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[2006] ZACC 24
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Fraser v ABSA Bank Limited (66/05) [2006] ZACC 24; 2007 (3) SA 484 (CC); 2007 (3) BCLR 219 (CC) (15 December 2006)

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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 66/05
TRENT GORE FRASER Applicant
versus
ABSA BANK
LIMITED Respondent
THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS Amicus
Curiae
Heard on : 23 May 2006
Decided on : 15 December
2006
JUDGMENT
VAN DER WESTHUIZEN J:
[1]
The Prevention of Organized
Crime Act 121 of 1998 (POCA) was introduced to combat organised crime, money
laundering and criminal gang
activities, to prohibit racketeering and to provide
for a range of related measures.
[1]
One of its aims is to prevent criminals benefiting from the proceeds of their
crimes. Consistent with that objective, Chapter 5
of POCA provides for the
restraint,
[2]
confiscation
[3]
and
realisation
[4]
of
property.
[2]
The National Director of
Public Prosecutions (NDPP) may apply on an ex
parte
[5]
basis for a restraint order
against the property of a “defendant”, who would be an accused in
criminal proceedings.
[6]
The question
central to this application is whether a creditor of a defendant may join the
proceedings when the defendant applies
to a court to provide in a restraint
order for reasonable legal expenses connected to his criminal trial. The Durban
High Court
ruled against intervention by a creditor. The Supreme Court of
Appeal interpreted POCA differently and ruled in favour of the intervention.

The applicant’s primary contention is that the interpretation adopted by
the Supreme Court of Appeal violates his right to
a fair trial as protected in
sections 35(3)(d), (f) and (h) of the
Constitution.
Factual Background
[3]
The applicant is Mr Trent
Gore Fraser, a businessman who is currently incarcerated without bail as a trial
awaiting prisoner. He
was arrested on 16 November 2003 and has since been
indicted on several counts related to racketeering and money laundering in terms
of POCA.
[7]
He also faces seven
charges under the
Drugs and Drug Trafficking Act 140 of 1992
. Under the
sentencing provisions of POCA
[8]
the
applicant is potentially liable to a fine not exceeding R1 000 million, or to
imprisonment for life.
[4]
The applicant is the owner
of the entire membership interest in a close corporation called Portion 3
Lavianto CC (the CC). The history
of the CC is somewhat dubious: In 2001 the
applicant inherited in excess of R1.8 million from a family trust and used the
money
to acquire immovable residential property in Johannesburg. In 2002 he
registered the CC and arranged that it acquire the immovable
property. The
applicant then arranged for his erstwhile fiancée, Ms Lisa Nicole Zeeman,
to hold the membership interest in
the CC on his behalf. The record suggests
that Mr Fraser devised this scheme so that the property would not fall into the
hands
of his creditors. In July 2004 the applicant sought an order in the
Johannesburg High Court directing Ms Zeeman to transfer –
amongst other
things –the membership interest in the CC to him on the basis that the
original transfer of the membership interest
to her was a simulated transaction.
Ms Zeeman eventually consented to the order and her membership interest in the
CC was transferred
to the applicant.
[5]
On 26 November 2004 in the
High Court, the NDPP obtained a provisional restraint order on the
applicant’s interest in the CC
and the immovable property as well as the
other movable property in terms of
section 26
of
POCA.
[9]
In terms of the order the
applicant’s property was placed in the hands of a curator bonis. The
provisional restraint order
was returnable on 27 January
2005.
[6]
On 3 December 2004 the
applicant lodged an application for legal expenses in the High Court in terms of
section 26(6)
of POCA. The applicant sought an order directing the curator to
sell the property and pay the proceeds to his attorneys for expenses
relating to
his criminal trial.
[7]
The respondent in this
application is ABSA Bank Limited (ABSA), a creditor of the applicant. It had
obtained a default judgment in
the Cape High Court against the applicant as
surety for a debt of R673 281.09 in July 2000. That amount with accumulated
interest
had grown to R1 028 214.25 by 11 December 2004. The debt is not
secured and as a concurrent creditor ABSA enjoys no preference under
the
Insolvency Act 24 of 1936
, or any other law, and has no claim against the CC or
its assets. ABSA cannot execute against the applicant’s membership
interest
in the CC by reason of the restraint
order.
[10]
[8]
On 20 December 2004 ABSA
lodged an application to intervene in the High Court in order to oppose Mr
Fraser’s application for
legal expenses. ABSA’s application was
based upon the default judgment in its favour. ABSA argued that if Mr Fraser
were
permitted to deplete the proceeds of the restrained property to pay legal
expenses, it would be unable to recover its judgment debt
– which ABSA
would ordinarily have been able to do, absent the restraint order, by writ of
execution.
[9]
Mr Fraser opposed
ABSA’s application to intervene. The NDPP opposed Mr Fraser’s
application for legal expenses. In order
to understand the rulings of the High
Court and the Supreme Court of Appeal thereafter, it is necessary to look at the
structure
and some of the contents of
POCA.
The structure and contents of
POCA
[10]
According to its preamble,
the purpose of POCA is to combat the rapid growth of organised crime, money
laundering and criminal gang
activities and to ensure that persons who take part
in those activities do not benefit from the proceeds of their crimes. Chapter
2
of POCA outlines offences relating to racketeering activities and sets forth
penalties for persons convicted of those
crimes.
[11]
Chapter 3 describes the
offences relating to the proceeds of unlawful activities and the penalties
associated therewith
[12]
and Chapter
4 deals with the offences and penalties associated with criminal gang
activities.
[13]
[11]
Chapter
5 of POCA, the subject of this application, contains a mechanism for the
confiscation by the state of proceeds derived from
criminal activity.
Part 1
of
Chapter 5 deals with the application of the chapter and includes definitions of
key concepts.
[14]
Part 2
of Chapter
5 provides for a confiscation order against a defendant, who has been convicted
of an offence, when the convicting court
suspects that the defendant has derived
some benefit from criminal or criminal-related
activity.
[15]
Part 3
deals with
restraint orders in relation to property which might later be
confiscated.
[16]
Sections 25
and
26
authorise the High Court to issue an order prohibiting a person who has, or will
be, charged with an offence
[17]
from
dealing in any manner with any property to which the order relates.
Section 26
states as follows:
“(1) 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.
. . . .
(6) Without derogating from the generality of the powers conferred by subsection
(1), a restraint order may make such provision as
the High Court may think
fit–
(a)
for
the reasonable living expenses of a person against whom the restraint order is
being made and his or her family or household;
and
(b)
for the reasonable legal expenses of
such person in connection with any proceedings instituted against him or her in
terms of this
Chapter or any criminal proceedings to which such proceedings may
relate,
if the court is satisfied that the person whose expenses must be provided for
has disclosed under oath all his or her interests in
property subject to a
restraint order and that the person cannot meet the expenses concerned out of
his or her unrestrained property.
. . . .
(10) 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 order 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; and
(b) shall
rescind the restraint order when the proceedings against the defendant concerned
are concluded.”
[12]
The effect of a restraint
order is to place the defendant’s property beyond his or her control and
into the hands of a curator
bonis pending the outcome of the criminal
proceedings.
[18]
All property held
by the defendant may be subject to restraint, in addition to property
transferred to him or her after the restraint
order is
imposed.
[13]
Section 26(6)
gives a
discretion to the High Court which issues a restraint order to make provision
for the reasonable living and legal expenses
of the defendant, who (as stated
earlier) is also an accused. This case is concerned with that discretion. The
court must be satisfied
that the defendant has disclosed all of his or her
interests in property subject to the restraint order and that he or she cannot
meet the expenses out of property which has not been
restrained.
[14]
Part 4
of Chapter 5 is
concerned with the realisation of property for the purposes of satisfying the
confiscation order.
[19]
Section
30(2)
authorises the High Court to direct the curator to realise and confiscate
the defendant’s property.
Sections 30(3)
and (4) ensure that those who
have an interest in the realisable property, who are likely to be affected by
the confiscation order,
and who have suffered injury as a result of the
defendant’s criminal activity are provided an opportunity to make
representations
in connection with the realisation of the
property.
[20]
Where the court finds
that persons have been affected by the defendant’s criminal activity,
section 30(5)
authorises suspension of the realisation of property so that any
judgment obtained, consequent upon certain claims associated with
it, can be
satisfied.
[21]
[15]
Section 31
provides that
sums of money in the hands of the curator, save for such payments that the High
Court has directed, should be applied
in satisfaction of the confiscation
order.
[22]
Section 33(1)
contains a general guideline that powers conferred upon the High
Court, or upon the curator, should be exercised with a view to making
the value
of realisable property available for satisfaction of the confiscation order.
This section also provides that any “obligation”
of the defendant
– except as provided for in sections 20(1) and 26(6) of the Act –
“which conflicts with the obligation
to satisfy a confiscation order shall
be left out of
account.”
[23]
[16]
The
remainder of Chapter 5 addresses the variation of confiscation
orders,
[24]
the effect of
sequestration of estates on realisable
property
[25]
and the effect of
winding-up of companies or other juristic persons on realisable
property.
[26]
Chapter 6 provides
for the civil forfeiture of the proceeds of crimes and the instrumentalities
used in the commission of crime.
Unlike Chapter 5, however, Chapter 6 is not
conviction-based and may be invoked even when there is no criminal
prosecution.
[17]
It might be observed that
the provisions relating to the realisation of property and related issues are
complex and not always easy
to
understand.
The High Court
[18]
As stated earlier, ABSA
lodged an application in the High Court to intervene and oppose Mr
Fraser’s section 26(6) application
for legal expenses. On 8 April 2005
the High Court confirmed the rule nisi, dismissed ABSA’s application to
intervene and
granted the application for legal expenses. Olsen J held that the
effect of a restraint order was to protect defendants against
the claims of
creditors and to provide defendants the right to have first call upon their
property in order to meet legal expenses.
This conclusion was based upon the
High Court’s construction of section 33(1) of POCA. The Court found that
claims of concurrent
creditors, such as ABSA, were “obligations” of
the applicant that “conflict with the obligation to satisfy a confiscation
order” within the meaning of section 33(1). The High Court thus concluded
that such claims must be left out of account. It
interpreted section 33(1) in
the light of the primary objective of confiscation orders, namely to deprive a
convicted person of ill-gotten
gains, and stated that the aim was not to enrich
the state. It observed that the forthcoming criminal trial was anticipated to
be
arduous and long, and emphasised the need for reasonable legal expenses to be
provided for as a fair trial requirement.
[19]
The High Court stated that
an order regarding legal expenses does not amount to allowing a convicted person
to retain ill-gotten gains.
A fair criminal trial is required by the Bill of
Rights and is not only advantageous to the accused, but also to the state. The
High Court thus held that concurrent creditors have no standing to intervene in
section 26(6) proceedings.
[20]
The High Court granted ABSA
leave to appeal to the Supreme Court of Appeal.
The Supreme Court of Appeal
[21]
The Supreme Court of
Appeal, in a judgment by Mlambo JA (with whom Mpati DP, Cameron JA, Nugent JA,
and Nkabinde AJA agreed), upheld
the appeal against the dismissal of
ABSA’s application to intervene. It also upheld ABSA’s appeal
against the order
providing for Mr Fraser’s reasonable legal expenses in
terms of section 26(6).
[22]
The
Supreme Court of Appeal found that the construction given to section 33(1) by
the High Court would have the result of elevating
the applicant’s legal
expenses and his obligation to satisfy a confiscation order to a status similar
to his secured and preferent
obligations, while downgrading his concurrent
obligations below those. That effect would be at odds with the concurrent
creditor’s
common-law entitlement to execution against a debtor’s
property. The Court found that the legislature could not have intended
that a
concurrent creditor, who had pursued a claim and obtained a judgment prior to
the issuance of a restraint order, would be
prevented from satisfying that
judgment simply because the debtor’s assets had been
restrained.
[23]
In interpreting section 26
of POCA, the Supreme Court of Appeal mentioned that the section was silent
regarding the rights of concurrent
creditors and other third parties. The Court
relied primarily on sections 30(5) and 31(1) of POCA in holding that ABSA could
intervene
in section 26(6) proceedings in order to oppose Mr Fraser’s
request for legal expenses. The Supreme Court of Appeal reasoned
that section
30(5) provides a mechanism for the claims of concurrent creditors to be taken
into account, because the section authorises
the High Court to delay the
realisation of a defendant’s restrained property so as to enable victims
of the defendant’s
crime to obtain and satisfy a judgment against such
property. Once the defendant’s property has been realised, section 31(1)
authorises the High Court to direct that “payment” be made from the
proceeds before the satisfaction of a confiscation
order. According to the
Supreme Court of Appeal, section 31(1) is the key to the resolution of the issue
at stake here. It found
that the term “payment” as contemplated in
section 33(1) includes payment in discharge of a defendant’s concurrent
obligations.
[24]
The Supreme Court of Appeal
dismissed the applicant’s contention that a construction of POCA denying
him access to legal expenses
would violate his right to a fair trial under the
provisions of section 35(3) of the Constitution. The Court reasoned that he had
a constitutional right to legal representation at the state’s expense in
terms of section 35(3)(g) of the Constitution if substantial
injustice would
otherwise result.
[25]
The Supreme Court of Appeal
concluded that ABSA’s concurrent claim did not fall to be “left out
of account” in terms
of section 33(1) (as found by the High Court), that
ABSA could intervene to oppose the applicant’s section 26(6) application
for legal expenses and that the applicant could not utilise his restrained
property for purposes of legal representation because
those assets should be
made available in discharge of his concurrent obligations. According to the
Supreme Court of Appeal, the
High Court’s decision would have the
consequence of allowing Mr Fraser to profit from his illegal actions and to
frustrate
ABSA’s claim.
[26]
Based on this reasoning,
the Supreme Court of Appeal concluded that ABSA had to be permitted to intervene
in the section 26(6) proceedings
and furthermore that ABSA’s appeal
against the provision for Mr Fraser’s legal expenses had to be upheld,
with the consequence
that ABSA’s claim be
secured.
[27]
Mr Fraser applied for leave
to appeal to this Court against the judgment and order of the Supreme Court of
Appeal.
Submissions by the applicant and the
respondent
[28]
The
applicant contends that the interpretation of POCA adopted by the Supreme Court
of Appeal violates his right to a fair trial protected
by sections 35(3)(d), (f)
and
(h)
[27]
as well as his right not to be arbitrarily deprived of his property in terms of
section 25(1)
[28]
of the
Constitution. He also submitted for the first time in oral argument that this
case relates to the nature and ambit of the
Supreme Court of Appeal’s
powers as a court, because the Court incorrectly interpreted POCA and permitted
ABSA to intervene.
[29]
As
far as the interpretation of POCA is concerned, the applicant argues that an
obligation to pay a concurrent creditor is an obligation
that “conflicts
with the obligation to satisfy a confiscation order” within the meaning of
section 33(1) of POCA, and
therefore must be excluded from account. Under this
interpretation, ABSA’s judgment debt cannot be considered by the High
Court during section 26(6) proceedings for legal expenses. He also suggests
that the Supreme Court of Appeal’s interpretation
of section 33(1) –
that an obligation to pay a concurrent creditor is
not
an obligation that
conflicts with the obligation to satisfy a confiscation order – strips the
provision of all meaning, because
it allows the claims of all creditors to be
taken into account. This, he argues, would have the untenable result of
providing standing
to all creditors whenever a defendant initiates section 26(6)
proceedings for living and/or legal expenses.
[30]
ABSA opposes the
application for leave to appeal on two grounds, namely that no constitutional
matter of substance has been raised
and that it would not be in the interests of
justice to grant leave to appeal because there are no prospects of success.
They emphasise
that the applicant has not challenged the constitutionality of
any of the specific provisions of POCA, or of the restraint order
itself. ABSA
stresses that it would have satisfied its judgment debt against the applicant
long ago, had he not concealed his assets.
[31]
ABSA adopts both the
reasoning and the interpretation of POCA espoused by the Supreme Court of
Appeal. In addition, ABSA offers an
alternative statutory construction not
addressed by the Supreme Court of Appeal: Section 20(1) of POCA – which
sets out one
exception to section 31(1)’s general rule that
“conflicting obligations” of the defendant be left out of account
– must be read with, and is subject to, section
20(5).
[29]
Section 20(5) directs
the High Court to take into account “all persons holding any interest in
the property concerned”
when determining the amount to be realised at the
time of making the confiscation order. Under this reading of POCA, ABSA argues,
the claims of concurrent creditors are protected and it was therefore
appropriate for the Supreme Court of Appeal to consider ABSA’s
judgment
debt in denying the applicant’s section 26(6) application for legal
expenses.
Submissions by the NDPP as amicus
curiae
[32]
The NDPP applied to be
admitted to these proceedings as amicus curiae, as it administers and applies
POCA and prosecutes accused persons.
The application was
granted.
[33]
The NDPP’s main
concern is not whether creditors who apply to intervene in section 26(6)
applications should be allowed to do
so. The NDPP contends that the Supreme
Court of Appeal’s judgment does not provide adequate guidelines concerning
two issues.
First, the Court did not outline the circumstances in which
concurrent creditors can intervene in section 26(6) proceedings in order
to
oppose a defendant’s request for living and/or legal expenses. If every
creditor is entitled to join such proceedings,
the NDPP urges, section 26(6)
applications (and even criminal proceedings) will be delayed, unless specific
guidelines are provided.
The NDPP maintains that ABSA was entitled to intervene
in this case, but proposes that creditors should ordinarily be entitled to
intervene only when restrained property is being dissipated for the benefit of
the accused and to the detriment of the
creditor.
[34]
Second, the NDPP complains
that the Supreme Court of Appeal did not specify which party bears the burden of
notifying creditors as
to the initiation of section 26(6) proceedings. The NDPP
submits that it could not be expected to bear the burden. According to
the
NDPP, the defendant is in a better position to demonstrate that the estate will
not be depleted and is required in any case to
fully disclose his or her
liabilities.
Is there a constitutional matter
to be decided?
[35]
The threshold enquiry in an
application for leave to appeal relates to jurisdiction. This Court’s
jurisdiction is governed
by section 167(3) of the
Constitution.
[30]
Section 167(3)(b)
limits its jurisdiction to constitutional matters, and issues connected with
decisions on constitutional matters.
In matters other than constitutional
matters the Supreme Court of Appeal is the highest court in our
land.
[31]
[36]
To attempt to define the
limits of the term “constitutional matter” rigidly is neither
necessary nor
desirable.
[32]
Philosophically and conceptually it is difficult to conceive of any legal issue
that is not a constitutional matter within a system
of constitutional supremacy.
All law is after all subject to the Constitution and law inconsistent with the
Constitution is invalid.
[33]
Nevertheless the jurisdiction of this Court is expressly restricted to only
those matters outlined in section 167(3)(b).
[37]
In a system of
constitutional supremacy it is inappropriate to construe the term
“constitutional matter” narrowly. In
Pharmaceutical
Manufacturers Association
this Court held that “[t]he exercise of all
public power must comply with the Constitution, which is the supreme law, and
the
doctrine of legality, which is part of that
law.”
[34]
In
Boesak
the Court recognised:
“If regard is had to the provisions of s 172(1)(a) and s 167(4)(a) of the
Constitution, constitutional matters must include
disputes as to whether any law
or conduct is inconsistent with the Constitution, as well as issues concerning
the status, powers
and functions of an organ of State. Under s 167(7), the
interpretation, application and upholding of the Constitution are also
constitutional
matters. So too, under s 39(2), is the question whether the
interpretation of any legislation or the development of the common law
promotes
the spirit, purport and objects of the Bill of Rights. If regard is had to this
and to the wide scope and application of
the Bill of Rights, and to the other
detailed provisions of the Constitution, such as the allocation of powers to
various legislatures
and structures of government, the jurisdiction vested in
the Constitutional Court to determine constitutional matters and issues
connected with decisions on constitutional matters is clearly an extensive
jurisdiction.” (footnotes
omitted)
[35]
[38]
This Court has held that a
constitutional matter is presented where a claim involves: (a) the
interpretation, application or upholding
of the Constitution itself, including
issues concerning the status, powers or functions of an organ of state and
disputes between
organs of
state;
[36]
(b) the development of
(or the failure to develop) the common law in accordance with the spirit,
purport and objects of the Bill
of
Rights;
[37]
(c) a statute that conflicts with a requirement or restriction imposed by the
Constitution; (d) the interpretation of a statute in
accordance with the spirit,
purport and objects of the Bill of Rights (or the failure to do
so);
[38]
(e) the erroneous interpretation or application of legislation that has been
enacted to give effect to a constitutional right or
in compliance with the
legislature’s constitutional
responsibilities;
[39]
or (f) executive or administrative action that conflicts with a requirement or
restriction imposed by the
Constitution.
[40]
[39]
While the conception of a
constitutional matter is broad, the term is of course not completely open. The
fact that section 167(3)(b)
of the Constitution limits this Court’s
jurisdiction to constitutional matters presupposes that a meaningful line must
be drawn
between constitutional and non-constitutional matters and it is the
responsibility of this Court to do so. The decisions of the
Court have
recognised the
distinction.
[41]
[40]
A contention that a lower
court reached an incorrect decision is not, without more, a constitutional
matter. Moreover, this Court
will not assume jurisdiction over a
non-constitutional matter only because an application for leave to appeal is
couched in constitutional
terms. It is incumbent upon an applicant to
demonstrate the existence of a bona fide constitutional
question.
[42]
An issue does not become a constitutional matter merely because an applicant
calls it one. The other side of the coin is, however,
that an applicant could
raise a constitutional matter, even though the argument advanced as to why an
issue is a constitutional matter,
or what the constitutional implications of the
issue are, may be flawed. The acknowledgement by this Court that an issue is a
constitutional
matter, furthermore, does not have to result in a finding on the
merits of the matter in favour of the applicant who raised
it.
[41]
The applicant has not
challenged the constitutional validity of any of the provisions of POCA itself,
or of the restraint order.
Rather, he claims that the Supreme Court of
Appeal’s interpretation of POCA is constitutionally problematic. It is
not necessary
to deal with all of the applicant’s submissions, which were
summarised in paragraphs 28 and 29 above.
[42]
Whether this case raises a
constitutional matter depends on the nature of the issue before this Court. We
are concerned with an interpretation
of section 26(6) of POCA. That section
confers a discretion upon the court to allow the payment of reasonable legal
expenses for
a criminal trial and related matters out of restrained property.
This Court must decide the nature of this discretion. The way
in which the
discretion is exercised will determine how much of the restrained property is
available for legal fees in the criminal
trial and could have an effect on how
speedily the trial is conducted.
[43]
When interpreting
legislation, a court must promote the spirit, purport and objects of the Bill of
Rights in terms of section 39(2)
of the
Constitution.
[43]
This Court has
made clear that section 39(2) fashions a mandatory constitutional canon of
statutory
interpretation.
[44]
[44]
As to an accused
person’s right to a fair criminal trial, the applicant invokes section
35(3)(d), which prohibits an unreasonable
delay in trial proceedings, section
35(3)(f) concerning the right to legal representation and section 35(3)(h),
which guarantees
the right to be presumed
innocent.
[45]
The applicant’s
submissions regarding this last-mentioned aspect appears to be an attack on the
legislation as such, rather
than on the Supreme Court of Appeal’s
interpretation, and does not have to be dealt with. The first two aspects are
relevant
though.
[45]
It is clear that the right
to have a criminal trial begin and conclude without unreasonable delay and the
right to legal representation,
as aspects of the right to a fair trial, may not
be ignored in the interpretation of section 26(6) of POCA. Section 26(6) indeed
recognises the right to legal representation in so far as it allows for a
restraint order to provide for reasonable legal expenses.
The NDPP furthermore
pointed out that the joining of creditors could under certain circumstances
cause delay in the section 26,
as well as the criminal, proceedings. The
interpretation of section 26(6) could well have consequences for an accused
person’s
right to a criminal trial free of unreasonable
delays.
[46]
The interpretation of POCA
by the Supreme Court of Appeal is therefore attacked on the basis that it is not
in accordance with the
Constitution. There is an alternative interpretation
before this Court, namely that of the High Court. POCA plays a legitimate
and
important role in combating crime. It could however also have potentially
far-reaching and abusive effects, if not interpreted
and applied in accordance
with the rights and values protected in the Constitution. Moreover, it is
relatively new on the statute
book and there is not an abundance of
jurisprudence to enlighten and guide its interpretation and
application.
[47]
The question raised by this
application is whether the Supreme Court of Appeal’s interpretation of
section 26 has failed to
promote the spirit, purport and objects of the Bill of
Rights in terms of section 39(2). This differs from an attack on an allegedly
wrong factual finding or incorrect interpretation or application of the law, as
in the cases referred to earlier. Section 39(2)
requires more from a court than
to avoid an interpretation which conflicts with the Bill of Rights. It demands
the promotion of
the spirit, purport and objects of the Bill of Rights. These
are to be found in the matrix and totality of rights and values embodied
in the
Bill of Rights. It could also in appropriate cases be found in the protection
of specific rights, like the right to a fair
trial in section 35(3), which is
fundamental to any system of criminal justice, and of which the rights to legal
representation and
against unreasonable delays are components. The spirit,
purport and objects of the protection of the right to a fair trial therefore
have to be considered. A constitutional matter has thus been raised, and this
Court accordingly has jurisdiction to hear the
matter.
Interests of justice and prospects of
success
[48]
Section 167(6) of the
Constitution provides for appeals from another court “when it is in the
interests of justice and with
leave of the Constitutional
Court”.
[46]
This Court determines whether it is in the interests of justice to grant leave
to appeal through a careful and balanced weighing
up of a number of
factors.
[47]
[49]
The considerable importance
of the constitutional matter raised in this application is highly relevant for
the interests of justice
enquiry.
[48]
So is its complexity.
[50]
The prospects of success
are important in determining whether to grant leave to
appeal.
[49]
As the rest of this
judgment shows, it cannot be said that there are no prospects of
success.
[51]
Leave to appeal therefore
has to be granted.
Merits of the
appeal
[52]
As indicated earlier, the
Supreme Court of Appeal upheld ABSA’s appeal against the High
Court’s dismissal of ABSA’s
application to intervene in Mr
Fraser’s section 26(6) application for reasonable legal expenses. It
granted ABSA leave to
intervene. It furthermore upheld ABSA’s appeal
against the High Court order providing for Mr Fraser’s legal expenses.
It
consequently ordered that “no moneys for payment of [his] legal expenses
shall be advanced in excess of an amount that
results in the moneys being
retained by the curator falling below the sum of R1 028 214”, being the
amount owed to ABSA by
December 2004. The Supreme Court of Appeal thus
‘ring-fenced’ ABSA’s claim from the applicant’s
competing
demand for legal expenses.
[53]
The first question is
whether a concurrent creditor of a defendant has standing to intervene, or
whether a court has a discretion
to allow it to intervene, in an application by
a defendant in terms of section 26(6) to provide in a restraint order for
reasonable
legal expenses. If the interpretation of the wording of POCA, within
the context of the Bill of Rights, results in a conclusion
that a court has a
discretion to permit intervention, the next enquiry would be into the nature and
extent of the discretion conferred
by section 26(6). Thereafter, the exercise
of the discretion in the case before us requires
attention.
May a creditor intervene?
[54]
As outlined above in
paragraphs 21 to 24, the main reason for the Supreme Court of Appeal’s
overturning of the decision of the
High Court, is the interpretation of sections
26(6), 30(5), 31(1) and 33(1) of Chapter 5 of
POCA.
[50]
The wording of POCA may
be open to more than one interpretation. The interpretation of the provisions
gave rise to difficulties
in both the High Court and the Supreme Court of
Appeal, particularly in the light of the Bill of Rights. Indeed the provisions
are
not easy to harmonise as will appear from the discussion below. The Supreme
Court of Appeal also referred to the purpose and contextual
scheme of the
provisions of POCA relating to confiscation orders and pointed out the
undesirable consequences of the High Court’s
interpretation.
[55]
A defendant who applies to
the High Court in terms of section 26(6) to make provision for reasonable living
and/or legal expenses
must satisfy the Court that he or she has disclosed under
oath all his or her interests in property subject to the restraint order
and
that he or she cannot meet the expenses for which an allowance is sought out of
the unrestrained property. If the court is satisfied
in this regard, section
26(6) gives a court a discretion: it may “make such provision as the High
Court may think fit”
for the reasonable living and/or legal
expenses.
[56]
The Supreme Court of Appeal
is correct in its criticism of the High Court’s construction of section
33(1) and in concluding
that a claim such as ABSA’s does not fall to be
“left out of account”. An obligation to satisfy a judgment debt
is
a relevant consideration to be taken into account in the exercise of the section
26(6) discretion and section 33(1) is no warrant
for the contrary proposition.
Section 33(1) comes into consideration primarily when property is being
realised. Section 30(5) supports
a conclusion that concurrent debts are not
irrelevant to what constitutes realisable property, and therefore section 26(6)
should
not be interpreted as impeding the exercise of the discretion by a
court.
[57]
However, the relevant
provisions of POCA cannot mean that all concurrent creditors must under all
circumstances be allowed to intervene.
Nor even if permitted to intervene, may
they automatically be treated as if they were preferential creditors, in a
manner that prevents
a defendant from using his or her funds for reasonable
legal expenses in the criminal trial or in forfeiture proceedings in terms
of
POCA.
[58]
The NDPP has illustrated in
its submissions the circumstances under which, and the reasons why, a creditor
would wish to intervene.
The purpose of a creditor’s intervention would
probably be to influence the court in the exercise of its discretion, for
example
to persuade it not to make an allowance for the defendant’s legal
expenses, or to limit the allowance to preserve as much of
the defendant’s
estate as possible for the creditor’s ultimate benefit. There are a
variety of circumstances in which
a creditor may participate in the distribution
of a defendant’s estate subject to a restraint order. They include the
following:
(a) The purpose of a restraint order is to preserve the defendant’s assets
pending the ultimate determination of the NDPP’s
application for a
confiscation order in terms of section 18 of POCA. The court may ultimately not
make a confiscation order, because
the defendant is acquitted, because the NDPP
does not meet the requirements of a confiscation order, or because the court
decides
in the exercise of its discretion not to make one. The restraint order
must then be rescinded in terms of section
26(10)(b),
[51]
read with section
17.
[52]
The defendant’s
assets would be returned to him or her, and are again available to creditors for
execution of their claims.
The section 26(6) discretion may not be exercised on
the basis that a confiscation order will inevitably be made.
(b) If a prosecutor applies for a confiscation order in terms of section
18(1)
[53]
of POCA and discharges the
requirements for such an order, the court still retains a discretion. It
“may” make a confiscation
order for “any amount it considers
appropriate”. It may in other words decline to make a confiscation order
at all,
or make one for an amount less than the value of the defendant’s
assets subject to restraint. In either event, the effect
is that all or some of
the defendant’s assets are returned to him or her and again become
available to creditors for the execution
of their claims. The court may even in
a worthy case deliberately make a confiscation order in a reduced amount to
ensure that the
claim of a worthy creditor is not defeated.
(c) The value of the defendant’s property may in any event be more than
the amount required to satisfy the confiscation order
against him or her. In
terms of section 31(1) the excess is then restored to the defendant and again
becomes available to creditors
for execution of their
claims.
(d) When a confiscation order is made, the defendant’s assets under
restraint are realised in terms of section 30 and the proceeds
are distributed
in terms of section 31. The first charge on the proceeds is “such payment
as the High Court may
direct”.
[54]
The payment must
be made from the proceeds even before the confiscation order is paid. The
section does not restrict the High Court
in the exercise of its power. Section
31(2) makes it clear that it is not restricted to the payment of claims which
enjoy priority
in terms of section 20(4). The High Court may accordingly, in an
appropriate case, direct that a worthy creditor’s claim be
paid before the
proceeds are used to satisfy the confiscation order.
[59]
These possibilities should
be taken into account when construing section 33(1)(a). It provides that,
subject to certain exceptions,
the High Court must exercise its powers in terms
of sections 26 to 31 “with a view to making available the current value of
realisable property for satisfying any confiscation order” and says that
any obligation of the defendant which conflicts with
the obligation to satisfy a
confiscation order must be left out of account.
[60]
In the first, second and
third scenarios, the defendant’s assets under restraint become available
to his or her creditors for
execution of their claims, either because no
confiscation order is made, or because there is a balance of assets under
restraint
after the confiscation order has been fully paid. When a court is
exercising its section 26(6) discretion, it will be a matter of
conjecture,
[55]
therefore, whether a
confiscation order will be made and accordingly which of the defendant’s
obligations would be inconsistent
with the obligation to satisfy any
confiscation order in the future.
[61]
Section 33(1)(a) should not
be applied in a rigid manner as the High Court did in this case. It could not
have been intended and
must not be understood to limit the section 26(6)
discretion. Its purpose is merely to lay down a principle to guide the High
Court
in the exercise of its powers. The section does not controvert the
express provision in section 31(1), read with section 31(2),
which empowers the
High Court to direct that payments be made from the proceeds of the
defendant’s estate under restraint before
any of it is used to pay the
confiscation order.
[62]
When a defendant’s
estate is under a restraint order and thus beyond the reach of creditors, it
remains in their interest that
as much of the estate as possible be preserved,
because part or all of it might still become available to them for the
satisfaction
of their claims. If the defendant is paid a living and/or legal
expense allowance from his or her estate while it is under restraint,
the effect
is to dissipate the estate and so reduce or even destroy creditors’
prospects of recovery. It is accordingly usually
in their interest to oppose
any application in terms of section 26(6) to persuade the court not to allow the
defendant to draw a
legal expense allowance.
[63]
It is therefore clear that
on the wording of POCA the High Court has a discretion to allow a creditor to
intervene. This interpretation
is not at odds with the obligation to promote
the spirit, purport and objects of the Bill of
Rights.
[64]
The applicant argued that
this interpretation of the section would be in conflict with his right to a
trial without unreasonable delay.
The right of an accused person to have their
trial begin and conclude without unreasonable delay is of great importance as an
aspect
of the fundamental right to a fair
trial.
[56]
Not only can the violation of this right result in a trial being unfair, but
section 35(3)(d) of the Constitution also states a value,
which should guide the
administration of criminal justice. The interests of complainants, accused
persons and the public require
that criminal trials be concluded as speedily as
reasonably possible.
[65]
However,
it is an unfortunate fact that the wheels of justice often turn slowly and that
delays occur in criminal trials. This reality
is recognised in section 35(3)(d)
and in the jurisprudence of this Court. The right of an accused person is one
against “unreasonable
delay”. In
Sanderson
the Court held
that the amount of time that has lapsed is central to the enquiry whether there
has been an unreasonable delay in criminal
proceedings.
[57]
The most
important factors bearing on that question are the nature of the prejudice
suffered by the accused, the nature of the case,
and whether the delay is
systemic.
[58]
The role of the
accused in causing the delay is also relevant. Kriegler J
stated:
“[I]f an accused has been the primary agent of delay, he should not be
able to rely on it in vindicating his rights under s
25(3)(a) [of the interim
Constitution]. The accused should not be allowed to complain about periods of
time for which he has sought
a postponement or delayed the prosecution in ways
that are less
formal.”
[59]
[66]
Whether the intervention of
a creditor could result in a situation where a criminal trial is unreasonably
delayed is therefore an
important factor to be considered by a court when
exercising its discretion.
[67]
The applicant also argued
that the interpretation of section 26(6) would conflict with his right to legal
representation in his criminal
trial. Section 35(3)(f) of the Constitution
guarantees the right “to choose, and be represented by, a legal
practitioner”.
For obvious reasons the right to legal representation is
an important aspect of the right to a fair
trial.
[60]
[68]
Without the recognition of
the right to legal representation in section 26(6), the scheme of restraint
embodied in POCA might well
have been unconstitutional. However, the right
embodied in section 35(3)(f) of the Constitution does not mean that an accused
is
entitled to the legal services of any counsel he or she chooses, regardless
of his or her financial
situation.
[61]
Financial
constraints necessarily play a role and competing needs and demands have to be
balanced. An accused also has the right
to have a legal practitioner assigned
at the state’s expense in terms of section 35(3)(g) where substantial
injustice would
otherwise
result,
[62]
as acknowledged by the
Supreme Court of Appeal. The extent to which this might be appropriate or
sufficient in a particular case
will depend on all relevant prevailing factors,
including the complexity and seriousness of the criminal
charges.
[69]
A defendant’s need to
access funds for reasonable legal expenses is an important factor to be taken
into account by a High Court
faced with an application to intervene. The High
Court is to be commended for interpreting POCA in the light of constitutionally
protected fair trial rights. However, the Supreme Court of Appeal is correct in
its view that the relevant provisions of POCA could
not be understood to mean
that a restraint order could necessarily elevate a defendant’s legal
expenses to a status similar
to that of secured or preferent obligations.
[70]
The Supreme Court of Appeal
correctly overturned the High Court’s decision in so far as the High
Court’s interpretation
resulted in a conclusion that it did not have a
discretion to permit a concurrent creditor in the position of ABSA to
intervene.
[63]
The conclusion that
a concurrent creditor may under certain circumstances intervene is justifiable
on the wording of POCA and does
not in itself militate against the fair trial
rights to a trial free of unreasonable delay and legal representation. The
exercise
of the High Court’s discretion in every particular case is
important though.
The nature and exercise of
the discretion
[71]
The discretion of a High
Court hearing an application of a creditor to intervene in section 26(6)
proceedings is one with which a
court of appeal will only interfere in limited
circumstances. As a court of first instance the High Court will necessarily
have
to take a somewhat robust approach, based on the facts before it.
Provision for reasonable legal expenses in a restraint order is
not a final
determination of the fate of the defendant’s property. An appellate court
will not question whether the decision
reached by the court of first instance
was the correct
one.
[64]
[72]
The circumstances of each
case have to be considered in order to reach a determination which is fair and
just in view of the objects
and wording of POCA, together with an accused
person’s constitutionally protected fair trial rights, existing rules and
principles
of the law of insolvency and other relevant areas of law. The High
Court should seek as best as possible to ensure that a defendant
neither
benefits unduly from the terms of a restraint order, nor is prejudiced as far as
reasonable legal and/or living expenses
are concerned. Circumstances to be
considered in the case of legal expenses would include: (a) the seriousness and
complexity of
the charges against the defendant or of the civil proceedings in
which he or she may be involved; (b) the conduct of the defendant,
preceding,
and in, the section 26(6) application proceedings (including whether a full
disclosure of all his or her interests in
the restraint property has taken place
and whether the defendant is attempting to benefit from a restraint order, or
has acted fraudulently);
(c) the value of his or her assets; (d) the number and
amount of known creditor’s claims; and (e) the history of the specific
claim of the creditor who seeks intervention.
[73]
In an appropriate case the
High Court should ask for a current report from the curator bonis on the value
and use of the property
and any mortgage bonds or other claims against it. In
considering these, a court should bear in mind that the rights of concurrent
creditors are ordinarily less weighty than the rights of preferential or secured
creditors.
[74]
It is therefore clear that
all of a defendant’s creditors do not have a right to be joined in a
section 26(6) application.
There can also not be a duty on the NDPP to give
notice to creditors. Bearing in mind the requirement of full disclosure in
section
26(6), the defendant would have more knowledge of claims and creditors
than the NDPP. The most practical approach however, appears
to be that any
creditor who wishes to intervene has to approach the court as soon as it becomes
aware of section 26(6) proceedings,
and that the court has to exercise its
discretion as to whether to admit the
creditor.
The facts of this case
[75]
ABSA’s intervention
does not seem to be the only factor limiting Mr Fraser’s ability to pay
for the legal defence of his
choice. His apparently unsound financial position
is surely relevant. It bears repeating that but for the lengths to which he
went
to hide his assets, ABSA might well have satisfied its judgment debt long
before the imposition of the restraint order.
[76]
There is no evidence that
the applicant experienced any delay at all as a consequence of ABSA’s
attempt to intervene in the
section 26(6) proceedings. To the extent that
ABSA’s desire to intervene is a direct result of the applicant’s
effort
to conceal his assets from his creditors, and then liquidate those assets
in order to secure legal expenses in terms of section 26(6)
of POCA, the earlier
quoted statement by Kriegler J in
Sanderson
is
relevant.
[65]
Mr Fraser’s own
role in any delay which might result from ABSA’s intervention must be
taken into account.
[77]
The decision of the Supreme
Court of Appeal to allow ABSA to intervene in this case cannot be faulted.
However, the Supreme Court
of Appeal was incorrect in proceeding to order that
ABSA’s claim against the applicant must practically be secured against
the
provision of his reasonable legal expenses. The decision is based on the notion
that ABSA’s claim as a concurrent claim
must automatically take priority
over an applicant’s legal expenses. A decision by a court in terms of
section 26(6) to allow
a creditor to intervene does not automatically result in
an order that ‘ring-fences’ its claim against the applicant’s
right to use funds to meet legal expenses. Whether it does, will depend on the
circumstances of each case which the court will take
into account when
exercising its discretion. Where possible a defendant will be neither unduly
prejudiced nor advantaged by the
fact that his or her property has been
restrained.
[78]
The Supreme Court of
Appeal’s judgment on ABSA’s appeal against the High Court order is
brief, consisting of four paragraphs.
The statement in paragraph 32 that no
proper grounds have been shown why Mr Fraser should be permitted to expend
moneys on legal
expenses that would ordinarily have been available to creditors
suggests that the court assumed that the applicant bore an onus to
justify his
claim to reasonable legal expenses over the claims of concurrent creditors.
This approach is incorrect. The defendant
does not bear an onus of this sort.
Instead, as stated above, the defendant’s request to use his property to
cover reasonable
legal expenses – given that the defendant has a
constitutional right to legal representation – must be carefully weighed
by the Court against both the state’s interest in securing the
defendant’s property for possible confiscation later,
as well as the
claims of the defendant’s creditors. The discretion conferred on a court
by section 26(6) must be exercised
in the light of all relevant circumstances
and based on the best available evidence. The conclusion reached by the Supreme
Court
of Appeal to ‘ring-fence’ ABSA’s claim might well be
correct in the circumstances of the present case, not because
concurrent claims
automatically take precedence over legal expenses, but because of the particular
circumstances of this case, where
it appears that Mr Fraser sought to evade his
legal obligations to ABSA by hiding his assets in a close corporation and only
taking
possession of them again once the restraint was in operation. On the
facts, it seems that Mr Fraser is seeking to benefit from the
restraint order,
something Parliament could not have intended.
[79]
Given that the Supreme
Court of Appeal decided to ‘ring-fence’ ABSA’s claim on the
basis that concurrent claims
should be protected in circumstances where a
defendant seeks to use his property to obtain legal representation, the exercise
of
its discretion was based on an incorrect legal principle and should be set
aside. The question is what should then happen. The
information at this
Court’s disposal is at this stage quite dated. For example, under normal
circumstances the value of fixed
property in Johannesburg would have increased
significantly over a few years. Furthermore, the amount of R1 028 214.25 owed
to ABSA
in December 2004, would also have accrued interest. The possibility
that ABSA’s claim could be preserved, as well as Mr Fraser’s
legal
expenses provided for, calls for investigation. This could be best achieved by
requesting a further report from the curator.
[80]
Under the circumstances it
would be fair as well as practical to refer the matter back to the High Court to
exercise its discretion
in terms of section 26(6) of POCA in the light of this
judgment. It could then properly determine the exact terms of an order allowing
ABSA’s interests to be considered, together with the applicant’s
reasonable needs related to his right to a fair trial,
and of course the
state’s interest in the property. In so doing, the High Court would have
to consider and weigh a range of
factors, including those mentioned in
paragraphs 72 and 73 above, in so far as they are applicable to this
case.
[81]
In view of the
above-mentioned, the judgment and order of the Supreme Court of Appeal has to be
partly upheld and partly overturned.
The appeal succeeds in
part.
Costs
[82]
In this Court the applicant
was partly successful. His success is substantial in that the Supreme Court of
Appeal’s order securing
ABSA’s claim at the cost of his reasonable
legal expenses is set aside, and that the matter is referred back to the High
Court.
On the other hand, ABSA has also succeeded significantly in that it has
obtained leave to intervene in the section 26(6) proceedings.
The
applicant’s previous conduct is also a factor. It is just and equitable
that all parties bear their own costs in this
Court and the Supreme Court of
Appeal. The costs related to ABSA’s application to intervene in the High
Court would best be
determined by the outcome of the High Court proceedings and
are therefore to be costs in the
cause.
Order
[83]
The following is therefore
ordered:
(1) The application for leave to appeal is granted.
(2) The appeal is upheld in part.
(3) The order of the Supreme Court of Appeal is set aside.
(4) ABSA is granted leave to intervene in the section 26(6) proceedings.
(5) The matter is referred back to the High Court for it to determine the
section 26(6) application in the light of this judgment.
(6) No order is made with regard to the costs of the proceedings in this Court
and in the Supreme Court of Appeal.
(7) The costs of ABSA’s application in the High Court to intervene in the
section 26(6) proceedings are to be costs in the
cause of that
application.
Langa CJ, Moseneke DCJ,
Madala J, O’Regan J, Sachs J, Skweyiya J and Yacoob J concur in the
judgment of Van der Westhuizen J.
For the applicant: M Pillemer SC and A Annandale instructed by Padayachee and
Partners.
For the respondent: RS van Riet SC and
P de B Vivier instructed by Heyns and Partners Inc.
For the amicus curiae: W Trengrove SC
and GM Ameer instructed by the State Attorney, Johannesburg.
[1]
See the long title of POCA.
The relevant provisions of POCA are quoted or referred to in paras 11-16 below.
[2]
Part 3 of chapter 5 of
POCA.
[3]
Part 2 of chapter 5 of
POCA.
[4]
Part 4 of chapter 5 of
POCA.
[5]
A provisional restraint order
may be granted without notice to a defendant. Note that in the case of
National Director of Public Prosecutions and Another v Mohamed NO
and
Others
[2002] ZACC 9
;
2002 (4) SA 843
(CC);
2003 (5) BCLR 476
(CC) this Court considered
whether section 38 of POCA infringed the right of access to courts. Section 38,
although dealing with
preservation orders, is drafted in very similar terms to
section 26 in that it allows the NDPP to apply for an order ex parte. In
Mohamed
the court a quo struck down section 38 on the basis that the
section made no provision for a rule nisi calling upon interested parties
to
show cause why a preservation order should not be made. This Court found that
the High Court erred in the order it made in that:
(a) it had attempted to
remedy, by way of a notional severance formulation, a constitutional invalidity
caused by an omission. The
Court held that the correct procedure would have
been to read-in the rule nisi requirement; and (b) section 38 was not
specifically
challenged in the court a quo. Rather, the whole of chapter 6 was
challenged. This Court therefore found that the High Court erred
in attempting
to decide the matter on the narrow basis it did rather than deciding the
constitutionality of chapter 6. No order
was therefore made by this Court as to
the constitutionality of the ex parte procedure.
[6]
A “defendant” is
defined in section 12, Part 1 of Chapter 5 of POCA as
“. . . a person against whom a prosecution for an offence has been
instituted, irrespective of whether he or she has been
convicted or not, and
includes a person referred to in section
25(1)(b)”.
[7]
Sections 2 and 4 of POCA.
[8]
Section 3(1) of POCA.
[9]
The text of section 26 is
quoted in para 11 below.
[10]
Section 28 of POCA.
[11]
See sections 2 and 3.
Chapter 1 deals with definitions and interpretation.
[12]
Sections 4-8.
[13]
Sections
9-11.
[14]
Sections 12-17.
Section 13 states that the proceedings are civil, not criminal. Section 17
states that proceedings in terms of
the chapter are 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.”
[15]
Sections 18-24. Section 18(1) states:
“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 that 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.”
[16]
Sections 24A-29A.
[17]
See subsections 25(1)(a) and
(b).
[18]
Section 28.
[19]
Sections
30-36.
[20]
Section 30(3)
states:
“A High Court shall not exercise its powers under subsection (2)(b) unless
it has afforded all persons known to have any interest
in the property concerned
an opportunity to make representations to it in connection with the realisation
of that property.”
Section 30(4) states:
“If the court referred to in subsection (2) is satisfied that a
person–
(a) is likely to be directly affected by the confiscation order;
or
(b) has suffered damage to or loss of property or injury as a result of an
offence or related criminal activity referred to in section
18(1) which was
committed by the defendant,
the court may allow that person to make representations in connection with the
realisation of that
property.”
[21]
Section 30(5) states:
“If the court is satisfied that a person who has suffered damage to or
loss of property or injury as a result of an offence
or related criminal
activity referred to in section 18(1) which was committed by the
defendant–
(a) has instituted civil proceedings, or intends to institute such proceedings
within a reasonable time; or
(b) has obtained a judgment against the defendant,
in respect of that damage, loss or injury, the court may order that the curator
bonis suspend the realisation of the whole or part
of the realisable property
concerned for the period that the court deems fit in order to satisfy such a
claim or judgment and related
legal expenses and may make such ancillary orders
as it deems
expedient.”
[22]
Section 31(1) states:
“Application of certain sums of money.–(1) The following sums of
money in the hands of a curator bonis appointed under
this Chapter,
namely–
(a) the proceeds of any realisable property realised by virtue of section 30;
and
(b) any other sums of money, being property of the defendant concerned,
shall, after such payment as the High Court may direct have been made out of
such sums of money, be applied on that defendant’s
behalf in satisfaction
of the confiscation order made against him or her: Provided that where the High
Court may direct payment out
of such sums of money, the State shall not have a
preferential claim: Provided further that, if sums of money remain in the hands
of the curator bonis after the amount payable under such confiscation order has
been fully paid, the curator bonis shall distribute
those sums of
money–
(i) among such persons who held realisable property which has been realised by
virtue of section 30;
and
(ii) in such proportions,
as that court may, after affording such persons an opportunity to make
representations to it in connection with the distribution
of those sums of
money, direct.”
Section 31(2) states:
“Without limiting the generality of subsection (1) such payment as the
High Court may direct shall, for the purposes of that
subsection, include any
payment in respect of an obligation which was found to have priority in terms of
section 20.”
Section 32(2) deals with the functions of the curator, and states:
“Save as is otherwise provided in this Chapter, the provisions of the
Administration of Estates Act, 1965 (Act No 66 of 1965),
shall with the
necessary changes apply in respect of a
curator bonis appointed under
this
Chapter.”
[23]
Section 33(1) states:
“Exercise of powers by High Court and curator bonis.–(1) The powers
conferred upon a High Court by sections 26 to 31,
or upon a curator bonis
appointed under this Chapter, shall–
(a) subject to paragraphs (b) and (c), be exercised with a view to making
available the current value of realisable property for
satisfying any
confiscation order made or which might be made against the defendant;
(b) in the case of realisable property held by a person to whom that defendant
has directly or indirectly made an affected gift,
be exercised with a view to
realising not more than the current value of such gift;
(c) be exercised with a view to allowing any person other than that defendant or
the recipient of such gift to retain or recover
the current value of any
property held by him or her,
and, except as provided in sections 20(1) and 26(6), any obligation of that
defendant or the recipient of such gift which conflicts
with the obligation to
satisfy a confiscation order shall be left out of
account.”
[24]
Section 34.
[25]
Section 35.
[26]
Section
36.
[27]
Sections 35(3)(d), (f),
(g) and (h) of the Constitution state:
“Every accused person has a right to a fair trial, which includes the
right–
. . .
(d) to have their trial begin and conclude without reasonable
delay;
. . .
(f) to choose, and be represented by, a legal practitioner, and to be informed
of this right promptly;
(g) to have a legal practitioner assigned to the accused person by the state and
at state expense, if substantial injustice would
otherwise result, and to be
informed of this right promptly;
(h) to be presumed
innocent, to remain silent, and not to testify during the proceedings”.
[28]
Section 25(1) of the
Constitution states:
“No one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of
property.”
[29]
Section 20(5) states:
“A court shall not determine the amounts which might be realised as
contemplated in subsection (1) unless it has afforded all
persons holding any
interest in the property concerned an opportunity to make representations to it
in connection with the realisation
of that
property.”
[30]
Section 167(3) of the Constitution provides:
“The Constitutional Court—
(a) is the highest court in all constitutional
matters;
(b) may decide only constitutional matters, and issues connected with decisions
on constitutional matters; and
(c) makes the final decision whether a matter is a constitutional matter or
whether an issue is connected with a decision on a constitutional
matter.”
[31]
Section 168(3) of the Constitution provides:
“The Supreme Court of Appeal may decide appeals in any matter. It is the
highest court of appeal except in constitutional
matters . . .
”.
[32]
S v
Boesak
[2000] ZACC 25
;
2001 (1) SA 912
(CC);
2001 (1) BCLR 36
(CC) at para
14.
[33]
Section 2 of the
Constitution provides:
“This Constitution is the supreme law of the Republic; law or conduct
inconsistent with it is invalid, and the obligations
imposed by it must be
fulfilled.”
Supreme Court of Appeal Judge, Carole Lewis,
addressed the question of when a matter has a constitutional dimension in Lewis
“Reaching
the pinnacle: principles, policies and people for a single apex
court in South Africa” (2005) 21
SA Journal on Human Rights
509 at
519:
“The truth is that in a unitary system – in which the principles of
law as well as its application must be constitutionally
coherent – there
is no such distinction. What should distinguish cases from one another is only
their relative importance
for the development of the law – which itself
constitutes good grounds for limiting appeals in some cases and not in
others.
. . . the Constitution and its values do permeate every aspect of the law, and .
. . the distinction between constitutional and other
matters is often
incoherent. It exposes the illusory quality of the supposed divide, and I
suggest that it is futile to persist
in the charade of divining what is
constitutional and what is
not.”
[34]
Pharmaceutical Manufacturers Association of SA and Another: In Re Ex parte
President of the Republic of South Africa
and Others
[2000] ZACC 1
;
2000 (2) SA 674
(CC);
2000 (3) BCLR 241
(CC) at para 20.
[35]
Above n
32
at para 14.
[36]
See for example
Boesak
above n
32
, with
reference to sections 167(4)(a) and 172(1)(a) of the Constitution.
[37]
Khumalo and Others v
Holomisa
[2002] ZACC 12
;
2002 (5) SA 401
(CC);
2002 (8) BCLR 771
(CC);
Carmichele v
Minister of Safety and Security
and Another (Centre for Applied Legal
Studies Intervening)
[2001] ZACC 22
;
2001 (4) SA 938
(CC);
2002 (10) BCLR 1100
(CC);
Shabalala and Others v Attorney-General, Transvaal, and Another
[1995] ZACC 12
;
1996 (1)
SA 725
(CC);
1995 (12) BCLR 1593
(CC) at para 9.
[38]
See for example
National
Coalition for Gay and Lesbian Equality and Others v Minister of Home Affairs and
Others
[1999] ZACC 17
;
2000 (2) SA 1
(CC);
2000 (1) BCLR 39
(CC) at para 23;
First
National Bank of SA Ltd t/a Wesbank v Commissioner for the South African Revenue
Services and Another; First National Bank of
SA Ltd t/a Wesbank v Minister of
Finance
[2002] ZACC 5
;
2002 (4) SA 768
(CC);
2002 (7) BCLR 702
(CC) at paras 40, 109, 113
and 114;
National Education Health and Allied Workers Union v University of
Cape Town and Others
2003 (3) SA 1
(CC);
2003 (2) BCLR 154
(CC);
Daniels
v Campbell NO and Others
[2004] ZACC 14
;
2004 (5) SA 331
(CC);
2004 (7) BCLR 735
(CC) at
para 16.
[39]
See for example
National
Education Health and Allied Workers Union
id;
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);
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 para 25;
Alexkor Ltd and Another v The
Richtersveld Community and Others
[2003] ZACC 18
;
2004 (5) SA 460
(CC);
2003 (12) BCLR 1301
(CC) at para 23;
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 20.
[40]
See for example
President, Republic of South Africa, and Another v Hugo
[1997] ZACC 4
;
1997 (4) SA 1
(CC);
1997 (6) BCLR 708
(CC);
Pharmaceutical Manufacturers Association
above n
34
.
[41]
See for example
Boesak
above n
32
;
S v Basson
[2004] ZACC 13
;
2005 (1) SA 171
(CC);
2004 (6) BCLR 620
(CC) at para 91;
Van der Walt v Metcash Trading
Ltd
[2002] ZACC 4
;
2002 (4) SA 317
(CC);
2002 (5) BCLR 454
(CC);
Phoebus Appollo
Aviation CC v Minister of Safety and Security
[2002] ZACC 26
;
2003 (2) SA 34
(CC);
2003 (1)
BCLR 14
(CC). Also see
K v Minister of Safety and Security
[2005] ZACC 8
;
2005 (6) SA
419
(CC);
2005 (9) BCLR 835
(CC) at para 22;. In
Lane and Fey NNO v
Dabelstein
and Others
[2001] ZACC 14
;
2001 (2) SA 1187
(CC);
2001 (4) BCLR 312
(CC)
at para 4 it was stated:
“The Constitution does not and could hardly ensure that litigants are
protected against wrong decisions. On the assumption
that s 34 of the
Constitution does indeed embrace that right, it would be the fairness and not
the correctness of the court proceedings
to which litigants would be
entitled.”
[42]
See
S v Dzukuda and Others; S v Tshilo
2000 (4) SA 1078
(CC);
2000 (11)
BCLR 1252
(CC) at para 51;
New National Party of South Africa v Government of
the Republic of South Africa and Others
[1999] ZACC 5
;
1999 (3) SA 191
(CC);
1999 (5) BCLR
489
(CC) at para 20;
Ferreira v Levin NO and Others; Vryenhoek and Others v
Powell NO and Others
1996 (1) SA 984
(CC);
1996 (1) BCLR 1
(CC) at para
44.
[43]
Section 39(2) of the
Constitution states:
“When interpreting any legislation, and when developing the common law or
customary law, every court, tribunal or forum must
promote the spirit, purport
and objects of the Bill of
Rights.”
[44]
In
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 para 21 it was stated that “[Section 39(2)] means that all
statutes must be interpreted through the prism of the Bill
of Rights”.
In
First National Bank of South Africa Ltd t/a Wesbank
above n
38
at para 31 the following was said:
“[E]ven fiscal statutory provisions, no matter how indispensable they may
be for the economic well-being of the country –
a legitimate governmental
objective of undisputed high priority – are not immune to the discipline
of the Constitution and
must conform to its normative standards.
. . .In the
Carmichele
case this Court held that the obligation of courts
to develop the common law, in the context of the s 39(2) objectives, is not
purely
discretionary but that the courts are under a general obligation to
develop the common law appropriately where it is deficient, as
it stands, in
promoting the s 39(2) objectives. There is a like obligation on the courts,
when interpreting any legislation –
including fiscal legislation –
to promote those objectives.” (footnotes
omitted)
[45]
The
relevant parts of section 35(3) of the Constitution are quoted above at n
27
.
[46]
The whole of section 167(6) reads:
“National legislation or the rules of the Constitutional Court must allow
a person, when it is in the interests of justice
and with leave of the
Constitutional Court—
(a) to bring a matter directly to the Constitutional Court; or
(b) to appeal directly to the Constitutional Court from any other
court.”
See
African Christian Democratic Party v Electoral Commission
and Others
[2006] ZACC 1
;
2006 (3) SA 305
(CC);
2006 (5) BCLR 579
(CC) at paras 17-18;
Phillips and Others v National Director of Public Prosecutions
[2005] ZACC 15
;
2006 (1)
SA 505
(CC);
2006 (2) BCLR 274
(CC) at paras 29-30;
Radio Pretoria
above
n
39
at para 19;
Khumalo
above n
37
at paras 6-8;
S v Bierman
[2002] ZACC 7
;
2002 (5) SA 243
(CC);
2002 (10) BCLR 1078
(CC) at paras 7-9;
S v Boesak
above n
32
at paras 10-12;
Brummer v Gorfil Brothers Investments (Pty) Ltd and Others
[2000] ZACC 3
;
2000 (2) SA
837
(CC);
2000 (5) BCLR 465
(CC) at para 3;
Fraser v Naude and Others
1999 (1) SA 1
(CC);
1998 (11) BCLR 1357
(CC) at para 7.
[47]
See
Radio Pretoria
above n
39
at para 19;
De Freitas
and Another v Society of Advocates of Natal (Natal Law Society Intervening)
1998 (11) BCLR 1345
(CC) at paras 17-20;
Member of the Executive Council for
Development Planning and Local Government, Gauteng v Democratic Party and
Others
[1998] ZACC 9
;
1998 (4) SA 1157
(CC);
1998 (7) BCLR 855
(CC) at para 32.
[48]
Member of the Executive
Council for Development Planning
id;
De Reuck
v Director of Public
Prosecutions, Witwatersrand Local Division, and Others
[2003] ZACC 19
;
2004 (1) SA 406
(CC);
2003 (12) BCLR 1333
(CC) at para 3. See also
Khumalo
above n
37
at para 14;
Islamic Unity
Convention
v Independent Broadcasting Authority and Others
[2002] ZACC 3
;
2002 (4)
SA 294
(CC);
2002 (5) BCLR 433
(CC) at paras 15-16;
National Education Health
and Allied Workers
above n
38
at
para 28;
Ingledew
above n
39
.
[49]
See for example
Fraser
above n
46
;
Brummer
above n
46
;
Boesak
above n
32
at para 12;
Ingledew
above n
39
at para 31;
De Reuck
id at para
3;
Shaik v Minister of Justice and Constitutional Development and Others
[2003] ZACC 24
;
2004 (3) SA 599
(CC);
2004 (4) BCLR 333
(CC) at para 16;
Bierman
above n
46
at para 9.
[50]
See sections 26(6), 30(3),
31(1) and 33(1) of POCA above in para 11 and n 20-23.
[51]
See section 26(10)(b) in
para 11 above.
[52]
See section 17 above n
14.
[53]
See section 18(1) above n
15.
[54]
Section 31(2) above n
22.
[55]
A confiscation order may be
made only after conviction (section 18 of POCA) and may be satisfied only after
the property has been
realised in terms of section 30(1). A section 26(6)
application for reasonable legal expenses will ordinarily be made before
conviction.
[56]
Sanderson v
Attorney-General, Eastern Cape
1998 (2) SA 38
(CC);
1997 (12) BCLR 1675
(CC)
at paras 22-24 and 37;
S v Dzukuda
above n
42
at paras 9 and 52;
Wild and Another
v Hoffert NO and Others
[1998] ZACC 5
;
1998 (3) SA 695
(CC);
1998 (6) BCLR 656
(CC) at
paras 4-7 and 11;
Mills v The Queen
(1986) 21 CRR 76
at 143 as quoted
with approval in
Sanderson
at para 23. See also
section 342A
of the
Criminal Procedure Act 51 of 1977
, inserted by Act 86 of 1996 and Act 55 of
2003.
[57]
Sanderson
id at para
28. In
Sanderson
the Court was concerned with section 25(3)(a) of the
interim Constitution.
[58]
Id at paras 31-35.
[59]
Id at para 33.
[60]
See for example
S v
Rudman and Another
;
S v Mthwana
1992 (1) SACR 70
(A)
; S v Du Toit
and Others
(2)
2005 (2) SACR 411
(T) at 426A-D
; S v Lusu
2005
(2) SACR 538
(E) at paras 11-15
; S v Manuel
2001 (4) SA 1351
(W) at paras
6-7;
S v Manguanyana
1996 (2) SACR 283
(E) at 287D-E;
S v Melani and
Others
1996 (1) SACR 335
(E) at 348I-349B
; S v Oakers
1990 (1) SACR
147
(C);
S v Davids
;
S v Dladla
1989 (4) SA 172
(N) at 193G;
S
v Khanyile and Another
1988 (3) SA 795
(N);
Gideon v Wainwright
[1963] USSC 42
;
372
US 335
, 344 (1963).
[61]
See
S
v Halgryn
2002 (2) SACR 211
(SCA) at para 11:
“Although the right to choose a legal representative is a fundamental
right and one to be zealously protected by the courts,
it is not an absolute
right and is subject to reasonable limitations. It presupposes that the accused
can make the necessary financial
or other arrangements for engaging the services
of the chosen lawyer. . . An accused cannot, through the choice of any
particular
counsel, ignore all other considerations . . . ” (footnotes
omitted)
See also
S and Others v Swanepoel
2000 (7) BCLR
818
(O), in which the court held that an accused, who declined to be defended by
counsel directed by the Legal Aid Board, must accept
that the range of choice of
legal representation is constrained by his or her financial means.
[62]
Section 35(3)(g) of the
Constitution guarantees every accused person the right “to have a legal
practitioner assigned to the
accused person by the state and at state expense,
if substantial injustice would otherwise result”. The constitutional
right
to legal representation is also reflected in
sections 73(1)
and (2) of the
Criminal Procedure Act 51 of 1977
, which provides:
“Accused entitled to assistance after arrest and at criminal
proceedings.–
(1) An accused who is arrested, whether with
or without warrant, shall, subject to any law relating to the management of
prisons,
be entitled to the assistance of his legal adviser as from the time of
his arrest.
(2) An accused shall be entitled to be represented by his legal adviser at
criminal proceedings, if such legal adviser is not in
terms of any law
prohibited from appearing at the proceedings in question.”
[63]
The High Court found that
“in the circumstances” ABSA did not have the right to intervene in
the application, but its
interpretation of POCA did not allow a discretion to
permit a creditor to
intervene.
[64]
See
Trevor B
Giddey NO v JC Barnard and Partners
CCT65/05, 1 September 2006, as yet
unreported, at para 19:
“The ordinary rule is that the approach of an appellate court to an appeal
against the exercise of a discretion by another
court will depend upon the
nature of the discretion concerned. Where the discretion contemplates that the
Court may choose from
a range of options, it is a discretion in a strict sense.
The ordinary approach on appeal to the exercise of a discretion in the
strict
sense is that the appellate court will not consider whether the decision reached
by the court at first instance was correct,
but will only interfere in limited
circumstances; for example, if it is shown that the discretion has not been
exercised judicially
or has been exercised based on a wrong appreciation of the
facts or wrong principle of law. Even where the discretion is not a discretion
in a strict sense, there may still be considerations which would result in an
appellate court only interfering in the exercise of
such a discretion in the
limited circumstances mentioned above.” (footnotes omitted)
[65]
Above para
65.