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[2015] ZAWCHC 96
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Van Heerden and Another v National Director of Public Prosecutions and Another (16910/11) [2015] ZAWCHC 96 (22 June 2015)
THE
HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 16910/11
DATE:
22 JUNE 2015
In
the matter between
PIENAAR
VAN
HEERDEN
..................................................................................
FIRST
APPLICANT
ANTHEA
LYNETTE VAN
HEERDEN
..........................................................
SECOND
APPLICANT
And
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
...........................
FIRST
RESPONDENT
ANDRE
CHARL VAN HEERDEN
N.O
.....................................................
SECOND
RESPONDENT
Coram
:
ROGERS J
Heard:
3 & 5 JUNE 2015
Delivered:
22 JUNE 2015
JUDGMENT
ROGERS
J:
Introduction
[1]
On 18 March 2011 this court (per Davis J)
made an ex parte provisional restraint order against the applicants
(Mr and Mrs van Heerden,
who are married in community of property) in
terms of s 26 of the Prevention of Organised Crime Act 121 of
1998 (‘POCA’).
It was alleged that the Van Heerdens,
during 2009 and while employed by British American Tobacco South
Africa (‘BATSA’),
participated with others in the theft
of cigarettes. A final order was granted by Veldhuizen J on 5 October
2011 without opposition.
A Mr AC van Heerden (unrelated to the
applicants) was appointed as the curator bonis (‘the curator
‘).
[2]
Following disciplinary hearings the Van
Heerdens were dismissed by BATSA in February and March 2010
respectively. According to the
founding affidavit in the ex parte
application, the disciplinary enquiry concluded that Mr van Heerden
was the mastermind behind
the theft of more than 590 boxes of
cigarettes worth in excess of R6,25 million. Mrs van Heerden was
allegedly dismissed on the
basis that she was a beneficiary of the
proceeds of stolen cigarettes and failed to disclose the theft to
BATSA.
[3]
The Van Heerdens issued the present
application on 24 April 2015, citing the National Director of Public
Prosecutions (‘the
NDPP’) as the first respondent and the
curator as the second respondent. In the application the applicants
seek a variation
of the restraint order so as to provide that the
curator pay from property under his control (i) R23 579 per
month to
them as reasonable living expenses, to be increased from
time to time at the curator’s reasonable discretion upon the
applicants’
providing evidence of an increase in their
reasonable living expenses; (ii) R250 000 to their
attorneys for their reasonable
legal expenses in a proposed
application for the rescission of this restraint order; and
(iii) R150 000 to their attorneys
to defend the criminal
proceedings.
[4]
The NDPP opposes the application. I heard
argument on 3 and 5 June 2015. Mr King SC leading Mr Engelbrecht
appeared for the Van
Heerdens on the first date while Mr Engelbrecht
appeared alone on the second date. Mr Titus appeared for the NDPP.
The
criminal case
[5]
The applicants and their co-accused
appeared for the first time in the district court on 29 August 2011.
After several postponements
the matter was transferred to the
regional court, where the accused appeared for the first time on 23
March 2012. The matter was
remanded on several occasions for the
State to obtain an authorization from the NDPP to institute
racketeering charges in terms
of s 2(4) of POCA. The certificate
was obtained. On 6 July 2012 the case was postponed to 27 September
2012 for the State
to supply the defence with further particulars.
The matter was thereafter postponed to 8 and 9 April 2013 for plea
and trial.
[6]
The charge sheet comprised 41 counts. Count
1 was a racketeering charge against Mr van Heerden alone. Count 2 was
a racketeering
charge against him, his wife and five other accused.
Counts 3 to 11 and 14 and 15 were charges of theft of specified boxes
of cigarettes
on specified occasions. Mr van Heerden featured in all
of these charges. Mrs van Heerden featured in none. Counts 12 and 13
were
generalised charges of theft of unspecified boxes of cigarettes
over a period spanning a year. Mr van Heerden featured in both of
these counts while Mrs van Heerden featured only in count 13. The
remaining 26 counts, which were all charges of money laundering
in
contravention of s 4 of POCA, were grouped into three batches
(16 to 19, 20 to 30 and 31 to 41). Mr and Mrs van Heerden
featured in
the first two batches, the alleged property being cash of R128 500
and R306 000 respectively paid into the
Van Heerdens’ bank
account.
[7]
The trial did not get underway in April
2013 because the prosecutor was ill. The case was postponed to August
2013. It was again
postponed to 10 February 2014 pending judgment
from the Constitutional Court in the
Savoi
case (judgment in which was
subsequently delivered on 20 March 2014:
Savoi
& Others v National Director Of Public Prosecutions & Another
2014 (5) SA 317
(CC), dismissing a
challenge to the constitutional validity of various racketeering
offences created by s 2 of POCA).
[8]
On 4 February 2014 the Van Heerdens gave
notice that on 10 February 2014 they would raise an objection to the
charge sheet in terms
of
s 85
of the
Criminal Procedure Act 51
of 1977
on the ground that it did not comply with the Act relating to
the essentials of a charge and did not disclose an offence. They also
gave notice of a constitutional challenge to the charges under POCA.
(The latter fell away following the
Savoi
judgment.)
[9]
On 7 February 2014 the Van Heerdens
delivered a request for further particulars and for documentation.
The first two paragraphs
of the request sought to clarify the
virtually unintelligible allegations in the charge sheet on the first
two counts (the racketeering
charges). The State’s allegations
included the curious assertion that the criminal enterprise for
purposes of s 2 of
POCA was BATSA’s Quality Assurance
Office and Distribution Centres. In respect of each of the theft
counts, the State was
asked to identify Mr van Heerden’s
alleged actus reus and what cigarettes he was alleged to have stolen.
A large range of
documentation was requested, including all emails
sent or received by the Van Heerdens on their work computers over the
period
December 2008 to January 2010 and various BATSA records such
as requisitions, transport documents, invoices, stock records,
operating
procedures and the like.
[10]
On 10 February 2014 the trial could not
begin because judgment was still awaited in
Savoi
and because of the Van Heerdens’
unanswered request for further particulars. The matter was postponed
by agreement to 14 April
2014. As noted, by virtue of the
Savoi
judgment delivered on 20 March 2014,
the constitutional challenge fell away.
[11]
On 4 April 2014 the State furnished its
reply to the request for further particulars. The State persisted in
the allegation that
the criminal enterprise was BATSA’s Quality
Assurance Office and Distribution Centres. For the rest, the answers
were said
to appear from the statements in the docket. In regard to
the request for documentation, the State said that it had requested
BATSA
to indicate if it was able to supply the Van Heerdens with the
requested documents.
[12]
On 14 April 2014 the case was further
postponed so that the Van Heerdens’ legal representatives could
consider the reply.
By agreement the matter was postponed to 4
November 2014 for plea and trial.
[13]
On 17 October 2014 the Van Heerdens again
gave notice of their intention to object to the charge sheet,
complaining that the State’s
reply to the request for
particulars did not identify or clarify the essential elements of the
charges and that the requested documents
had not been supplied.
[14]
On 4 November 2014 Mr King SC appeared for
the Van Heerdens. He submitted heads of argument in support of the
objection to the charges.
The case was postponed to 17 November 2014
to give the State opportunity to prepare its responding submissions.
On that date the
prosecutor opposed the Van Heerdens’ objection
but submitted in the alternative that the court should give an order
in terms
of s 85(2)(a) and/or
s 87(1)(a)
of the
Criminal
Procedure Act affording
the State an opportunity to deal with the
defects. The magistrate evidently regarded the objections as sound
and was not prepared
to accede to the State’s alternative
submission. On the other hand, he did not quash the charges. He
simply struck the matter
from the roll. Before me, counsel were in
agreement that this meant that the State could reinstate the
prosecution by delivering
a fresh charge sheet.
[15]
On 13 March 2015 the Van Heerdens’
attorneys wrote to the State Attorney complaining that their clients
had been deprived
of their property for three and a half years,
during which time the State had not been able to formulate a
sustainable charge sheet
against them. The letter requested a release
of assets in accordance with the relief subsequently requested in the
present application.
[16]
In a response dated 18 March 2015 the State
Attorney’s office said that the prosecuting team regretted the
delay in reinstituting
charges against the Van Heerdens and assured
them that no malice was intended. The State Attorney recorded the
prosecution team’s
undertaking to deliver the amended charge
sheet by not later than 17 April 2015.
[17]
The present application followed on 24
April 2015, by which date an amended charge sheet had not been
delivered. One of the affidavits
in the NDPP’s answering papers
was an affidavit by the new prosecutor assigned to the case. He said
that the State’s
undertaking to deliver the amended charge
sheet by 17 April 2015 was ‘short-sighted’ because the
process is ‘a
prolonged one that requires sufficient time for
the NDPP to approve an amended racketeering charge’. He said
that the State
now undertook to deliver the amended charge sheet by
31 July 2015.
The
restraint application and subsequent related developments
[18]
The provisional restraint order was granted
ex parte on 18 March 2011, shortly before the accused’s first
appearance in the
district court. In the founding affidavit it was
stated that Mr van Heerden was implicated in the theft 590 boxes of
cigarettes
worth R6,25 million. (One box contains 50 cartons, with 10
packs of 20 cigarettes per carton. The specified numbers of boxes
featuring
in the charge sheet totalled 396 though this does not take
into account the two generalised charges of theft.) From certain
stock
sheets alone it appeared that Mr van Heerden had stolen 272
boxes. Based on a value of R10 000 per box, Mr van Heerden’s
‘known benefit’ was said to be R2,72 million though it
might turn out to be more.
[19]
The founding affidavit identified the
following realisable assets belonging to the Van Heerdens:
(i) R270 000 in the trust
account of certain attorneys,
being part of the proceeds of the sale by the Van Heerdens of a
property in Heidelberg which they
had sold in July 2010 for R2,4
million; (ii) an unbonded property in Paarl worth R980 000;
(iii) a 2008 BMW X3 with
an estimated book value of R343 444;
(iv) a 2006 Opel Corsa bakkie with an estimated book value of
R62 064.
[20]
The provisional restraint order was in
standard form. Although the order referred to an annexure ‘A’
supposedly specifying
realisable assets to be attached, there appears
to have been no such annexure. The restraint order excluded such
realisable property
as the curator certified in writing to be in
excess of R2,72 million, adjusted for fluctuations in the value of
money and the expenses
relating to the property.
[21]
The
curator was required to file his first report by 21 September 2011
[1]
and to file quarterly reports thereafter.
[22]
The Van Heerdens were required by para 1.36
of the order to make an affidavit describing and identifying the
whereabouts of all
property not physically surrendered into the
curator’s possession, of all property which to their knowledge
would be transferred
to them at any time and of all affected gifts as
defined in
ss 12(1)
and
16
of POCA. Para 1.38 required them to
file with the curator monthly income and expenditure statements
together with supporting documentation.
[23]
Para 1.41 of the restraint order
essentially incorporated the provisions of
s 26(6)
of POCA
relating to the release of assets for reasonable living and legal
expenses.
[24]
On 5 September 2011 Mr van Heerden signed a
sworn statement of affairs (Mrs van Heerden did not do so, but Mr van
Heerden’s
statement covered the joint estate). In addition to
the assets mentioned in the ex parte application, he disclosed, in
annexure
II, the following assets of the joint state: (i) a
business called Coco Boutique with an estimated value of about
R150 000;
(ii) a food and packaging business called Lemon
Tree Trading with an estimated value of about R350 000; and
(iii) a
fixed deposit of R100 000 with Capitec plus cash of
R41 000 in three current accounts. In annexure III, dealing with
outstanding claims, Mr van Heerden identified his claim and that of
his wife against the ‘BAT Pension Fund’ (actually
the BAT
Retirement Fund – ‘the Fund’) in the amounts
of approximately R1,2 million and R500 000 respectively,
in
respect of which he made the annotation ‘Kept back by BAT’.
Four specified insurance policies were said to have
been paid up. The
Paarl property was not included in the statement of affairs. As
appears below, the Van Heerdens no longer owned
it.
[25]
The curator filed his first report on 20
September 2011. In relation to the Paarl property, he recorded that
according to the Van
Heerdens they had sold it during 2007. He had
taken the remaining assets mentioned in the ex parte application into
his possession.
He attached the Van Heerdens’ statement of
affairs and said that he was currently considering, in conjunction
with the NDPP,
the best manner of dealing with the disclosed assets.
[26]
The restraint order was made final on 5
October 2011. The order recorded that the Paarl property was excluded
from the restraint
as it was no longer owned by the Van Heerdens. The
order stated, further, that the restrained property included the
property and
interests disclosed by the Van Heerdens in annexure II
of the statement of affairs ‘as well as the pension of [Mr van
Heerden]
held at Sanlam under pension fund number 12146’.
[27]
On 20 December 2011 the Fund wrote to the
Van Heerdens’ attorneys regarding the withdrawal benefits
payable to the Van Heerdens.
This letter read in relevant part as
follows:
‘
Our
legal adviser have [
sic
]
lodged a written application to the court that issued the restraint
order on behalf of the BAT Retirement Fund confirming that
the fund
holds value for both respondents (Mr & Mrs van Heerden) as a
result of the pending criminal matter against them.
We suggested that
the value held in the retirement fund for both respondents should
form part of the detention order attached hereto
or that he clarifies
why only Mr van Heerden’s value should be held.
We have followed
this up a number of times with Mr Kajee [of the State Attorney] but
have unfortunately not received final feedback.
We have tried again
very recently but understand that Mr Kajee will only be able to
provide us with an answer early in the new year.
Apologies for the
delay in your request and we endeavour to do our best to finalise
this matter before the end of January 2012.’
[28]
On 29 February 2012 the Van Heerdens
launched their first application for a release of assets (the present
application being the
second). By that date the termination benefits
which the Fund was holding in respect of the Van Heerdens had still
not been paid
out. They sought the release of R30 000 per month
for reasonable living expenses and R150 000 for legal expenses.
In
his founding affidavit Mr van Heerden provided information
concerning Lemon Tree Trading (his business) and Coco Boutique (a
business
in which his wife had a 50% share). They requested the
release of the Opel Corsa for their personal use and for use in their
businesses.
They also asked that the BMW be sold and the proceeds
kept by the curator.
[29]
On 12 March 2012 an order was made by
agreement for the release of the Opel Corsa and the sale of the BMW.
The remaining relief
was to stand over for determination on 6 June
2012. Later in March an arrangement was reached in terms whereof the
Fund released
Mrs van Heerden’s termination benefit of R736
4488 to her attorneys and paid Mr van Heerden’s termination
benefit of
R1 396 386 to the curator. The attorneys
retained R150 000 in respect of legal fees and released the
balance of
R586 488 to the Van Heerdens. This rendered the
remaining relief sought in the first application unnecessary.
[30]
The present application was launched on 24
April 2015. In essence, the applicants say that they have now
exhausted the money which
was released to them in March 2012. I shall
refer presently to the content of the affidavits.
[31]
Simultaneously with the filing of the
opposing papers the curator filed a second report. (He had not filed
quarterly reports in
accordance with the restraint order.) The
curator still holds the cash of R270 000 from the Heidelberg
property and about
R115 000 received from Capitec. The BMW was
sold and the proceeds of R142 954 placed on fixed deposit. He
confirmed receipt
of Mr van Heerden’s pension benefit of
R1 396 386 on 30 March 2012. Inclusive of accrued interest,
he was holding,
at the date of his second report, R2 106 922,86.
Mr
van Heerden’s pension benefit
[32]
I raised with counsel at an early stage on
3 June 2015 whether Mr van Heerden’s termination benefit from
the Fund had correctly
been paid to the curator, having regard to the
provisions of s 37A(1) of the Pension Funds Act 24 of 1956 (‘the
PFA’).
If the said benefit was exempt from preservation and if
it should have been paid by the Fund to Mr van Heerden, the need for
a
release of assets in terms of s 26(6) of the Act would fall
away. After considering their positions, counsel agreed that I
should
determine this question. Supplementary submissions were filed and I
heard oral argument on that point on 5 June 2015. Argument
on the
other issues was completed on 3 June 2015.
[33]
For reasons I shall explain presently, I
have concluded that I should not decide the s 37A(1) issue.
However, and because it
was argued, I shall briefly indicate the
questions relevant to this issue.
[34]
Section 37A(1) reads as follows:
‘
Save
to the extent permitted by this Act, the Income Tax Act, 1962 (Act
No. 58 of 1962), and the
Maintenance Act, 1998
, no benefit provided
for in the rules of a registered fund (including an annuity purchased
or to be purchased by the said fund
from an insurer for a member), or
a right to such benefit, or a right in respect of contributions made
by or on behalf of a member,
shall, notwithstanding anything to the
contrary contained in the rules of such a fund, be capable of being
reduced, transferred
or otherwise ceded, or of being pledged or
hypothecated, or be liable to be attached or subjected to any form of
execution under
a judgment or order of a court of law, or to the
extent of not more than three thousand rand per annum, be capable of
being taken
into account in a determination of a judgment debtor’s
financial position in terms of
section 65
of the
Magistrates’
Courts Act, 1944
(Act No. 32 of 1944), and in the event of the member
or beneficiary concerned attempting to transfer or otherwise cede, or
to pledge
or hypothecate, such benefit or right, the fund concerned
may withhold or suspend payment thereof: Provided that the fund may
pay
any such benefit or any benefit in pursuance of such
contributions, or part thereof, to any one or more of the dependants
of the
member or beneficiary or to a guardian or trustee for the
benefit of such dependant or dependants during such period as it may
determine.’
[35]
In terms of
s 37A(3)(c)
the above
prohibition does not apply with reference to anything done towards
reducing or obtaining settlement of a debt which a
fund may reduce or
settle under
s 37D.
In terms of
s 37D(1)(b)(ii)
, one of the
debts which may be set off against a pension benefit is a deduction
of any amount due by the member to his employer
on the date of his
retirement or on which he ceases to be a member of the fund, in
respect of –
‘
(ii) compensation
(including any legal costs recoverable from the member in a matter
contemplated in subparagraph (bb)) in
respect of any damage caused to
the employer by reason of any theft, dishonesty, fraud or misconduct
by the member, and in respect
of which –
(aa) the member
has in writing admitted liability to the employer; or
(bb) judgment
has been obtained against the member in any court, including a
magistrate’s court,…’.
[36]
The first question is whether POCA
overrides the protection afforded by
s 37A(1).
There can be
little doubt, I think, that
s 37A(1)
of the PFA overrides other
laws, whether they predate or postdate
s 37A
, unless the later
law expressly or by necessary implication overrides
s 37A(1)
, in
which event the later legislation would be a pro tanto amendment of
s 37A(1).
This conclusion flows from the language of
s 37A(1)
and from the maxim that a later general law does not override an
earlier special law (see
R v
Gwantshu
1931 EDL 29
at 31;
Consolidated
Employers Medical Aid Society & Others v Leveton
1999
(2) SA 32
(SCA) at 40J-41C;
Sasol
Synthetic Fuels (Pty) Ltd & Others v Lambert & Others
2002
(2) SA 21
(SCA) at 30I). There is nothing in Chapter 5 of POCA which
expressly or by necessary implication overrides
s 37A(1)
of the
PFA. The fact that incorporeal rights are within the broad definition
of ‘realisable property’ as read with
the definition of
‘property’ in POCA does not appear to be sufficient to
derogate from
s 37A(1).
[37]
The second question is whether a restraint
order in respect of a
s 37A(1)
benefit would be an act forbidden
by that section. The purpose of a restraint order granted in terms of
s 26
of POCA is to preserve property pending a possible
confiscation order in terms of
s 18
(see
National
Director of Public Prosecutions v
Rebuzzi
2002 (1) SACR 128
(SCA) para 4). Once a
confiscation order is made, the High Court may order restrained
property to be realised in terms of
s 30.
The realisation of
property pursuant to these provisions may well be viewed as a ‘form
of execution under a judgment or order
of a court of law’
within the meaning of
s 37A(1).
If, by virtue of
s 37A(1)
,
a pension benefit cannot be realised in satisfaction of a
confiscation order, it would appear to follow that it cannot be
restrained
in terms of
s 26
of POCA.
[38]
The third question is whether the
protection accorded by
s 37A(1)
is lost once the benefit is paid
to the member. Mr Engelbrecht very properly drew my attention to the
decisions in
Foit v FirstRand Bank Bpk
2002 (5) SA 148
(T) and
Van
Aartsen v Van Aartsen
2006 (4) SA 131
(T) para 23 which answer this
question affirmatively. In the former case Basson J cited
Gibson
v Howard
1918 TPD 185.
Gibson
concerned the analogous protection
accorded to a benefit payable to a miner by the Miners’
Phthisis Board pursuant to the
Miners’ Phthisis Act 44 of 1916.
Foit
dealt
with the analogous protection afforded by s 2(1) of the General
Pensions Act 29 of 1979.
Van Aarsten
dealt with s 37A(1). Mr Engelbrecht also
directed my attention to the fact that the word ‘benefit’
is defined in
s 1 of the PFA as meaning ‘any amount
payable to a member or beneficiary in terms of the rules of’
the pension
fund in question. He submitted that what was said in
Foit
and
Van
Aartsen
on
this question was obiter and or wrong. In regard to the statutory
definition of ‘benefit’, he submitted that the
emphasis
should be placed on the notion of an ‘amount’ (ie a
quantified sum) rather than ‘payable’.
[39]
The prohibition in s 37A(1) and the
carefully tailored exceptions in s 37D show that the persons
whose protection the
lawmaker primarily had in mind were those of the
member and his or her dependants (see
Absa
Bank Ltd v Burmeister & Others
2004
(5) SA 595
(SCA) para 12;
Old Mutual
Life Assurance Company Namibia Ltd v Old Mutual Namibia Staff Pension
Fund & Another
[2005] NAHC 45
pp 17-18). If that is so, it is legitimate to ask what the point
would be of shielding from execution a member’s right
to
receive payment of a benefit but not the benefit once received. The
member’s right to receive payment from the pension
fund does
not in itself enable the member to put food on his table or a roof
over his head.
[40]
It will be noted that s 37A(1) affords
protection to three things: (i) a ‘benefit’ provided
for in a fund’s
rules; (ii) a ‘right to such benefit’;
and (iii) a ‘right in respect of contributions made by or on
behalf of
a member’. The distinction drawn between a ‘benefit’
and a ‘right to such benefit’ makes it difficult
to apply
the statutory definition of ‘benefit’, since the word
‘payable’ in the definition would seem to
mean the same
thing as a right to a benefit, ie a right to be paid a benefit.
Section 37A was inserted into the Act in 1976, and
its current
wording predates by some years the introduction in 2007 of ‘benefit’
as a defined term. The defined meaning
could not have been present to
the lawmaker’s mind when it framed s 37A.
[41]
There are, however, certain difficulties
which would arise if one construed the word ‘benefit’ in
s 37A(1) as meaning
the money paid to the member or dependant as
distinct from such person’s right to receive payment thereof at
a future date.
One such difficulty is that the money paid to the
member could quickly lose its identity in his hands as a ‘benefit’.
This might simply be a question of onus (if the member cannot
identify the attached cash or asset as representing the benefit he
received, he would not be able to show that it is protected). Another
difficulty is that if the cash in the member’s hands
represents
a shielded ‘benefit’, the cash would become subject to
all the prohibitions in s 37A(1) and not merely
the prohibition
against attachment in execution of a court order, and such
prohibitions might practically prevent the member from
doing anything
with the money. This could be overcome by a restrictive
interpretation of the concepts of reduction in transfer
in s 37A(1).
[42]
The present case does not directly raise
the question whether the s 37A(1) protection extends to the cash
proceeds of the right
to claim a benefit. Mr van Heerden’s
withdrawal benefit did not, prior to its payment by the Fund to the
curator, exist as
cash in Mr van Heerden’s hands. What Mr van
Heerden had prior to the Fund’s payment to the curator was a
right to receive
the benefit, a right clearly falling within the
ambit of s 37A(1). However the extent of the s 37A(1)
protection does
arise indirectly, because if
Foit
and
Van
Aartsen
are correct one might say,
viewing the matter pragmatically, that no harm has been done by the
Fund’s payment of the benefit
directly to the curator: even if
the Fund should have paid the money to Mr van Heerden, he would have
been obliged forthwith to
pay the cash to the curator in terms of the
restraint order.
[43]
Another
argument which Mr Titus advanced was the following. In
Highveld
Steel and Vanadium Corporation Limited v Oosthuizen
2009
(4) SA 1
(SCA) the court held that it is necessarily implicit in
s 37D(1)(b)(ii) that a pension fund has a discretion to withhold
payment
of a pension benefit pending the finalisation of civil
proceedings by the employer against the member for damages arising
from
the alleged theft. Mr Titus submitted that here the Fund
elected, prior to paying the money to the curator, to invoke its
discretion
to withhold the benefit in terms of s 37D(1)(b)(ii)
and that the Fund was entitled to transfer the money to the curator
‘for
safekeeping, pending the outcome of the criminal case’,
at which stage it might be paid out (presumably to BATSA) pursuant
to
a compensation order in terms of
s 300
of the
Criminal Procedure
Act or
pursuant to a direction of the court in terms of
s 31(1)
of POCA.
[2]
[44]
I find this argument difficult to grasp. If
the Fund wished to assert that right, it should simply have retained
the money. Mr van
Heerden would not have been the owner of any of the
cash or investments held by the Fund and would not, in view of the
exercise
by the Fund of its discretionary power, have had a right to
enforce payment. On what basis could his curator be in a better
position?
I should add that the evidence does not suggest to my mind
that there was an agreement between the Fund and the curator that the
latter would hold the proceeds on behalf of the Fund and I do not
understand how that could properly form part of a curator’s
powers.
[45]
The most difficult of the questions
discussed above is, to my mind, whether the
s 37A(1)
protection
extends to cash received by the member in payment of a pension
benefit. The restrictive interpretation of ‘benefit’
seems to render the protection afforded by the section largely
hollow. However, and for the following reasons, I do not think I
should finally decide this or any of the other
s 37A(1)
questions now. Whatever the correct legal position may be, as a fact
the final restraint order stipulated that Mr van Heerden’s
pension benefit should be paid to the curator. As far as I can see,
neither Mr van Heerden nor the Fund was given notice that this
amendment to the provisional order would be sought. Nevertheless, the
final order was made, and both Mr van Heerden and the Fund
have had
knowledge of it for several years. This does not mean that Mr van
Heerden waived (if he could) such rights as he had under
s 37A(1).
I think it is fair to say that, until I raised the issue, both sides
were either unaware of, or had overlooked, the provisions
of
s 37A(1).
The argument which took place before me regarding
s 37A(1)
concerned in essence a proposed variation to the final
restraint order so as to exclude the pension benefit.
[46]
The difficulty is that Mr van Heerden and
the NDPP are not the only persons with an interest in the questions
(i) whether the final
order correctly required Mr van Heerden’s
pension benefit to be paid to the curator and (ii) if not, how the
error should
now be rectified. By virtue of
s 37D(1)(b)(ii)
, the
Fund and BATSA have a distinct interest in the answer to these
questions.
[47]
It may be assumed that neither of the
conditions for deduction in terms of the latter provision has as yet
been satisfied, ie BATSA
does not yet have a judgment against Mr van
Heerden for damages suffered in consequence of alleged theft and Mr
van Heerden has
not in writing admitted liability. However, in terms
of
Highveld Steel
supra
a pension fund has a discretion to withhold payment of a pension
benefit pending the finalisation of civil proceedings by
the employer
against the member. It appears from the Fund’s letter of 20
December 2011 that the Fund may have had in mind
to withhold the
pension benefits payable to the Van Heerdens pending the finalisation
of the criminal matter. Although the letter
does not squarely assert
the discretionary power recognised in
Highveld
Steel
, the Fund may have contemplated
that civil liability or a written acknowledgment of liability would
follow if the Van Heerdens
were convicted or that the regional court
might make a compensation order in BATSA’s favour in terms of
s 300
of the
Criminal Procedure Act, which
would in terms of
s 300(2)(b)
have the effect of a civil judgment. But the Fund
was faced with a court order which stated that the restrained assets
included
Mr Van Heerden’s pension benefit. Para 1.7 of the
restraint order required and authorized the curator to take all
realisable
property into his possession.
[48]
If it were not for this order, the Fund
might have declined to pay the termination benefit to either the
curator or Mr van Heerden
personally and instead have asserted a
discretionary power to withhold payment. If the court were now to
rule that the inclusion
of Mr van Heerden’s pension benefit in
his realisable assets was impermissible by virtue of
s 37A(1)
,
the Fund and BATSA might wish to say that the pension benefit and
accrued interest should then be returned to the Fund so that
it can
consider its position in the light of
s 37D(1)(b)(ii)
and
Highveld Steel
.
I do not say that the Fund and BATSA would succeed in such a
contention but it is a matter on which they are entitled to
be
heard.
[49]
In the circumstances, I think the exclusion
of Mr van Heerden’s termination benefit from the ambit of the
restraint order
is an issue which should be raised in a substantive
application served inter alia on the Fund and BATSA.
Release
of money for reasonable living and legal expenses
[50]
I must thus consider the Van Heerdens’
application for the release of funds in terms of
s 26(6).
I was
referred inter alia to the leading judgments of the Constitutional
Court in
Fraser v Absa Bank Ltd
(National Director Of Public Prosecutions As Amicus Curiae)
[2006] ZACC 24
;
2007
(3) SA 484
(CC) and
Naidoo & Others
v National Director Of Public Prosecutions & Another
2012
(1) SACR 358
(CC), which dealt with restraint orders in terms of
s 26
, and
National Director of
Public Prosecutions v Elran
2013 (1)
SACR 429
(CC). The court’s discretion in terms of
s 26(6)
can only be exercised if it is satisfied (i) 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
(ii) that the person cannot meet the expenses concerned
out of
his or her unrestrained property. These jurisdictional facts differ
in formulation from those laid down in
s 44(2)
of POCA. In
particular,
s 26(6)
does not state that the person must have
submitted a sworn and full statement of all his or her assets and
liabilities; what he
must fully disclosed under oath are all his or
her interests in property subject to a restraint order. However, and
because the
court must also be satisfied that the person cannot meet
the expenses in question from unrestrained property, a full
disclosure
of unrestrained property is necessarily required.
Furthermore, a court is unlikely to be able properly to exercise its
discretion
under
s 26(6)
unless it also has full information
concerning the person’s liabilities.
[51]
Mr Titus emphasised in his argument the
strictness of the approach laid down by the majority in
Elran
in cases falling under
s 44
of
POCA. His submission was that the Van Heerdens had not provided
sufficiently full information and had not vouched for it sufficiently
by documentation and corroborating affidavits.
[52]
Although a court exercising the discretion
conferred by
s 26(6)
must first be satisfied on the matters
previously mentioned, the adequacy of the evidence is a matter for
the court’s judgment,
having regard to the particular
circumstances of the case. I do not think that it would be right to
be so severe as to make an
application for the release of assets
effectively impossible. More punctilious proof may be required in
some cases than in others.
There must be some sense of proportion in
undertaking the exercise.
[53]
The Van Heerdens failed to comply with the
restraint order in regard to the furnishing of monthly statements of
income and expenditure
with supporting documentation. In their
replying affidavit they admitted the ‘oversight’ and
apologised. While their
non-compliance is a factor which the court
may take into account in exercising its discretion, it is not an
absolute bar to the
granting of relief.
[54]
The curator has also failed to comply with
the restraint order by not filing quarterly reports. There is nothing
to indicate that
he has investigated the adequacy of the Van
Heerdens’ disclosures or requested information about their
businesses.
[55]
The Van Heerdens have made three relevant
sworn disclosures of their assets and liabilities. The first is
contained in the statement
of affairs signed during September 2011.
The second is in the first release application launched in late
February 2012. The third
is in the present proceedings, by way of
affidavits made during April, May and June 2015. In this latter
regard, the applicants
applied for leave to file a supplementary
affidavit on 3 June 2015. Mr Titus objected on behalf of the NDPP but
said that if I
was minded to allow the affidavit his client did not
seek an opportunity to respond to it. I reserved my decision and
permitted
argument to proceed.
[56]
Although an applicant is required to make
out its case in the founding papers, the court does have a discretion
to allow new facts
to be averred in reply or to allow supplementary
affidavits, subject to considerations of prejudice. In the present
case the Van
Heerdens, while contending that they had already made
sufficient disclosure, sought to meet, by way of attaching
documentation,
some of the particular criticisms raised in the
answering papers and heads of argument. I do not think any injustice
would be done
by having regard to such further material.
[57]
I have already summarised in broad terms
the disclosures made in the statement of affairs. In the first
release application Mr van
Heerden said that he did not earn a salary
but was trying to run a small packaging business under the name Lemon
Tree Trading.
He provided a brief description of its operations,
saying that it had four employees. He gave particulars of their
salaries, the
rental for the premises and municipal services. At that
stage the Van Heerdens did not have a vehicle, as a result of which
the
business hardly covered monthly expenses. He borrowed R30 000
from his brother, Mr WH van Heerden, to pay for the business’
growing expenses. His brother extended his bond in order to assist.
Although in the statement of affairs Mr van Heerden inserted
the
figure of R350 000 in the column for ‘estimated value’,
his notation reflects that this was the estimated
value of the stock
and assets. It seems unlikely that the net value of the business as a
profit-earning enterprise was as high
as R350 000.
[58]
He also disclosed that his wife owned a 50%
share in Coco Boutique, each of the partners having contributed
R150 000 to the
establishment of the business during 2010. He
attached what he styled a ‘valuation’ recently done by an
auditor, though
the attached documents were in fact trial balances
for the years ended 28 February 2011 and 29 February 2012 and a
schedule of
monthly sales. In the first period the business made a
net loss of R49 210 and in the second period a net profit of
R44 114.
This was the business valued in the statement of
affairs at R150 000.
[59]
The Van Heerdens alleged that they had had
to cancel four specified life insurance policies and annuities due to
lack of income.
(They did not state whether any surrender values were
paid.)
[60]
In the present proceedings the Van Heerdens
say that their household’s only income is about R5000 per month
which his wife
earns from her share of Coco Boutique. One of Mr
Titus’ criticisms was that no updated accounting records or
vouchers in
respect Coco Boutique were furnished.
[61]
Mr
van Heerden says that Lemon Tree Trading was not a success, that it
closed its doors in November 2014 and that he has been unemployed
since then. He is still trying to pay off debts in excess of R350 000
in respect of Lemon Tree Trading. These liabilities
are
particularised in a schedule attached to the founding affidavit, and
include an FNB overdraft of about R85 000 and an
indebtedness to
Wesbank of R136 717 in respect of a Nissan bakkie purchased
after the grant of the restraint order.
[3]
It appears from the supplementary affidavit that the packaging
business was conducted through a company called Subiplex (Pty) Ltd
of
which Mr van Heerden was the owner. The supplementary affidavit
stated that on 18 May 2015 Wesbank repossessed the Nissan bakkie;
supporting documentation in that regard was attached.
[62]
The Van Heerdens alleged in the founding
papers that they had exhausted the money received in respect of Mrs
van Heerden’s
pension benefit. Particulars of the way in which
the proceeds were used were set out in a schedule attached to their
attorneys’
letter of 18 March 2015. The net sum they received,
after their attorneys’ retention of R150 000 in respect of
legal
fees, was R586 4882. Of this sum, R135 000 was said
to have been used to buy Mrs van Heerden’s half-share of Coco
Boutique; R25 000 for the purchase of stock for Coco Boutique;
R45 000 to repay the Absa overdraft; R30 000 and
R15 000
to repay loans made to them by two identified family members; R86 700
to pay amounts in which Subiplex was in
arrears to various identified
suppliers; R42 000 to buy a vehicle for their daughter which she
subsequently wrote off; and
repayments of small debts which they
could no longer recall. The balance of about R180 000 had been
consumed in daily living
expenses.
[63]
The Van Heerdens said in their founding
papers that in order to make ends meet they were being forced ‘to
beg for loans and
handouts from family and friends’ and had had
to incur ‘extortionately expensive credit card debt’. In
regard
to bank debt, the schedule to the founding affidavit reflected
an Absa credit card debt of R54 000, a Sanlam loan of R25 000
and a Standard Bank Blue Bean loan of R29 000. In the
supplementary affidavit they attached current bank statements for
these
debts, from which it appears that they are in arrears in
respect of the Sanlam and Blue Bean accounts.
[64]
Although the unacceptable delay in the
criminal proceedings engenders some sympathy for the Van Heerdens and
a concern that the
continued operation of POCA’s draconian
provisions in their circumstances is unjust, this does not relieve
the court of the
task of determining whether it can be satisfied of
the matters set out in
s 26(6).
Upon careful reflection, I have
come to the view that I cannot be so satisfied. While there may be
other criticisms of the information
supplied by the Van Heerdens, the
particular aspects which have weighed with me are the following.
[65]
The first relates to the Coco Boutique
business. In the earlier release application the Van Heerdens
supplied trial balances for
the years ended February 2011 and
February 2012 and a schedule of monthly sales. Included in the trial
balances were the salaries
paid to Mrs van Heerden and her partner.
In the present application no updated information has been supplied
apart from the averment
that Mrs van Heerden’s monthly income
from the business is about R5000. No trial balances for the years
ended February 2013,
February 2014 or February 2015 have been
attached. These would have given one a picture of the sales and
expenditure of the business,
its stock on hand and Mrs van Heerden’s
capital.
[66]
There is also an inconsistency in the Van
Heerdens’ evidence as to when and how Mrs van Heerden funded
her half-share of the
business. In the first release application,
which was delivered on 29 February 2012, the Van Heerdens said that
each shareholder
contributed R150 000 during 2010 and that after
the granting of the restraint order Mrs van Heerden tried to sell her
half
share to her partner without success. The business had been
operating for close on two years by the time the first release
application
was brought. However, in their explanation as to how they
dealt with Mrs van Heerden’s net pension benefit of R586 488
(contained in an attachment to their attorneys’ letter of 13
March 2015, which was an annexure to the founding affidavit
in the
present case), they said that R150 000 thereof had been used to
purchase Mrs van Heerden’s share of Coco Boutique.
Since the
net pension proceeds were only received by them during March 2012,
this allegation cannot be true.
[67]
I also observe that the trial balances for
the year ended February 2011 and February 2012, attached to the
earlier application,
raise certain question marks about the accuracy
of what the court has been told. As at 28 February 2011 Mrs van
Heerden and her
partner Ms Marais are reflected as having loan claims
against the business of R190 713 and R39 772 respectively.
On the
assumption that these were the contributions made by the
partners, why are they so disproportionate? In the next year’s
trial
balance Mrs van Heerden’s loan account had reduced to
R66 600 while Ms Marais was now indebted to the business in the
amount of R339. This indicates substantial loan account repayments to
the two partners.
[68]
The next aspect concerns Lemon Tree
Trading. The Van Heerdens say that this business closed its doors
during November 2014. Apart
from the statement that Mr van Heerden
still owes in excess of R350 000 in respect of unpaid business
liabilities, no information
has been supplied regarding the results
of the business prior to its closure or the manner of its
liquidation. It emerged for the
first time in the supplementary
affidavit filed on 3 June 2015 that the business was not owned by Mr
van Heerden but by a company.
If Mr van Heerden personally owes money
in respect of its debts, this must be because of suretyships
furnished by him, yet no information
regarding any suretyships has
been given. The company must have kept financial records and
would have been required to produce
annual accounts. The most recent
financial statements or management accounts would have given some
sense of the business’s
income-generating operations and its
assets and liabilities. Nothing is said about the stock and debtors
on hand when the business
closed down in November 2014, what was
realised for these assets and so forth.
[69]
Another aspect arises from the Van
Heerdens’ dealings in immovable property prior to the restraint
order. These matters were
not dealt with in the present application
but I cannot close my eyes to what was said in the restraint
application. The Van Heerdens
are seeking a relaxation of an order
granted on the basis of the information supplied in the ex parte
application. If there is
information in the ex parte application
bearing on their financial position, it is not unreasonable to expect
them to address it.
[70]
At
the time the restraint application was delivered, the NDPP believed
that the Van Heerdens were the owners of the Paarl property
which,
according to deeds office information, they purchased during March
2006 for R900 000 and which was unbonded.
[4]
This property was not included in the Van Heerdens’ statement
of affairs and it appears from the curator’s first report
and
from the final restraint order that they sold it during 2007. There
is no information as to how much the property was sold
for and what
became of the proceeds.
[71]
In
regard to the Van Heerdens’ Heidelberg property, it was said in
the ex parte application that they sold it to a Mr Cronje
in July
2010 for R2,4 million. This was a few months after their dismissal
from BATSA. Because Mr Cronje was only able to raise
a bond of R2,08
million, he undertook to pay the balance of R320 000 in cash at
a later stage. On 31 January 2011 he paid
them R50 000 and on 26
July 2011 he paid the balance of R270 000 into their attorneys’
trust account. On 12 August
2011, and before the money could be paid
out to the Van Heerdens, the Financial Intelligence Centre gave
instructions (presumably
to the attorneys) in terms of
s 34
of
the
Financial Intelligence Centre Act 38 of 2001
that there should be
no dealings in the funds because it was suspected that such
transaction would be a transaction as contemplated
in
s 29(2)(b)
of that Act.
[5]
The ex parte
restraint application was delivered a few days later, which is how
the sum of R270 000 in the attorneys’
hands came to be
subject to the restraint order.
[72]
In
Col Barkhuizen’s affidavit in support of the ex parte
application, he said that in November 2007 the Van Heerdens took
out
with Standard Bank a 20-year mortgage bond of R1,54 million over the
Heidelberg property. They repaid the bond within three
years:
R366 000 in 2008, R247 000 in 2009 and R1 312 001
in 2010 (this according to the deponent’s examination
of the
relevant Absa and Standard Bank statements). Mr van Heerden’s
monthly salary at the time was R43 000.
[6]
Although Col Barkhuizen made this allegation with a view to showing
that Mr van Heerden must have received significant benefits
from the
proceeds of theft, his allegation that the Heidelberg property was
unbonded when the Van Heerdens sold it in July 2010
is obviously
significant. He made this point later in his affidavit, saying that
he had not yet established what the Van Heerdens
did with the R2,08
million received from the sale of the property,
[7]
ie the portion of the purchase price funded by Mr Cronje’s
mortgage bond which would have been registered simultaneously
with
transfer to him.
[73]
Although this aspect was not mentioned by
the respondents in the current application, it is so glaring that I
do not see how I can
be satisfied that the Van Heerdens have made a
full disclosure where there has been no explanation in the statement
of affairs
or in the first application or in the present proceedings
as to what became of the amount of R2,08 million which they received
in the latter part of 2010 or early 2011 upon transfer of the
Heidelberg property to Mr Cronje. There are no disclosed assets into
which that money could to any substantial extent have plausibly been
converted (the BMW was bought in April 2008 and the Opel Corsa
in May
2010, prior to the sale of the Heidelberg property).
[74]
The final aspect is the absence of bank
statements for a reasonable period prior to the launching of the
application. The Van Heerdens
attached to their supplementary
affidavit of 3 June 2015 the most recent monthly statements for each
of their overdrawn accounts.
Although the statements confirm the
amounts of the indebtedness alleged by the Van Heerdens, they do not
contain any history recording
the transactions on the accounts. One
also does not know whether, in addition to these accounts, the Van
Heerdens have an ordinary
bank account into which Mrs van Heerden’s
income and other gifts and loans from friends were paid and from
which they paid
expenses.
[75]
Mr Titus submitted that they should have
furnished their bank statements for the six months prior to the
launching of the application.
There is naturally no absolute rule in
that regard. In particular circumstances the court might expect a
longer history to be furnished
or might be content with less. Here,
however, there is a complete absence of bank statements showing any
relevant history. The
court cannot see whether the Van Heerdens’
alleged income and alleged reasonable living expenses are supported
by their bank
statements and whether the bank statements reflect
other items of income or expenditure calling for explanation.
Particularly since
the Van Heerdens did not comply with their
obligation to furnish the curator with monthly income and expenditure
statements supported
by documentation, it is not unreasonable to have
expected them in the present proceedings to attach their bank
statements for the
last year or six months.
Conclusion
[76]
Since I am not satisfied that the Van
Heerdens have made a full disclosure of their restrained and
unrestrained assets, I do not
have jurisdiction to come to their aid.
[77]
In regard to costs, I expressed concern on
3 June 2015 that the hearing of supplementary argument on 5 June 2015
in relation to
s 37A(1) of the PF Act should not be allowed to
result in an increased cost burden for the parties. Overall, the
amount of
time spent in court on the two days did not exceed the
ordinary sitting hours of one court day. Since the s 37A(1)
issue was
raised by the court itself and since in the event I have
concluded that it would not be appropriate to decide it without the
joinder
of the Fund and BATSA, fairness dictates that the Van
Heerdens should not be ordered to pay a second day’s costs.
[78]
I thus make the following order: The
application is dismissed with costs, such costs to exclude the costs
of the additional appearance
on 5 June 2015.
ROGERS
J
APPEARANCES
For
Applicants Messrs W Kings SC and J Engelbrecht
Instructed
by Abrahams & Gross Inc
1st
Floor, 56 Shortmarket Street
Cape
Town
For
First Respondent Mr MD Titus
Instructed
by The State Attorney
4th
Floor, 22 Long Street
Cape
Town
[1]
The
order erroneously says 21 September 2010.
[2]
Section
31(1) of POCA provides that where a confiscation order has been made
the following sums in the hands of a curator, namely
(a) the
proceeds of any realisable property realised by virtue of s 30;
and (b) any other sums of money, being
property of the
defendant concerned, shall, ‘after such payments as the High
Court may direct have been made out of such
sums of money', be
applied in satisfaction of the confiscation order.
[3]
‘
PH9’
at record 73.
[4]
Ex
parte application (‘EPA’) para 60.2 p 59; deed of
transfer at EPA pp 152-157.
[5]
EPA
paras 10-13 p 25; EPA para 3 pp 43-44.
[6]
EPA
para 53 p 57.
[7]
EPA
para 62 p 60.