Mngomezulu and Another v Van den Heever NO and Others

• Jurisdiction: South Africa
• Citation: 2018 (1) SACR 601 (GJ)

Mngomezulu and Another v Van den Heever NO and Others
2018 (1) SACR 601 (GJ)

2018 (1) SACR p601

Citation	2018 (1) SACR 601 (GJ)
Case No	44211/2012
Court	Gauteng Local Division, Johannesburg
Judge	Fisher J
Heard	November 14, 2017
Judgment	February 6, 2018
Counsel	DN Unterhalter SC (with RJA Moultrie) for the applicants.; EF Theron SC (with TV Steyn) for the first and second respondents.; F Latif SC for the third, fifth and ninth respondents.

Flynote : Sleutelwoorde

Prevention of crime — Restraint order in terms of Prevention of Organised Crime Act 121 of 1998 — Rescission of — Duties of curator — Curator obliged to account to owner of property in terms of common law, over and above statutory duties to account under POCA — Curator not needing C to be discharged as soon as restraint order rescinded.

Headnote : Kopnota

Property belonging to the applicants, worth some R11,5 million in 2004, was taken into possession by the first respondent, acting as a curator bonis, after it had been subjected to a restraint order in terms of s 26 of the Prevention D of Organised Crime Act 121 of 1998 (POCA). By January 2013, six months after the first applicant was acquitted of all charges against him, the value of the property had decreased to R3 million.

In the present application, the applicants sought the rescission of the restraint order and an order compelling the curator to fully and completely account to them for the property during his curatorship. They contended furthermore that the curator should not be discharged until the accounting had E been satisfactorily performed.

The respondents opposed the application and contended that the only accounting required by POCA was an account to the Master of the High Court.

Held, that the curator's contention that he was obliged only to account under POCA arose from a failure to appreciate that his obligation as curator was F both statutory, in relation to his function under POCA, and fiduciary vis-à-vis the applicants. That the curator stood in a fiduciary relationship towards the applicants in relation to the restrained property was clear, and it followed therefore, in the ordinary course, that he was under a duty at the end of his period of office to render an account to them in the manner required by the common law. (See [16] – [18].)

Held, further, that there was no time limit prescribed for the discharge of the G curator, and the office created by POCA envisaged court oversight as a central ingredient thereof. In any event, even if there were any uncertainty in this regard as to the reading of s 28(3)(b), given that POCA authorised a serious erosion of the rights contained in the Bill of Rights, it had to be applied in accordance with the rights and values protected by the Constitution. (See [40] – [41].) An order was granted as sought by the applicants. H

Cases cited

Absa Bank Bpk v Janse van Rensburg2002 (3) SA 701 (SCA): referred to

Atkin v Botes2011 (6) SA 231 (SCA) ([2011] ZASCA 125): compared

Bellairs v Hodnett and Another1978 (1) SA 1109 (A): dictum at 1130F I applied

Clarkson NO v Gelb and Others1981 (1) SA 288 (W): referred to

Da Silva and Others v CH Chemicals (Pty) Ltd2008 (6) SA 620 (SCA): referred to

Doyle and Another v Fleet Motors PE (Pty) Ltd1971 (3) SA 760 (A): applied

Doyle v Board of Executors1999 (2) SA 805 (C): dictum at 813H – I applied J

2018 (1) SACR p602

Fraser A v Absa Bank Ltd (National Director of Public Prosecutions as Amicus Curiae)2007 (3) SA 484 (CC) (2007 (3) BCLR 219; [2006] ZACC 24): dictum in para [46] applied

Grancy Property Ltd and Another v Seena Marena Investment (Pty) Ltd and Others [2014] 3 All SA 123 (SCA) ([2014] ZASCA 50): dictum in para [26] applied

In B re W Clydesdale (1861 – 1867) 1 Roscoe 258: followed

Krige v Van Dijk's Executors1918 AD 110: dicta at 112 and 121 applied

Maitland Cattle Dealers (Pty) Ltd v Lyons 1943 WLD 1: referred to

Mngomezulu and Others v National Director of Public Prosecutions2007 (2) SACR 274 (SCA): referred to

National Director of Public Prosecutions v Phillips and Others2002 (4) SA 60 (W): C considered

National Director of Public Prosecutions v Phillips and Others2005 (1) SACR 360 (SCA) (2005 (5) SA 265; [2005] 1 All SA 635): referred to

National Director of Public Prosecutions v Rebuzzi2002 (1) SACR 128 (SCA) (2002 (2) SA 1): considered

Phillips and Others v National Director of Public Prosecutions2003 (2) SACR 410 (SCA) D (2003 (6) SA 447; [2003] 4 All SA 16): referred to

Phillips and Others v National Director of Public Prosecutions2006 (1) SACR 78 (CC) (2006 (1) SA 505; 2006 (2) BCLR 274; [2005] ZACC 15): applied

Phillips v Fieldstone Africa (Pty) Ltd and Another2004 (3) SA 465 (SCA) ([2004] 1 All SA 150; [2003] ZASCA 137): referred to

Sacks E v Ogince1960 (1) SA 180 (O): dictum at 181E – H applied

Sibex Construction (SA) (Pty) Ltd and Another v Injectaseal CC and Others1988 (2) SA 54 (T): referred to.

Legislation cited

The Prevention of Organised Crime Act 121 of 1998, ss 26 and 28(3)(b): F see Juta's Statutes of South Africa 2016/17 vol 1 at 2-569 to 2-570.

Case Information

DN Unterhalter SC (with RJA Moultrie) for the applicants.

EF Theron SC (with TV Steyn) for the first and second respondents.

F Latif SC for the third, fifth and ninth respondents.

An G application for an order compelling a curator bonis under the provisions of the Prevention of Organised Crime Act 121 of 1998 to account for his dealings with the restrained property during his curatorship. See [44] below for the order.

Judgment

Fisher J:

Introduction H

[1] The stated purpose of the Prevention of Organised Crime Act [1] (POCA) is to provide a civil remedy for the preservation, siezure and forfeiture of property which is derived from or concerned with the carrying-out of unlawful activities. [2] Central to the machinery provided I for in POCA are ss 26 and 28 of POCA. Section 26 provides for the granting of a restraint order which prohibits a person charged with, or to be

2018 (1) SACR p603

Fisher J

charged with, an offence from dealing with the property concerned, with A the ultimate aim that it be confiscated by the state. Section 28 allows for the appointment, by the court that has granted the restraint order, of a curator bonis to take possession and control of the restrained property. This appointment can occur at any time after the restraint order is granted. The curator acts, at all times, subject to the directions of the B court. Such directions can be varied from time to time. In terms of s 26(10)(b) of POCA the court must rescind the restraint order when the proceedings against the defendant are concluded. [3]

[2] This case deals with the aftermath of the rescission of a restraint order where no confiscation order has ensued (in this case because of C acquittal), with specific reference to the legal obligations of the curator to the owner of the property under his curatorship.

Facts

[3] The first applicant was arrested on various criminal charges during D July 2004. On 17 September 2004 the third respondent (the NDPP) brought an ex parte application for a restraint order against the applicants — who are married to each other. The court granted a provisional restraint order on the same date and also appointed the first respondent (to whom I shall refer as 'the curator') as curator bonis — with detailed directions as to the performance of his function. The restraint order was E made final on 21 January 2005 and pursuant thereto letters of curatorship were issued. On 23 July 2012 the first applicant was acquitted of all charges against him. The restraint order and the curatorship endure, and have done for more than 13 years.

[4] The property under restraint included some 12 immovable properties, F interests in a number of close corporations; shareholding in companies including the sixth respondent; movable properties — which included Persian carpets, artworks, vehicles — and the interests in some 46 bank accounts. The curator took possession of the property in terms of an order which formed part of the order in issue.

[5] For the period that the restraint order has been in force, the property G has been under the control of the curator, and the applicants and the various companies and close corporations have not been able to deal with it. During 2011 the close corporations and companies, except the

2018 (1) SACR p604

Fisher J

sixth A respondent, were removed from the registers of companies and close corporations for failure to submit statutory annual returns, and consequently all of their property at the time of their deregistration became bona vacantia and passed into the ownership of the state. Relief was initially sought in this application for the reregistration of these B entities, but this has since occurred and the relief is no longer sought.

[6] It is not disputed by the curator and the state that the value of the restrained property has reduced during the course of the curatorship. The total forced-sale value of the C restrained property as at 27 October 2004 was more than R11,5 million, while in January 2013 the curator valued the restrained property at no more than R3 million, and requested that the security bond required to be maintained by him should be reduced to cover that amount. This reduction was duly achieved. The contention of the applicants is that the diminution of the value of the property is as a result of his mismanagement. The curator denies this. I am not called on to deal with this dispute.

[7] D The curator has, as yet, made no formal accounting as to his administration of the property. In terms of s 32(2) of POCA the provisions of the Administration of Estates Act [4] apply mutatis mutandis in relation to the functions of a curator appointed under...