Natonal Director of public Prosecutions v Seoposengwe and Others (424/2002) [2002] ZANWHC 43 (5 December 2002)

CASE NO. 424/2002

IN THE HIGH COURT OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)

In the matter between:

NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS APPLICANT

and

POPOTA SEOPOSENGWE 1ST RESPONDENT

DANIEL NICOLAAS PRETORIUS 2ND RESPONDENT

PALETI SEOPOSENGWE 3RD RESPONDENT

PETROBOU CONSTRUCTION CC 4TH RESPONDENT

SESARAH JOHANNA PRETORIUS 5TH RESPONDENT

HED CONSTRUCTION CC 6TH RESPONDENT

WINNIE MALEBOGENG SEOPOSENGWE 7TH RESPONDENT

M.M. SEOPOSENGWE 8TH RESPONDENT

______________________________________________________________________

JUDGMENT

MOGOENG JP.

[1] On 04 September 2002 Hendler J made a provisional restraint order coupled with a rule nisi in terms of s 26(3)(a) of the Prevention of Organised Crime Act No. 121 of 1998 (“the Act”).

[2] When the matter eventually came before me on 14 November 2002, it was opposed. Several issues, which will be highlighted and dealt with later in this judgment, were raised by the Respondents. I find it necessary to give a brief background to this application at this stage. Background [3] During November 1999 the tender board on behalf of the Department of Public Works, Roads and Transport, North West Province (“Public Works”) advertised a tender project for the construction of a school. Sixteen service providers submitted their tenders. Three of them, including the fourth Respondent and HCS, were short-listed. At the time, the first Respondent was the project co-ordinator of Public Works. He is the one who prepared a tender adjudication report recommending that the fourth Respondent, of which the second Respondent is a proprietor, and an entity called HCS be awarded the tender. He submitted this adjudication report to his Director who in turn made a similar recommendation to the Chief Director. The latter submitted that recommendation to the tender board which then awarded the tender as recommended.

[2] When the matter eventually came before me on 14 November 2002, it was opposed. Several issues, which will be highlighted and dealt with later in this judgment, were raised by the Respondents. I find it necessary to give a brief background to this application at this stage.

Background

[3] During November 1999 the tender board on behalf of the Department of Public Works, Roads and Transport, North West Province (“Public Works”) advertised a tender project for the construction of a school. Sixteen service providers submitted their tenders. Three of them, including the fourth Respondent and HCS, were short-listed. At the time, the first Respondent was the project co-ordinator of Public Works. He is the one who prepared a tender adjudication report recommending that the fourth Respondent, of which the second Respondent is a proprietor, and an entity called HCS be awarded the tender. He submitted this adjudication report to his Director who in turn made a similar recommendation to the Chief Director. The latter submitted that recommendation to the tender board which then awarded the tender as recommended.

[4] The provisional restraint order, which is now sought to be confirmed, was made following an investigation which allegedly revealed that the aforementioned tender was awarded to the fourth Respondent and HCS as a result of corruption and some fraudulent misrepresentations on tender documents. The first Respondent is alleged to have committed acts of corruption and also, together with the second and third Respondents to have been instrumental and/or party to those fraudulent misrepresentations. [5] The fifth Respondent is the second Respondent’s wife, the second Respondent is a 33% shareholder in the sixth Respondent, the seventh Respondent is the first Respondent’s wife and the eighth Respondent is the first and third Respondents’ mother. A provisional restraint order was granted against all the other Respondents who are not accused of having fraudulently misrepresented the facts about the successful tender for different reasons. Money paid in respect of the tender was deposited into the account of the fifth Respondent and this is mainly why a restraint order was obtained against her. The seventh Respondent is married in community of property to the first Respondent and therefore has a direct and material interest in the matter. It is not clear why, but for being the first and third Respondents’ mother, the order was sought against the eighth Respondent. [6] The Respondents attacked the granting of the final restraint order on the basis that: the Applicant had failed to satisfy the requirements of s 26 read with s 25 of the Act; the Act does not give the Applicant the unrestricted latitude to restrain assets whose value far exceed the factually established and accepted amount of money actually benefited by a defendant;

[4] The provisional restraint order, which is now sought to be confirmed, was made following an investigation which allegedly revealed that the aforementioned tender was awarded to the fourth Respondent and HCS as a result of corruption and some fraudulent misrepresentations on tender documents. The first Respondent is alleged to have committed acts of corruption and also, together with the second and third Respondents to have been instrumental and/or party to those fraudulent misrepresentations.

[5] The fifth Respondent is the second Respondent’s wife, the second Respondent is a 33% shareholder in the sixth Respondent, the seventh Respondent is the first Respondent’s wife and the eighth Respondent is the first and third Respondents’ mother. A provisional restraint order was granted against all the other Respondents who are not accused of having fraudulently misrepresented the facts about the successful tender for different reasons. Money paid in respect of the tender was deposited into the account of the fifth Respondent and this is mainly why a restraint order was obtained against her. The seventh Respondent is married in community of property to the first Respondent and therefore has a direct and material interest in the matter. It is not clear why, but for being the first and third Respondents’ mother, the order was sought against the eighth Respondent.

[6] The Respondents attacked the granting of the final restraint order on the basis that:

the Applicant had failed to satisfy the requirements of s 26 read with s 25 of the Act;

the Act does not give the Applicant the unrestricted latitude to restrain assets whose value far exceed the factually established and accepted amount of money actually benefited by a defendant;

the Act does not authorise the Applicant to obtain a restraint order in respect of assets which are not the fruits or proceeds of criminal or unlawful activities. [7] Apart from the above issues, the Respondents brought an application for condonation and for striking out the Replying Affidavit or certain parts of it. The Merits [8] The Respondents brought an application for the condonation of the late-filing of the heads of argument. Good cause was shown for the delay and the Applicant did not oppose the application. Condonation was accordingly granted.

the Act does not authorise the Applicant to obtain a restraint order in respect of assets which are not the fruits or proceeds of criminal or unlawful activities.

[7] Apart from the above issues, the Respondents brought an application for condonation and for striking out the Replying Affidavit or certain parts of it.

The Merits

[8] The Respondents brought an application for the condonation of the late-filing of the heads of argument. Good cause was shown for the delay and the Applicant did not oppose the application. Condonation was accordingly granted.

[9] As part of the Respondents’ heads of argument, there is some indication that new issues were raised in the Replying Affidavit and that for that reason either the whole Replying Affidavit or parts thereof have to be struck out. No indication or proper notice was given as to which paragraphs would be sought to be struck out. This was only done during argument. It was only at the end of both counsel’s address when counsel for the Respondents sought to hand up a proper notice to strike out. The Applicant had only received those documents on the morning of the day of hearing and obviously did not have a proper opportunity to respond to them. The Court refused to accept those documents. There was no explanation given as to why those documents were not made available to the Applicant and the Court earlier than on the day of the hearing. The result is that there really was no proper notice to strike out before Court and this is all that has to be said for that application. I turn now to address the question whether the provisions of s 26 read with s 25 of the Act were complied with. Section 25 and the relevant part of s 26 are reproduced below. [10] Section 25 reads thus: “25. Cases in which restraint orders may be made.– (1) 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 that 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 that defendant have not been concluded; or (b) when– (i) that court is satisfied that a person is to be charged with an offence; and (ii) it appears to the court that there are reasonable grounds for believing that a confiscation order may be made against such person. (2) Where the High Court has made a restraint order under subsection (1)(b), that court shall rescind the restraint order if the relevant person is not charged within such period as the court may consider reasonable.” [11] Section 26(1) to (3) reads thus: “26. Restraint orders.–

[9] As part of the Respondents’ heads of argument, there is some indication that new issues were raised in the Replying Affidavit and that for that reason either the whole Replying Affidavit or parts thereof have to be struck out. No indication or proper notice was given as to which paragraphs would be sought to be struck out. This was only done during argument. It was only at the end of both counsel’s address when counsel for the Respondents sought to hand up a proper notice to strike out. The Applicant had only received those documents on the morning of the day of hearing and obviously did not have a proper opportunity to respond to them. The Court refused to accept those documents. There was no explanation given as to why those documents were not made available to the Applicant and the Court earlier than on the day of the hearing. The result is that there really was no proper notice to strike out before Court and this is all that has to be said for that application. I turn now to address the question whether the provisions of s 26 read with s 25 of the Act were complied with. Section 25 and the relevant part of s 26 are reproduced below.

[10] Section 25 reads thus:

“25. Cases in which restraint orders may be made.–

(1) 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 that 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 that defendant have not been concluded; or

(b) when–

(i) that court is satisfied that a person is to be charged with an offence; and

(ii) it appears to the court that there are reasonable grounds for believing that a confiscation order may be made against such person.

(2) Where the High Court has made a restraint order under subsection (1)(b), that court shall rescind the restraint order if the relevant person is not charged within such period as the court may consider reasonable.”

[11] Section 26(1) to (3) reads thus:

“26. Restraint orders.–

(1) The National Director may by way of an ex parte application apply to a competent High Court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property to which the order relates. (2) A restraint order may be made– (a) in respect of such realisable property as may be specified in the restraint order and which is held by the person against whom the restraint order is being made; (b) in respect of all realisable property held by such person, whether it is specified in the restraint order or not; (c) in respect of all property which, if it is transferred to such person after the making of the restraint order, would be realisable property. (3)(a) A court to which an application is made in terms of subsection (1) may make a provisional restraint order having immediate effect and may simultaneously grant a rule nisi calling upon the defendant upon a day mentioned in the rule to appear and to show cause why the restraint order should not be made final. (b) If the defendant had been absent during a period of 21 days from his or her usual place of residence and from his or her business, if any, within the Republic, the court may direct that it shall be sufficient service of that rule if a copy thereof is affixed to or near the outer door of the buildings where the court sits and published in the Gazette, or may direct some other mode of service. (c) Upon application by the defendant, the court may anticipate the return day for the purpose of discharging the provisional restraint order if 24 hours’ notice of such application has been given to the application contemplated in subsection (1).” Has the prosecution been instituted?

(1) The National Director may by way of an ex parte application apply to a competent High Court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property to which the order relates.

(2) A restraint order may be made–

(a) in respect of such realisable property as may be specified in the restraint order and which is held by the person against whom the restraint order is being made;

(b) in respect of all realisable property held by such person, whether it is specified in the restraint order or not;

(c) in respect of all property which, if it is transferred to such person after the making of the restraint order, would be realisable property.

(3)(a) A court to which an application is made in terms of subsection (1) may make a provisional restraint order having immediate effect and may simultaneously grant a rule nisi calling upon the defendant upon a day mentioned in the rule to appear and to show cause why the restraint order should not be made final.

(b) If the defendant had been absent during a period of 21 days from his or her usual place of residence and from his or her business, if any, within the Republic, the court may direct that it shall be sufficient service of that rule if a copy thereof is affixed to or near the outer door of the buildings where the court sits and published in the Gazette, or may direct some other mode of service.

(c) Upon application by the defendant, the court may anticipate the return day for the purpose of discharging the provisional restraint order if 24 hours’ notice of such application has been given to the application contemplated in subsection (1).”

Has the prosecution been instituted?

[12] This is not the first case where the meaning of the phrase ‘institution of the prosecution’ was considered. The institution of the prosecution has been found to mean the same thing as the commencement of the proceedings. It was also found that the institution of the prosecution would be said to have taken place when a summons, which incorporates a charge preferred against the suspect, the date and place of the hearing (s 54 of the Code) is issued. (See R v Friedman 1948 (2) SA 1034 (C)). This question was subsequently dealt with in the case of Minister of Law and Order v Kader 1991 (1) SA 41(A) at 51D-J - 52A as follows: “These then, in my view, are the purpose and effect of s 50(1) of the Criminal Procedure Act, and the question is how s 64 of the Internal Security Act affects the operation of s 50(1) in cases where an accused person is held for an alleged contravention of s 54 of the Internal Security Act. Now s 64 provides that ‘no prosecution . . . shall be instituted’ without the authority of the Attorney-General. What is meant by the institution of a prosecution depends on the context in which the expression is used (cf R v Priest 1931 AD 492 and R v Friedman 1948 (2) SA 1034 (C)). The purpose of s 64 is to ensure that the decision to prosecute a person for a contravention of s 54 is a responsible one, taken by the person who, in terms of s 3 of the Criminal Procedure Act, has the authority to prosecute in the name of the Republic in criminal proceedings. This purpose cannot be achieved if the Attorney-General is required to arrive at a decision on incomplete or preliminary information. Institution of a prosecution in this context cannot, therefore, bear a wide meaning which would include any step in the criminal proceedings against an accused. I do not propose attempting to define it with any precision in the present case. What is required at the very least, in my view, is a decision on the part of the prosecutor, conveyed to the accused in a formal manner, that he is to be prosecuted on a charge defined with some particularity (cf R v Priest (supra at 495)).

[12] This is not the first case where the meaning of the phrase ‘institution of the prosecution’ was considered. The institution of the prosecution has been found to mean the same thing as the commencement of the proceedings. It was also found that the institution of the prosecution would be said to have taken place when a summons, which incorporates a charge preferred against the suspect, the date and place of the hearing (s 54 of the Code) is issued. (See R v Friedman 1948 (2) SA 1034 (C)). This question was subsequently dealt with in the case of Minister of Law and Order v Kader 1991 (1) SA 41(A) at 51D-J - 52A as follows:

“These then, in my view, are the purpose and effect of s 50(1) of the Criminal Procedure Act, and the question is how s 64 of the Internal Security Act affects the operation of s 50(1) in cases where an accused person is held for an alleged contravention of s 54 of the Internal Security Act. Now s 64 provides that ‘no prosecution . . . shall be instituted’ without the authority of the Attorney-General. What is meant by the institution of a prosecution depends on the context in which the expression is used (cf R v Priest 1931 AD 492 and R v Friedman 1948 (2) SA 1034 (C)). The purpose of s 64 is to ensure that the decision to prosecute a person for a contravention of s 54 is a responsible one, taken by the person who, in terms of s 3 of the Criminal Procedure Act, has the authority to prosecute in the name of the Republic in criminal proceedings. This purpose cannot be achieved if the Attorney-General is required to arrive at a decision on incomplete or preliminary information. Institution of a prosecution in this context cannot, therefore, bear a wide meaning which would include any step in the criminal proceedings against an accused. I do not propose attempting to define it with any precision in the present case. What is required at the very least, in my view, is a decision on the part of the prosecutor, conveyed to the accused in a formal manner, that he is to be prosecuted on a charge defined with some particularity (cf R v Priest (supra at 495)).

It is quite clear, in my view, that proceedings under s 50(1) of the Criminal Procedure Act, and an order for further detention made pursuant to those proceedings, do not by themselves amount to the institution of a prosecution in this sense. Of course, it would be perfectly possible to take steps at the hearing under s 50(1) which would clearly amount to the institution of a prosecution. A charge may be put to the accused, he may be asked to plead, he may be questioned in terms of s 112 or s 115 of the Criminal Procedure Act, evidence may be led, etc. These are permissible courses; but it will be equally open to the court merely to order the further detention of the accused pending a decision on whether and, if so in what court and on what charge he is to be prosecuted. This is what happened in the present matter. No doubt justice requires that the accused should be informed in such a case why he is being held (see Ex parte Prokureur-general, Transvaal (supra at 519B-C)), and in the present case a pro forma charge was before the court. However, the order for further detention by itself did not, in my view, amount to the institution of a prosecution within the meaning of s 64 of the Internal Security Act.” (My emphasis) Having regard to the above dictum, I am satisfied that the prosecution has not yet been instituted in this matter. All that has happened is that the first to third Respondents were arrested, they were told why they were arrested, they appeared in Court within 48 hours of their arrest, they applied for and were granted bail. No decision has been conveyed by the Prosecutor to the Respondents in a formal manner, that they are to be prosecuted on a charge with some particularity. Apart from the fact that a charge sheet was already drawn up in the Kader case, this is by and large what happened in the Kader case and clearly does not amount to the institution of the prosecution. Have the proceedings against the first to third Respondents been concluded?

It is quite clear, in my view, that proceedings under s 50(1) of the Criminal Procedure Act, and an order for further detention made pursuant to those proceedings, do not by themselves amount to the institution of a prosecution in this sense. Of course, it would be perfectly possible to take steps at the hearing under s 50(1) which would clearly amount to the institution of a prosecution. A charge may be put to the accused, he may be asked to plead, he may be questioned in terms of s 112 or s 115 of the Criminal Procedure Act, evidence may be led, etc. These are permissible courses; but it will be equally open to the court merely to order the further detention of the accused pending a decision on whether and, if so in what court and on what charge he is to be prosecuted. This is what happened in the present matter. No doubt justice requires that the accused should be informed in such a case why he is being held (see Ex parte Prokureur-general, Transvaal (supra at 519B-C)), and in the present case a pro forma charge was before the court. However, the order for further detention by itself did not, in my view, amount to the institution of a prosecution within the meaning of s 64 of the Internal Security Act.”

(My emphasis)

Having regard to the above dictum, I am satisfied that the prosecution has not yet been instituted in this matter. All that has happened is that the first to third Respondents were arrested, they were told why they were arrested, they appeared in Court within 48 hours of their arrest, they applied for and were granted bail. No decision has been conveyed by the Prosecutor to the Respondents in a formal manner, that they are to be prosecuted on a charge with some particularity. Apart from the fact that a charge sheet was already drawn up in the Kader case, this is by and large what happened in the Kader case and clearly does not amount to the institution of the prosecution.

Have the proceedings against the first to third Respondents been concluded?

[13] One of the requirements for the granting of a restraint order is that the proceedings against the defendant should not have been concluded. Counsel for the Respondents contended that the proceedings were concluded since the Applicant said in the Founding Affidavit that the proceedings were concluded. Both counsels seemed to understand the issue of the conclusion of the proceedings to be relating to the investigations. In other words, they both argued on the assumption that the proceedings would be said to have been concluded when the investigations are finalised. Replying on this understanding, the Applicant contended that the proceedings have not been concluded as contemplated by s 25(1)(a)(iii) and that the provisional restraint order should be made final. On the other hand the Respondents contended that on the Applicant’s own papers the proceedings have been concluded and the final order should therefore not be granted. The proceedings can only be said to have been concluded in the following circumstances set out in s 17 of the Act: “17. Conclusion of proceedings against defendant.– For the purposes of this Chapter, the proceedings contemplated in terms of this Chapter against a defendant shall be concluded when– (a) the defendant is acquitted or found not guilty of an offence; (b) subject to section 18(2), the court convicting the defendant of an offence, sentences the defendant without making a confiscation order against him or her; (c) the conviction in respect of an offence is set aside on review or appeal; or (d) the defendant satisfies the confiscation order made against him or her.”

[13] One of the requirements for the granting of a restraint order is that the proceedings against the defendant should not have been concluded. Counsel for the Respondents contended that the proceedings were concluded since the Applicant said in the Founding Affidavit that the proceedings were concluded. Both counsels seemed to understand the issue of the conclusion of the proceedings to be relating to the investigations. In other words, they both argued on the assumption that the proceedings would be said to have been concluded when the investigations are finalised. Replying on this understanding, the Applicant contended that the proceedings have not been concluded as contemplated by s 25(1)(a)(iii) and that the provisional restraint order should be made final. On the other hand the Respondents contended that on the Applicant’s own papers the proceedings have been concluded and the final order should therefore not be granted. The proceedings can only be said to have been concluded in the following circumstances set out in s 17 of the Act:

“17. Conclusion of proceedings against defendant.–

For the purposes of this Chapter, the proceedings contemplated in terms of this Chapter against a defendant shall be concluded when–

(a) the defendant is acquitted or found not guilty of an offence;

(b) subject to section 18(2), the court convicting the defendant of an offence, sentences the defendant without making a confiscation order against him or her;

(c) the conviction in respect of an offence is set aside on review or appeal; or

(d) the defendant satisfies the confiscation order made against him or her.”

None of the above circumstances, under which the proceedings would be said to have been concluded, exist. Therefore, the proceedings have clearly not been concluded. The third requirement under s 25(1)(a) relates to the reasonable possibility of a confiscation order being granted. This is also a requirement in s 25(1)(b). A restraint order cannot be granted in terms of s 25(1)(a) since the requirement whether the prosecution of the offence has been instituted was not met. Besides, a belief that a confiscation order may be granted is a requirement of both s 25(1)(a) and s 25(1)(b). It will be discussed together with the other requirements set out in s 25(1)(b) for the granting of the restraint order. Are the first to third Respondents to be charged with an offence?

None of the above circumstances, under which the proceedings would be said to have been concluded, exist. Therefore, the proceedings have clearly not been concluded. The third requirement under s 25(1)(a) relates to the reasonable possibility of a confiscation order being granted. This is also a requirement in s 25(1)(b). A restraint order cannot be granted in terms of s 25(1)(a) since the requirement whether the prosecution of the offence has been instituted was not met. Besides, a belief that a confiscation order may be granted is a requirement of both s 25(1)(a) and s 25(1)(b). It will be discussed together with the other requirements set out in s 25(1)(b) for the granting of the restraint order.

Are the first to third Respondents to be charged with an offence?

[14] The first requirement set out in s 25(1)(b) for granting a restraining order in terms of s 26(1) is whether the Court is satisfied that a person in the position of the first to third Respondents is to be charged with an offence. In my view, this means that the information at the disposal of the Court must be such as to justify a reasonable conclusion by the Court that some bases exist for charging such a person with an offence. It may well be that the prosecution would end up not bringing charges against a defendant. Be that as it may, the requirement is that a fairly strong indication must exist that charges would be preferred against the defendant before a draconian order such as the restraint order, is not granted. A restraint order must be granted in circumstances where it is not based on flimsy grounds which border on the abuse of the power which is at the disposal of the Applicant. The Applicant in this case has set out the grounds for alleging that the first to third Respondents were involved in the alleged fraudulent misrepresentation. The Applicant essentially alleges that HCS, which was held out to the tender board as an affirmable black-owned close corporation in a joint venture with a white-owned Pretbou, the fourth Respondent, is a fictitious entity. All the documentation relating to its existence and registration, are fake and the first to third Respondents knew this to be the case at the time of the submission, processing and awarding of the tender. All three Respondents are said to have had a hand in the misrepresentation of the facts which contributed to the favourable consideration of that tender. The first Respondent is alleged to have adjudicated the tenders and to have recommended HCS/PRETBOU well knowing the misrepresentation that was made, to which he was also party. A Mr Mothibi and Moeketsi who are alleged to be the shareholders of HCS have deposed to affidavits in which they exposed HCS as a fictitious entity. They have also disclosed details of the secret meetings that were held between them and the first to third Respondents regarding this and other tenders. A thick document by a person who is held out as a handwriting expert was produced to show that the signatures and some entries on the tender documents were forged. These are but only some of the allegations which have satisfied this Court that the first to third Respondents may well be charged with fraud should the Applicant choose to do so in the end. The requirement in s 25(1)(b)(i) has, therefore, been met. Is a confiscation order likely to be made against the first to third Respondents?

[14] The first requirement set out in s 25(1)(b) for granting a restraining order in terms of s 26(1) is whether the Court is satisfied that a person in the position of the first to third Respondents is to be charged with an offence. In my view, this means that the information at the disposal of the Court must be such as to justify a reasonable conclusion by the Court that some bases exist for charging such a person with an offence. It may well be that the prosecution would end up not bringing charges against a defendant. Be that as it may, the requirement is that a fairly strong indication must exist that charges would be preferred against the defendant before a draconian order such as the restraint order, is not granted. A restraint order must be granted in circumstances where it is not based on flimsy grounds which border on the abuse of the power which is at the disposal of the Applicant. The Applicant in this case has set out the grounds for alleging that the first to third Respondents were involved in the alleged fraudulent misrepresentation. The Applicant essentially alleges that HCS, which was held out to the tender board as an affirmable black-owned close corporation in a joint venture with a white-owned Pretbou, the fourth Respondent, is a fictitious entity. All the documentation relating to its existence and registration, are fake and the first to third Respondents knew this to be the case at the time of the submission, processing and awarding of the tender. All three Respondents are said to have had a hand in the misrepresentation of the facts which contributed to the favourable consideration of that tender. The first Respondent is alleged to have adjudicated the tenders and to have recommended HCS/PRETBOU well knowing the misrepresentation that was made, to which he was also party. A Mr Mothibi and Moeketsi who are alleged to be the shareholders of HCS have deposed to affidavits in which they exposed HCS as a fictitious entity. They have also disclosed details of the secret meetings that were held between them and the first to third Respondents regarding this and other tenders. A thick document by a person who is held out as a handwriting expert was produced to show that the signatures and some entries on the tender documents were forged. These are but only some of the allegations which have satisfied this Court that the first to third Respondents may well be charged with fraud should the Applicant choose to do so in the end. The requirement in s 25(1)(b)(i) has, therefore, been met.

Is a confiscation order likely to be made against the first to third Respondents?

[15] Another requirement in terms of s 25(1)(b)(ii) for the granting of a restraint order in terms of s 26(1) is that such an order would be granted if it appears to the Court that there are reasonable grounds for believing that a confiscation order may be made against a person in a position similar to that of the first to third Respondents. This basically requires of the Court to form some view as to whether if the allegations levelled against the Respondents were proven and the Respondents accordingly convicted, there would be a basis for making a confiscation order. It is not in every fraud case or a case envisaged by the Act that a confiscation order would be necessary. For example, there are cases where defendants would be convicted of fraud even if the complainant did not actually lose anything. That would be a case where the potential prejudice and potential benefit as opposed to the actual prejudice and real benefit would be the basis for the conviction. Obviously there would be no need for a confiscation order in such a case since the need to give back to the complainant what was lost would never arise. In this particular case it is common cause that an amount of R689 912.03 has already been paid out consequent upon the awarding of the controversial tender. In the event of the first to third Respondents being convicted, it appears to this Court that there are reasonable grounds for believing that a confiscation order would be made against them. The requirement in s 25(1)(b)(ii) has therefore been satisfied. The provisional restraint order, which I believe was made or could only have been made in terms of s 25(1)(b), may now, in the absence of any other obstacle, be made final in terms of s 25(1)(b) of the Act. This then brings me to the next question raised by the Respondents which is whether a case has been made out for the rescission of the provisional restraint order. Should the provisional restraint order be rescinded? [16] The Respondents contended that from 04 September 2002, when the restraint order was granted, to 14 November 2002 when this matter was heard a period of about two and a half months has elapsed and that that period constitutes a reasonable period envisaged by s 25(2) of the Act. It was further submitted that a reasonable time in respect of criminal proceedings is 48 hours or 7 days, as the case may be.

[15] Another requirement in terms of s 25(1)(b)(ii) for the granting of a restraint order in terms of s 26(1) is that such an order would be granted if it appears to the Court that there are reasonable grounds for believing that a confiscation order may be made against a person in a position similar to that of the first to third Respondents. This basically requires of the Court to form some view as to whether if the allegations levelled against the Respondents were proven and the Respondents accordingly convicted, there would be a basis for making a confiscation order. It is not in every fraud case or a case envisaged by the Act that a confiscation order would be necessary. For example, there are cases where defendants would be convicted of fraud even if the complainant did not actually lose anything. That would be a case where the potential prejudice and potential benefit as opposed to the actual prejudice and real benefit would be the basis for the conviction. Obviously there would be no need for a confiscation order in such a case since the need to give back to the complainant what was lost would never arise. In this particular case it is common cause that an amount of R689 912.03 has already been paid out consequent upon the awarding of the controversial tender. In the event of the first to third Respondents being convicted, it appears to this Court that there are reasonable grounds for believing that a confiscation order would be made against them. The requirement in s 25(1)(b)(ii) has therefore been satisfied. The provisional restraint order, which I believe was made or could only have been made in terms of s 25(1)(b), may now, in the absence of any other obstacle, be made final in terms of s 25(1)(b) of the Act. This then brings me to the next question raised by the Respondents which is whether a case has been made out for the rescission of the provisional restraint order.

Should the provisional restraint order be rescinded?

[16] The Respondents contended that from 04 September 2002, when the restraint order was granted, to 14 November 2002 when this matter was heard a period of about two and a half months has elapsed and that that period constitutes a reasonable period envisaged by s 25(2) of the Act. It was further submitted that a reasonable time in respect of criminal proceedings is 48 hours or 7 days, as the case may be.

[17] What constitutes a reasonable time within which a defendant should be charged from the granting of a restraint order varies from case to case. Viewed in isolation, the two and a half months, relied on by the Respondents for contending that the restraint order should be rescinded, since the Respondents were not charged within a reasonable time, are indeed a reasonably long period. However, I think it would be dangerous to consider the reasonableness of the period in isolation from all other relevant factors and to do so almost mechanically. [18] The Respondents also rely on s 35(1)(d) and (e) of the Constitution of the Republic of South Africa Act 108 of 1996, for the above contention. This section is the equivalent of s 25(3)(a) of the Interim Constitution. The latter section was discussed in Sanderson v Attorney-General, Transvaal and Another [1995] ZACC 12; 1996 (1) SA 725(CC) and in Wild and Another v Hoffert NO and Others [1998] ZACC 5; 1998 (3) SA 695 (CC). Kriegler J in the Wild case, with reference to the Sanderson case above, summarised factors that have to be taken into account in dealing with the question of the reasonableness of the time lapse between charging a suspect and instituting the prosecution in the following terms:

[17] What constitutes a reasonable time within which a defendant should be charged from the granting of a restraint order varies from case to case. Viewed in isolation, the two and a half months, relied on by the Respondents for contending that the restraint order should be rescinded, since the Respondents were not charged within a reasonable time, are indeed a reasonably long period. However, I think it would be dangerous to consider the reasonableness of the period in isolation from all other relevant factors and to do so almost mechanically.

[18] The Respondents also rely on s 35(1)(d) and (e) of the Constitution of the Republic of South Africa Act 108 of 1996, for the above contention. This section is the equivalent of s 25(3)(a) of the Interim Constitution. The latter section was discussed in Sanderson v Attorney-General, Transvaal and Another [1995] ZACC 12; 1996 (1) SA 725(CC) and in Wild and Another v Hoffert NO and Others [1998] ZACC 5; 1998 (3) SA 695 (CC). Kriegler J in the Wild case, with reference to the Sanderson case above, summarised factors that have to be taken into account in dealing with the question of the reasonableness of the time lapse between charging a suspect and instituting the prosecution in the following terms:

“[6] Those interests, so it was held, had to be taken into consideration in assessing the fundamental question whether there had been an infringement of the protection afforded by the constitutional imperative of a speedy trial. Although the starting point is to establish whether the time lapse between charge and trial is reasonable, time is not merely a trigger to an enquiry as to prejudice. It remains the most important consideration throughout the enquiry, bearing on the other considerations and, in turn, being coloured by them. Furthermore, other than is the case in some comparable jurisdictions, no formal line is drawn in our law between particular time spans regarded as acceptable and those that do not pass muster. Our approach, rather, is to make a flexible evaluation of the time elapsed in the context of and in conjunction with all other relevant features of the case, starting with the nature, gravity and extent of the prejudice suffered, or likely to be suffered, by the accused. The most invasive prejudice suffered by a person pending trial is obviously pre-trial incarceration, which entails not only loss of personal liberty but often loss of livelihood and the ability to maintain dependants. Ordinarily, therefore, this form of prejudice will weigh heavily in deciding how long a wait is reasonable. [7] The second main feature considered in Sanderson as important was the gravity, nature and complexity of the case. The judgment explains that this is not only a consideration in its own right but that it interacts with the time lapse, and also with the prejudice suffered by the accused. Thus, to take a simple example, an awaiting trial prisoner facing a straightforward and trivial case should not have to wait longer than any sentence of imprisonment that is likely to be imposed. In such a case a ‘reasonable’ time would be short, requiring the accused to be brought to trial quickly. On the other hand, there are cases like the one against the accused in Sanderson, where a difficult and long case was being investigated against a man who continued with his life much as before.” (My emphasis)

“[6] Those interests, so it was held, had to be taken into consideration in assessing the fundamental question whether there had been an infringement of the protection afforded by the constitutional imperative of a speedy trial. Although the starting point is to establish whether the time lapse between charge and trial is reasonable, time is not merely a trigger to an enquiry as to prejudice. It remains the most important consideration throughout the enquiry, bearing on the other considerations and, in turn, being coloured by them. Furthermore, other than is the case in some comparable jurisdictions, no formal line is drawn in our law between particular time spans regarded as acceptable and those that do not pass muster. Our approach, rather, is to make a flexible evaluation of the time elapsed in the context of and in conjunction with all other relevant features of the case, starting with the nature, gravity and extent of the prejudice suffered, or likely to be suffered, by the accused. The most invasive prejudice suffered by a person pending trial is obviously pre-trial incarceration, which entails not only loss of personal liberty but often loss of livelihood and the ability to maintain dependants. Ordinarily, therefore, this form of prejudice will weigh heavily in deciding how long a wait is reasonable.

[7] The second main feature considered in Sanderson as important was the gravity, nature and complexity of the case. The judgment explains that this is not only a consideration in its own right but that it interacts with the time lapse, and also with the prejudice suffered by the accused. Thus, to take a simple example, an awaiting trial prisoner facing a straightforward and trivial case should not have to wait longer than any sentence of imprisonment that is likely to be imposed. In such a case a ‘reasonable’ time would be short, requiring the accused to be brought to trial quickly. On the other hand, there are cases like the one against the accused in Sanderson, where a difficult and long case was being investigated against a man who continued with his life much as before.”

By analogy, the factors that help to determine whether a reasonable period has elapsed between arresting or charging the suspect and the trial and those that are relevant to deciding on the reasonableness or otherwise of the period between the granting of the restraint order and preferring formal charges against the defendant are basically the same. It is for this reason that I find the observations of Kriegler J in the above extract very useful in addressing the issue before me. The reasoning behind s 25(2) is to prevent an inordinate and unjustifiable delay in charging a defendant who has no access to his/her assets due to a restraint order. Considerations such as the gravity, nature and complexity of the case, the loss of livelihood and the ability to maintain dependants, prejudice suffered by the defendants, the need for further investigations to access more assets to be restrained, the availability of resources and person-power and the explanation given by the Applicant for not having charged the defendants yet have to inform the decision whether or not a reasonable period within the meaning of s 25(2) was elapsed. It is not unusual for a fraud case which involves a sizeable amount of money to be investigated for a longer period than the two and a half months complained about. Besides the Applicant has said that more assets were being looked for and that the possibility of more charges and other people being added to the known charges and defendants were being explored. [19] I am satisfied that the period of two and a half months that has elapsed since the granting of the provisional restraint order is not, in the circumstances of this case, such as to justify the rescission of the restraint order. Have the fifth, seventh, and eighth Respondents received gifts or fruits of criminal activities? [20] The Respondents’ contention is that no averments have been made to justify the confirmation of the provisional restraint order on the property of the fifth, seventh and eighth Respondents. Consequently, so it was argued, a restraint order should not be granted against them. This cannot be true of the fifth and seventh Respondents having regard to what follows hereafter.

By analogy, the factors that help to determine whether a reasonable period has elapsed between arresting or charging the suspect and the trial and those that are relevant to deciding on the reasonableness or otherwise of the period between the granting of the restraint order and preferring formal charges against the defendant are basically the same. It is for this reason that I find the observations of Kriegler J in the above extract very useful in addressing the issue before me. The reasoning behind s 25(2) is to prevent an inordinate and unjustifiable delay in charging a defendant who has no access to his/her assets due to a restraint order. Considerations such as the gravity, nature and complexity of the case, the loss of livelihood and the ability to maintain dependants, prejudice suffered by the defendants, the need for further investigations to access more assets to be restrained, the availability of resources and person-power and the explanation given by the Applicant for not having charged the defendants yet have to inform the decision whether or not a reasonable period within the meaning of s 25(2) was elapsed. It is not unusual for a fraud case which involves a sizeable amount of money to be investigated for a longer period than the two and a half months complained about. Besides the Applicant has said that more assets were being looked for and that the possibility of more charges and other people being added to the known charges and defendants were being explored.

[19] I am satisfied that the period of two and a half months that has elapsed since the granting of the provisional restraint order is not, in the circumstances of this case, such as to justify the rescission of the restraint order.

Have the fifth, seventh, and eighth Respondents received gifts or fruits of criminal activities?

[20] The Respondents’ contention is that no averments have been made to justify the confirmation of the provisional restraint order on the property of the fifth, seventh and eighth Respondents. Consequently, so it was argued, a restraint order should not be granted against them. This cannot be true of the fifth and seventh Respondents having regard to what follows hereafter.

[21] It is alleged in the founding affidavit that all the payments relating to the awarded tender were paid into the fifth Respondent’s bank account. This allegation was not responded to at all and must stand. There is therefore justification for the restraint order being granted against the fifth Respondent. The sixth Respondent is married to the first Respondent in community of property. By virtue of this marriage regime she does indeed have a direct and substantial interest in the assets of the first Respondent which are the subject of the restraint order and she was, therefore, correctly cited. [22] In the Appellant’s description of the eighth Respondent it is stated that she is cited as a party ‘inasmuch as, as will be demonstrated, there is reason to believe that she has received affected gifts from Popota and/or Paledi and/or holds property on their behalf.’ This is all that was said about her. As would have been noted from the provisions of s 26(2) above, this Court is indeed entitled to make a restraint order in respect of any realisable property. Section 14(1)(b) defines realisable property as ‘any property held by a person to whom that defendant has directly or indirectly made any affected gift’ (my emphasis). An affected gift would be any gift of property to the eighth Respondent by the first and/or third Respondent connected to the controversial tender (s 12).

[21] It is alleged in the founding affidavit that all the payments relating to the awarded tender were paid into the fifth Respondent’s bank account. This allegation was not responded to at all and must stand. There is therefore justification for the restraint order being granted against the fifth Respondent. The sixth Respondent is married to the first Respondent in community of property. By virtue of this marriage regime she does indeed have a direct and substantial interest in the assets of the first Respondent which are the subject of the restraint order and she was, therefore, correctly cited.

[22] In the Appellant’s description of the eighth Respondent it is stated that she is cited as a party ‘inasmuch as, as will be demonstrated, there is reason to believe that she has received affected gifts from Popota and/or Paledi and/or holds property on their behalf.’ This is all that was said about her. As would have been noted from the provisions of s 26(2) above, this Court is indeed entitled to make a restraint order in respect of any realisable property. Section 14(1)(b) defines realisable property as ‘any property held by a person to whom that defendant has directly or indirectly made any affected gift’ (my emphasis). An affected gift would be any gift of property to the eighth Respondent by the first and/or third Respondent connected to the controversial tender (s 12).

[23] Apart from the unkept promise to demonstrate on what basis the belief was held, that the eighth Respondent has received affected gifts from her sons, no reason whatsoever was given as to why an order was sought against her. This allegation was pertinently challenged by the Respondents in the Answering Affidavit but the Applicant chose not to address it. I cannot, therefore, find any basis for confirming the provisional restraint order against the assets of the eighth Respondent. Accordingly, the restraint order will be discharged in so far as it relates to her. The value of the restrained assets. [24] The Respondents raised the question whether the Act gives the Applicant an unrestricted latitude to restrain assets, whose value is far in excess of the amount which the defendants are actually known to have benefited as a result of their alleged criminal conduct. What gave rise to this question was that the amount that was actually paid out by Public Works to the successful tenderer is known to be R689 912.03. Notwithstanding this common cause fact, the provisional restraint order was sought and obtained for the amount of R1 724 300.00. The reason advanced by the Applicant for this is that the latter amount is the price of the tender and therefore represents the extent to which the first to third Respondents stood to benefit and the extent of the prejudice to which Public Works was exposed as a result of the alleged corruption and fraudulent misrepresentations. The Applicant also argued that s 26(2) does not limit the amount or the value of the assets which may be made the subject of a restraint order.

[23] Apart from the unkept promise to demonstrate on what basis the belief was held, that the eighth Respondent has received affected gifts from her sons, no reason whatsoever was given as to why an order was sought against her. This allegation was pertinently challenged by the Respondents in the Answering Affidavit but the Applicant chose not to address it. I cannot, therefore, find any basis for confirming the provisional restraint order against the assets of the eighth Respondent. Accordingly, the restraint order will be discharged in so far as it relates to her.

The value of the restrained assets.

[24] The Respondents raised the question whether the Act gives the Applicant an unrestricted latitude to restrain assets, whose value is far in excess of the amount which the defendants are actually known to have benefited as a result of their alleged criminal conduct. What gave rise to this question was that the amount that was actually paid out by Public Works to the successful tenderer is known to be R689 912.03. Notwithstanding this common cause fact, the provisional restraint order was sought and obtained for the amount of R1 724 300.00. The reason advanced by the Applicant for this is that the latter amount is the price of the tender and therefore represents the extent to which the first to third Respondents stood to benefit and the extent of the prejudice to which Public Works was exposed as a result of the alleged corruption and fraudulent misrepresentations. The Applicant also argued that s 26(2) does not limit the amount or the value of the assets which may be made the subject of a restraint order.

[25] A similar point was taken in NDPP v Phillips and Others 2001 (2) SACR 542 (W). It was argued that the Court has no power under s 26 to order a restraint which would have the effect of an attachment of assets exceeding in value the amount of the confiscation order to be made except, perhaps, for the practical reason that a non-liquid asset cannot, while held as security, be tailored to match exactly the predicated proceeds of crime. Heher J rejected the above contention for the following reasons at 553g-i: “Had it been the Legislature’s intention to relate the extent of the permissible restraint to the scope of the confiscation it could easily have made that clear by the addition of an appropriate proviso to s 26(2). Instead it chose to use language in that subsection which suggests that a restraint order may relate to assets which, in their value, need bear no relation to the amount which may ultimately be confiscated, extending as it may, to all realisable property held by such person whether specified in the restraint or not. It seems clear to me that the Legislature has chosen to leave the aspect of proportionality as a matter which may be considered in the formulation of the conditions and exceptions (referred to in s 26(1) which may be specified in the order. That conclusion seems to be consistent with the purpose of the section which is to provide adequate interim security under circumstances in which the actual entitlement of the applicant may not be determined for some considerable time and then only after an enquiry under s 18(1). . . . .” The learned Judge continued at 554c and f as follows: “Obviously the applicant cannot realistically, at the restraint stage, predict or place before the court more than a limited portion of the material which is likely to influence the court faced with the confiscation application. There may also be the difficulty of identifying, at the restraint stage, the related criminal activities which are referred to in s 18(1)(c) which can influence the amount of the proceeds of crime which may be confiscated. . . . . . . . . . . . . . .

[25] A similar point was taken in NDPP v Phillips and Others 2001 (2) SACR 542 (W). It was argued that the Court has no power under s 26 to order a restraint which would have the effect of an attachment of assets exceeding in value the amount of the confiscation order to be made except, perhaps, for the practical reason that a non-liquid asset cannot, while held as security, be tailored to match exactly the predicated proceeds of crime. Heher J rejected the above contention for the following reasons at 553g-i:

“Had it been the Legislature’s intention to relate the extent of the permissible restraint to the scope of the confiscation it could easily have made that clear by the addition of an appropriate proviso to s 26(2). Instead it chose to use language in that subsection which suggests that a restraint order may relate to assets which, in their value, need bear no relation to the amount which may ultimately be confiscated, extending as it may, to all realisable property held by such person whether specified in the restraint or not.

It seems clear to me that the Legislature has chosen to leave the aspect of proportionality as a matter which may be considered in the formulation of the conditions and exceptions (referred to in s 26(1) which may be specified in the order. That conclusion seems to be consistent with the purpose of the section which is to provide adequate interim security under circumstances in which the actual entitlement of the applicant may not be determined for some considerable time and then only after an enquiry under s 18(1). . . . .”

The learned Judge continued at 554c and f as follows:

“Obviously the applicant cannot realistically, at the restraint stage, predict or place before the court more than a limited portion of the material which is likely to influence the court faced with the confiscation application. There may also be the difficulty of identifying, at the restraint stage, the related criminal activities which are referred to in s 18(1)(c) which can influence the amount of the proceeds of crime which may be confiscated.

. . . . . . . . . . . . . .

The Legislature must also have realised that, in many cases, the applicant would consider it essential to move under s 26 at a relatively early stage of his investigation since the longer he waits the more likely the prospect of concealment or disposal. The earlier the move is made the less likely the applicant is to be able to justify the amount of the predicted proceeds of crime.” [26] I agree with Heher J. However, what is said above must be understood within the context of the facts of the Phillips case. It would be recalled that in that matter Phillips had been running what was admittedly an illegal business for a period of about 13 years. Although the media had speculated that he had amassed from that business about R800 000 000.00, the fact of the matter was that it was not known how much money was generated by the business over the period of 13 years. It was therefore impossible to tell, at the time when the restraint order was sought, how much had been received from the unlawful activities and what the value of the assets was which had to be subject to a restraint order. It is also correct that s 26(2) does not limit the value of the assets which may be made subject to the restraint order for the reasons spelt out in the Phillips case above. The telling difference between the Phillips case and the case before me is that the full extent of the value of the proceeds of the Respondents’ alleged unlawful activities is known.

The Legislature must also have realised that, in many cases, the applicant would consider it essential to move under s 26 at a relatively early stage of his investigation since the longer he waits the more likely the prospect of concealment or disposal. The earlier the move is made the less likely the applicant is to be able to justify the amount of the predicted proceeds of crime.”

[26] I agree with Heher J. However, what is said above must be understood within the context of the facts of the Phillips case. It would be recalled that in that matter Phillips had been running what was admittedly an illegal business for a period of about 13 years. Although the media had speculated that he had amassed from that business about R800 000 000.00, the fact of the matter was that it was not known how much money was generated by the business over the period of 13 years. It was therefore impossible to tell, at the time when the restraint order was sought, how much had been received from the unlawful activities and what the value of the assets was which had to be subject to a restraint order. It is also correct that s 26(2) does not limit the value of the assets which may be made subject to the restraint order for the reasons spelt out in the Phillips case above. The telling difference between the Phillips case and the case before me is that the full extent of the value of the proceeds of the Respondents’ alleged unlawful activities is known.

[27] Section 25 makes the granting of or a reasonable possibility of a confiscation order being granted against a suspect a condition for the granting of a restraint order. This clearly means that property of a suspect is being restrained so as to make it possible for a confiscation order that may be made consequent upon the conviction of a defendant, to be executed on that same restrained property. There is, therefore a connection between a restraint order and a confiscation order. In considering the appropriate amount or value of the assets which are to be the subject of a restraint order, where the amount to be returned to the State upon conviction is clearly known, it would be necessary to consider the amount in respect of which a confiscation order in terms of s 18(1) may be made. To this end s 18(2)(a) provides that the amount which a Court may order the defendant to pay to the State under s 18(1) ‘shall not exceed the value of the defendant’s proceeds of the offences or related criminal activities referred to in that subsection, as determined by the Court in accordance with the provisions of this Chapter’. This subsection finds further clarification from s 19(1) which provides that: “the value of a defendant’s proceeds of unlawful activities shall be the sum of the values of the property, services, advantages, benefits or rewards received, retained, or derived by him or her at any time whether before or after the commencement of this Act, in connection with the unlawful activity carried on by him or her or any other person.” Property in respect of which a declaration of forfeiture or a confiscation order has been made is in terms of s 19(2) excluded from the determination of the value of the proceeds of unlawful activities.

[27] Section 25 makes the granting of or a reasonable possibility of a confiscation order being granted against a suspect a condition for the granting of a restraint order. This clearly means that property of a suspect is being restrained so as to make it possible for a confiscation order that may be made consequent upon the conviction of a defendant, to be executed on that same restrained property. There is, therefore a connection between a restraint order and a confiscation order. In considering the appropriate amount or value of the assets which are to be the subject of a restraint order, where the amount to be returned to the State upon conviction is clearly known, it would be necessary to consider the amount in respect of which a confiscation order in terms of s 18(1) may be made. To this end s 18(2)(a) provides that the amount which a Court may order the defendant to pay to the State under s 18(1) ‘shall not exceed the value of the defendant’s proceeds of the offences or related criminal activities referred to in that subsection, as determined by the Court in accordance with the provisions of this Chapter’. This subsection finds further clarification from s 19(1) which provides that:

“the value of a defendant’s proceeds of unlawful activities shall be the sum of the values of the property, services, advantages, benefits or rewards received, retained, or derived by him or her at any time whether before or after the commencement of this Act, in connection with the unlawful activity carried on by him or her or any other person.”

Property in respect of which a declaration of forfeiture or a confiscation order has been made is in terms of s 19(2) excluded from the determination of the value of the proceeds of unlawful activities.

[28] We know that the value of the first to third Respondents’ alleged proceeds of unlawful activities is R689 912.03. This is the amount in respect of which a confiscation order may be made in terms of s 18(1) should the first to third Respondents be convicted. This is the amount ‘received, retained (kept) or derived’ by them. The difference between this amount and the amount of R1 724 300.00 was definitely not received, retained or derived by any of the defendants and should, therefore, be disregarded for the purpose of the restraint order since it will be disregarded in making the confiscation order. Accordingly, the amount reflected in the provisional restraint order, to wit R1 724 300.00 should and, will be replaced with the amount of R689 912.03. This overlaps with the question whether the Act authorises a restraint order over assets which are not proceeds of crime. Does the Act authorise a restraint order over assets which are not proceeds of crime? [29] The question whether the Act authorises the Applicant to obtain a restraint order over the defendant’s assets which are not proceeds of crime was touched upon in NDPP v Mcasa and Another 2000 (1) SACR 263 (TkH). The Court indicated at para 96 that ‘. . . the restraint order and, eventually the confiscation order seek to prevent the enjoyment of a benefit derived from unlawful activity by confiscating the respondent’s assets (whether lawfully acquired or not) . . .’(my emphasis) As was correctly stated in the Phillips case above, at para 9 thereof, most of the restraint orders are made at a relatively early stage of the investigation since the longer the Applicant waits the more likely the prospect of the concealment or disposal of property. It is very difficult at that stage to be able to tell which of the defendant’s assets are proceeds of unlawful activities or were bought with proceeds of unlawful activities and which were not. Besides, this limitation sought to be placed in the ambit of the restraint order is not provided for anywhere in the Act. Had the Legislature intended only assets which are proven to be proceeds of unlawful activities to be subject to the restraint order it would certainly have made express provision to that effect. It follows that the restraint order is not restricted to a defendant’s assets which are known to be proceeds of unlawful activities or acquired with such proceeds.

[28] We know that the value of the first to third Respondents’ alleged proceeds of unlawful activities is R689 912.03. This is the amount in respect of which a confiscation order may be made in terms of s 18(1) should the first to third Respondents be convicted. This is the amount ‘received, retained (kept) or derived’ by them. The difference between this amount and the amount of R1 724 300.00 was definitely not received, retained or derived by any of the defendants and should, therefore, be disregarded for the purpose of the restraint order since it will be disregarded in making the confiscation order. Accordingly, the amount reflected in the provisional restraint order, to wit R1 724 300.00 should and, will be replaced with the amount of R689 912.03. This overlaps with the question whether the Act authorises a restraint order over assets which are not proceeds of crime.

Does the Act authorise a restraint order over assets which are not proceeds of crime?

[29] The question whether the Act authorises the Applicant to obtain a restraint order over the defendant’s assets which are not proceeds of crime was touched upon in NDPP v Mcasa and Another 2000 (1) SACR 263 (TkH). The Court indicated at para 96 that ‘. . . the restraint order and, eventually the confiscation order seek to prevent the enjoyment of a benefit derived from unlawful activity by confiscating the respondent’s assets (whether lawfully acquired or not) . . .’(my emphasis) As was correctly stated in the Phillips case above, at para 9 thereof, most of the restraint orders are made at a relatively early stage of the investigation since the longer the Applicant waits the more likely the prospect of the concealment or disposal of property. It is very difficult at that stage to be able to tell which of the defendant’s assets are proceeds of unlawful activities or were bought with proceeds of unlawful activities and which were not. Besides, this limitation sought to be placed in the ambit of the restraint order is not provided for anywhere in the Act. Had the Legislature intended only assets which are proven to be proceeds of unlawful activities to be subject to the restraint order it would certainly have made express provision to that effect. It follows that the restraint order is not restricted to a defendant’s assets which are known to be proceeds of unlawful activities or acquired with such proceeds.

Reasonable living and legal expenses [30] Counsel for the Respondents made an application from the bar for the reasonable living and legal expenses envisaged by s 26(6).

There was no prior notice that such a request would be made because a request is what it truly was. No information whatsoever was given with respect to the extent of the living and legal expenses, the assets and income presently at the disposal of the Respondents, and it was not even indicated whether all or some of the Respondents needed these expenses. Before such an order may be made there must be a properly motivated application for those expenses. This view finds support in the following extract from the Mcasa case supra at para (85) and (86): “[85] The first respondent thus bears an onus of proof. In discharging the onus, a respondent must go further than merely stating that he/she has to meet living and legal expenses. There must be clear evidence which sufficiently demonstrates that there are no other assets available out of which such expenses may be met (cf A v C [1981] 2 All ER 126; also see Courtney (op cit at 88 et seq) and the authorities cited therein) . . . [86] The first respondent does make the bald assertion that there are no other available assets to meet living, legal and other related expenses. He must go further than that. He must, for example, indicate what the turnover of the hotel business is at present, what the running expenses are and what the nett profit is. It may very well be that funds are available from that business for whatever use by the first respondent and his family.” (My emphasis) The Respondents’ application for reasonable living and legal expenses in terms of s 26(6) must, for the same considerations fail.

Reasonable living and legal expenses

[30] Counsel for the Respondents made an application from the bar for the reasonable living and legal expenses envisaged by s 26(6).

There was no prior notice that such a request would be made because a request is what it truly was. No information whatsoever was given with respect to the extent of the living and legal expenses, the assets and income presently at the disposal of the Respondents, and it was not even indicated whether all or some of the Respondents needed these expenses. Before such an order may be made there must be a properly motivated application for those expenses. This view finds support in the following extract from the Mcasa case supra at para (85) and (86):

“[85] The first respondent thus bears an onus of proof. In discharging the onus, a respondent must go further than merely stating that he/she has to meet living and legal expenses. There must be clear evidence which sufficiently demonstrates that there are no other assets available out of which such expenses may be met (cf A v C [1981] 2 All ER 126; also see Courtney (op cit at 88 et seq) and the authorities cited therein) . . .

[86] The first respondent does make the bald assertion that there are no other available assets to meet living, legal and other related expenses. He must go further than that. He must, for example, indicate what the turnover of the hotel business is at present, what the running expenses are and what the nett profit is. It may very well be that funds are available from that business for whatever use by the first respondent and his family.”

The Respondents’ application for reasonable living and legal expenses in terms of s 26(6) must, for the same considerations fail.

Why the ex parte application? [31] The Respondents have questioned the appropriateness of the ex parte application which was brought in terms of s 26(3) of the Act in this matter. Their contention was that they should at least have been given a short notice. I am satisfied that there is no merit whatsoever in this argument. The Applicant has explained, inter alia, that the first to third Respondents are accused of having committed an offence of which dishonesty is an element. For this reason it would have been risky to notify them of the intended application for fear that they could cause some of their valuable assets to disappear which would have resulted in the restraint order being frustrated. Conclusion [32] I have taken into account the version of the Applicant and that of the Respondents. I am satisfied that the Applicant has, on a balance of probabilities, made out a case for the confirmation of the provisional restraint order in so far as it relates to the first to seventh Respondents subject to the deletion of R1 724 300.00 and the replacement thereof with the amount of R689 912.03 and the discharge thereof against the eighth Respondent. M.T.R. MOGOENG JUDGE PRESIDENT OF THE HIGH COURT

Why the ex parte application?

[31] The Respondents have questioned the appropriateness of the ex parte application which was brought in terms of s 26(3) of the Act in this matter. Their contention was that they should at least have been given a short notice. I am satisfied that there is no merit whatsoever in this argument. The Applicant has explained, inter alia, that the first to third Respondents are accused of having committed an offence of which dishonesty is an element. For this reason it would have been risky to notify them of the intended application for fear that they could cause some of their valuable assets to disappear which would have resulted in the restraint order being frustrated.

Conclusion

[32] I have taken into account the version of the Applicant and that of the Respondents. I am satisfied that the Applicant has, on a balance of probabilities, made out a case for the confirmation of the provisional restraint order in so far as it relates to the first to seventh Respondents subject to the deletion of R1 724 300.00 and the replacement thereof with the amount of R689 912.03 and the discharge thereof against the eighth Respondent.

M.T.R. MOGOENG

JUDGE PRESIDENT OF THE HIGH COURT

APPEARANCES DATE OF HEARING : 14 NOVEMBER 2002 DATE OF JUDGMENT : 05 DECEMBER 2002 COUNSEL FOR APPLICANT : ADV N. NGALWANA COUNSEL FOR RESPONDENTS : ADV SHAKOANE ATTORNEYS FOR APPLICANT : THE STATE ATTORNEY ATTORNEYS FOR RESPONDENTS : GURA TLALETSI INC.

APPEARANCES

DATE OF HEARING : 14 NOVEMBER 2002

DATE OF JUDGMENT : 05 DECEMBER 2002

COUNSEL FOR APPLICANT : ADV N. NGALWANA

COUNSEL FOR RESPONDENTS : ADV SHAKOANE

ATTORNEYS FOR APPLICANT : THE STATE ATTORNEY

ATTORNEYS FOR RESPONDENTS : GURA TLALETSI INC.