniels v Campbell NO and Others
[2004] ZACC 14
;
2004 (5) SA 331
(CC);
2004
(7) BCLR 735
(CC) at footnote 101.
52
1997 (4) SA 1076
(CC);
1997 (10) BCLR 1413
(CC).
53
Per Corbett JA in
Universal City Studios Inc
and Others v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986 (2) SA 734
(A) at
754G.
54
Moch v Nedtravel (Pty) Ltd t/a American Express Travel Service
1996 (3) SA 1
(A) at 7E - F.
55
Above n 52 at para 22.
56
1997 (4) SA 1095
(CC);
1997 (10) BCLR 1337
(CC)
at paras 4 - 5.
57
In
Ingledew v Financial Services Board: In re Financial Services
Board v Van der Merwe and Another
[2003] ZACC 8
;
2003 (4) SA 584
(CC);
2003 (8)
BCLR 825
(CC)
at paras 23 - 24, Ngcobo J stated:
“
In
NAPTOSA and Others v Minister of Education,
Western Cape, and Others
the Cape High Court was concerned with
the appropriateness or otherwise of granting relief directly under s
23(1) of the Constitution
without a complaint that the Labour
Relations Act was constitutionally deficient in the remedy it
provides. The High Court held
that it could not ‘conceive that it
is permissible for an applicant, save by attacking the
constitutionality of the LRA, to go
beyond the regulatory framework
which it establishes’. In
National Education Health and Allied
Workers Union v University of Cape Town and Others
, this Court
refrained from expressing any opinion on the correctness of this
decision.
These cases cast doubt on the correctness of the
proposition that a litigant can rely upon the Constitution, where
there is a statutory
provision dealing with the matter without
challenging the constitutionality of the provision concerned.”
[footnotes omitted.]
58
Id.
59
Above n 21.
60
Above n 18.
61
The applicants sought to have the restraint order
rescinded because the effect of it and its implementation has been
to reduce the
value of the properties to which it relates. The bulk
of the evidence relied upon by the applicants relates to a property
which
is not subject to the restraint order. There is in existence
a preservation order in respect of that property (54 Autumn Road).

That property falls to be maintained by the curator, Mr Reynolds,
who is not a party to these proceedings. (See para 7 above).
The
impossibility of performance by the curator thus applies
substantially in relation to property not covered by the restraint
order. See above n 17.