National Director of Public Prosecutions v Hlongwa, National Director of Public Prosecutions v Nkosi and Others (7968/04 , 7970/04) [2006] ZAGPHC 16; [2006] 2 All SA 486 (T) (17 February 2006)

SGIN THE HIGH COURT OFSOUTH AFRICA(TRANSVAALPROVINCIAL DIVISION)DATE:17/2/2006CASE NO:7968/2004 and 7970/2004REPORTABLEIn the matter between:THE NATIONAL DIRECTOR OF PUBLICPROSECUTIONS

APPLICANTAndBONGINKOSI FERINGTON HLONGWA

DEFENDANTAnd in the matter between:THE NATIONAL DIRECTOR OF PUBLICPROSECUTIONS

APPLICANTAndAUBREY BAFANA NKOSI

DEFENDANTTHEPISO MAUREEN NKOSI

1STRESPONDENTA B NKOSI CONTRACTORS (PTY) LTD

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, JIntroduction[1] The applicant, the National Director of Public Prosecutions appliedex partefortwo provisionalorders,oneagainst Bonginkosi Ferington Hlongwa, the defendantwho is a radiographer, and the otheragainst Aubrey Bafana Nkosi, the defendantwho is a medical practitionerandhis wifeThepiso Maureen Nkosi,she is also a medical practitioner andcited as the first respondentand A B Nkosi Contractors(Pty) Ltd,the second respondent. The orders were securedin terms of section 26 of the Prevention of Organised Crime Act 121 of 1998 (POCA).To avoidconfusion the case against Mr Hlongwa is referred to as “Hlongwa matter” and against Dr Nkosi is referred to as “Nkosi matter”.[2] In both applications,a rulenisiwas issuedby VAN DER MERWE J, on 30 March 2004, in terms of section 26(3)(a). In terms oftheprovisional ordersbothdefendants and the respondents wererestrained from dealing with specified assets listed in the annexures to the orders. The orders together with the applicant’s founding papers were served on the defendants and the respondents. The defendants evinced their respective intention to oppose the confirmation of the rule.Both of themrespectively filedalmost similaranswering affidavitsand discovery affidavitsand to which the applicant responded.[3]Thedefendants in their respective answering affidavits didnot dispute the allegations in the applicant’s founding papers but broadly attack the constitutionality of Chapter 5 of POCA. They raised two issues:first, their right to remain silent in these proceedings; andsecondly, that the provisions set out in Chapter 5 are unconstitutional since they depriveda person of control over his or her property and are not justifiable. Or to limit their application to the value of what is shown to be the benefit derived.[4] On the initial return day the rules were extendedand both matters were set down on the roll of theopposed motion court of 15 October 2004. On that daythe matters came before me. Since the issues were substantially similar,counsel agreed that a single hearing would avoid duplicity. Argument commenced and the rules were further extended to 4 November for furtherargument.Structuredorders[5]On that day the rules were once again extended to 25 November 2004 when a briefex temporejudgment was delivered indicating why the following orders were made:(a)Hlongwa matter“1. THAT the provisional restrain order is hereby discharged in respect of:1.1 The two vehicle referred to in paragraph 2.1 and 2.2 of Annexure “A” (to the order Marked “X” at page 29);1.2 All equipment and sundry items necessary for the Defendant’s practice as a registered radiographer and household goods (referred to in paragraph 6 of Defendant’s discovery affidavit, at paginated pages 276)are thatthe Applicant is to return:1.2.1 the items, referred to in sub-paragraph 1.1 and 1.2 above, to the Defendant;1.2.2 all household goods (referred to in paragraph 6 of the Defendant’s discovery affidavit at paginated pages 276) totheDefendant;and1.2.3 the immovable property referred to in annexure “A” to the provisional order “X” (at page 29)2. THAT the Defendant is to deal with the items referred to in subparagraph 1.1 and 1.2 as follows:2.1 not to dispose of any of the items referred to above except with authorisation by thisCourt on reasonable cause shown or upon conclusion of the criminal case or upon an order in terms of section 18 of the Prevention of OrganisedCrime Act 121 of 1998 (“the Act”)2.2 the Defendanttokeep and/or use the said items until finalisation of the criminal case or until an order in terms of the section 18 of the Act is made;2.3 the Defendant is to hand over one or more of the said items on a direction or order by the trial court of the criminal case instituted against the Defendant and for the purpose of confiscation order in terms of Section 18 of the Act.3. THAT the Applicant is to pay the Defendant’s tax costs of this application.”(b)Nkosi matter“1.THAT the provisional restrain order is hereby discharged in respect of:-1.1All medical instruments and equipment at the defendants and first respondents consulting rooms at24 Louisa Street, Brackenhurst, Alberton;1.2The household goods at the place of residence of the defendant’s situate at24 Louise Street, Brackenhurst, Alberton;1.3All the motor vehicle referred to in paragraphs 3.1, 3.2, 3.4 and 3.5 in Annexure “A” to the order marked “X”;1.4The applicant return the assets referred to in sub-paragraphs 1.1, 1.2 and 1.3 of this order;1.5 That the defendant and the first respondent are hereby ordered to deal with the assets referred to in sub-paragraph 1.1, 1.2 and 1.3 as follows:1.5.1not to dispose of the motor vehicle in sub-paragraph 1.3 of this order, except with authorisation of this court on reasonable cause shown or upon conclusion of the criminal case or upon on order in terms of Section 18 of the Prevention of Organised Crime Act 121 of 1998 (“the Act”);1.5.2defendant to keep and/or use the said motor vehicle until finalisation of thecriminal case or until an order in terms of Section 18 of the Act is made;1.5.3defendant to hand over all or any of the assets referred to here above on a direction or order by the trial court at the criminal case instituted against the defendant and for the purpose of confiscation order in terms of Section 18 of the Act.2.THAT the provisional restraint order is hereby confirmed in respect of the assets attached and/or seized by the curator as referred to in paragraphs 1.1, 1.2. 1.3, 1.4, 1.5, 2, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 in Annexure “A” to the provisional restraint order of 30 March 2004 marked “X”.3.THAT each party is to pay his and her costs of this application.”[6]On 29 September 2005 the applicant delivered a “Request for Written Reasons” for the ordersof 25 November 2005.The reasons for the orders arefullyset out in this judgment.Purposeand nature of a restraint order[7] The purpose and nature of a restraintorder is essentially the first step in the recovery of the proceeds of unlawful activitiesand profits of crime. Thiswas aptlyalluded toby Lord WOOLF CJ, inR v Dekkon and Others;R v Mcfaul;R v Knights and Another[2002] EWCD Crim 2954,[2003] 3 All ER 508, (CA) 510e, that:“[1] One of the most successful weapons which can be used to discourage offences that are committed in order to enrich the offenders is to ensure that if the offenders are brought to justice, any profits which they have made from their offending is confiscated. Itis therefore not surprising that Parliament hasrepeatedlyenacted legislationdesigned to enable the courts to confiscate the proceeds of crime.”[8] In order to catch the proceeds and profits of major crimes, our Legislatureenacted the Prevention of Organised Crime Act of1988(POCA). In general terms,the purpose ofthe statute is to strip a personof assets that areobtained bymeans ofthe proceeds of criminal activity. Thisobjective isachieved by means of aconfiscation orderprovided for in part2 of Chapter 5Section 18-24.Toattain that objective it is necessary topreserve the assets pending a confiscation orderby means ofarestraint orderas provided for in part 3 of Chapter 5Section 24A-29A.It is this restraint order which is deployed to prevent dealings withdesignated property and assets.The procurement of the restraint order by the applicant is invasivesince it seizes the designated property and assets. Therefore, an appropriate starting point is to briefly allude to the nature of the restraint order,the procedure for its procurement and the remedies available to an affected personagainst whomarestraint orderis granted on anex parteapplication, which is a drastic procedure designated to surprise a suspect and enable the applicant to preserve assets before they are whittled away.Undoubtedly the purpose of the restraint order is to preserve the realisable property in respect of which a confiscation order has been made or may ultimately be made, that is, any property of the defendantBy virtue of section 12, the reference to a defendant is to the accused or prospective accused in criminal proceedings instituted or to be institute.and therecipients of his or her affected gifts. The order may be made against “any person”Section 26(1).from dealing in manner with “anyproperty” to which the order relates.Suchan order may be made against the defendantas well asthe recipients of his or her affected gifts. The order need, however, not be made in respect ofallrealisable property, that is, against all the property of the defendant and the recipients of hisor heraffected giftsSection 26(2) and (6).But, it may be made againstalltheir property including the property they acquire after the order ismade but may be limited to designated property specified in the order.[9]Thecourt in exercising its discretion whether or not to grantarestraint order may limit the order to such items of property it may specify. It has a wide discretion to include in the order prohibiting the person against whom it is made from dealing in any way with the property to which it relatesandmay be subject to such conditions and exceptions as the court may specify in the orderSection 26(1).At the time of making the order the court mayauthorisethe seizure ofallmovables concerned and with any ancillary order it considers appropriate for the proper, fair and effective execution of the orderSection 26(8),and also give directions concerning the manner in which the movables seized must be dealt withSection 26(9).The court may in its discretion provide in the restraint order for the reasonable living and legal expenses of the person against whom it is made, including his or her family or household, but only if that person has made full disclosure of his interests in the property subject to the restraint and cannot meet those expenses out of his unrestrained propertySection 26(6).The reasonable legal expenses are for any proceedings instituted against him or her in terms of Chapter 5 or any criminal prosecution to which the proceedings may relateSection 26 (6)(b).[10] The court is also empowered to make any further order for the discovery of any facts as it considers necessary or expedient with a view to achieving the objects of the restraint order. It may include an order for the discovery of facts relating to any property over which the defendant has effective control and their whereaboutsSection 26(7).It may appoint acurator bonisand order the person against whom the restraint is made, to surrender any property to which the order relates to thecurator. The court may authorise thecuratorto perform certain functions in respect of all or any of the property subject to the restraint order on behalf of the person against whom the order is made but subject to the directions of the courtSection 28(1).In addition,it mayalsoorder the registrar of deeds to make certain restrictive endorsements on the title deeds of the immovable property subject to the restraint orderSection 29.The restraining regime is designed to prevent disposing of designated property and thereby preserving the assets for a future confiscation order in the event of a successful criminal prosecution.Overview of procedural provisions[11] Parliament in enacting the legislation embodied in it procedural provisions to enable the High Court to make a restraint orderSection 25(1) and 26(1).Theseprovisionsprovide a convenient and fair machineryto enable the court to exercise its jurisdiction. Colloquially the proceedings under Chapter 5 are referred to ascriminal forfeiture proceedings. An application for a restraint order constitutes civil proceedingsSection 13(1) and (5)andit is collateral to subsequentcriminal proceedings. Therefore, any question of factmustbe determined on a balance of probabilities.[12]Itis only the National Director of Public Prosecutions who may way of anex parteapplication seek a restraint orderSection 26(1).The court, to which an application is made, may make a provisional restraint order with immediate effect coupled with a rulenisicalling uponthe defendant to appear and show cause why the restraint order should not be made final.Section 26(3)The ordermust provide for anotice to be given to persons affected by the provisional order.Section 26(4)(a)Upon an application by the defendant, the court may anticipate the return day to discharge the provisional restraint order if twenty-four hours notice of the application is given to the applicant.Section 26(3)(c)The statutory procedural provisions are in essence the handmaidens of fairness and justice in the face of the invasive nature of the restraint order. What the court is required to do in all the circumstances is to ensure that the prosecuting authority do not rideroughshodover the rights of a prospective criminal defendant or an accused person.Available remedies[13] The general interest of the community underlyingthePOCA isdesigned to catch the proceeds and profits of crime. The initial step is the preservation of such proceeds and profits before they are siphoned off. However, important, butitwillcertainlynot justify thatarestraint order may be used as a shackle that the defendant or any third person may suffer. A prolonged restraint order may lead to injustice. Therefore, Parliament provided a spectrum of available remedies for anyone affected by a restraint order. When the restraint order is made before the defendant is charged the court must rescind the order ifhe is not charged within a reasonable time.Section 25(2)Any person affected by a restraint order may apply to the court which made the order to vary or rescind a restraint orderif it is unduly onerous. If the court is satisfied that the operation of order will deprive the applicant the means to provide for his or her reasonable living expenses and cause undue hardship that heor shewill suffer and which outweighs the risk that the property concerned may be dissipated in some way.Section 26(10)(a)(i) and (ii)The court shall rescind the restraint order when the proceeding against the defendantareconcluded.Section 26(10)(b)When a court rescindsa restraint order that authorised the seizure of property then it shall make such other order as it considers apposite for the proper, fair and effective execution of the restraint order.Section 26(11)An affected person may also apply to the court at any time to vary or rescind the restraint order for cancellationofany restrictive endorsement on the title deed of the immovable property and deeds registrar shall give effect to the direction.225Section 29(7)(b)5The court may at any time vary or rescind an order for the appointment of acuratorbonison the application of any person affected by it.226Section 28(2) and (3)6The underlying rational for the availability ofa wide spectrum ofremedies to an affected person is that the restraint order is primarilyfor the purpose of aiding the enforcement of confiscation order and collateral to the criminal cause.Pre-requites for a restraint order[14] It is common cause that the defendants in both matters were charged with the crime of fraud in thatit was alleged thatthey respectively submitted fraudulent claims to certain medical aid schemes. From the Bar,both counselindicatedthat thetwodefendants were toappear in the Pretoria Magistrate’s Court on trial during March 2005. Sincecriminal prosecutions wereinstituted against the defendants, the pertinent questionwas: when can a High Court make a restraint order. In this regard, the jurisdictionalprerequisites for a restraint order are set out in section 25(1)(a). It reads as follows:“A High Court may exercise the powers conferred on it by section 26(1) –(a) When –(i) a prosecution for an offence has been instituted against the defendant concerned;(ii) either a confiscation order has been made against the defendant or it appears to the court that there are reasonable grounds for believing that a confiscation order may be made against that defendant; and(iii) the proceedings against the defendant have not been concluded; ...(b) ...”[15] The jurisdiction to make a confiscation order is vested in the criminal court which convicts the defendantquaaccused.227Section 18(1)7Although a confiscation order may only be made after the defendant is convicted but a restraint order may be made once a defendant has been charged228Section 25(1)(a). See para [14] above8or about to be charged,229Section 25(1)(b)9orif there are reasonable grounds to believe that a confiscation order may ultimately be made against him or her. The restraint order merely freezes the defendant’s assets and those of the recipients of his or her affected gifts.[16] In the matters beforeme, the applicantsoughtthe confirmation ofthe provisional restrain orders. The applicanthad toshow thatone, the defendants hadbeen charged. Thiswas common cause.Two, that therewere reasonable grounds to believe that(a)the two defendants may be convicted of the crimes with which theywererespectively charged; and(b)that confiscations orders may be made against each of them.Theseare the jurisdictional pre-requites for the granting of a restraint order.Reasonable grounds for believing[17] Before a court exercisesits discretion vested by section 26, there must be reason to believe that a confiscation order may be made against the defendant in the event of him or herbeing convicted. The phrase “reasonable grounds for believing” places a much lighter burden of proof on the applicant than, for instance, “the court is satisfied”.330See:Trust Bank van Afrika Bpk v Lief and Another1963 (4) SA 752(T);Agro Drip (Pty) Ltd v Fedgen Insurance Co Ltd1998 (1) SA 182(W) 186E;Vumba Intertrade CC v Geometric Intertrade CC2001 (2) SA 1068(W)0The “reasonable grounds for believing” must have a factual basis for giving rise to such belief.331Cf:LondonEstates (Pty) Ltd v Nair1957 (3) SA 591(D) 592F1A blind beliefhearsayevidence,does not suffice.332Cf:Native Commission and Union Government v Nthako1931 TPD 234at 2422[18]In the unreported judgment of theNational Director of Public Prosecutions v Visser and Others333TPD Case No 6352/2002, 21 December 2001, at page 123, VAN DER WESTHUIZEN J said:“The essence seems to section 25(1)(b)(ii), namely that it must appear to the court that there are reasonable grounds for believing that a confiscation order may be made.The word ‘appear’ probably relates to anonusof some kind. It must on a balance of probabilities look like there are reasonable grounds for believing that a confiscation order may be made. This does not mean that the court must be satisfied, on a balance of probabilities, that aconfiscation order will indeed follow. The concept of ‘reasonable grounds’ is not strange or unique in our law. Some objective assessment is necessary. It is not clear to me what role exactly the word ‘believe’ plays in this regard.Having said all the above, I agree with the applicant that the task of the court is not at this stage to conduct a criminal trial. The court certainly does not have to be convinced beyond reasonable doubt of a person’s guilt. There must also be reasonable grounds for believing that the trial court may find, when the inquiry is made, that the person has benefited. The court does not have to be able to calculate the benefit accurately.One of the central questions is what the phrase ‘may be made’ (as opposed to will be made, or will probably be made, or is likely to me made, etc) may mean. If this phrase is separated from the preceding part of the sentence, it simply means that it is possible that a confiscationorder may be made, or even that it is theoretically possible. This very liberal interpretation of the phrase ‘may be made’ would be so wide that it would make little proper sense in the context of this and probably several other cases. A restraint order will then almost always inevitably have to follow once a person is charged or to be charged, for example with theft. If one is charged, after all, it is theoretically possible that he or she will be convicted. And if it is theft that is at stake, there are grounds to believe that the thief has benefited. Theft is after all a deed of greed.The word ‘may’ has to be read with the concept of ‘reasonable grounds’. If ‘may’ simply means the mathematical or theoretical possibility for it to happen, there is little scope for reasonableness and for any adjudication. Inmy opinion the term ‘may’ is deliberately wide to make the intention of the legislator clear, namely that a possibility would suffice and that a court does not have to be convinced beyond reasonable doubt, or even on a balance of probabilities, that a conviction will follow. Most courts would always say that it is not possibleto look into the future and to prejudge a criminal trial still to come. But, perhaps because ‘may’ is linguistically at least potentially so wide that it would almost inevitably render the clause meaningless or unconstitutional, the court still has a discretion.Therefore a number of factors are to be taken into account in exercising the court’s discretion. One factor must be the apparent strength or weakness of the expectation that a conviction will follow and that the person has benefited, so that the trial court may exercise its discretion to grant a confiscation order. This relates to specific allegations of criminal conduct, but also to the case as a whole. Theapparent value and strength of the evidence against a respondent should be taken into account, which would include the availability of evidence needed, the credibility etc of witnesses, as well as the complexity of charges, bearing in mind that the eventualonusof proof in a criminal trial is one beyond reasonable doubt.In other words, I may suspect that a crime has been committed and persons have benefited. I may even be convinced, on the evidence before me, on a balance of probabilities, that this is the case. But I may conclude that in view of the eventualonusof proof it is extremely unlikely that a conviction will follow.Again it must be emphasized though that the idea is not to conduct a criminal trial on paper.”[19]Subsequently,VAN DER WESTHUIZEN J inNational Director of Public Prosecutions v Alexander David and Others3342001 (2) SACR 1(TPD) 8c/d – h/i4stated:“It must therefore appear to the court that there are reasonable grounds, obviously at the time of the application, to believe that a confiscation order following a conviction may – and not will – be made. Naturally the law of evidence applies. However, the court hearing the restraint order application clearly does not have to be convinced in terms of any particular burden of proof that a conviction and confiscation will follow. The court has to form an opinion based on appearance and reasonableness as to future possibilities.I, respectfully, am not of the opinion that it could be argued on the wording of s 25(1) that a court has to be satisfied on a balance of probabilities that a conviction and confiscation order will indeed follow. Perhaps it could be said that it must, on a balance of probabilities then, appear to the court that there are reasonable grounds for believing that a confiscation order may follows.In forming such an opinion or a belief a court obviously has to take into account that the onus of proof in the criminal trial will indeed be on the State, and that it is beyond reasonable doubt.What does this say regarding the admissibility of for example hearsay evidence? Hearsay evidence is generally inadmissible, but it is well known that there are exceptions. These have to be applied within the context of a particular case and situation. By its nature the evidence available to a court in a restraint order application may not necessarily be as direct and concrete as could be expected to secure a criminal conviction. After all, s25(1)(b) even allows for this procedure where a court is satisfied that the person isstill to be charged with an offence. It might sometimes be unavoidable to take some hearsay evidence into account. Certainly support of any hearsay allegations in the relevant affidavits would be most valuable, inter alia in view of the drastic consequences of this procedure. It would be highly undesirable to grant an order in an application merely based on wild and unsupported hearsay allegations.”335My italics for emphasis5[20]In an application for a restraint order in section 26 proceedings the applicant is liberated from proving that aconfiscation will be made. All that is required is reasonable grounds of believing that the criminal courtmayand notnecessarilywill make a confiscation order.336See:National Director of Public Prosecutions v Kyriacou2004 (1) SA 379(SCA) para [10] at 385; para [49] at 395G-H.6InNational Director of Public Prosecutions v Phillips and Others3372002 (4) SA 60(W) 81D/E – G/H7HEHER J (as he then was) said:“[12] In my view an application for a restraint order is analogous (although not identical) to an application for an interim interdict and attachmentpendentelite. In so far as such relief containselements of finality, the legislature could never have intended that it should be defeated by reason of conflicts of factper se. Nor would a reference to evidence be appropriate: that might well anticipate the enquiry at the criminal trial and impinge on the right of silence. Theprima faciecase is proof of a reasonable prospect of obtaining both a conviction in respect of the charges levelled against the defendant and a subsequent confiscation order under section 18(1). It is appropriate in determining whether theonushas been discharged to apply the long accepted test of taking the facts set out by the applicant together with any facts set out by the respondent which the applicant cannot dispute and to consider whether, having regard to the innate probabilities, the applicant should on those facts obtain final relief at a trial (for this purpose, the confiscation hearing). The facts set up in contradiction by the respondent should then be considered and, if serious doubt is thrown upon the applicant’s case, he cannot succeed.”Approach to factual disputes in section 26 proceedings[21]The approach adopted by HEHER J was endorsed by the Supreme Court of Appeal inPhillips and Others v National Director of Public Prosecutions3382003 (6) SA 447(SCA) 452 and 4538, HOWIE P noted:“[17] Turning the respondent’s argument, its starting point was that HEHER J had rightly held that a restraint order was analogous to an application for an interim interdict or for attachment of property pending litigation.I may point out that HEHER J did not actually hold that a restraint order is analogous to an interim common law restraintpendentelite. He merely commented ... that there is a similarity.”“[20] Counsel for the respondent is right, in my view, in submitting that a restraint order is only of interim operation and that, like interim interdicts and attachment orders pending trial, it has no definitive or dispositive effectas envisaged inZweni. Plainly, a restraint order decides nothing final as to the defendant’s guilt or benefit from crime, or as to the propriety of a confiscation order or its amount.”[22] InNational Director of Public Prosecutions vKyriacou,3392004 1 SA 379(SCA) 385. My emphasis in italics9MALAMBO AJA (as he then was) said:“[10] ... Section 25(1) (a) confers a discretion upon a court to make a restraint order if,inter alia, there are reasonable grounds for believing that a confiscation order may be made ...While a mere assertion to that effect by the appellant will not suffice(National Director of Public Prosecutions v Basson2002 (1) SA 419(SCA);2001 (2) SACR 712para [19] at 428B-C)on the other hand appellant is not required to prove the fact that a confiscation order will be made, and in those circumstances there is no room for determining the existence of reasonable grounds for the application of principles andonusthat apply in ordinary motion proceedings.What is required is no more than evidence that satisfies a court thatthere are reasonable grounds for believing that the court that convicts the person concerned may make such an order.”[23]NEGPEN J inNational Director of Public Prosecutions v Rudman and Others440ECD Case No 15/2004 (undated).0, followed the approach enunciated inKyriacou,supra,and noted:“[15] ... The information referred to would only have indicated that second defendant has consistently denied having been involved in any criminal activity and would have provided details of his defence. This, accordingly, would have given rise to a dispute of fact. It is not appropriate for a court, when considering whether or not to grant a provisional restraint order, or for that matter a final restraint order, to attempt to resolve disputed facts in relation to the guiltor otherwise of a defendant. This will be done by the trial court. Furthermore, the usual rule in motion proceedings’ as set out inPlascon-Evans Paints Limited v Van Riebeek Paints (Pty) Limited1987 (3) SA 623(AD), does not apply when it comes to determining whether or not reasonable grounds exist for believing that a confiscation order may be made (seeNational Director of Public Prosecutions v Kyriacou2003 (2) SACR 524(SCA) at 529f-h [10]).”[24]In an application for a restraint order aprima faciecase is proof of a reasonable prospect of obtaining a conviction in respect of the charges levelled against the defendantand a subsequent confiscation order. To determine whether theonushas been discharged thePlascon-Evanstest only becomes applicable where the version put forward by the applicant isnotdisputed or agreed uponby the respondent. Inthetwo matters the applicant purported todisclose the nature and tenor of available evidencewhich is substantially hearsay as it will become apparentlaterin this judgment. Thedefendants simply elected to make a bolddenial. They failed to put their version before thecourt, exceptfor assertingtheirfundamentalright to silence. Notwithstanding the constitutional issue raised by the defendants thecourt wasconstrainedbythe applicant’s versionswhich wassubstantially based on unattested hearsay information.Applicant’s version[25] In both matters the deponent to the founding affidavits is Advocate Juliana Galetlane Rabaji, the Special Director of Public Prosecutions.She has no personal knowledge of any of the jurisdictional requirements for the restraint orders. Regarding the first requirement, she reliedon the affidavit byMbongo Marcus Koyana employed by the National Prosecuting Authority as a state advocate, andpertaining the second requirement she reliedon the affidavit byHelen GuguMotepe, a charteredaccount and employed as a manager at Pricewaterhouse Coopers Forensic Service (Pty) Ltd.The latter stated thatonherexamination of the “various evidentiary materials”she was of theopinionthat two types of fraudulent activities occurred. These were fictitious claimsthatwere submitted to the medical aid fundsfor consultations with the defendants whilst the specific member or hisor herdependants were not consulted at all. According to Motepe the submissions of claims were with the assistance of the members of the medical aid funds. It was represented that the defendants were consulted but a fictitious chargewasraised and a portion of it was paid to the member. She deposed that she had the opportunity to examine “the evidence against the various claimants”. Rabaji reliedin both matterson Motepe’s affidavits. Her allegationsthat itwas likely that fraud might be substantially greater and that she was not yet in a position to state the exact extent of the fraudulent claims. It was apparent that Rabaji’s assertionswere factuallybaselessand incorrect as it will become clearly apparent soon.(a)“Cash loan”Hlongwa matter[26] In support of the allegation of the “cash loan” claims pertaining to Hlongwa, the applicant relied on the affidavits by Ncgobo andOnicaNkosi. In paragraph 7 (p 89) Ncgobo explained“the process”. He didnot assertthat he had personal knowledge of the allegations made. In light of his statement that he never met any of the patients, howeverthey would visit the clinic without his knowledge. Thus, he could not have had personal knowledge. At best these allegations are hearsay. Therewasnobasis advanced by the applicantto admit such hearsayevidence. The allegations wereexstreamlyvague by simplyreferring to “a lot of people” but not identifying a single person. Norwereany ofthese persons identifiedin the applicant’s papers. Thiswas particularly startling sincethe investigation commenced on 20 December 2002.Ncgobo only deposed to his affidavit on 10 June 2003that was nine months prior to lauchingapplication in March 2004.The vague allegations didnot appear to implicate the defendant, Hlongwa. Therewasamere reference to people visiting “the surgery” and people visiting “the doctor”. Itwasnot disputedthat there were several medical practitioners at the specific practice.Nkosi’s affidavit didnot even mention the defendant. The only reference to the defendantappearedin paragraph 14 of the affidavit. It was a single sentence dealing with the allegation against the defendant that “within three to four months, there were patients coming and informing me that they had appointments withherin connection with cash requests.”There was no elucidation what these alleged cash requests were.This certainlywas not evidence proving,prima facie, any of the requirements for fraud. In any event this allegationwas simply hearsay. Therewas nobasiswhy this court ought tohave admitted such unsubstantiated hearsay information.Therewere material contradictions between the affidavits of Ncgobo and Nkosi. Both allegedthat it was their duty to usher patients into the defendant’s room. Ncgobo allegedthat he processed some of the defendant’s claims, whereas Nkosi statedthat a certain Nhlanhla processed the defendant’s claims.The applicant, furthermore, failed to indicate a single claimthat waslodged whichallegedly fellinto the category of “cash loan” claims. The applicant’s entire case pertaining to “cash loan” claims was based upon unsubstantiated allegations of hearsay by two individuals who materially contradicted each other.Nkosimatter[27] Regarding Dr Nkosi,almost a similar patternprevailedas in the case of Hlongwa. In support of the allegation of the “cash loan” claims,the applicant reliedon the affidavit by Friedlandand Onica Nkosi.Friedland’s affidavit containedno incriminating evidence against the defendant. From Onica Nkosi’s affidavit itwas clear that she hadno personal knowledge of any activities that couldbe remotely characterised as fraud. She merely allegedthat patients told her that they wanted to speak to Dr Nkosi about cash. But sheconcededthat shewas not aware “how much cash was paid or requested”. According to her Matthews Xishe handled the claims. Further,the applicant failed to indicate a single claim lodged which it allegedfell into the category of “cash loan” claims.[28] The evidence presented by the applicant regarding “cash loan” claims in respect of bothdefendantswas based upon unsubstantiated allegations of hearsay by certain individuals. There was no reasons advanced by the applicant whysuchhearsay shouldhave beenadmitted. In the absence of such reasons this court found that theapplicant didnot make out a case.(b)Fictitious claims[29] The applicant’s allegation that fictitious claims were submitted in both matters. In support of this allegation the applicant annexedaffidavits by eight Medcor Medical Aid Scheme members regarding theHlongwa matterand by two members of the same scheme pertaining totheNkosimatter.Hlongwa matter[30] Mpendu allegedthat he reviewed annexure MG1 whichwas a summary of claims submitted by the defendant to MediHelp and MX Health. In this regard,he didnot aver that he hadpersonal knowledge. Moreover,he didnot reveal the source of his information.Mpendu’s allegationwasthat his dependant’s did not consult with the defendant because he “would also have known” if any of his dependants had seen a doctor. He didnot indicate which of his dependants consulted the defendant and whensuch a consultation took place. However, according to him he didnot know who B Hlongwawas and that hewas never approached by anyone to give his medical aid particulars in return forcash. This begs the question as to how these particulars would have been available to the defendant in order to submitallegedlyfictitious claims. This aspectwas not addressed at all by the applicant.[31]Similarly, with regard to the deponents’ knowledge of the claims submitted, wasequallyapplicable to the other seven Medcor members, except that Sibanyoni identifieda Mr T Maiwashe as the person who showed him the annexures to his affidavit. Further, a bald allegationwas made about two of the six visits. One Mogomotsi indicatedthat over the relevant period she was a dependant on her deceased husband’s membership of Medcor Medical Aid Scheme. She allegedthatthere were certain chargesfor her son and others for herselfbut therewas no elucidation as to how she camemakesuch an allegation.She conceded that she hadno knowledge as to whetheror not her deceased husband hadseen thedefendant. The affidavit by Khoza is inherently contradictory and ought to be ignored. He allegedthat he didnot know who B Hlongwa was. He concededthat the defendant legitimately raisedcharges against his medical aid number on two occasions. He hadno knowledge ofit, hisdependantssawthe defendant. The affidavit by Madlophawas not commissioned at all. However, only a bald statementwas made that two of the nineclaims over a period of a year were not correct.The affidavit by Mamaru didnot makemuchsensesince he purportedto confirm that two specific claims were not “legitimate claims”. However, two dates didnotcorrespond with any ofthe dates of the nine claims. Further, Dladla made abald allegation that two of the five claims listed were not in respect of consultations by him or his dependants. And Molaudi allegedthat he never consulted with the defendant and didnot knowhim. He confirmedthat he was never approached by anyone. Once again there was noindication as to how the defendant would have been in a position to claim against Molaudi’s medical aid number.[32]The affidavit of Wessel van Vuren was of no assistance. The assertion made by Motepethat Van Vuren stated that Medcor made payments to the defendant and that documents in support were supplied, however, this wasnot supported by the affidavit of Van Vuren. The affidavit by Lesomo appearedto be an attempt to show that the defendant received payment from MX Health. In support of the allegationthat claims were received from the defendant under practice number 3901688.But,from annexure “B” itwas apparent that another person, a certain Mrs P A Shabalala also made use of the same practice number. Nowhere in the applicant’s papers, itindicated howitascertained that claims were made by the defendant and not by Shabalala.Nkosi matter[33] Likewise,the applicant alleged that fictitious claims were also submitted by Dr Nkosi. In support of this allegation affidavitsof two members of Medcor Medical Aid Schemewere annexed to the applicant’s papers.Both Motepe and Wessel van Vuren, employed by Medihelp,allegedthat they reviewed the annexures,allegedlysummaries of claims submitted by the defendant to MediHelp and MX Health.In this regard it appeared to the court that they hadno personal knowledgesince the source of the information was not disclosed norwastherean affidavit confirming the contentof thedocumentsthat wereattached. Khoza concededthat he consulted with the defendantbuthe did not consult the defendant “for the procedures as indicated”. This bald allegation didnot show any intention to defraudon Dr Nkosi’s part.Mathibako made similar references in his affidavit. Neither of theaffidavitsof Khoza and Mathibakowerecommissioned as required by the regulations in terms of section 10 of the Justices of the Peace and Commissioners of Oaths Act 16 of 1963.The affidavit of Wessel van Vuren was no assistance. The claims made by Motepe that Van Vuren stated that Medcor made payments to the defendant and that documents insupport thereof were supplied, was not supported by the affidavit of Van Vuren. Lastly, the affidavit by Lesomo, employed by MX Healthappearedto be an attempt to show that the defendant received payment from MX Health, however, thiswas not linked to anyallegedfraudulent transactions.Thrust of the defendants’ argument[34] The applicant neededto disclose the nature and tenor of the available evidence in order to establish a reasonable prospect of obtaining a conviction and a confiscation order.441National Director of Public Prosecutions v Tam and Others2004 (1) SACR 126(W)1The main thrust of the argument advanced by Mr Bester, on behalf of thedefendants, was that the applicant’s conduct in the presentation of both matters was characterised byinaptitude ordisdain of the basic rules of procedure and evidence. Inex parteapplicationswhich arelikely to have severe consequence to the defendants, the applicantcan not simplybe allowed to rely on unattested and hearsay information. JOFFE J inSwissborough Diamond Mines v Government of RSA4421999 2 SA 279(T) at 345F2admonished:“Regard being had to the functions of affidavits, it is not open to an applicant or a respondent to merely annex to its affidavit documentation and to request the court to have regard to it.”[35]In both matters the applicant reliedfirst, upon supporting affidavits which were defective in that they did not comply with the requirements for the commissioning of an affidavit,secondlyon hearsay information andthirdlyon purported expert evidence.(c)Commission of affidavits[36] The applicant relied upon the supporting affidavits obtained in terms ofsection 28(6)of theNational Prosecuting Authority Act 32 of 1998. This section requires that the oath or affirmation must be administered by the Investigating Director. This requirement was not met in any of the supporting affidavitsand as such the applicant could not rely on their contents. Further, therequirements for the commissioning of an affidavitareset out in the Justice of the Peace and Commissioners of Oaths Act 16 of 1963 and the regulations thereunder.443GN R1258 GG 3619 of 21 July 1972 (Reg Gaz 1649), as amended by GN R1648 GG 5716 of 19 August 1977 (Reg Gaz 2516), GN R1428 GG 7119 of 11 July 1980 (Reg Gaz 3030) and GN R774 GG 8169 of 23 April 1982 (Reg Gaz 3411).3The regulations require that:“4(1) Below the deponent’s signature or mark the commissioner of oaths shall certify that the deponent has acknowledge that he knows and understands the contents of the declaration and he shall state the manner, place and date of taking the declaration.(2) The commissioner of oaths shall–(a) sign the declaration and print his full name and business address below his signature; and(b) state his designation and the area for which he holds his appointment or the office held by him if he holds his appointmentex officio.”[37]It was clearly apparent that there was non-compliance with regulation 4(2). There was nothing before court indicating that the affidavitsweredeposed to before a commissioner as required in regulation 4(1). Further,there was an element of uncertainty astowhether or not either an oath or an affirmation was administered to the deponents. Thus, a document purporting to be an affidavit is not evidence.444Caldwell v Chelcourt Limited1965 1 SA 304(N) 307E4Regulation 4 has been held to be directory, however, the discretion is only exercised in favour of accepting the affidavits where substantial compliance has been proved.445S v Munn1973 3 SA 734(NC) 738A – C andS v Msibi1974 4 SA 821(T)5The applicantdid not seek condonation forthe defects.446Swart v Swart1950 1 SA 263(O)6The defects,therefore,couldnot to be condoned.(d)Inadmissible hearsay[38] Our courts have declined to countenance the admission ofhearsay evidence unless thereisurgency or special circumstances to warrant the acceptance of such evidence447Galp v Tansley NO and Another1966 4 SA 555(C) 558 & 560;Southern Pride Foods (Pty) Ltd v Mohidien1982 3 SA 1068(C) 1071H – 1072B;Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another1984 4 SA 149(W) 157E-H;Swissborough Diamond Mines v Government of RSA1999 2 SA 279(T) 336G-J7.The applicant’s case against thedefendants was substantially based on hearsay information.Section 34(1)of theLaw of Evidence Amendment Act 45 of 1988provides that a statement made by a person in a document tending to establish that fact shall be admissible as evidence provided that the person who made the statement had personal knowledge of the matters dealt with in the statement and that person is called as a witness unless he is dead or unfit by reason by his bodily or mental conditionor he is outside of the Republic and it is not reasonably practicable to secure his attendance or all reasonable efforts to fine him were without success.Section 3of theLaw of Evidence Amendment Act providesthat hearsay evidence shall not be admitted as evidence in any proceedings unless the parties agreed to the admission thereof or the person upon whose credibility the probative value of such evidence depends testifies him – or herself or the court, having regard to the factors set out in the section, is of the opinion that such evidence should be admitted in the interests of justice.[39]Neither Advocate Rabaji in the founding affidavits claimed that hearsay evidence should be admitted, nor did Mrs Biseswar contendin argumentthat these matters were of exceptional nature and special circumstancesprevailed that justified in admittinghearsay evidence. InSouthern Pride Foods(Pty) Ltd4481982 3 SA 1068(C) 1071C – 1072E, my emphasis in italics8, ODES AJ said:“[T]he applicant was not entitled to rely on hearsay evidence in launching the application, and the passages referred to later in this judgment must accordingly be struck out.Even if I am incorrect in the conclusion arrived at in regard to the urgency of the matter I am of the view that the hearsay passages should in any event be struck out. After holding that our Courts have permitted hearsay evidence to be admitted in affidavits in interlocutory matters of an urgent kind, THERON J inGalp’scasesupraheld at 559G:‘But one important point emerging from the cases which I have enumerated in the proceeding paragraph is this, viz that our Courts have consistently refused to countenance the admission as evidence – for any purpose whatever – of any statement embodying hearsay material, save where such statement has properly been made the subject of an affidavit ... of information and belief, ie save where the deponent ... has not only revealed the source of information concerned but in addition has sworn ... that he believes such information to be true and furnished the ground for his belief.’InMia’scasesupra, SCHREINER J (as he then was) dealtspecifically with the necessity for averring in applications of urgency containing hearsay statements that the deponent believes in the truth of the statement in question. At 104 he expressed himself as follows:‘It seems to me, however, that the foundation for the admission in application of this sort of what would otherwise not be evidence is the deponent’s sworn or solemnly affirmed statement that he is informed and believes that certain facts exist. We have no rule requiring any particular form to be used and it may be assumed that any languageshowing that the deponent affirms his belief in the information would suffice. But it would not in my view be sufficient for the deponent merely to set out statements made by other persons without indicating whether he believes them to be true or not. The deponent’s assurance that he believes the statements to be true may not provide a strong guarantee that they are true but it is the least that should be required of the deponent.’See alsoHarris’ Executor v Weinberg1938 CPD 134;Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk1957 (2) SA 347(C) at 353.The Courts were not indulging in formalistic fantasies in requiring an affidavit or affirmation ‘of information and belief’for the admission of hearsay statements. Sound and practical reasons exist for the twofold requirement. The source of information must be disclosed to enable a respondent, confronted by an allegationnormally inadmissible as hearsay, to check its accuracy. And when the Courts prescribe the disclosure of the source of information, they mean, in my view, a disclosure with a degree of particularity sufficient to enable the opposing party to make independent investigations of his own, including, if necessary, verification of the statement from the source itself. General statements as to source such as ‘one of the respondent’s creditors’ will not suffice to constitute an adequate compliance with the requirements. Such statements tell the opposingparty nothing and are no more a disclosure of source than the well-worn phrase, ‘I have been informed’.The statement on oath or the affirmation by a deponent that he believes the truth of the hearsay statement is equally essential for the reasons stated by SCHREINER J inMia’scasesupraand quoted above. If, moreover, the deponent is unable to state that he believes the truth of the hearsay information furnished to him, he can hardly be permitted to rely upon it for the relief which he seeks.I am thereforeunable to agree with the contention that the failure to comply with the above requirements for the admission of hearsay statement is a mere technicality.”[40] Moreover,in both matters the alleged factual inaccuries in the hearsay depositions certainly reflected on the veracity of the applicant’s witnesses. This was especiallyprejudicialto the defendantssince they were unable toproperly rebuthearsayevidence under the circumstances.Thiswascertainlythecriticalmoment for a final adjudication pertaining to the restraint orders and the applicant’s replying affidavits did not seek to remedy the deficitsin the presentation of its case against both defendants.(e)Purported expert evidence.[41] Afurther problem was regarding Motepe’s affidavit upon which Rabaji relied. Awitnessmaytestify in one of two capacities, eitherhe or sheis a person who has knowledge of certain facts which is placed before court in support of a claim, orasan expert qualified in relation to a specific specialisedsubjectandis competent to conveyhis or her expert opinion to the court as well as the basis upon whichhis or heropinion has been formed and what documents or other sources have been considered in forming theopinion. It is clear from the affidavit by Motepethat she is not a person with knowledge of the events upon which the applicant attemptedto rely. The only other possibilitywas that Motepewas endeavouring todepose to an affidavitas an expert. There was lack of clarity on this aspect. However,as an expertthe test of the admissibility of the opinion ofan expertis whether or not the court can receive appreciable assistance fromhim or heron a particular issue. In other words, the test is a relative one depending upon the particular subject and the particular witness with reference to that subject. Otherwise the evidence would be supererogatory and superfluous and,thereforeI was notadmitted.448Gentiruco AG v Firestone SA (Pty) Ltd1972 1 SA 589(A) 616A-J;Ruto Flour Mills Ltd v Adelson(1)1958 4 SA 235(T)8Anexpert’sopinion can only be admissible where by reason ofhis or herspecial knowledge and skill thathe or sheis in a better position to draw inferences than the judicial officer.Theexpert witness isrequiredto state his or her opinion either as an inference from facts within his or her own knowledge or upon the basis of facts proved by others. Inboth matters, Motepe clearly didnot have any personal knowledgeas abases for heropinion. Thus, the only possibility waslimited to drawing inferences from whatwasallegedby others.Thecrucialquestion was,whether there was evidence upon which to reasonably believe that the defendantsmay beconvictedand that a confiscation ordermay bemade against them. The inferences drawn by Motepe could not assist the court.In addition,the evidence upon which Motepe’s opinion was basedwasnot provenbecause it was substantially hearsay. The applicantattemptedto circumvent the rules of evidence by trying to rely on expertopinionto persuade the court ofthe defendants’ misdemeaner.There is absolutely no basis in our law nor any room for such a principle.Mr Bester correctly submitted that such a principle would make a mockery of an accusedperson’s right toa fair trial which includes the right to be presumed innocent.449Section 35(3)(h) of the Constitution9The court was not concerned about an accused person’s guilt or innocence intherestraint order proceedings.Conclusion[42]Thus,therewas no evidence of any cogency that pointed thattheprovisional restraint ordersshouldbemade final. Nor did Mrs Biseswar contendedthat the interest of the state was beingprejudiced if theorders were not confirmed.However,inspiteof the defectsand weakness in the applicant’scaseagainst both defendants, the courtwas inclined to structure appropriate orders.[43]What was crucial,was that the defendants were charged with the crime of fraud and were to appear on trial in thePretoria Magistrate Courtduring March 2005.It was against this pending prosecutionand whattheydeposedtoin their respective discovery affidavitsthat the court structuredtheorderssothat therecouldbenodisposition of property without the authorisation of the court or upon thefinalisation of the criminal prosecutionsor until a confiscation orders weremade. Further, in the case of Hlongwa an immovable property was already sold in execution on 26 April 2004andit was not necessary toconfirmthe restraint of a property that was already disposed of.Broadly,the orders weretailoredsothaton the one handto preservethepropertyeven in the hands of the defendantspending theout came of thecriminal prosecution and on the other hand not toundulydeprivethe defendants and their familiesfrom using the propertywith least restraint but adequately protect from disposition.[44]Instructuring thetwoorders, I was mindful of the followingdictaby ACKERMANN J inFose v Minister of Safety and Security550[1997] ZACC 6;1997 3 SA 786(CC) 799F-G/H and 826H-I. See alsoPretoriaCityCouncil vWalker[1998] ZACC 1;1998 2 SA 363(CC) para [96];S v Z and 23 similar cases[2004] 1 All SA 438(E) paras [37] – [38]0:“[19] Appropriate relief will in essence be relief that is required to protect and enforce the Constitution.20Depending on the circumstances of each particular case the relief may be a declaration of rights, and interdict, amandamusor such other relief as may be required to ensure that the rights enshrined in the Constitution are protected and enforced. If it is necessary to do so, the courts may even have to fashion new remedies to secure the protection and enforcement of these all-important rights......[69] In our context an appropriate remedy must mean an effective remedy, for without effective remedies for breach, the values underlying and the right entrenched in the Constitution cannot properly be upheld or enhanced. Particularly in a country where so few have the means to enforce their rights through the courts,it is essential that on those occasions when the legal process does establish that an infringement of an entrenched right has occurred, it be effectively vindicated. The courts have a particular responsibility in this regard and are obliged to ‘forge new tools’ and shape innovative remedies, if needs be, to achieve this goal.”[45]Inspiteof the invasive nature of restraint orders and the shortcomings in the applicants’ case,the court exercised its wide discretion, bynot simply discharging or confirming the rules but striking a fair balance between the legitimateobjectivesof the POCA and the rights of the defendants.Under the circumstances, both orders were structured as responsive and effective measures within the bounds of the rule of law.E M PATELJUDGE OF THE HIGH COURTHeard on:15 October; 4 & 25 November 2004For theApplicant: Adv P BiseswarInstructed by: The State Attorney,PTAFor theDefendants: Adv A BesterInstructed by: Messrs Glover Inc,JHBDate of Judgment:17February 2006

SG

IN THE HIGH COURT OF

SOUTH AFRICA

(

TRANSVAAL

PROVINCIAL DIVISION)

DATE:

17/2/2006

CASE NO:

7968/2004 and 7970/2004

REPORTABLE

In the matter between:

THE NATIONAL DIRECTOR OF PUBLIC

PROSECUTIONS

APPLICANTAndBONGINKOSI FERINGTON HLONGWA

DEFENDANT

And in the matter between:

THE NATIONAL DIRECTOR OF PUBLICPROSECUTIONS

APPLICANTAndAUBREY BAFANA NKOSI

DEFENDANTTHEPISO MAUREEN NKOSI

1

ST

RESPONDENT

A B NKOSI CONTRACTORS (PTY) LTD

2

ND

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

JUDGMENT

PATEL, JIntroduction

PATEL, J

Introduction

[1] The applicant, the National Director of Public Prosecutions appliedex partefortwo provisionalorders,oneagainst Bonginkosi Ferington Hlongwa, the defendantwho is a radiographer, and the otheragainst Aubrey Bafana Nkosi, the defendantwho is a medical practitionerandhis wifeThepiso Maureen Nkosi,she is also a medical practitioner andcited as the first respondentand A B Nkosi Contractors(Pty) Ltd,the second respondent. The orders were securedin terms of section 26 of the Prevention of Organised Crime Act 121 of 1998 (POCA).To avoidconfusion the case against Mr Hlongwa is referred to as “Hlongwa matter” and against Dr Nkosi is referred to as “Nkosi matter”.[2] In both applications,a rulenisiwas issuedby VAN DER MERWE J, on 30 March 2004, in terms of section 26(3)(a). In terms oftheprovisional ordersbothdefendants and the respondents wererestrained from dealing with specified assets listed in the annexures to the orders. The orders together with the applicant’s founding papers were served on the defendants and the respondents. The defendants evinced their respective intention to oppose the confirmation of the rule.Both of themrespectively filedalmost similaranswering affidavitsand discovery affidavitsand to which the applicant responded.[3]Thedefendants in their respective answering affidavits didnot dispute the allegations in the applicant’s founding papers but broadly attack the constitutionality of Chapter 5 of POCA. They raised two issues:first, their right to remain silent in these proceedings; andsecondly, that the provisions set out in Chapter 5 are unconstitutional since they depriveda person of control over his or her property and are not justifiable. Or to limit their application to the value of what is shown to be the benefit derived.[4] On the initial return day the rules were extendedand both matters were set down on the roll of theopposed motion court of 15 October 2004. On that daythe matters came before me. Since the issues were substantially similar,counsel agreed that a single hearing would avoid duplicity. Argument commenced and the rules were further extended to 4 November for furtherargument.Structuredorders

[1] The applicant, the National Director of Public Prosecutions applied

ex parte

for

two provisional

orders

,

one

against Bonginkosi Ferington Hlongwa, the defendant

who is a radiographer, and the other

against Aubrey Bafana Nkosi, the defendant

who is a medical practitioner

and

his wife

Thepiso Maureen Nkosi

she is also a medical practitioner and

cited as the first respondent

and A B Nkosi Con

tractors

(Pty) Ltd

the second respondent. The orders were secured

in terms of section 26 of the Prevention of Organised Crime Act 121 of 1998 (POCA).

To avoid

confusion the case against Mr Hlon

g

wa is referred to as “

Hlongwa matter

” and ag

a

inst Dr Nkosi is referred to as “

Nkosi matter

”.

[2] In both applications

a rule

nisi

was issued

by VAN DER MERWE J

, on 30 March 2004, in terms of section 26(3)(a). In terms of

the

provisional orders

both

defendants and the respondents were

restrained from dealing with specified assets listed in the annexures to the orders. The orders together with the applicant’s founding papers were served on the defendants and the respondents. The defendants evinced their respective intention to oppo

se the confirmation of the rule

.

Both of them

respectively filed

almost similar

answering affidavits

and discovery affidavits

and to which the applicant responded.

[3]

The

defendants in their respective answering affidavits d

id

not dispute the allegations in the applicant’s founding papers but broadly attack the constitutionality of Chapter 5 of POCA. They raised two issues:

first

, their right to remain silent in these proceedings; and

secondly

, that the provisions set out in Chapter 5 are unconstitutional since they deprive

d

a person of control over his or her property and are not justifiable. Or to limit their application to the value of what is shown to be the benefit derived.

[4

] On the initial return day the rules were extended

and both matters were set down on the roll of the

opposed motion court of 15 October 2004. On that day

the matters came before me. Since the issues were substantially similar

counsel agreed that a single hearing would avoid duplicity. A

rgument commenced and the rules were further extended to 4 November for further

argument

Structured

o

rders

[5]On that day the rules were once again extended to 25 November 2004 when a briefex temporejudgment was delivered indicating why the following orders were made:

[

5

]

On that day the rules were once again extended to 25 November 2004 when a brief

ex tempore

judgment was delivered indicating why the following orders were made:

(a)Hlongwa matter

(a)

“1. THAT the provisional restrain order is hereby discharged in respect of:

“

1. THAT the provisional restrain order is hereby discharged in respect of:

1.1 The two vehicle referred to in paragraph 2.1 and 2.2 of Annexure “A” (to the order Marked “X” at page 29);1.2 All equipment and sundry items necessary for the Defendant’s practice as a registered radiographer and household goods (referred to in paragraph 6 of Defendant’s discovery affidavit, at paginated pages 276)are thatthe Applicant is to return:

1.1 The two vehicle referred to in paragraph 2.1 and 2.2 of Annexure “A” (to the order Marked “X” at page 29);

1.2 All equipment and s

und

r

y items necessary for the Defendant’s practice as a registered radiographer and household goods (referred to in paragraph 6 of Defendant’s discovery affidavit, at paginated pages 276

)

are that

the Applicant is to return

:

1.2.1 the items, referred to in sub-paragraph 1.1 and 1.2 above, to the Defendant;1.2.2 all household goods (referred to in paragraph 6 of the Defendant’s discovery affidavit at paginated pages 276) totheDefendant;and1.2.3 the immovable property referred to in annexure “A” to the provisional order “X” (at page 29)

1.2.1 the items, referred to in sub-paragraph 1.1 and 1.2 above, to the Defendant

;

1.2.2 all household goods (referred to in paragraph 6 of the Defendant’s discovery affidavit at paginated pages 276) to

Defendant;

1.2.3 the immovable property referred to in annexure “A” to the provisional order “X” (at page 29)

2. THAT the Defendant is to deal with the items referred to in subparagraph 1.1 and 1.2 as follows:

2.1 not to dispose of any of the items referred to above except with authorisation by thisCourt on reasonable cause shown or upon conclusion of the criminal case or upon an order in terms of section 18 of the Prevention of OrganisedCrime Act 121 of 1998 (“the Act”)2.2 the Defendanttokeep and/or use the said items until finalisation of the criminal case or until an order in terms of the section 18 of the Act is made;2.3 the Defendant is to hand over one or more of the said items on a direction or order by the trial court of the criminal case instituted against the Defendant and for the purpose of confiscation order in terms of Section 18 of the Act.

2.1 not to dispose of any of the items referred to above except with authorisation by this

C

ourt on reasonable cause shown or upon conclusion of the criminal case or upon an order in terms of s

ection 18 of the Prevention of O

rganised

rime Act 121 of 1998 (“the Act”)

2.2 the Defendant

to

keep and/or use the said items until finalisation of the criminal case or until an order in terms of the section 18 of the Act is made;

2.3 the Defendant is to hand over one or more of the said items on a direction or order by the trial court of the criminal case instituted against the Defendant and for the purpose of confiscation order in terms of Section 18 of the Act.

3. THAT the Applicant is to pay the Defendant’s tax costs of this application.”

3. THAT the Applicant is to pay the Defendant’s tax costs of this application.

”

(b)Nkosi matter

(b)

“1.THAT the provisional restrain order is hereby discharged in respect of:-

1.

THAT the provisional restrain order is hereby discharged in respect of:-

1.1All medical instruments and equipment at the defendants and first respondents consulting rooms at24 Louisa Street, Brackenhurst, Alberton;1.2The household goods at the place of residence of the defendant’s situate at24 Louise Street, Brackenhurst, Alberton;1.3All the motor vehicle referred to in paragraphs 3.1, 3.2, 3.4 and 3.5 in Annexure “A” to the order marked “X”;1.4The applicant return the assets referred to in sub-paragraphs 1.1, 1.2 and 1.3 of this order;1.5 That the defendant and the first respondent are hereby ordered to deal with the assets referred to in sub-paragraph 1.1, 1.2 and 1.3 as follows:

1.1

All medical instruments and equipment at the defendants and first respondents consulting rooms at

24 Louisa Street

, Brackenhurst, Alberton;

1.2

The household goods at the place of residence of the defendant’s situate at

24 Louise Street

1.3

All the motor vehicle referred to in paragraphs 3.1, 3.2, 3.4 and 3.5 in Annexure “A” to the order marked “X”;

1.4

The applicant return the assets referred to in sub-paragraphs 1.1, 1.2 and 1.3 of this order;

1.5 That the defendant and the first respondent are hereby ordered to deal with the assets referred to in sub-paragraph 1.1, 1.2 and 1.3 as follows:

1.5.1not to dispose of the motor vehicle in sub-paragraph 1.3 of this order, except with authorisation of this court on reasonable cause shown or upon conclusion of the criminal case or upon on order in terms of Section 18 of the Prevention of Organised Crime Act 121 of 1998 (“the Act”);1.5.2defendant to keep and/or use the said motor vehicle until finalisation of thecriminal case or until an order in terms of Section 18 of the Act is made;1.5.3defendant to hand over all or any of the assets referred to here above on a direction or order by the trial court at the criminal case instituted against the defendant and for the purpose of confiscation order in terms of Section 18 of the Act.

1.5.1

not to dispose of the motor vehicle in sub-paragraph 1.3 of this order, except with authorisation of this court on reasonable cause shown or upon conclusion of the criminal case or upon on order in terms of Section 18 of the Prevention of Organised Crime Act 121 of 1998 (“the Act”);

1.5.2

defendant to keep and/or use the said motor vehicle until finalisation of the

c

riminal case or until an order in terms of Section 18 of the Act is made;

1.5.3

defendant to hand over all or any of the assets referred to here above on a direction or order by the trial court at the criminal case instituted against the defendant and for the purpose of confiscation order in terms of Section 18 of the Act.

2.THAT the provisional restraint order is hereby confirmed in respect of the assets attached and/or seized by the curator as referred to in paragraphs 1.1, 1.2. 1.3, 1.4, 1.5, 2, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 in Annexure “A” to the provisional restraint order of 30 March 2004 marked “X”.3.THAT each party is to pay his and her costs of this application.”

2.

THAT the provisional restraint order is hereby confirmed in respect of the assets attached and/or seized by the curator as referred to in paragraphs 1.1, 1.2. 1.3, 1.4, 1.5, 2, 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9 and 4.10 in Annexure “A” to the provisional restraint order of 30 March 2004 marked “X”.

3.

THAT each party is to pay his and her costs of this application.

[6]On 29 September 2005 the applicant delivered a “Request for Written Reasons” for the ordersof 25 November 2005.The reasons for the orders arefullyset out in this judgment.

[6]

On 29 September 2005 t

he applicant delivered a “Request for Written Reasons” for the order

s

of 25 November 2005.

T

he reasons for the order

s are

fully

set out in this judgment

Purposeand nature of a restraint order

Purpose

and nature of a restraint order

[7] The purpose and nature of a restraintorder is essentially the first step in the recovery of the proceeds of unlawful activitiesand profits of crime. Thiswas aptlyalluded toby Lord WOOLF CJ, inR v Dekkon and Others;R v Mcfaul;R v Knights and Another[2002] EWCD Crim 2954,[2003] 3 All ER 508, (CA) 510e, that:

7

] T

he purpose and nature of a restrain

t

order is essentially the first step in t

he recovery of the proceeds of unlawful activities

and profits of crime

. This

was aptly

alluded to

by Lord WOOLF CJ, in

R v Dekkon and Others

R v Mcfaul

R v Knights and Another

[2002] EWCD Crim 2954,[2003] 3 All ER 508, (CA) 510e

[2003] 3 All ER 508

, that:

“[1] One of the most successful weapons which can be used to discourage offences that are committed in order to enrich the offenders is to ensure that if the offenders are brought to justice, any profits which they have made from their offending is confiscated. Itis therefore not surprising that Parliament hasrepeatedlyenacted legislationdesigned to enable the courts to confiscate the proceeds of crime.”

“[1] One of the most successful weapons which can be used to discourage offences that are committed in order to enrich the offenders is to ensure that if the offenders are brought to justice, any profits which they have made from their offending is confiscated. It

is therefore not surprising that Parl

iament has

repeatedly

enacted legislation

designed to enable the courts to confiscate the proceeds of crime.

[8] In order to catch the proceeds and profits of major crimes, our Legislatureenacted the Prevention of Organised Crime Act of1988(POCA). In general terms,the purpose ofthe statute is to strip a personof assets that areobtained bymeans ofthe proceeds of criminal activity. Thisobjective isachieved by means of aconfiscation orderprovided for in part2 of Chapter 5Section 18-24.Toattain that objective it is necessary topreserve the assets pending a confiscation orderby means ofarestraint orderas provided for in part 3 of Chapter 5Section 24A-29A.It is this restraint order which is deployed to prevent dealings withdesignated property and assets.The procurement of the restraint order by the applicant is invasivesince it seizes the designated property and assets. Therefore, an appropriate starting point is to briefly allude to the nature of the restraint order,the procedure for its procurement and the remedies available to an affected personagainst whomarestraint orderis granted on anex parteapplication, which is a drastic procedure designated to surprise a suspect and enable the applicant to preserve assets before they are whittled away.Undoubtedly the purpose of the restraint order is to preserve the realisable property in respect of which a confiscation order has been made or may ultimately be made, that is, any property of the defendantBy virtue of section 12, the reference to a defendant is to the accused or prospective accused in criminal proceedings instituted or to be institute.and therecipients of his or her affected gifts. The order may be made against “any person”Section 26(1).from dealing in manner with “anyproperty” to which the order relates.Suchan order may be made against the defendantas well asthe recipients of his or her affected gifts. The order need, however, not be made in respect ofallrealisable property, that is, against all the property of the defendant and the recipients of hisor heraffected giftsSection 26(2) and (6).But, it may be made againstalltheir property including the property they acquire after the order ismade but may be limited to designated property specified in the order.

8

] In order to catch the proceeds and profit

s of major crimes, our Legislature

enacted the Preve

ntion of Organised Crime Act of

1988

(POCA)

. In general terms

the purpose of

the statute is to strip a person

of assets that are

obtained by

means of

the proceeds of criminal activity. This

objective is

achieved by means of a

confiscation order

provided for in part

2 of Chapter 5

Section 18-24

To

attain that objective it is necessary to

preserve the asse

ts pending a confiscation order

by means of

restraint order

s provided for in part 3 of Chapter 5

Section 24A-29A

It is this restraint order which is deployed to prevent dealings with

designated property and assets.

The procurement of the restraint order by the applicant is invasive

since it seizes the designated property and assets

. Therefore, an appropriate starting point is to briefly allude to the nature of the restraint order

the procedure for its procurement and the remedies available to an affected person

against whom

is granted on an

application

, which is a drastic procedure designated to surprise a suspect and enable the applicant to preserve assets before they are whittled away

Undoubtedly the purpose of the restraint order is to preserve the realisable property in respect of which a confiscation order has been made or may ultimately be made, that is, any property of the defendant

By virtue of section 12, the reference to a defendant is to the accused or prospective accused in criminal proceedings instituted or to be institute.

and the

recipients of his or her affected gifts. The order may be made against “

any person

Section 26(1)

f

rom dealing in manner with “

any

property

” to which the order relates.

Such

an order may be made against the defendant

as well as

the recipients of his or her affected gifts. The order need, however, not be made in respect of

all

realisable property, that is, against all the property of the defendant and the recipients of his

or her

affected gifts

Section 26(2) and (6)

But, it may be made against

their property including the property the

y acquire after the order is

made but may be limited to designated property specified in the order.

[9]Thecourt in exercising its discretion whether or not to grantarestraint order may limit the order to such items of property it may specify. It has a wide discretion to include in the order prohibiting the person against whom it is made from dealing in any way with the property to which it relatesandmay be subject to such conditions and exceptions as the court may specify in the orderSection 26(1).At the time of making the order the court mayauthorisethe seizure ofallmovables concerned and with any ancillary order it considers appropriate for the proper, fair and effective execution of the orderSection 26(8),and also give directions concerning the manner in which the movables seized must be dealt withSection 26(9).The court may in its discretion provide in the restraint order for the reasonable living and legal expenses of the person against whom it is made, including his or her family or household, but only if that person has made full disclosure of his interests in the property subject to the restraint and cannot meet those expenses out of his unrestrained propertySection 26(6).The reasonable legal expenses are for any proceedings instituted against him or her in terms of Chapter 5 or any criminal prosecution to which the proceedings may relateSection 26 (6)(b).[10] The court is also empowered to make any further order for the discovery of any facts as it considers necessary or expedient with a view to achieving the objects of the restraint order. It may include an order for the discovery of facts relating to any property over which the defendant has effective control and their whereaboutsSection 26(7).It may appoint acurator bonisand order the person against whom the restraint is made, to surrender any property to which the order relates to thecurator. The court may authorise thecuratorto perform certain functions in respect of all or any of the property subject to the restraint order on behalf of the person against whom the order is made but subject to the directions of the courtSection 28(1).In addition,it mayalsoorder the registrar of deeds to make certain restrictive endorsements on the title deeds of the immovable property subject to the restraint orderSection 29.The restraining regime is designed to prevent disposing of designated property and thereby preserving the assets for a future confiscation order in the event of a successful criminal prosecution.Overview of procedural provisions[11] Parliament in enacting the legislation embodied in it procedural provisions to enable the High Court to make a restraint orderSection 25(1) and 26(1).Theseprovisionsprovide a convenient and fair machineryto enable the court to exercise its jurisdiction. Colloquially the proceedings under Chapter 5 are referred to ascriminal forfeiture proceedings. An application for a restraint order constitutes civil proceedingsSection 13(1) and (5)andit is collateral to subsequentcriminal proceedings. Therefore, any question of factmustbe determined on a balance of probabilities.

9

he

ourt in exercising its discretion whether or not to grant

restraint order may limit the order to such items of property it may specify. It has a wide discretion to include in the order prohibiting the person against whom it is made from dealing in any way with the property to which it relates

may be subject to such conditions and exceptions as the court may specify in the order

At the time of making the order the court may

authorise

the seizure of

movables concerned and with any ancillary order it considers appropriate for the proper, fair and effective execution of the order

Section 26(8)

and also give directions concerning the manner in which the movables seized must be dealt with

Section 26(9)

he court may in its discretion provide in the restraint order for the reasonable living and legal expenses of the person against whom it is made, including his or her family or household, but only if that person has made full disclosure of his interests in the property subject to the restraint and cannot meet those expenses out of his unrestrained property

Section 26(6)

The reasonable legal expenses are for any proceedings instituted against him or her in terms of Chapter 5 or any criminal prosecution to which the proceedings may relate

Section 26 (6)(b)

[1

0

] The court is also empowered to make any further order for the discovery of any facts as it considers necessary or expedient with a view to achieving the objects of the restraint order. It may include an order for the discovery of facts relating to any property over which the defendant has effective control and their whereabouts

Section 26(7)

It may appoint a

curator bonis

and order the person against whom the restraint is made, to surrender any property to which the order relates to the

curator

. The court may authorise the

to perform certain functions in respect of all or any of the property subject to the restraint order on behalf of the person against whom the order is made but subject to the directions of the court

Section 28(1)

In addition,

it may

also

order the registrar of deeds to make certain restrictive endorsements on the title deeds of the immovable property subject to the restraint order

Section 29

The restraining regime is designed to prevent disposing of designated property and thereby preserving the assets for a future confiscation order in the event of a successful criminal prosecution.

Overview of procedural provisions

1

] Parliament in enacting the legislation embodied in it procedural provisions to enable the High Court to make a restraint order

Section 25(1) and 26(1)

se

provisions

provide a convenient and fair machinery

to enable the court to exercise its jurisdiction. Colloquially the proceedings under Chapter 5 are referred to as

criminal forfeiture proceedings

. A

n application for a restraint order constitutes civil proceedings

Section 13(1) and (5)

it is collateral to subsequent

criminal proceedings. Therefore, any question of fact

must

be determined on a balance of probabilities.

[12]Itis only the National Director of Public Prosecutions who may way of anex parteapplication seek a restraint orderSection 26(1).The court, to which an application is made, may make a provisional restraint order with immediate effect coupled with a rulenisicalling uponthe defendant to appear and show cause why the restraint order should not be made final.Section 26(3)The ordermust provide for anotice to be given to persons affected by the provisional order.Section 26(4)(a)Upon an application by the defendant, the court may anticipate the return day to discharge the provisional restraint order if twenty-four hours notice of the application is given to the applicant.Section 26(3)(c)The statutory procedural provisions are in essence the handmaidens of fairness and justice in the face of the invasive nature of the restraint order. What the court is required to do in all the circumstances is to ensure that the prosecuting authority do not rideroughshodover the rights of a prospective criminal defendant or an accused person.

2

It

is only the National Director of Public Prosecutions who may way of an

application seek a restraint order

The court, to which an application is made, may make a provisional restraint order with immediate effect coupled with a rule

calling upon

the defendant to appear and show cause why the restraint order should not be made final.

Section 26(3)

The order

must provide for a

notice to be given to persons affected by the provisional order.

Section 26(4)(a)

Upon an application by the defendant, the court may anticipate the return day to discharge the provisional restraint order if twenty-four hours notice of the application is given to the applicant.

Section 26(3)(c)

The statutory procedural provisions are in essence the handmaidens of fairness and justice in the face of the invasive nature of the restraint order. What the court is required to do in all the circumstances is to ensure that the prosecuting authority do not ride

roughshod

over the rights of a prospective criminal defendant or an accused person.

Available remedies[13] The general interest of the community underlyingthePOCA isdesigned to catch the proceeds and profits of crime. The initial step is the preservation of such proceeds and profits before they are siphoned off. However, important, butitwillcertainlynot justify thatarestraint order may be used as a shackle that the defendant or any third person may suffer. A prolonged restraint order may lead to injustice. Therefore, Parliament provided a spectrum of available remedies for anyone affected by a restraint order. When the restraint order is made before the defendant is charged the court must rescind the order ifhe is not charged within a reasonable time.Section 25(2)Any person affected by a restraint order may apply to the court which made the order to vary or rescind a restraint orderif it is unduly onerous. If the court is satisfied that the operation of order will deprive the applicant the means to provide for his or her reasonable living expenses and cause undue hardship that heor shewill suffer and which outweighs the risk that the property concerned may be dissipated in some way.Section 26(10)(a)(i) and (ii)The court shall rescind the restraint order when the proceeding against the defendantareconcluded.Section 26(10)(b)When a court rescindsa restraint order that authorised the seizure of property then it shall make such other order as it considers apposite for the proper, fair and effective execution of the restraint order.Section 26(11)An affected person may also apply to the court at any time to vary or rescind the restraint order for cancellationofany restrictive endorsement on the title deed of the immovable property and deeds registrar shall give effect to the direction.225Section 29(7)(b)5The court may at any time vary or rescind an order for the appointment of acuratorbonison the application of any person affected by it.226Section 28(2) and (3)6The underlying rational for the availability ofa wide spectrum ofremedies to an affected person is that the restraint order is primarilyfor the purpose of aiding the enforcement of confiscation order and collateral to the criminal cause.Pre-requites for a restraint order

Available remedies

3

] The general interest of the community underlying

POCA is

designed to catch the proceeds and profits of crime

. T

he initial step is the preservation of such proceeds and pro

fits before they are siphoned off. H

owever, important, but

it

will

certainly

not justify that

restraint order may be used as a shackle that the defendant or any third person may suffer. A prolonged restraint order may lead to injustice. Therefore, Parliament provided a spectrum of available remedies for anyone affected by a restraint order. When the restraint order is made before the defendant is charged the court mus

t rescind the order if

he is not charged within a reasonable time.

Section 25(2)

Any person affected by a restraint order may apply to the court which made the order to vary or rescind a restraint order

if it is unduly onerous

. If the court is satisfied that the operation of order will deprive the applicant the means to provide for his or her reasonable living expenses and cause undue hardship that he

or she

will suffer and which outweighs the risk that the property concerned may be dissipated in some way.

Section 26(10)(a)(i) and (ii)

The court shall rescind the restraint order when the proceeding against the defendant

are

concluded.

Section 26(10)(b)

When a court rescind

a restraint order that authorised the seizure of property then it shall make su

ch other order as it considers a

pposite for the proper, fair and effective execution of the restraint order.

Section 26(11)

An affected person may also apply to the court at any time to vary or rescind the restraint order for cancellation

of

any restrictive endorsement on the title deed of the immovable property and deeds registrar shall give effect to the direction.

25

Section 29(7)(b)

The court may at any time vary or rescind an order for the appointment of a

bonis

on the application of any person affected by it.

26

Section 28(2) and (3)

6

The underlying rational for the availability of

a wide spectrum of

remedies to an affected person is that the restraint order is primarily

for the purpose of aiding the enforcement of confiscation order and c

ollateral to the criminal cause

Pre-requites for a restraint order

[14] It is common cause that the defendants in both matters were charged with the crime of fraud in thatit was alleged thatthey respectively submitted fraudulent claims to certain medical aid schemes. From the Bar,both counselindicatedthat thetwodefendants were toappear in the Pretoria Magistrate’s Court on trial during March 2005. Sincecriminal prosecutions wereinstituted against the defendants, the pertinent questionwas: when can a High Court make a restraint order. In this regard, the jurisdictionalprerequisites for a restraint order are set out in section 25(1)(a). It reads as follows:

4

] It is common cause that the defe

ndants in both matters we

re charged with the crime of fraud in that

it was alleged that

they respectively submitted fraudulent claims to certain medic

al aid schemes. From the Bar,

both counsel

indicated

that the

two

defendants w

ere to

appear in the Pretoria Magistrate’s Court on trial during March 2005. Since

criminal prosecutions were

instituted against the defendants, the pertinent question

wa

s: when can a High Court make a restraint order. In this regard, the jurisdiction

al

prerequisites for a restraint order are set out in section 25(1)(a). It reads as follows:

“A High Court may exercise the powers conferred on it by section 26(1) –

(a) When –

(i) a prosecution for an offence has been instituted against the defendant concerned;(ii) either a confiscation order has been made against the defendant or it appears to the court that there are reasonable grounds for believing that a confiscation order may be made against that defendant; and(iii) the proceedings against the defendant have not been concluded; ...

(i) a prosecution for an offence has been instituted against the defendant concerned;

(ii) either a confiscation order has been made against the defendant or it appears to the court that there are reasonable grounds for believing that a confiscation order may be made against that defendant; and

(iii) the proceedings against the defendant have not been concluded; ...

(b) ...”

[15] The jurisdiction to make a confiscation order is vested in the criminal court which convicts the defendantquaaccused.227Section 18(1)7Although a confiscation order may only be made after the defendant is convicted but a restraint order may be made once a defendant has been charged228Section 25(1)(a). See para [14] above8or about to be charged,229Section 25(1)(b)9orif there are reasonable grounds to believe that a confiscation order may ultimately be made against him or her. The restraint order merely freezes the defendant’s assets and those of the recipients of his or her affected gifts.[16] In the matters beforeme, the applicantsoughtthe confirmation ofthe provisional restrain orders. The applicanthad toshow thatone, the defendants hadbeen charged. Thiswas common cause.Two, that therewere reasonable grounds to believe that(a)the two defendants may be convicted of the crimes with which theywererespectively charged; and(b)that confiscations orders may be made against each of them.Theseare the jurisdictional pre-requites for the granting of a restraint order.Reasonable grounds for believing[17] Before a court exercisesits discretion vested by section 26, there must be reason to believe that a confiscation order may be made against the defendant in the event of him or herbeing convicted. The phrase “reasonable grounds for believing” places a much lighter burden of proof on the applicant than, for instance, “the court is satisfied”.330See:Trust Bank van Afrika Bpk v Lief and Another1963 (4) SA 752(T);Agro Drip (Pty) Ltd v Fedgen Insurance Co Ltd1998 (1) SA 182(W) 186E;Vumba Intertrade CC v Geometric Intertrade CC2001 (2) SA 1068(W)0The “reasonable grounds for believing” must have a factual basis for giving rise to such belief.331Cf:LondonEstates (Pty) Ltd v Nair1957 (3) SA 591(D) 592F1A blind beliefhearsayevidence,does not suffice.332Cf:Native Commission and Union Government v Nthako1931 TPD 234at 2422

] The jurisdiction to make a confiscation order is vested in the criminal court which convicts the defendant

qua

accused.

27

Section 18(1)

Although a confiscation order may only be made after the defendant is convicted but a restraint order may be made once a defendant has been charged

28

Section 25(1)(a). See para [14] above

or about to be charged,

29

Section 25(1)(b)

or

if there are reasonable grounds to believe that a confiscation order may ultimately be made against him or her. The restraint order merely freezes the defendant’s assets and those of the recipients of his or her affected gifts.

] In the matters before

me

, the applicant

sought

the confirmation of

the provisional restrain orders

. The applicant

had to

show that

, the defendants ha

been charged. This

s common cause.

Two

, that there

we

re reasonable grounds to believe that

the two defendants may be convicted of the crimes with which they

were

respectively charged; and

that confiscations orders may be made against each of them.

hese

are the jurisdictional pre-requites for the granting of a restraint order.

Reasonable grounds for believing

17

] Before a court exercise

its discretion vested by section 26, there must be reason to believe that a confiscation order may be made against the defendant in the event of him or her

being convicted

. The phrase “

reasonable grounds for believing

” places a much lighter burden of proof on the applicant than, for instance, “

the court is satisfied

30

See:

Trust Bank van Afrika Bpk v Lief and Another

1963 (4) SA 752(T);

1963 (4) SA 752

Agro Drip (Pty) Ltd v Fedgen Insurance Co Ltd

1998 (1) SA 182(W) 186E;

1998 (1) SA 182

Vumba Intertrade CC v Geometric Intertrade CC

2001 (2) SA 1068(W)

2001 (2) SA 1068

The “

” must have a factual basis for giving rise to such belief.

31

Cf:

London

Estates (Pty) Ltd v Nair

1957 (3) SA 591(D) 592F

1957 (3) SA 591

A blind belief

hearsay

evidence

does not suffice.

32

Native Commission and Union Government v Nthako

1931 TPD 234at 242

1931 TPD 234

[18]In the unreported judgment of theNational Director of Public Prosecutions v Visser and Others333TPD Case No 6352/2002, 21 December 2001, at page 123, VAN DER WESTHUIZEN J said:

18

In the unreported judgment of the

National Director of Public Prosecutions v Visser and Others

33

TPD Case No 6352/2002, 21 December 2001, at page 12

, VAN DER WESTHUIZEN J said:

“The essence seems to section 25(1)(b)(ii), namely that it must appear to the court that there are reasonable grounds for believing that a confiscation order may be made.The word ‘appear’ probably relates to anonusof some kind. It must on a balance of probabilities look like there are reasonable grounds for believing that a confiscation order may be made. This does not mean that the court must be satisfied, on a balance of probabilities, that aconfiscation order will indeed follow. The concept of ‘reasonable grounds’ is not strange or unique in our law. Some objective assessment is necessary. It is not clear to me what role exactly the word ‘believe’ plays in this regard.Having said all the above, I agree with the applicant that the task of the court is not at this stage to conduct a criminal trial. The court certainly does not have to be convinced beyond reasonable doubt of a person’s guilt. There must also be reasonable grounds for believing that the trial court may find, when the inquiry is made, that the person has benefited. The court does not have to be able to calculate the benefit accurately.One of the central questions is what the phrase ‘may be made’ (as opposed to will be made, or will probably be made, or is likely to me made, etc) may mean. If this phrase is separated from the preceding part of the sentence, it simply means that it is possible that a confiscationorder may be made, or even that it is theoretically possible. This very liberal interpretation of the phrase ‘may be made’ would be so wide that it would make little proper sense in the context of this and probably several other cases. A restraint order will then almost always inevitably have to follow once a person is charged or to be charged, for example with theft. If one is charged, after all, it is theoretically possible that he or she will be convicted. And if it is theft that is at stake, there are grounds to believe that the thief has benefited. Theft is after all a deed of greed.The word ‘may’ has to be read with the concept of ‘reasonable grounds’. If ‘may’ simply means the mathematical or theoretical possibility for it to happen, there is little scope for reasonableness and for any adjudication. Inmy opinion the term ‘may’ is deliberately wide to make the intention of the legislator clear, namely that a possibility would suffice and that a court does not have to be convinced beyond reasonable doubt, or even on a balance of probabilities, that a conviction will follow. Most courts would always say that it is not possibleto look into the future and to prejudge a criminal trial still to come. But, perhaps because ‘may’ is linguistically at least potentially so wide that it would almost inevitably render the clause meaningless or unconstitutional, the court still has a discretion.Therefore a number of factors are to be taken into account in exercising the court’s discretion. One factor must be the apparent strength or weakness of the expectation that a conviction will follow and that the person has benefited, so that the trial court may exercise its discretion to grant a confiscation order. This relates to specific allegations of criminal conduct, but also to the case as a whole. Theapparent value and strength of the evidence against a respondent should be taken into account, which would include the availability of evidence needed, the credibility etc of witnesses, as well as the complexity of charges, bearing in mind that the eventualonusof proof in a criminal trial is one beyond reasonable doubt.In other words, I may suspect that a crime has been committed and persons have benefited. I may even be convinced, on the evidence before me, on a balance of probabilities, that this is the case. But I may conclude that in view of the eventualonusof proof it is extremely unlikely that a conviction will follow.Again it must be emphasized though that the idea is not to conduct a criminal trial on paper.”

“The essence seems to section 25(1)(b)(ii), namely that it must appear to the court that there are reasonable grounds for believing that a confiscation order may be made.

The word ‘appear’ probably relates to an

onus

of some kind. It must on a balance of probabilities look like there are reasonable grounds for believing that a confiscation order may be made. This does not mean that the court must be satisfied, on a balance of probabilities, that a

confiscation order will indeed follow. The concept of ‘reasonable grounds’ is not strange or unique in our law. Some objective assessment is necessary. It is not clear to me what role exactly the word ‘believe’ plays in this regard.

Having said all the above, I agree with the applicant that the task of the court is not at this stage to conduct a criminal trial. The court certainly does not have to be convinced beyond reasonable doubt of a person’s guilt. There must also be reasonable grounds for believing that the trial court may find, when the inquiry is made, that the person has benefited. The court does not have to be able to calculate the benefit accurately.

One of the central questions is what the phrase ‘may be made’ (as opposed to will be made, or will probably be made, or is likely to me made, etc) may mean. If this phrase is separated from the preceding part of the sentence, it simply means that it is possible that a confiscation

order may be made, or even that it is theoretically possible. This very liberal interpretation of the phrase ‘may be made’ would be so wide that it would make little proper sense in the context of this and probably several other cases. A restraint order will then almost always inevitably have to follow once a person is charged or to be charged, for example with theft. If one is charged, after all, it is theoretically possible that he or she will be convicted. And if it is theft that is at stake, there are grounds to believe that the thief has benefited. Theft is after all a deed of greed.

The word ‘may’ has to be read with the concept of ‘reasonable grounds’. If ‘may’ simply means the mathematical or theoretical possibility for it to happen, there is little scope for reasonableness and for any adju

di

cation. In

my opinion the term ‘may’ is deliberately wide to make the intention of the legislator clear, namely that a possibility would suffice and that a court does not have to be convinced beyond reasonable doubt, or even on a balance of probabilities, that a conviction will follow. Most courts would always say that it is not possible

to look into the future and to prejudge a criminal trial still to come. But, perhaps because ‘may’ is linguistically at least potentially so wide that it would almost inevitably render the clause meaningless or unconstitutional, the court still has a discretion.

Therefore a number of factors are to be taken into account in exercising the court’s discretion. One factor must be the apparent strength or weakness of the expectation that a conviction will follow and that the person has benefited, so that the trial court may exercise its discretion to grant a confiscation order. This relates to specific allegations of criminal conduct, but also to the case as a whole. The

apparent value and strength of the evidence against a respondent should be taken into account, which would include the availability of evidence needed, the credibility etc of witnesses, as well as the complexity of charges, bearing in mind that the eventual

of proof in a criminal trial is one beyond reasonable doubt.

I

n other words

, I may suspect that a crime has been committed and persons have benefited. I may even be convinced, on the evidence before me, on a balance of probabilities, that this is the case. But I may conclude that in view of the eventual

of proof it is extremely unlikely that a conviction will follow.

Again it must be emphasized though that the idea is not to conduct a criminal trial on paper.

[19]Subsequently,VAN DER WESTHUIZEN J inNational Director of Public Prosecutions v Alexander David and Others3342001 (2) SACR 1(TPD) 8c/d – h/i4stated:

19

Subsequently

VAN DER WESTHUIZEN J in

National Director of Public Prosecutions v Alexander David and Others

34

2001 (2) SACR 1(TPD) 8c/d – h/i

2001 (2) SACR 1

stated:

“It must therefore appear to the court that there are reasonable grounds, obviously at the time of the application, to believe that a confiscation order following a conviction may – and not will – be made. Naturally the law of evidence applies. However, the court hearing the restraint order application clearly does not have to be convinced in terms of any particular burden of proof that a conviction and confiscation will follow. The court has to form an opinion based on appearance and reasonableness as to future possibilities.I, respectfully, am not of the opinion that it could be argued on the wording of s 25(1) that a court has to be satisfied on a balance of probabilities that a conviction and confiscation order will indeed follow. Perhaps it could be said that it must, on a balance of probabilities then, appear to the court that there are reasonable grounds for believing that a confiscation order may follows.In forming such an opinion or a belief a court obviously has to take into account that the onus of proof in the criminal trial will indeed be on the State, and that it is beyond reasonable doubt.What does this say regarding the admissibility of for example hearsay evidence? Hearsay evidence is generally inadmissible, but it is well known that there are exceptions. These have to be applied within the context of a particular case and situation. By its nature the evidence available to a court in a restraint order application may not necessarily be as direct and concrete as could be expected to secure a criminal conviction. After all, s25(1)(b) even allows for this procedure where a court is satisfied that the person isstill to be charged with an offence. It might sometimes be unavoidable to take some hearsay evidence into account. Certainly support of any hearsay allegations in the relevant affidavits would be most valuable, inter alia in view of the drastic consequences of this procedure. It would be highly undesirable to grant an order in an application merely based on wild and unsupported hearsay allegations.”335My italics for emphasis5

“It must therefore appear to the court that there are reasonable grounds, obviously at the time of the application, to believe that a confiscation order following a conviction may – and not will – be made. Naturally the law of evidence applies. However, the court hearing the restraint order application clearly does not have to be convinced in terms of any particular burden of proof that a conviction and confiscation will follow. The court has to form an opinion based on appearance and reasonableness as to future possibilities.

I, respectfully, am not of the opinion that it could be argued on the wording of s 25(1) that a court has to be satisfied on a balance of probabilities that a conviction and confiscation order will indeed follow. Perhaps it could be said that it must, on a balance of probabilities then, appear to the court that there are reasonable grounds for believing that a confiscation order may follows.

In forming such an opinion or a belief a court obviously has to take into account that the onus of proof in the criminal trial will indeed be on the State, and that it is beyond reasonable doubt.

W

hat does this s

ay regarding the admissibility of for example hearsay evidence? Hearsay evidence is generally inadmissible, but it is well known that there are exceptions. These have to be applied within the context of a particular case and situation. By its nature the evidence available to a court in a restraint order application may not necessarily be as direct and concrete as could be expected to secure a cri

minal conviction. After all, s

25(1)(b) even allows for this procedure where a court is satisfied that the person is

till to be charged with an offence. It might sometimes be unavoidable to take some hearsay evidence into account. Certainly support of any hearsay allegations in the relevant affidavits would be most valuable, inter alia in view of the drastic consequences of this procedure. It would be highly undesirable to grant an order in an application merely based on wild and unsupported hearsay allegations.

35

My italics for emphasis

[20]In an application for a restraint order in section 26 proceedings the applicant is liberated from proving that aconfiscation will be made. All that is required is reasonable grounds of believing that the criminal courtmayand notnecessarilywill make a confiscation order.336See:National Director of Public Prosecutions v Kyriacou2004 (1) SA 379(SCA) para [10] at 385; para [49] at 395G-H.6InNational Director of Public Prosecutions v Phillips and Others3372002 (4) SA 60(W) 81D/E – G/H7HEHER J (as he then was) said:

20

In an application for a restraint order in section 26 proceedin

s the applicant is liberated from proving that a

confiscation will be made. All that is required is reasonable grounds of believing that the criminal court

may

and not

necessarily

will make a confiscation order.

36

National Director of Public Prosecutions v Kyriacou

2004 (1) SA 379(SCA) para [10] at 385; para [49] at 395G-H.

2004 (1) SA 379

In

National Director of Public Prosecutions v Phillips and Others

37

2002 (4) SA 60(W) 81D/E – G/H

2002 (4) SA 60

HEHER J (as he then was) said:

“[12] In my view an application for a restraint order is analogous (although not identical) to an application for an interim interdict and attachmentpendentelite. In so far as such relief containselements of finality, the legislature could never have intended that it should be defeated by reason of conflicts of factper se. Nor would a reference to evidence be appropriate: that might well anticipate the enquiry at the criminal trial and impinge on the right of silence. Theprima faciecase is proof of a reasonable prospect of obtaining both a conviction in respect of the charges levelled against the defendant and a subsequent confiscation order under section 18(1). It is appropriate in determining whether theonushas been discharged to apply the long accepted test of taking the facts set out by the applicant together with any facts set out by the respondent which the applicant cannot dispute and to consider whether, having regard to the innate probabilities, the applicant should on those facts obtain final relief at a trial (for this purpose, the confiscation hearing). The facts set up in contradiction by the respondent should then be considered and, if serious doubt is thrown upon the applicant’s case, he cannot succeed.”

“[12] In my view an application for a restraint order is analogous (although not identical) to an application for an interim interdict and attachment

pendente

lite

. In so far as such relief contains

elements of finality, the legislature could never have intended that it should be defeated by reason of conflicts of fact

per se

. Nor would a reference to evidence be appropriate: that might well anticipate the enquiry at the criminal trial and impinge on the right of silence. The

prima facie

case is proof of a reasonable prospect of obtaining both a conviction in respect of the charges levelled against the defendant and a subsequent confiscation order under section 18(1). It is appropriate in determining whether the

has been discharged to apply the long accepted test of taking the facts set out by the applicant together with any facts set out by the respondent which the applicant cannot dispute and to consider whether, having regard to the innate probabilities, the applicant should on those facts obtain final relief at a trial (for this purpose, the confiscation hearing). The facts set up in contradiction by the respondent should then be considered and, if serious doubt is thrown upon the applicant’s case, he cannot succeed.”

Approach to factual disputes in section 26 proceedings

[21]The approach adopted by HEHER J was endorsed by the Supreme Court of Appeal inPhillips and Others v National Director of Public Prosecutions3382003 (6) SA 447(SCA) 452 and 4538, HOWIE P noted:

[2

The approach adopted by HEHER J was endorsed by the Supreme Court of Appeal in

Phillips and Others v National Director of Public Prosecutions

38

2003 (6) SA 447(SCA) 452 and 453

2003 (6) SA 447

, HOWIE P noted:

“[17] Turning the respondent’s argument, its starting point was that HEHER J had rightly held that a restraint order was analogous to an application for an interim interdict or for attachment of property pending litigation.

I may point out that HEHER J did not actually hold that a restraint order is analogous to an interim common law restraintpendentelite. He merely commented ... that there is a similarity.”

I may point out that HEHER J did not actually hold that a restraint order is analogous to an interim common law restraint

. He merely commented ... that there is a similarity.”

“[20] Counsel for the respondent is right, in my view, in submitting that a restraint order is only of interim operation and that, like interim interdicts and attachment orders pending trial, it has no definitive or dispositive effectas envisaged inZweni. Plainly, a restraint order decides nothing final as to the defendant’s guilt or benefit from crime, or as to the propriety of a confiscation order or its amount.”

“[20] Counsel for the respondent is right, in my view, in submitting that a restraint order is only of interim operation and that, like interim interdicts and attachment orders pending trial, it has no definitive or dispositive effect

as envisaged in

Zweni

. Plainly, a restraint order decides nothing final as to the defendant’s guilt or benefit from crime, or as to the propriety of a confiscation order or its amount.”

[22] InNational Director of Public Prosecutions vKyriacou,3392004 1 SA 379(SCA) 385. My emphasis in italics9

] In

National Director of Public Prosecutions v

Kyriacou

39

2004 1 SA 379(SCA) 385. My emphasis in italics

2004 1 SA 379

MALAMBO AJA (as he then was) said:

“[10] ... Section 25(1) (a) confers a discretion upon a court to make a restraint order if,inter alia, there are reasonable grounds for believing that a confiscation order may be made ...While a mere assertion to that effect by the appellant will not suffice(National Director of Public Prosecutions v Basson2002 (1) SA 419(SCA);2001 (2) SACR 712para [19] at 428B-C)on the other hand appellant is not required to prove the fact that a confiscation order will be made, and in those circumstances there is no room for determining the existence of reasonable grounds for the application of principles andonusthat apply in ordinary motion proceedings.What is required is no more than evidence that satisfies a court thatthere are reasonable grounds for believing that the court that convicts the person concerned may make such an order.”

“[10] ... Section 25(1) (a) confers a discretion upon a court to make a restraint order if,

inter alia

, there are reasonable grounds for believing that a confiscation order may be made ...

While a mere assertion to that effect by the appellant will not suffice

National Director of Public Prosecutions v Basson

2002 (1) SA 419(SCA);2001 (2) SACR 712para [19] at 428B-C)

2002 (1) SA 419

2001 (2) SACR 712

on the other hand appellant is not required to prove the fact that a confiscation order will be made, and in those circumstances there is no room for determining the existence of reasonable grounds for the application of principles and

that apply in ordinary motion proceedings.

What is required is no more than evidence that satisfies a court that

there are reasonable grounds for believing that the court that convicts the person concerned may make such an order.

[23]NEGPEN J inNational Director of Public Prosecutions v Rudman and Others440ECD Case No 15/2004 (undated).0, followed the approach enunciated inKyriacou,supra,and noted:

NEGPEN J in

National Director of Public Prosecutions v Rudman and Othe

40

ECD Case No 15/2004 (undated).

, followed the approach enunciated in

K

y

riacou

supra

and noted:

“[15] ... The information referred to would only have indicated that second defendant has consistently denied having been involved in any criminal activity and would have provided details of his defence. This, accordingly, would have given rise to a dispute of fact. It is not appropriate for a court, when considering whether or not to grant a provisional restraint order, or for that matter a final restraint order, to attempt to resolve disputed facts in relation to the guiltor otherwise of a defendant. This will be done by the trial court. Furthermore, the usual rule in motion proceedings’ as set out inPlascon-Evans Paints Limited v Van Riebeek Paints (Pty) Limited1987 (3) SA 623(AD), does not apply when it comes to determining whether or not reasonable grounds exist for believing that a confiscation order may be made (seeNational Director of Public Prosecutions v Kyriacou2003 (2) SACR 524(SCA) at 529f-h [10]).”

“[15] ... The information referred to would only have indicated that second defendant has consistently denied having been involved in any criminal activity and would have provided details of his defence. This, accordingly, would have given rise to a dispute of fact. It is not appropriate for a court, when considering whether or not to grant a provisional restraint order, or for that matter a final restraint order, to attempt to resolve disputed facts in relation to the guil

or otherwise of a defendant. This will be done by the trial court. Furthermore, the usual rule in motion proceedings’ as set out in

Plascon-Evans Paints Limited v Van Riebeek Paints (Pty) Limited

1987 (3) SA 623(AD), does not apply when it comes to determining whether or not reasonable grounds exist for believing that a confiscation order may be made (see

1987 (3) SA 623

2003 (2) SACR 524(SCA) at 529f-h [10]).

2003 (2) SACR 524

[24]In an application for a restraint order aprima faciecase is proof of a reasonable prospect of obtaining a conviction in respect of the charges levelled against the defendantand a subsequent confiscation order. To determine whether theonushas been discharged thePlascon-Evanstest only becomes applicable where the version put forward by the applicant isnotdisputed or agreed uponby the respondent. Inthetwo matters the applicant purported todisclose the nature and tenor of available evidencewhich is substantially hearsay as it will become apparentlaterin this judgment. Thedefendants simply elected to make a bolddenial. They failed to put their version before thecourt, exceptfor assertingtheirfundamentalright to silence. Notwithstanding the constitutional issue raised by the defendants thecourt wasconstrainedbythe applicant’s versionswhich wassubstantially based on unattested hearsay information.

In an application for a restraint order a

case is proof of a reasonable prospect of obtaining a conviction in respect of the charges levelled against the defendant

and a subsequent confiscation order. To determine whether the

has been discharged the

Plascon-Evans

test only becomes applicable where the version put forward by the applicant is

not

disputed or agreed upon

by the respondent. I

n

two matters the applicant purported to

disclose the nature and tenor of available evidence

which is substantially hearsay as it will become apparent

later

in this judgment. T

defendants simply elected to make a bold

denial. They failed to put their version before the

ourt, except

for asserting

their

fundamental

right to silence. Notwithstanding the constitutional issue rais

ed by the defendants the

ourt wa

constrained

by

the applicant’s versions

which was

substantially based on unattested hearsay information

Applicant’s version[25] In both matters the deponent to the founding affidavits is Advocate Juliana Galetlane Rabaji, the Special Director of Public Prosecutions.She has no personal knowledge of any of the jurisdictional requirements for the restraint orders. Regarding the first requirement, she reliedon the affidavit byMbongo Marcus Koyana employed by the National Prosecuting Authority as a state advocate, andpertaining the second requirement she reliedon the affidavit byHelen GuguMotepe, a charteredaccount and employed as a manager at Pricewaterhouse Coopers Forensic Service (Pty) Ltd.The latter stated thatonherexamination of the “various evidentiary materials”she was of theopinionthat two types of fraudulent activities occurred. These were fictitious claimsthatwere submitted to the medical aid fundsfor consultations with the defendants whilst the specific member or hisor herdependants were not consulted at all. According to Motepe the submissions of claims were with the assistance of the members of the medical aid funds. It was represented that the defendants were consulted but a fictitious chargewasraised and a portion of it was paid to the member. She deposed that she had the opportunity to examine “the evidence against the various claimants”. Rabaji reliedin both matterson Motepe’s affidavits. Her allegationsthat itwas likely that fraud might be substantially greater and that she was not yet in a position to state the exact extent of the fraudulent claims. It was apparent that Rabaji’s assertionswere factuallybaselessand incorrect as it will become clearly apparent soon.

Applicant’s version

[25

] In both matters the deponent to the foundin

g affidavits is Advocate Juliana Galetlane Rabaji, the Special Director of Public Prosecutions.

She has no personal knowledge of any of the jurisdictional requirements for the restraint orders. Regarding the first requirement, she relie

on the affidavit by

Mbongo Marcus Koyana employed by the National Prosecuting Authority as a state advocate, a

nd

pertain

ing the second requirement she relie

Helen Gugu

Motepe

, a chartered

account and employed as a manager at Pricewaterhouse Coopers Forensic Service (Pty) Ltd

The latter stated that

on

examination of the “various evidentiary materials”

she was of the

opinion

that two types of fraudulent activities occurred. These were fictitious claims

that

were sub

mitted to the medical aid funds

for consultations with the defendants whilst the specific member or his

dependants were not consulted at all. According to Mot

epe the submissions of claims w

ere with the assistance of the members of the medical aid funds. It was represented that the defendants were consulted but a fictitious charge

was

raised and a portion of it was paid to the member. She deposed that she had the opportunity to examine “the evidence against the various claimants”. Rabaji relie

in both matter

on Motepe’s affidavits

. H

er allegations

that it

s likely that fraud might be subs

tantially greater and that she wa

s not yet in a position to state the exact extent of the fraudulent claims

. It was apparent that Rabaji’s a

ssertions

were factually

baseless

and incorrect as it will become clearly apparent soon

(a)“Cash loan”Hlongwa matter

“Cash loan”

[26] In support of the allegation of the “cash loan” claims pertaining to Hlongwa, the applicant relied on the affidavits by Ncgobo andOnicaNkosi. In paragraph 7 (p 89) Ncgobo explained“the process”. He didnot assertthat he had personal knowledge of the allegations made. In light of his statement that he never met any of the patients, howeverthey would visit the clinic without his knowledge. Thus, he could not have had personal knowledge. At best these allegations are hearsay. Therewasnobasis advanced by the applicantto admit such hearsayevidence. The allegations wereexstreamlyvague by simplyreferring to “a lot of people” but not identifying a single person. Norwereany ofthese persons identifiedin the applicant’s papers. Thiswas particularly startling sincethe investigation commenced on 20 December 2002.Ncgobo only deposed to his affidavit on 10 June 2003that was nine months prior to lauchingapplication in March 2004.The vague allegations didnot appear to implicate the defendant, Hlongwa. Therewasamere reference to people visiting “the surgery” and people visiting “the doctor”. Itwasnot disputedthat there were several medical practitioners at the specific practice.Nkosi’s affidavit didnot even mention the defendant. The only reference to the defendantappearedin paragraph 14 of the affidavit. It was a single sentence dealing with the allegation against the defendant that “within three to four months, there were patients coming and informing me that they had appointments withherin connection with cash requests.”There was no elucidation what these alleged cash requests were.This certainlywas not evidence proving,prima facie, any of the requirements for fraud. In any event this allegationwas simply hearsay. Therewas nobasiswhy this court ought tohave admitted such unsubstantiated hearsay information.Therewere material contradictions between the affidavits of Ncgobo and Nkosi. Both allegedthat it was their duty to usher patients into the defendant’s room. Ncgobo allegedthat he processed some of the defendant’s claims, whereas Nkosi statedthat a certain Nhlanhla processed the defendant’s claims.The applicant, furthermore, failed to indicate a single claimthat waslodged whichallegedly fellinto the category of “cash loan” claims. The applicant’s entire case pertaining to “cash loan” claims was based upon unsubstantiated allegations of hearsay by two individuals who materially contradicted each other.

[26

] In support of the allegation of the “cash loan” claims pertaining to Hlongwa, the applicant relied on the affidavits by Ncgobo and

Onica

Nkosi. In paragraph 7 (p 89) Ncgobo explain

ed

“the process”. He d

not a

ssert

that he had personal knowledge of the allegations made. In light of his statement that he never met any of the patients

, however

they would visit the clinic without his knowledge. Thus, he could not have had personal knowledge. At best these allegations are hearsay. There

no

basis advanced by the applicant

to admit such hearsay

evidence. The allegations we

re

exstreamly

vague by simply

referr

ing to “a lot of people” but not identifying a single person. Nor

any of

these persons identified

in the applicant’s papers. This

s particularly startling since

the investigation commenced on 20 December 2002

Ncgobo only deposed to his affidavit on 10 June 2003

that was nine months prior to lauching

application in March 2004.

he vague allegations d

not appear to implicate the defendant, Hlongwa. There

mere reference to people visiting “the surgery” and people visiting “the doctor”. It

not disputed

that there were several medical practitioners at the specific practice.

Nkosi’s affidavit d

not even mention the defendant. The only reference to the defendant

appeared

in para

graph 14 of the affidavit. It wa

s a single sentence dealing with the allegation against the defendant that “within three to four months, there were patients coming and informing me that they had appointments with

her

in connection with cash requests.”

There was no elucidation what these alleged cash requests were.

This certainly

s not evidence proving,

, any of the requirements for fraud. In any event this allegation

s simply hearsay. There

s no

basis

why this court ought to

have admitted such unsubstantiated hearsay information.

here

wer

e material contradictions between the affidavits of Ncgobo and Nkosi. Both allege

that it was their duty to usher patients into the defendant’s room. Ncgobo allege

that he processed some of the defendant’s claims, whereas Nkosi state

that a certain Nhlanhla processed the defendant’s claims.

The applicant, furthermore, failed to indicate a single claim

that was

lodged which

llege

dly fell

into the category of “cash loan” claims. The applicant’s entire case pe

rtaining to “cash loan” claims wa

s based upon unsubstantiated allegations of hearsay by two individuals who materially contradict

ed each other

Nkosimatter

Nkosi

matter

[27] Regarding Dr Nkosi,almost a similar patternprevailedas in the case of Hlongwa. In support of the allegation of the “cash loan” claims,the applicant reliedon the affidavit by Friedlandand Onica Nkosi.Friedland’s affidavit containedno incriminating evidence against the defendant. From Onica Nkosi’s affidavit itwas clear that she hadno personal knowledge of any activities that couldbe remotely characterised as fraud. She merely allegedthat patients told her that they wanted to speak to Dr Nkosi about cash. But sheconcededthat shewas not aware “how much cash was paid or requested”. According to her Matthews Xishe handled the claims. Further,the applicant failed to indicate a single claim lodged which it allegedfell into the category of “cash loan” claims.

] Regarding Dr Nkosi

almost a similar pattern

prevailed

as in the case of Hlongwa. In support of the alleg

ation of the “cash loan” claims,

the applicant relie

on the affidavit by F

iedlan

and Onica Nkosi.

Friedland’s affidavit contained

no incriminating evidence against the defendant. From Onica Nkosi’s affidavit it

s clear that she ha

no personal knowledge of any activities that c

ould

be remotely characteris

ed as fraud. She merely alleged

that patients told her that they wanted to speak to Dr Nkosi about cash. But she

concede

that she

s not aware “how much cash was paid or requested”. According to her Matthews Xishe handled the claims. Further

the applicant failed to indicate a sing

le claim lodged which it alleged

e

ll into the category of “cash loan” claims.

[28] The evidence presented by the applicant regarding “cash loan” claims in respect of bothdefendantswas based upon unsubstantiated allegations of hearsay by certain individuals. There was no reasons advanced by the applicant whysuchhearsay shouldhave beenadmitted. In the absence of such reasons this court found that theapplicant didnot make out a case.

[28] T

he evidence presented by the applicant regarding “cash loan” claims in respect of both

defendants

s based upon unsubstantiated allegations of hearsay by certain individuals. There was no reasons advanced by the applicant why

such

hearsay should

have been

admitted. In the absen

ce of such reasons this court fou

nd that the

applicant did

not ma

k

e out a case.

(b)Fictitious claims

Fictitious claims

[29] The applicant’s allegation that fictitious claims were submitted in both matters. In support of this allegation the applicant annexedaffidavits by eight Medcor Medical Aid Scheme members regarding theHlongwa matterand by two members of the same scheme pertaining totheNkosimatter.

] The applicant’s allegation that fictitious claims were submitted in both matters. In support of this a

llegation the applicant annexed

affidavits by eight Medcor Medical Aid Scheme members regarding the

and by two members of the same scheme pertaining to

[30] Mpendu allegedthat he reviewed annexure MG1 whichwas a summary of claims submitted by the defendant to MediHelp and MX Health. In this regard,he didnot aver that he hadpersonal knowledge. Moreover,he didnot reveal the source of his information.Mpendu’s allegationwasthat his dependant’s did not consult with the defendant because he “would also have known” if any of his dependants had seen a doctor. He didnot indicate which of his dependants consulted the defendant and whensuch a consultation took place. However, according to him he didnot know who B Hlongwawas and that hewas never approached by anyone to give his medical aid particulars in return forcash. This begs the question as to how these particulars would have been available to the defendant in order to submitallegedlyfictitious claims. This aspectwas not addressed at all by the applicant.[31]Similarly, with regard to the deponents’ knowledge of the claims submitted, wasequallyapplicable to the other seven Medcor members, except that Sibanyoni identifieda Mr T Maiwashe as the person who showed him the annexures to his affidavit. Further, a bald allegationwas made about two of the six visits. One Mogomotsi indicatedthat over the relevant period she was a dependant on her deceased husband’s membership of Medcor Medical Aid Scheme. She allegedthatthere were certain chargesfor her son and others for herselfbut therewas no elucidation as to how she camemakesuch an allegation.She conceded that she hadno knowledge as to whetheror not her deceased husband hadseen thedefendant. The affidavit by Khoza is inherently contradictory and ought to be ignored. He allegedthat he didnot know who B Hlongwa was. He concededthat the defendant legitimately raisedcharges against his medical aid number on two occasions. He hadno knowledge ofit, hisdependantssawthe defendant. The affidavit by Madlophawas not commissioned at all. However, only a bald statementwas made that two of the nineclaims over a period of a year were not correct.The affidavit by Mamaru didnot makemuchsensesince he purportedto confirm that two specific claims were not “legitimate claims”. However, two dates didnotcorrespond with any ofthe dates of the nine claims. Further, Dladla made abald allegation that two of the five claims listed were not in respect of consultations by him or his dependants. And Molaudi allegedthat he never consulted with the defendant and didnot knowhim. He confirmedthat he was never approached by anyone. Once again there was noindication as to how the defendant would have been in a position to claim against Molaudi’s medical aid number.[32]The affidavit of Wessel van Vuren was of no assistance. The assertion made by Motepethat Van Vuren stated that Medcor made payments to the defendant and that documents in support were supplied, however, this wasnot supported by the affidavit of Van Vuren. The affidavit by Lesomo appearedto be an attempt to show that the defendant received payment from MX Health. In support of the allegationthat claims were received from the defendant under practice number 3901688.But,from annexure “B” itwas apparent that another person, a certain Mrs P A Shabalala also made use of the same practice number. Nowhere in the applicant’s papers, itindicated howitascertained that claims were made by the defendant and not by Shabalala.

[30

] Mpendu allege

that he reviewed annexure MG1 which

s a summary of claims submitted by the defendant to MediHelp and MX Health. In this regard

he d

not aver that he ha

personal knowledge. More

over

he did

not reveal the source of his information

Mpendu’s allegation

that his dependant

’

s did not consult with the defendant because he “would also have known” if any of his dependants had seen a doctor. He d

not indicate which of his dependants consulted the defendant and when

such a consultation took place

. However, according to him he d

not know who B Hlongwa

s and that he

w

as never approached by anyone to give his medical aid particular

s in return for

cash. This begs the question as to how these particulars would have been available to the defendant in order to submit

allegedly

fictitious claims. This aspect

s not addressed at all by the applicant.

[31]

Similarly, with regard to the deponents’ knowledge of the claims submitted

, wa

equally

applicable to the other seven Medcor membe

s, except that Sibanyoni identifie

a Mr T Maiwashe as the person who showed him the annexures to his affidavit. Further, a bald allegation

s made about two of the six visits. One Mogomotsi indicate

that over the relevant period she was a dependant on her deceased husband’s membership of Medcor Medical Aid Scheme. She allege

there were certain charges

for her son and others for herself

but t

s no elucidation as to how she c

ame

make

such an allegation.

S

he conceded that she ha

no knowledge as to whether

or not her deceased husband had

seen the

defendant. The affidavit by Kh

oza is inherently contradictory and ought to be ignored. He allege

that he d

not know who B Hlo

ngwa wa

s. H

e conceded

that the defendant legitimately raised

charges against his medical aid num

ber on two occasions. H

e ha

no knowledge of

it, his

dependants

saw

the defendant. The affidavit by Madlopha

was not commissioned at all. However, only a bald statement

s made that two of the nine

claims over a period of a year we

re not correct.

The affidavit by Mamaru d

not make

much

sense

since h

e purport

to confirm that two specific claims were not “legitimate claims”. However, two dates d

correspond with any of

the dates of the nine claims

. Further, Dladla mad

e a

bald allegation that two of the five claims listed were not in respect of consultations by him or his dependants. And Molaudi allege

that he never consulted with the defen

dant and did

not know

him

. He confirmed

that he was never approache

d by anyone. Once again there wa

indication as to how the defendant would have been in a position to claim against Molaudi’s medical aid number.

[32]

The affidavit of Wessel van V

uren wa

s of no assistance. The assertion made by Motepe

that Van V

uren stated that Medcor made payments to the defendant and that documents in su

pport were supplied, however, this was

not supported by the aff

idavit of Van Vuren. T

he affidavit by Lesomo appear

to be an attempt to show that the defendant received payment from MX Health. In support of the allegation

that claims were received from the defendant under practice number 3901688.

But

rom annexure “B” it

s apparent that another person, a certain Mrs P A Shabalala also made use of th

e same practice number. Nowhere in the applicant’s papers, it

indicated how

ascertained that claims were made by the defendant and not by Shabalala.

[33] Likewise,the applicant alleged that fictitious claims were also submitted by Dr Nkosi. In support of this allegation affidavitsof two members of Medcor Medical Aid Schemewere annexed to the applicant’s papers.Both Motepe and Wessel van Vuren, employed by Medihelp,allegedthat they reviewed the annexures,allegedlysummaries of claims submitted by the defendant to MediHelp and MX Health.In this regard it appeared to the court that they hadno personal knowledgesince the source of the information was not disclosed norwastherean affidavit confirming the contentof thedocumentsthat wereattached. Khoza concededthat he consulted with the defendantbuthe did not consult the defendant “for the procedures as indicated”. This bald allegation didnot show any intention to defraudon Dr Nkosi’s part.Mathibako made similar references in his affidavit. Neither of theaffidavitsof Khoza and Mathibakowerecommissioned as required by the regulations in terms of section 10 of the Justices of the Peace and Commissioners of Oaths Act 16 of 1963.The affidavit of Wessel van Vuren was no assistance. The claims made by Motepe that Van Vuren stated that Medcor made payments to the defendant and that documents insupport thereof were supplied, was not supported by the affidavit of Van Vuren. Lastly, the affidavit by Lesomo, employed by MX Healthappearedto be an attempt to show that the defendant received payment from MX Health, however, thiswas not linked to anyallegedfraudulent transactions.Thrust of the defendants’ argument[34] The applicant neededto disclose the nature and tenor of the available evidence in order to establish a reasonable prospect of obtaining a conviction and a confiscation order.441National Director of Public Prosecutions v Tam and Others2004 (1) SACR 126(W)1The main thrust of the argument advanced by Mr Bester, on behalf of thedefendants, was that the applicant’s conduct in the presentation of both matters was characterised byinaptitude ordisdain of the basic rules of procedure and evidence. Inex parteapplicationswhich arelikely to have severe consequence to the defendants, the applicantcan not simplybe allowed to rely on unattested and hearsay information. JOFFE J inSwissborough Diamond Mines v Government of RSA4421999 2 SA 279(T) at 345F2admonished:

[3

] Likewise

the applicant alleged that fictitious claims were also submitted by Dr Nkosi. In support of this allegation affidavit

of two members of Med

cor Medical Aid Scheme

were annexed to the applicant’s papers.

Both Motepe and Wessel van Vu

ren

, employed by Medihelp,

allege

that they r

eviewed the annexures

summaries of claims submitted by the defendant to MediHelp and MX Health.

In this regard it appeared to the court that t

hey ha

no personal knowledge

in

ce the source of the information w

s not disclosed nor

there

an affidavit confirming the content

of th

document

that were

attached. Khoza concede

that he consulted with the defendant

but

he did not consult the defendant “for the procedures as indica

ted”. This bald allegation did

not show any intention to defraud

on Dr Nkosi’s part

Mathibako ma

e similar references in his affidavit. Neither of the

affidavits

of Khoza and Mathibako

commissioned as required by the regulations in terms of section 10 of the Justices of the Peace an

d Commissioners of Oaths Act 1

6 of 1963.

The affida

vit of Wessel van Vuren wa

s no assistance. The claims made by Motepe that Van Vuren stated that Medcor made payments to the defendant and that documents in

support thereof were supplied, wa

s not supported by the affidavit of Van Vuren. Lastly, the affidavit by Lesomo

, employed by MX Health

appear

to be an attempt to show that the defendant received payment from MX Health

, however, t

his

as not linked to any

alleged

fraudulent transactions.

Thrust of the defendants’ argument

] The applicant need

to disclose the nature and tenor of the available evidence in order to establish a reasonable prospect of obtaining a conviction and a confiscation order.

41

National Director of Public Prosecutions v Tam and Others

2004 (1) SACR 126(W)

2004 (1) SACR 126

he main thrust of the argument advanced by Mr Bester

, on behalf of the

defendant

, was that t

he applicant’s conduct in the presentation of both matters was characterised by

inaptitude or

disdain of the basic rules of procedure and evidence. In

applications

which are

likely to have severe consequence to the defendants, the applicant

can not simply

be allowed to rely on unattested and hearsay information. JOFFE J in

Swissborough Diamond Mines v Government of RSA

42

1999 2 SA 279(T) at 345F

1999 2 SA 279

admonished

“Regard being had to the functions of affidavits, it is not open to an applicant or a respondent to merely annex to its affidavit documentation and to request the court to have regard to it.”

[35]In both matters the applicant reliedfirst, upon supporting affidavits which were defective in that they did not comply with the requirements for the commissioning of an affidavit,secondlyon hearsay information andthirdlyon purported expert evidence.(c)Commission of affidavits[36] The applicant relied upon the supporting affidavits obtained in terms ofsection 28(6)of theNational Prosecuting Authority Act 32 of 1998. This section requires that the oath or affirmation must be administered by the Investigating Director. This requirement was not met in any of the supporting affidavitsand as such the applicant could not rely on their contents. Further, therequirements for the commissioning of an affidavitareset out in the Justice of the Peace and Commissioners of Oaths Act 16 of 1963 and the regulations thereunder.443GN R1258 GG 3619 of 21 July 1972 (Reg Gaz 1649), as amended by GN R1648 GG 5716 of 19 August 1977 (Reg Gaz 2516), GN R1428 GG 7119 of 11 July 1980 (Reg Gaz 3030) and GN R774 GG 8169 of 23 April 1982 (Reg Gaz 3411).3The regulations require that:

In both matters the applicant relied

, upon supporting affidavits which were defective in that they did not comply with the requirements for the commissioning of an affidavit,

on hearsay information and

thirdly

on purported expert evidence.

Commission of affidavits

] T

he applicant relied upon t

he supporting affidavits obtained in terms ofsection 28(6)of theNational Prosecuting Authority Act 32 of 1998. This section requires that the oath or affirmation must be administered by the Investigating Director. This requirement was not met in any of the supporting affidavits

section 28(6)

National Prosecuting Authority Act 32 of 1998

and a

s such the applicant could not rely on their contents. Further, the

requirements for the commissioning of an affidavit

set out in the Justice of the Peace and Commissioners of Oaths Act 16 of 1963 and the regulations thereunder.

43

GN R1258 GG 3619 of 21 July 1972 (Reg Gaz 1649), as amended by GN R1648 GG 5716 of 19 August 1977 (Reg Gaz 2516), GN R1428 GG 7119 of 11 July 1980 (Reg Gaz 3030) and GN R774 GG 8169 of 23 April 1982 (Reg Gaz 3411).

The regulations require that:

“4(1) Below the deponent’s signature or mark the commissioner of oaths shall certify that the deponent has acknowledge that he knows and understands the contents of the declaration and he shall state the manner, place and date of taking the declaration.

(2) The commissioner of oaths shall–

(2) The commissioner of oaths shall

–

(a) sign the declaration and print his full name and business address below his signature; and

(b) state his designation and the area for which he holds his appointment or the office held by him if he holds his appointmentex officio.”

(b) state his designation and the area for which he holds his appointment or the office held by him if he holds his appointment

ex officio

.”

[37]It was clearly apparent that there was non-compliance with regulation 4(2). There was nothing before court indicating that the affidavitsweredeposed to before a commissioner as required in regulation 4(1). Further,there was an element of uncertainty astowhether or not either an oath or an affirmation was administered to the deponents. Thus, a document purporting to be an affidavit is not evidence.444Caldwell v Chelcourt Limited1965 1 SA 304(N) 307E4Regulation 4 has been held to be directory, however, the discretion is only exercised in favour of accepting the affidavits where substantial compliance has been proved.445S v Munn1973 3 SA 734(NC) 738A – C andS v Msibi1974 4 SA 821(T)5The applicantdid not seek condonation forthe defects.446Swart v Swart1950 1 SA 263(O)6The defects,therefore,couldnot to be condoned.

[37]

It was clearly apparent that there was non-compliance with regulation 4(2). There was nothing before court indicating that the affidavit

ere

deposed to before a commissioner as required in regulation 4(1). Further,

there was an element of uncertainty as

whether or not either an oath or an affirmation was administered to the deponent

. Thus, a document purporting to be an affidavit is not evidence.

44

Caldwell v Chelcourt Limited

1965 1 SA 304(N) 307E

1965 1 SA 304

Regulation 4 has been held to be directory, however, the discretion is only exercised in favour of accepting the affidavits where substantial compliance has been proved.

45

S v Munn

1973 3 SA 734(NC) 738A – C and

1973 3 SA 734

S v Msibi

1974 4 SA 821(T)

1974 4 SA 821

The applicant

did not seek condonation for

the defect

46

Swart v Swart

1950 1 SA 263(O)

1950 1 SA 263

The defect

therefore

could

not to be condoned.

(d)Inadmissible hearsay

(d

Inadmissible hearsay

[38] Our courts have declined to countenance the admission ofhearsay evidence unless thereisurgency or special circumstances to warrant the acceptance of such evidence447Galp v Tansley NO and Another1966 4 SA 555(C) 558 & 560;Southern Pride Foods (Pty) Ltd v Mohidien1982 3 SA 1068(C) 1071H – 1072B;Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another1984 4 SA 149(W) 157E-H;Swissborough Diamond Mines v Government of RSA1999 2 SA 279(T) 336G-J7.The applicant’s case against thedefendants was substantially based on hearsay information.Section 34(1)of theLaw of Evidence Amendment Act 45 of 1988provides that a statement made by a person in a document tending to establish that fact shall be admissible as evidence provided that the person who made the statement had personal knowledge of the matters dealt with in the statement and that person is called as a witness unless he is dead or unfit by reason by his bodily or mental conditionor he is outside of the Republic and it is not reasonably practicable to secure his attendance or all reasonable efforts to fine him were without success.Section 3of theLaw of Evidence Amendment Act providesthat hearsay evidence shall not be admitted as evidence in any proceedings unless the parties agreed to the admission thereof or the person upon whose credibility the probative value of such evidence depends testifies him – or herself or the court, having regard to the factors set out in the section, is of the opinion that such evidence should be admitted in the interests of justice.

] Our courts have declined to countenance the admission of

hearsay evidence unless there

is

urgency or special circumst

ances to warrant the acceptance of such evidence

47

Galp v Tansley NO and Another

1966 4 SA 555(C) 558 & 560;

1966 4 SA 555

Southern Pride Foods (Pty) Ltd v Mohidien

1982 3 SA 1068(C) 1071H – 1072B;

1982 3 SA 1068

Cerebos Food Corporation Ltd v Diverse Foods SA (Pty) Ltd and Another

1984 4 SA 149(W) 157E-H;

1984 4 SA 149

1999 2 SA 279(T) 336G-J

he applicant’s case against the

defendants was substantially based on hearsay information.Section 34(1)of theLaw of Evidence Amendment Act 45 of 1988provides that a statement made by a person in a document tending to establish that fact shall be admissible as evidence provided that the person who made the statement had personal knowledge of the matters dealt with in the statement and that person is called as a witness unless he is dead or unfit by reason by his bodily or mental condition

Section 34(1)

Law of Evidence Amendment Act 45 of 1988

or he is outside of the Republic and it is not reasonably practicable to secure his attendance or all reasonable efforts to fine him were without success.Section 3of theLaw of Evidence Amendment Act provides

Section 3

Law of Evidence Amendment Act provides

that hearsay evidence shall not be admitted as evidence in any proceedings unless the parties agreed to the admission thereof or the person upon whose credibility the probative value of such evidence depends testifies him – or herself or the court, having regard to the factors set out in the section, is of the opinion that such evidence should be admitted in the interests of justice.

[39]Neither Advocate Rabaji in the founding affidavits claimed that hearsay evidence should be admitted, nor did Mrs Biseswar contendin argumentthat these matters were of exceptional nature and special circumstancesprevailed that justified in admittinghearsay evidence. InSouthern Pride Foods(Pty) Ltd4481982 3 SA 1068(C) 1071C – 1072E, my emphasis in italics8, ODES AJ said:

[39]

Neither Advocate Rab

aj

i in the founding affidavi

ts cl

aimed that hearsay evidence should be admitted

, nor did Mrs Biseswar cont

end

in argument

that these matters were of exceptional nature and special circumstances

prevailed that justified in admitting

hearsay evidence. In

Southern Pride Foods

48

1982 3 SA 1068(C) 1071C – 1072E, my emphasis in italics

, ODES AJ said:

“[T]he applicant was not entitled to rely on hearsay evidence in launching the application, and the passages referred to later in this judgment must accordingly be struck out.Even if I am incorrect in the conclusion arrived at in regard to the urgency of the matter I am of the view that the hearsay passages should in any event be struck out. After holding that our Courts have permitted hearsay evidence to be admitted in affidavits in interlocutory matters of an urgent kind, THERON J inGalp’scasesupraheld at 559G:

“[T]he applicant was not entitled to rely on hearsay evidence in launching the application, and the passages referred to later in this judgment must accordingly be struck out.

Even if I am incorrect in the conclusion arrived at in regard to the urgency of the matter I am of the view that the hearsay passages should in any event be struck out. After holding that our Courts have permitted hearsay evidence to be admitted in affidavits in interlocutory matters of an urgent kind, THERON J in

Galp’s

case

held at 559G:

‘But one important point emerging from the cases which I have enumerated in the proceeding paragraph is this, viz that our Courts have consistently refused to countenance the admission as evidence – for any purpose whatever – of any statement embodying hearsay material, save where such statement has properly been made the subject of an affidavit ... of information and belief, ie save where the deponent ... has not only revealed the source of information concerned but in addition has sworn ... that he believes such information to be true and furnished the ground for his belief.’

‘But one important point emerging from the cases which I have enumerated in the proceeding paragraph is this, viz that our Courts have consistently refused to countenance the admission as evidence – for any purpose whatever – of any statement embodying hearsay material, save where such statement has proper

ly been made the subject of an affidavit ... of information and belief, ie save where the deponent ... has not only revealed the source of information concerned but in addition has sworn ... that he believes such information to be true and furnished the ground for his belief.’

InMia’scasesupra, SCHREINER J (as he then was) dealtspecifically with the necessity for averring in applications of urgency containing hearsay statements that the deponent believes in the truth of the statement in question. At 104 he expressed himself as follows:

Mia’s

, SCHREINER J (as he then was) dealt

specifically with the necessity for averring in applications of urgency containing hearsay statements that the deponent believes in the truth of the statement in question. At 104 he expressed himself as follows:

‘It seems to me, however, that the foundation for the admission in application of this sort of what would otherwise not be evidence is the deponent’s sworn or solemnly affirmed statement that he is informed and believes that certain facts exist. We have no rule requiring any particular form to be used and it may be assumed that any languageshowing that the deponent affirms his belief in the information would suffice. But it would not in my view be sufficient for the deponent merely to set out statements made by other persons without indicating whether he believes them to be true or not. The deponent’s assurance that he believes the statements to be true may not provide a strong guarantee that they are true but it is the least that should be required of the deponent.’

‘It seems to me, however, that the foundation for the admission in application of this sort of what would otherwise not be evidence is the deponent’s sworn or solemnly affirmed statement that he is informed and believes that certain facts exist. We have no rule requiring any particular form to be used and it may be assumed that any language

showing that the deponent affirms his belief in the information would suffice. But it would not in my view be sufficient for the deponent merely to set out statements made by other persons without indicating whether he believes them to be true or not. The deponent’s assurance that he believes the statements to be true may not provide a strong guarantee that they are true but it is the least that should be required of the deponent.’

See alsoHarris’ Executor v Weinberg1938 CPD 134;Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk1957 (2) SA 347(C) at 353.The Courts were not indulging in formalistic fantasies in requiring an affidavit or affirmation ‘of information and belief’for the admission of hearsay statements. Sound and practical reasons exist for the twofold requirement. The source of information must be disclosed to enable a respondent, confronted by an allegationnormally inadmissible as hearsay, to check its accuracy. And when the Courts prescribe the disclosure of the source of information, they mean, in my view, a disclosure with a degree of particularity sufficient to enable the opposing party to make independent investigations of his own, including, if necessary, verification of the statement from the source itself. General statements as to source such as ‘one of the respondent’s creditors’ will not suffice to constitute an adequate compliance with the requirements. Such statements tell the opposingparty nothing and are no more a disclosure of source than the well-worn phrase, ‘I have been informed’.The statement on oath or the affirmation by a deponent that he believes the truth of the hearsay statement is equally essential for the reasons stated by SCHREINER J inMia’scasesupraand quoted above. If, moreover, the deponent is unable to state that he believes the truth of the hearsay information furnished to him, he can hardly be permitted to rely upon it for the relief which he seeks.I am thereforeunable to agree with the contention that the failure to comply with the above requirements for the admission of hearsay statement is a mere technicality.”

See also

Harris’ Executor v Weinberg

1938 CPD 134;

1938 CPD 134

Mall (

Cape

) (Pty) Ltd v Merino Ko-operasie Bpk

1957 (2) SA 347(C) at 353.The Courts were not indulging in formalistic fantasies in requiring an affidavit or affirma

1957 (2) SA 347

tion ‘of information and belief’

for the admission of hearsay statements. Sound and practical reasons exist for the twofold requirement. The source of information must be disclosed to enable a respondent, confronted by an allegation

normally inadmissible as hearsay, to check its accuracy. And when the Courts prescribe the disclosure of the source of information, they mean, in my view, a disclosure with a degree of particularity sufficient to enable the opposing party to make independent investigations of his own, including, if necessary, verification of the statement from the source itself. General statements as to source such as ‘one of the respondent’s creditors’ will not suffice to constitute an adequate compliance with the requirements. Such statements tell the opposing

party nothing and are no more a disclosure of source than the well-worn phrase, ‘I have been informed’.

The statement on oath or the affirmation by a deponent that he believes the truth of the hearsay statement is equally essential for the reasons stated by SCHREINER J in

and quoted above. If, moreover, the deponent is unable to state that he believes the truth of the hearsay information furnished to him, he can hardly be permitted to rely upon it for the relief which he seeks

.I am therefore

unable to agree with the contention that the failure to comply with the above requirements for the admission of hearsay statement is a mere technicality.”

[40] Moreover,in both matters the alleged factual inaccuries in the hearsay depositions certainly reflected on the veracity of the applicant’s witnesses. This was especiallyprejudicialto the defendantssince they were unable toproperly rebuthearsayevidence under the circumstances.Thiswascertainlythecriticalmoment for a final adjudication pertaining to the restraint orders and the applicant’s replying affidavits did not seek to remedy the deficitsin the presentation of its case against both defendants.

[40] Moreover

in both matters the alleged factual inaccuries in the hearsay depositions certainly reflected on the veracity of the applicant’s witnesses. This wa

s especially

prejudicial

to the defendant

since they were unable to

properly rebut

evidence under the circumstances.

This

critical

moment for a final adjudication pertaining to the restraint orders and the applicant’s replying affidavits did not seek to remedy the deficits

in the presentation of its case against both defendants.

(e)Purported expert evidence.

(e

Purported expert evidence

[41] Afurther problem was regarding Motepe’s affidavit upon which Rabaji relied. Awitnessmaytestify in one of two capacities, eitherhe or sheis a person who has knowledge of certain facts which is placed before court in support of a claim, orasan expert qualified in relation to a specific specialisedsubjectandis competent to conveyhis or her expert opinion to the court as well as the basis upon whichhis or heropinion has been formed and what documents or other sources have been considered in forming theopinion. It is clear from the affidavit by Motepethat she is not a person with knowledge of the events upon which the applicant attemptedto rely. The only other possibilitywas that Motepewas endeavouring todepose to an affidavitas an expert. There was lack of clarity on this aspect. However,as an expertthe test of the admissibility of the opinion ofan expertis whether or not the court can receive appreciable assistance fromhim or heron a particular issue. In other words, the test is a relative one depending upon the particular subject and the particular witness with reference to that subject. Otherwise the evidence would be supererogatory and superfluous and,thereforeI was notadmitted.448Gentiruco AG v Firestone SA (Pty) Ltd1972 1 SA 589(A) 616A-J;Ruto Flour Mills Ltd v Adelson(1)1958 4 SA 235(T)8Anexpert’sopinion can only be admissible where by reason ofhis or herspecial knowledge and skill thathe or sheis in a better position to draw inferences than the judicial officer.Theexpert witness isrequiredto state his or her opinion either as an inference from facts within his or her own knowledge or upon the basis of facts proved by others. Inboth matters, Motepe clearly didnot have any personal knowledgeas abases for heropinion. Thus, the only possibility waslimited to drawing inferences from whatwasallegedby others.Thecrucialquestion was,whether there was evidence upon which to reasonably believe that the defendantsmay beconvictedand that a confiscation ordermay bemade against them. The inferences drawn by Motepe could not assist the court.In addition,the evidence upon which Motepe’s opinion was basedwasnot provenbecause it was substantially hearsay. The applicantattemptedto circumvent the rules of evidence by trying to rely on expertopinionto persuade the court ofthe defendants’ misdemeaner.There is absolutely no basis in our law nor any room for such a principle.Mr Bester correctly submitted that such a principle would make a mockery of an accusedperson’s right toa fair trial which includes the right to be presumed innocent.449Section 35(3)(h) of the Constitution9The court was not concerned about an accused person’s guilt or innocence intherestraint order proceedings.

] A

further problem was regarding Motepe’s affidavit upon which Rabaji relied. A

witness

testify in on

e of two capacities

, e

ither

he or she

is a person who has knowledge of certain facts which is placed before court in support of a claim, or

as

an expert qualified in relation to a specific specialised

subject

is competent to convey

his or her expert opinion to the court as well as the basis upon which

his or her

opinion has been formed and what documents or other sources have be

en considered in forming the

opinion. It is clear from the affidavit by M

otepe

that she is not a person with knowledge of the events upon which the applicant attempt

to rely. The only other possibility

s that M

s endeavouring to

depose to an affidavit

as an expert

. There was lack of clarity on this aspect. However,

he test of the admissibility of the opinion of

an expert

is whether or not the court can receive appreciable assistance from

him or her

on a particular issue. In other words, the test is a relative one depending upon the particular subject and the particular witness with reference to that subject. Otherwise the evidence would be supererogatory and superfluous and

I was not

admitted.

Gentiruco AG v Firestone SA (Pty) Ltd

1972 1 SA 589(A) 616A-J;

1972 1 SA 589

Ruto Flour Mills Ltd v Adelson

(1)1958 4 SA 235(T)

1958 4 SA 235

A

expert

’s

opinion can only be admissible where by reason of

special knowledge and skill that

is in a better position to draw inferences than the judicial officer.

expert witness is

required

to state his or her opinion either as an inference from facts within his or her own knowledge or upon the basis of facts proved by other

. In

both matters, Motepe clearly did

not have any personal knowledge

as a

base

s for her

opinion. Thus

, the only possibility was

limited to drawing inferences from what

by others.

crucial

question was

whether there was evidence upon which to reasonably believe that the defendants

may be

convicted

and that a confiscation order

made against them

. The inferences drawn by Motepe could not assist the court

In addition

the evidence upon which Motepe’s opinion was based

not proven

because it was substantially hearsay

attempted

to circumvent the rules of evidence by trying to re

ly on expert

to persuade the court of

the defendants’ misdemeaner

There is absolutely no basis in our law nor any room for such a principle

Mr Bester correctly submitted that such a principle would make a mockery of a

n accused

person’s right to

a fair trial which includes the right to b

e presumed innocent.

49

Section 35(3)(h) of the Constitution

he court was not concerned about an accused person’s guilt or innocence in

restraint order proceedings.

Conclusion

[42]Thus,therewas no evidence of any cogency that pointed thattheprovisional restraint ordersshouldbemade final. Nor did Mrs Biseswar contendedthat the interest of the state was beingprejudiced if theorders were not confirmed.However,inspiteof the defectsand weakness in the applicant’scaseagainst both defendants, the courtwas inclined to structure appropriate orders.[43]What was crucial,was that the defendants were charged with the crime of fraud and were to appear on trial in thePretoria Magistrate Courtduring March 2005.It was against this pending prosecutionand whattheydeposedtoin their respective discovery affidavitsthat the court structuredtheorderssothat therecouldbenodisposition of property without the authorisation of the court or upon thefinalisation of the criminal prosecutionsor until a confiscation orders weremade. Further, in the case of Hlongwa an immovable property was already sold in execution on 26 April 2004andit was not necessary toconfirmthe restraint of a property that was already disposed of.Broadly,the orders weretailoredsothaton the one handto preservethepropertyeven in the hands of the defendantspending theout came of thecriminal prosecution and on the other hand not toundulydeprivethe defendants and their familiesfrom using the propertywith least restraint but adequately protect from disposition.[44]Instructuring thetwoorders, I was mindful of the followingdictaby ACKERMANN J inFose v Minister of Safety and Security550[1997] ZACC 6;1997 3 SA 786(CC) 799F-G/H and 826H-I. See alsoPretoriaCityCouncil vWalker[1998] ZACC 1;1998 2 SA 363(CC) para [96];S v Z and 23 similar cases[2004] 1 All SA 438(E) paras [37] – [38]0:

Thus,

was no evidence of any cogency that pointed that

provisional restraint order

should

be

made final. Nor did Mrs Biseswar contend

that the interest of the state was being

prejudiced if the

orders were not confirmed.

However,

i

nspite

of the defect

and weakness in the applicant’s

against both defendants

, the court

was inclined to structure appropriate orders.

hat was crucial

was that the defendants were charged with the crime of fraud and were to appear on trial in the

Pretoria Magistrate Court

during March 2005

t was against this pending prosecution

and what

they

deposed

in their respective discovery affidavits

that the court structured

so

that there

disposition of property without the authorisation of the court or upon the

finalisation of the criminal prosecution

or until a confiscation order

s were

made. Further, in the case of Hlongwa an immovable property was already sold in execution on 26 April 2004

it was not necessary to

confirm

the restraint of a property that was already disposed of.

B

roadly

he orders were

tailored

on the one hand

to preserve

even in the hands of the defendant

pending the

out came of the

criminal prosecution and on the other hand not to

unduly

deprive

the defendants and their families

from using the property

with least restraint but adequately protect from disposition.

structuring the

, I was mindful of the following

dicta

by ACKERMANN J in

Fose v Minister of Safety and Security

50

[1997] ZACC 6;1997 3 SA 786(CC) 799F-G/H and 826H-I. See also

[1997] ZACC 6

1997 3 SA 786

Pretoria

City

Council v

Walker

[1998] ZACC 1;1998 2 SA 363(CC) para [96];

[1998] ZACC 1

1998 2 SA 363

S v Z and 23 similar cases

[2004] 1 All SA 438(E) paras [37] – [38]

[2004] 1 All SA 438

“[19] Appropriate relief will in essence be relief that is required to protect and enforce the Constitution.20Depending on the circumstances of each particular case the relief may be a declaration of rights, and interdict, amandamusor such other relief as may be required to ensure that the rights enshrined in the Constitution are protected and enforced. If it is necessary to do so, the courts may even have to fashion new remedies to secure the protection and enforcement of these all-important rights.

“[19] Appropriate relief will in essence be relief that is required to protect and enforce the Constitution.

Depending on the circumstances of each particular case the relief may be a declaration of rights, and interdict, a

mandamus

or such other relief as may be required to ensure that the rights enshrined in the Constitution are protected and enforced. If it is necessary to do so, the courts may even have to fashion new remedies to secure the protection and enforcement of these all-important rights.

.....

[69] In our context an appropriate remedy must mean an effective remedy, for without effective remedies for breach, the values underlying and the right entrenched in the Constitution cannot properly be upheld or enhanced. Particularly in a country where so few have the means to enforce their rights through the courts,it is essential that on those occasions when the legal process does establish that an infringement of an entrenched right has occurred, it be effectively vindicated. The courts have a particular responsibility in this regard and are obliged to ‘forge new tools’ and shape innovative remedies, if needs be, to achieve this goal.”

[69] In our context an appropriate remedy must mean an effective remedy, for without effective remedies for breach, the values underlying and the right entrenched in the Constitution cannot properly be upheld or enhanced. Particularly in a country where so few have the means to enforce their rights through the courts,

it is essential that on those occasions when the legal process does establish that an infringement of an entrenched right has occurred, it be effectively vindicated. The courts have a particular responsibility in this regard and are obliged to ‘forge new tools’ and shape innovative remedies, if needs be, to achieve this goal.”

[45]Inspiteof the invasive nature of restraint orders and the shortcomings in the applicants’ case,the court exercised its wide discretion, bynot simply discharging or confirming the rules but striking a fair balance between the legitimateobjectivesof the POCA and the rights of the defendants.Under the circumstances, both orders were structured as responsive and effective measures within the bounds of the rule of law.

Inspite

of the invasive nature of restraint orders and the shortcomings in the applicants’ case,

the court exercised its wide discretion

, by

not simply discharging or confirming the rules but striking a fair balance between the legitimate

objectives

of the POCA and the rights of the defendants.

Under the circumstances, both orders were structured as responsive and effective measures within the bounds of the rule of law.

E M PATEL

JUDGE OF THE HIGH COURT

H

eard on

15 October; 4 & 25 November 2004

F

or the

pplicant

: Adv P Biseswar

nstructed by

: The State Attorney,

PTA

For the

D

efendants

: A

dv A Bester

: M

essrs Glover Inc,

JHB

ate of Judgment

February 2006