Fraser v Absa Bank Ltd (National Director of Public Prosecutions as Amicus Curiae)

• Jurisdiction: South Africa

Fraser v Absa Bank Ltd (National Director of Public Prosecutions as Amicus Curiae)
2007 (3) SA 484 (CC)

2007 (3) SA p484

Citation	2007 (3) SA 484 (CC)
Case No	CCT 66/05
Court	Constitutional Court
Judge	Langa CJ, Moseneke DCJ, Madala J, O'Regan J, Sachs J, Skweyiya J, Van Der Westhuizen J and Yacoob J
Heard	May 23, 2006
Judgment	December 15, 2006
Counsel	M Pillemer SC (with A Annandale) for the applicant.; R S van Riet SC (with P de B Vivier) for the respondent.; W Trengove SC (with G M Ameer) for the amicus curiae.

Flynote : Sleutelwoorde B

Criminal procedure — Search and seizure — Restraint order in terms of ss 25 and 26 of Prevention of Organised Crime Act 121 of 1998 — Application for provision of reasonable legal expenses in terms of s 26(6) — Intervention of C creditor — Concurrent creditor — Discretion of Court to allow intervention — Obligation to satisfy judgment debt relevant consideration — Not to be automatically treated as preferential creditors — Intervention not militating against fair trial rights to legal representation and against unreasonable delay.

Criminal procedure — Search and seizure — Restraint order in terms of ss 25 and 26 of D Prevention of Organised Crime Act 121 of 1998 — Application for provision of reasonable legal expenses in terms of s 26(6) — High Court exercising discretion under s 26 to take robust approach — Court of Appeal only interfering in circumscribed circumstances — Considerations relevant to application for reasonable legal expenses set out. E

Constitutional practice — Courts — Constitutional Court — Jurisdiction — Constitutional matter — Interpretation by Supreme Court of Appeal of s 26 of Prevention of Organised Crime Act promoting spirit, purport and objects of Bill of Rights, particularly right to fair trial — Such constitutional matter — Constitutional Court having jurisdiction.

Constitutional practice — Appeal — To Constitutional Court — Leave to appeal — Application for — When to be F granted — Application for leave to appeal against interpretation of Act by Supreme Court of Appeal — Act one of considerable importance and complexity — Prospects of success existing — Leave to appeal granted.

Headnote : Kopnota

The applicant was an awaiting trial prisoner who had been indicted on several counts related to racketeering and money laundering under G the Prevention of Organised Crime Act 121 of 1998 (POCA) and who also faced other criminal charges. A provisional restraint order under s 26 of POCA had been obtained on the applicant's interest in a close corporation and on certain of his immovable and movable property, and this property had been placed in the hands of a curator H bonis. The applicant lodged an application in the High Court in terms of s 26(6) of POCA for the curator to sell the property in order to fund the reasonable legal expenses relating to his criminal trial.

The respondent was one of the applicant's concurrent creditors who had obtained a default judgment against the applicant. The respondent had sought leave to intervene in the High Court s 26(6) I proceedings, opposing the application on the basis that if the applicant were permitted to deplete the proceeds of the restrained property to pay his reasonable legal expenses, it would be unable to recover its judgment debt.

The High Court dismissed the respondent's application to intervene and granted the application for reasonable legal expenses. It found that the effect of a J

2007 (3) SA p485

restraint order was to provide protection against creditors' claims and emphasised the need for reasonable legal expenses to be A provided as a fair trial requirement. It stated that such an order regarding legal expenses does not amount to allowing a convicted person to retain ill-gotten gains.

The respondent appealed to the Supreme Court of Appeal (SCA), which upheld both the appeal against the dismissal of the application to intervene and the grant of the application for reasonable legal expenses. It found that the Legislature could not have intended that a B concurrent creditor who had obtained a judgment prior to the restraint order would be prevented from satisfying that judgment because the debtor's assets had been restrained. The Court reasoned that the applicant had a constitutional right to legal representation at the State's expense if substantial injustice would otherwise result. The SCA ordered that, in advancing funds from the restrained property to C the applicant for his legal expenses, the curator should retain the amount owed to the respondent, thus 'ring-fencing' the respondent's claim from the applicant's competing demand for legal expenses.

The applicant then approached the Constitutional Court (CC) for leave to appeal against the judgment and the order of the SCA, primarily on the ground that the decision would result in an unreasonable delay and hence violate his right to a fair trial, as enshrined in s 35 of the D Constitution of the Republic of South Africa Act, 1996. The substantive issues before the CC were: (a) Does a concurrent creditor have standing to intervene in a s 26(6) application for reasonable legal expenses and does a Court have a discretion to allow it to intervene? (b) What is the nature and extent of the discretion conferred by s 26(6) on a Court? (c) The exercise of the discretion in the matter before it. E

Held, that the application had raised the question of whether the SCA's interpretation of s 26 failed to promote the spirit, purport and objects of the Bill of Rights, particularly the right to a fair trial, and that this was a constitutional matter, which meant that the CC had jurisdiction to hear the matter. (Paragraph F [47] at 503F - H.)

Held, further, that leave to appeal to the CC had been granted since the constitutional matter raised was of considerable importance and complexity and it could not be said that there were no prospects of success. (Paragraphs [49] and [50] at 504B.)

(a) May a creditor intervene in s 26(6) proceedings? G

Held, that the SCA was correct insofar as it held that an obligation to satisfy a judgment debt was a relevant consideration to be taken into account in the exercise of the Court's s 26(6) discretion. (Paragraph [56] at 505G - H.)

Held, however, that all concurrent creditors may not under all circumstances be allowed to intervene nor, once joined, may they automatically be treated as if they were preferential creditors in a way that prevented restrained funds from being used for reasonable H legal expenses. The Court discussed the circumstances in which creditors may participate in the distribution of an estate subject to a restraint order (Paragraphs [57], [58] and [74] at 505I - 507A and 511C.)

Held, accordingly, that it was clear on the wording of POCA that the High Court had a discretion to allow a creditor to intervene in s 26(6) proceedings, and that this interpretation did not in itself I militate against the fair trial rights to legal representation and against unreasonable delay. The SCA had correctly overturned the High Court's decision insofar as the High Court had concluded that it did not have a discretion to permit a concurrent creditor in the position of the respondent to intervene. (Paragraphs [63] and [70] at 507I and 509E - 510A.). J

2007 (3) SA p486

(b) The nature and extent of the discretion A

Held, that a Court of Appeal would only interfere with the exercise of such a discretion in limited circumstances and that, as a Court of first instance, a High Court would necessarily have to take a somewhat robust approach. (Paragraph [71] at 510C.)

Held, further, that considerations relevant to an application for reasonable legal expenses included: (i) the seriousness and complexity of the charges or civil proceedings against the B defendant; (ii) the defendant's conduct prior to and during the s 26(6) proceedings, including whether full disclosure had taken place, whether he was attempting to benefit from the restraint order or had acted fraudulently; (iii) the value of his or her assets; (iv) the number and amount of known creditors' claims; and (v) the history of the specific claim of the creditor who sought intervention. (Paragraph C [72] at 510F - 511A.)

Held, further, that whether or not the creditor's intervention would result in the criminal trial being unreasonably delayed was an important factor to be considered by a Court when exercising its discretion. (Paragraph [66] at 508F.)

Held, further, that a defendant's need to access funds for reasonable legal expenses was an important factor to be taken into D account by a Court when exercising its discretion. (Paragraph [69] at 509D.) An accused was not entitled to the legal services of any counsel of his or her choice, regardless of his or her financial circumstances. The extent to which legal representation at the State's expense might be appropriate or sufficient would depend on, inter alia, the complexity and seriousness of the criminal charges. (Paragraph E [68] at 509A - C.)

Held, accordingly, that in exercising its discretion, a High Court should seek as best as possible to ensure that a defendant neither benefited unduly from the terms of a restraint order, nor was prejudiced in terms of reasonable legal and living expenses (Paragraph [72] at 510E - F.) F

(c) The exercise of the discretion

Held, that the decision of the SCA to grant the application to intervene could not be faulted. However, the SCA's order practically securing the creditor's claim against the provision of the applicant's reasonable legal expenses was incorrect since it was based on the notion that a concurrent creditor's claim automatically took priority over the provision of a defendant's reasonable legal G expenses. (Paragraph [77] at 511H.)

Held, further, that the SCA's...