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IN THE SUPREME COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

PRETORIA

1994-08-16

Case No. 6527/92

In the matter between:

O BESSERGLIK                                                                                                                      Plaintiff

versus

MINISTER OF COMMERCE, INDUSTRY AND TOURISM                                       Defendant

CURLEWIS DJP.: The plaintiff has claimed substantial damages for malicious arrest and prosecution. I have only to decide liability.

The gist of his claim is that since 1987 he has been hounded by the D-Board and the police to such good effect that he has been ruined financially. The process - if I can call it that, because I think his own counsel called it that - started with a visit by Mr Du Plessis and Mr Breedt to his factory on 9 September 1987. The report is to be found in Bundle 1, page 1-S. It is critical of the operations of the factory and of the conduct of the persons working there.

It should be noted that as a result of a report made to the police by a certain Raseem who was dismissed by plaintiff on 31 July 1987, a Colonel Ackermann was interested in the

 activities of the plaintiff and his companies. This policeman

Ackermann met Du Plessis and Breedt and gave them certain information prior to their visit to the factory.

The facts stated by Du Plessis and Breedt were in general not disputed by plaintiff, but their opinions and conclusions were rejected by him out of hand. From that date the D-Board became concerned about the bona fides and/or correctness of a number of pecuniary claims which were put forward by plaintiff's companies. I should add that already in 1986, about September, the police had received an information about plaintiff's factory which, if true, disclosed irregularities.

Eventually a Colonel Franken became involved and took the investigation further. This was approximately in December 1987. Plaintiff's complaint, inter alia, is that Franken launched an investigation without a formal complaint from anyone and without having any particular charge in mind, in other words, he began a fishing expedition or a witch hunt. It is his complaint also that Pienaar of the D-Board, acting on behalf of the D-Board, authorised the police investigation, instigated it in fact, which in the event led to a prosecution. What is more, his complaint is that this was not done bona fide by Pienaar but for an ulterior motive, to wit, to avoid the D­Board having to make payments. He also suggested that Franken fell in with this view and had this or another ulterior motive in mind.

Plaintiff has described how his attorneys were so harassed that they were no longer prepared to act for him. This also happened to his auditors who were told not to discuss the books or of the affairs of the company with plaintiff. Numerous searches were carried out by Franken, of plaintiff's house, of his car, of his factories, of his offices, of his company, of the offices of his solicitor and auditors and even of his bank. His passport and that of his son were impounded and that of the son was only returned in court after an application was launched. It should be added that each party paid its own costs. His personal documents were seized, he says.

Franken gave information to a newspaper in Bloemfontein where plaintiff lived with his family and there was a lurid article about plaintiff. The police were warned several times that they were acting improperly and would be held liable for

damages. Plaintiff says he tried to find out what was wrong, so he could explain, if necessary. He tried to get the investigation concluded since the protracted investigation was causing him great prejudice. He obtained the help of various persons in this regard - Van Heerden, Cowan and such like – to try and get the matter brought to finality.

Eventually he was arrested in July 1989 and appeared in court. Franken, it appears, gave evidence in the bail application and opposed bail, but it was however granted. The matter was postponed for trial on various occasions and the state could not produce a charge-sheet. The magistrate eventually fused a further postponement and the charge was withdrawn.

Eventually he came to trial on several counts, which counsel says were of no importance compared to what had been talked about by Franken and the D-Board, and he was acquitted without having to testify. This was in 1991. Let me say something here which is known to me and others who administer justice, if not to the plaintiff. For many years now Attorneys-General have not prosecuted on various charges and sometimes not prosecuted with great enthusiasm, because of expense, or time or inconvenience that would be involved.

The complaint of plaintiff in short form is that, although various discrepancies justified an investigation by the D- Board, they did not justify the D-Board calling in the police; had the D-Board asked him for explanations, he would and could have provided an explanation and that in any event the yearly reconciliation would have put the matter right if there was anything wrong. Plaintiff felt that Franken was influenced in the just performance of his duty by his. personal dislike of plaintiff and Israelis. Franken expressed himself in this regard to Mrs Coetzee and Mr Van der Merwe, according to these witnesses, and plaintiff was convinced he has simply

cobbled up a case against him.

The case for the defendant, equally shortly put, is that there gradually accumulated a number of suspicious circumstances and these justified an investigation and a referral to the police. I should repeat that the police as such were originally brought in not by the D-Board.

The law on the matter is set out in the Beckenstrater case 1955 1 SA 129. The plaintiff must on the balance of probability prove the defendant had an improper motive and that there) was no reasonable and probable cause - this as to the prosecution. Plaintiff has also in the pre-trial minute accepted the onus in regard to the arrest. Mr Bruwer, who I think was brought in at a fairly late stage in place of a Cape silk, has quoted numerous authorities on the question of onus and how much is required to establish a prima facie case.

The question that arises is what facts has plaintiff put before this court to show that the D-Board and/or the police acted in a manner which falls within the Beckenstrater principle. It is there, in my opinion, that the plaintiff fails lamentably. The plaintiff could point to no factual misstatement. Indeed, somewhat surprisingly Mr Bruwer said that this was not plaintiff's case and when invited to comment on various reports and such like, was equally not able to do so.

I do not propose to go over the reports, nor plaintiff's attempt to answer questions about them and other documents, nor do I propose to go over the various matters that were debated at length in court with plaintiff, for example, the existence or otherwise, ie the genuine and bona fide existence or otherwise, of National Import and Export and of its claim; the manner in which the claim for R53 000 for electrical work was dealt with and whether the payment of R53 000 was for electrical work or simply on account, and whether the work was done at all or the amount paid to Scorpio; the whole question of whether the price of the house was inflated to enable plaintiff to obtain foreign exchange to which he was not otherwise entitled; the overcharges for labour and such like. It is not

necessary to do so. There is no  onus on to show that plaintiff was guilty or that the contents of the various documents are true.

I wish to turn to the various witnesses that were called by plaintiff.

The plaintiff called Germishuysen but in my opinion he took the matter no further. The first witness who certainly might have assisted the plaintiff was the domestic servant who worked for him and his wife in Cape Town and in Bloemfontein. This was Regina. Her evidence, however, did not substantiate plaintiff's evidence. Regina cannot write Afrikaans

but she

can read Afrikaans and understand it. She was not harassed or brutalised by Franken. She was not asked to say things she not want to say. The black policeman fetched her from plain­ tiff's house, took her to the police office where she was questioned by Franken in English and drove her back again. The fact that she understood Franken to say that she should leave plaintiff whereas he wanted, so it was put, to know w ere she would be found if she left plaintiff, is of no critical significance. She was told she need not worry about herself; the investigation only went to her employer and/or factory. She was told that she might have to give evidence, as others employed at the factory would have to do so and it might take a long time.

The next witness was Mrs Coetzee. She worked in plain­ tiff's factory in Botshabelo. She was visited by Franken there who wanted the wage books or registers or documents. She says she was upset or affronted by Franken's attitude. I am not quite certain why this should be so. She was the manager in charge of the factory, or apparently in charge, and although Mrs Bates no doubt did the actual work in regard to the wages, Mrs Coetzee would obviously be a person to approach by virtue of her position December 1987. She got the impression from Franken that he

thought a criminal act had already been committed. He tried to find out whether she knew of anything that was amiss or irregular. After phoning plaintiff at his office in Bloemfontein, ie after Mrs Coetzee phoned plaintiff in his office in Bloemfontein, Franken was given the records and he signed for them. She says Franken intimated that a fraud of millions of rand - he later told her something like R7 million - was being investigated. He arrived at her home the following afternoon.

He again attempted to find out whether she knew of any irregularity. He was, according to Mrs Coetzee, obsessed with getting further information. He said for the second time that she was in no position to be involved in this sort of thing, presumably shady activities. Anyway, she made clear her displeasure and repeated she knew nothing. He told her that he was out to get plaintiff; he had problems with Israelis - at first blush a somewhat surprising communication from a senior police officer to a complete stranger in the circumstances as described by Mrs Coetzee. She says she ·phoned Colonel Ackermann whom she knew well and complained, or at any rate asked him to leave her alone and to ask Franken to leave her alone - at least that is how I interpreted her evidence.

When cross-examination began she admitted she had known Ackermann from a previous unfortunate experience. I gave counsel for the plaintiff an opportunity to consider their position and the authorities. In the event I ruled that certain facts could be put. She admitted two facts which could affect credibility.

If one reads her evidence in chief and then her evidence under cross-examination it

will be seen that her memory was not perfect the first time round, which is understandable, and that matters bore a somewhat different light after the cross­ examination. It is clear beyond doubt, firstly, that Franken did not attempt to make her give false or incorrect information against plaintiff, as he had not with Regina; and secondly, that the witness would, because of her previous experience, be somewhat sensitive indeed, perhaps over-sensitive to questions from the police or visits by them. It is perhaps also true to say that plaintiff was not able to reassure her of the absolute. Otherwise she would not have left in January.

Mr Van der Merwe had omitted to put to her that Franken denied the derogatory remarks attributed to him by her. I wish to point out that what was important was to know that his instructions were that Franken denied such behaviour. In view of her evidence in cross-examination that such remarks were uttered on all the meetings - and there were three of them - it was not required by me that he actually put the denial to her ·In the event as I think I have already said Franken did not give evidence, nor Ackermann or anyone on behalf of the the various defendants. Her evidence does not show that Franken, whatever his personal feelings, cooked up a false case against plaintiff or did not wish genuinely to have him prosecuted or had no ground to arrest or to prosecute him.

Mr Van der Merwe was the next witness. He was a clerk of the office of the plaintiff's offices in Botshabelo, Bruch.manns. His evidence did nothing to dissipate the cloud of suspicion that hovered round the claims. He says he believed he was doing nothing wrong in claiming for one person from two

factories. I must point out that in his statement to the police or that of Gouws, it was never made clear that he had actually told plaintiff that this was perfectly legitimate and in order. It is crystal clear, however, that he knew that an employer had to be employed full-time, eight hours per day. He fills in hundreds of claims of this nature and he could not possibly miss the nota bene note which was pointed out to him and which even I saw, even if he had not studied the blue book. It follows that someone must have told him that indeed his employers were employed full-time in each factory. Quite, how he could think, even if he was so told, that an employer could work eight hours each day or for the required number of days in each factory, is beyond me. There is no doubt at all that the D-Board was entitled to investigate this matter and to refer it to the police.

Then there is the claim of 29 October 1986. His attempt - as plaintiff's also - to hide behind the words "not in production" did not impress. It is clear that plaintiff himself thought of it as a claim (see page 343 of Exhibit “B”), as apparently did the D-Board. (See page 344 of Exhibit “B”)

I have little doubt that the D-Board paid R53 000 when it did, on the claim of R53 000. Perhaps someone showed someone at the D-Board the paid quotation at page 324 of Exhibit "B".

Germishuysen's evidence in this regard is not satisfactory. What prompted him to authorise the payment is unclear. This similarity between the amount claimed for electrical work and the payment is too close to be mere coincidence. I should point out that Van der Merwe's assertion that he drew up the 1987 claim, omitting the electric and plumbing claims because plaintiff did not produce proof of payment, rings hollow as a complete explanation. I need hardly add that the plumbing claim was a fraud. The original document shows this a copy sent to the D Board did not.

The attempt by the witness to explain the wording of the claim dated 29 October 1982 (page 403, Bundle 2) was pathetic. I have an idea that he only became aware of paragraph VI in the Blue Book and its implications at the criminal trial. r need hardly stress that the claim of 29 October 1986 was worded in the same way as the claim lodged in June 1987 (Bundle 1, page 7), and follows very closely the annexure to the Blue Book as recommended (Bundle 6, page 200).

The plaintiff closed its case and defendant did the same immediately - ie defendant called no witnesses.

Mr Bruwer has argued that the vast majority of documents used in cross-examination, even in chief or re-examination, could not be used in argument or by myself, because they were not proved either by agreement or in terms of the rules or by proving their authenticity. He developed a substantial argument in this regard. I am not prepared to accede to the contentior. Even though counsel for the defendant do not oppose the contention, they say they are irrelevant. The only time objection was made, ie to Mrs Bates affidavit, it was withdrawn when I pointed out that it was common cause that the truth of its contents was not in issue.

I am keenly aware of the use of documents in cross­ examination. I pointed this out and it is on the record.

Thereafter no objections at all were made to the continued use of the documents. I assumed for something like three weeks that while references were being made to these documents left and right that it was accepted that the documents in that form in the bundles existed on that date and were in possession of the various parties, ie he D-Board, the plaintiff, the auditors and such like. I am not impressed with a belated and technical objection of this nature. I should point out that my warning to one of counsel I think it was Mr Van der Merwe that he could not use a document for a particular purpose unless he was going to prove it, has nothing to do with this point and counsel knows this.

It should be remembered although I do not think that anyone has forgotten plaintiff was asked to comment on a particular passage in a report or affidavit or whatever it may be, as to whether it was correct or twisted or such like, and this was after all basically the complaint that he has in bringing this whole action. I have already said his counsel told me it was not plaintiff's complaint that matters were incorrectly stated in the various documents. Mr  Bruwer in argument indeed said that Pienaar must have told the policeman Franken something orally that does not appear in his letter or diary or in the various reports. It is this "something", according to Mr Bruwer, that must have been false and malicious and prompted Franken to investigate, arrest and finally led to the prosecution. This submission is entirely without substance and does not deserve even the name of speculation.

Mr Bruwer referred me to a passage in the evidence of Pienaar at the criminal trial which he says shows that Pienaar was actively seeking a conviction, even to the extent that he lied or concealed material evidence. It is sufficient to say that a fair reading of the record does not show this.

He furthermore argued that the reports of Smit (2), and Plessis/Breedt did not show any possible criminal conduct. I disagree entirely. The reports must be read as a whole and not merely selected pieces. Mr Bruwer also seems to think that Mr Pienaar had acceded to the word "witch-hunt" in a passage in his evidence at the criminal trial which he read to me from that evidence. This is clearly not so. He refers almost immediately to serious allegations and serious matters.

Mr Bruwer referred to the word "rumour" in Pienaar's evidence. It is clear that Pienaar relied on the reports. Certainly there were rumours. These are often the beginning of an investigation. The police were aware of these, or some of them. If anything proves Franken's bona fides it is his diary and the letter he wrote to which Mr Bruwer referred. That was the letter right at the end, I think, after the criminal trial, which Mr Bruwer relied on because it advocated the plaintiff's deportation.

In every case, as I have stated, the documents show an apparent irregularity. Whether the irregularities were of the nature which were debated is not important, but the fact of the matter is that whether one takes the overclaims or the claims on the house or on the electrical or on the plumbing or whatever it may. be - I have said I am not going to go into the detail - there were matters there that required investigation. Certainly the plaintiff's evidence does nothing to suggest that these matters did not exist or were transparently clear and understandable and did not require investigation. The suspicion engendered by the various matters that were put up by the D-Board and the police, has certainly not been removed by plaintiff's evidence, which, to say the least, was unsatisfactory. The plaintiff, as I have said, had various complaints, but when he was cross-examined on these he was not able to show any place where the Board or the police had acted unlawfully or maliciously or improperly - on the contrary.

I believe the plaintiff was or is under the impression - and this came through to me very strongly - that the police or the D-Board was obliged to discuss problems and ask for explanations. This is not so. They can do so and sometimes will do so, but it is a matter for them to decide. In many cases where the suspicions go to bona fides, the police and others will not discuss the matter.  One reason is to forestall certain actions the suspect might make. It may well be that the procedures are different in Israel and this lent weight to the plaintiff's indignation. I think also that the plaintiff gave undue weight, perhaps, to his acquittal. I do not know how he was advised in this matter. If he insisted on proceeding despite cautions to the contrary, he was grossly mistaken. I agree with Mr Van der Merwe that, having obtained the contents of the police docket, he was ill-advised to proceed.

A great deal. of time was wasted in court because plaintiff had not been properly prepared. His senior counsel told me that they did not think it was necessary to take him through all the various documents and reports. I accept this but it was an error of judgment and it certainly wasted a great deal of time. Had the result of this case been different I would have made a special order as to costs.

Near the end of the cross-examination by Mr Van der Merwe for the police, the plaintiff was asked to comment on the letter to which I have just referred and on which Mr Bruwer had relief; J., and its attendant affidavits. The following day he gave

his explanations or objections. When properly analysed these objections amount to nothing concrete. The very first objection, for example, that he made, to the last paragraph on page 75 of Exhibit "E", fell away because it was clear it was due to a misunderstanding of an Afrikaans term.

Another example: His objection to paragraph 2.6 on page 76, read with Exhibit "M", page 450 of Exhibit "B", is based purely on an interpretation. On my reading his objection was not justified.

Another example: His objection to the statement in paragraph 2.7 at page 76, house was only R290 000, is unfounded. The price of the house was only R290 000 and Nel was prepared to sell the house for that.

Plaintiff insisted on improvements, so he says, to the value of R135 000 which brought about these various deeds of sale which have been put in. I have said that in the light of all the evidence the police were justified in considering this as an unlawful attempt to inflate the price to obtain more foreign currency to which he was not entitled.

I should add that even his attorney was unhappy about this transaction as appears from his own affidavit at page 561-568. Exhibit "B". I am reminded, also, that already in 1986 he had phoned the police to find out whether there was anything wrong with this particular transaction or whether it could go through. That is my recollection.

The fact that Nel's death caused a problem vis-a-vis a prosecution is irrelevant. It will further be remembered that Franken apparently - it is in some letter, it may be in this very letter - advised against a prosecution on the matter for this reason. Whether that was his personal view I do not know but it certainly does not indicate positively that he was actuated by malice or a desire to prosecute come what may.

As regards the house I may mention this: When plaintiff was asked in cross-examination what actually Nel had done in regard to the improvements, it was clear it amounted to very little. He took refuge in saying he could not remember. This was thoroughly unsatisfactory. When he was re-examined later, however, he gave a massive detail of what Nel had done. I de­ cline to take this as proof that it was done and certainly no value was ever placed by the plaintiff of what Nel had done. Mr Van der Merwe said the paid cash cheque for R135 000 could not be traced to plaintiff. This is as it may be, but it is not without significance that the cheque had the name "Obed" on it. I did not realise at the time that this was plaintiff's Christian name. Clearly this transaction justified police investigation. The cheque, incidentally is at page 595, Exhibit "B".

Mr Bruwer, as I have said, set out the law and I give merely a short list of the authorities which he has put before me and argued, and argued extremely well, Lederman's case, 1969 1 SA 190 at 196 and 197; Prinsloo's case 1975 1 SA 481 at 495; Tsose's case 1951 3 SA 10 at 17; Strydom's case 1967 3 SA 460

at 467; Duncan's case 1986 2 .SA 805 at 814 and 819; Duncan's case 1984 3 SA 460 at 465; Hurley's case 1986 3 SA 568 at 589; Mabaso's case 1981 3 SA 865 at 873-875; Saik's case 1913 AD 156

at 173; Gericke's case 1978 1 SA 821 at 827; Marine & Trade case 1972 1 SA 26 at 37 and 40; Enyati's case 1984 2 SA 551 at 564; Choene's case 1986 3 SA 445 at 455; Concise Oxford Dictionary under "Belief".

There is no difficulty about the law, nor is there any

dispute. Counsel for defendants gave me typed heads of argument and they do not query Mr Bruwer's legal arguments certainly not in the main. Their argument is short, as I have already said. They said there is absolutely no onus on them to prove anything; they are quite correct about that. What they did in the course of the case was, strictly speaking, superfluous but it showed, they say, prima facie that there was reasonable cause and no malice for the arrest and the prosecution. Both Mr Terblanche and Mr Van der Merwe pointed out that plaintiff has not shown an absence of these two requirements, which is

what is required.

It must be remembered the letter of Ackermann dated 25 February 1988, Exhibit "E", page 39-42, to which Mr Bruwer refers, is not a pleading, nor is it an indictment in terms of the Criminal Procedure Act. In my opinion it contains nothing to which reasonable objection can be made. The same applies to the diary of Colonel Franken to which Mr Bruwer referred (Exhibit "A", page 66-68). The latter document indeed shows that a complaint, not from the D-Board, had been received.

On all the evidence the police were obliged and entitled to investigate, arrest and prosecute. No doubt the police are as aware as I that complaints from sacked workers would need to be taken with great caution. I do not wish to say - and it is not necessary to say so - that plaintiff was guilty of these various charges or any irregularities and apparent frauds. All I say is that there were straws in the wind already in 1986, and these, together with all the other complaints and reports, constitute a firm foundation for investigation, arrest and prosecution.

I have considered the claim for attorney and client costs; defendants have put up a strong argument but I do not think it is justified in the present case. Plaintiffs are entitled to the costs of the application, number 6527/92, whose Notice of the Motion is dated 28 June 1994, on an opposed scale. What has happened in this case does not detract from the fact that plaintiff had to bring an application and eventually got what he wanted. The reservation of costs therefore means nothing. I should add that Mr Van der Merwe in fact argued that because, inter alia, plaintiff got the docket and saw exactly what the police had, he was reckless in continuing with the case.

Qualifying fees are asked for in regard to Van Jaarsveld and Smit. I am not certain to what extent these two people qualified in the present case. It seems they gave the same report and/or affidavit in a previous matter in which plaintiff• s daughter was involved. The law is set out in Champion v Markel 1971 2 SA 121 at 128. I read from 128B:

"In Cloete v Cloete, 1961 2 SA 607 (W), and in Humphreys v Humphreys, 1965 R.L.R. 333, orders were made allowing the qualifying fees of private investigators employed to obtain evidence of adultery. In Barratt v Barratt and Another, 1966 3 SA 364 (N), Shearer, A.J. (as he thenwas), refused, under similar circumstances, to make such an order. It is my respectful view that the reasoning in Barratt's case is clearly correct and should be followed. It is of the essence of qualifying expenses that they represent the reasonable charges to be allowed to an expert witness for so preparing himself with regard to the specific matter upon which his testimony is required that his evidence may be properly impressed with that measure of authority which may be attributed to it by reason of his specialised knowledge and training in the particular field to which his evidence relates. This emerges, think, from the authorities cited by Harcourt, J., in Köhne and Another v Union & National Insurance Ltd., 1968 2 SA 499 (N) at pp. 501-503."

That appears to me a correct statement, if I may say with respect, of the law and what constitutes expert evidence. As I say, this is clear. But the problem is, where the persons have already qualified themselves in one case and charged accordingly, whether they could do so again. Now I must of course point out that Mr Terblanche said quite unequivocally and I accept what he says - that there would be no double charging. But of course, the problem still remains. More important, whether the defendant here, can claim the same fees from plaintiff; one must assume for this purpose that in the previous case such fees would have been or have been claimed from the plaintiff's daughter. If they were not, for some reason, they cannot now as it were try and fill in the gap.

That the expert can charge again for refreshing his memory about a complicated matter seems clear and the taxing master will no doubt allow him such fees as he thinks appropriate.

But I do not believe he can claim again from the same client, ie the D-Board, for the same work, and thus the D-Board cannot get it from the plaintiffs. Mr Bruwer thought, I think mistakenly, that because Van Jaarsveld and Smit were not called, that ended the matter. That is not so. Even if they are not subpoenaed, qualifying fees can be granted by a court if it thinks that the evidence was relevant or would have been relevant. It is true that the report of Van Jaarsveld is dated long after the trial, but it appears to me that it has relevance to the matters, irregularities and such like, that were being investigated over those years.

The plaintiff's claim, in the result, is dismissed with costs. The taxing master to allow such qualifying fees as he deems reasonable for Van Jaarsveld and Smit in the light of the above remarks. The defendants are ordered to pay the costs of the application, jointly and severally, on an opposed scale in application 6527/92 whose Notice of Motion is dated 28 June 1994.

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