---

IN THE HIGH COURT OF SOUTH AFRICA

(TRANSVAAL PROVINCIAL DIVISION)

CASE NO: 35056\05

DATE: 16/8/2006

UNREPORTABLE

In the matter between:

NATIONAL DIRECTOR OF PUBLIC

PROSECUTIONS APPLICANT

And

CHRISTIAAN GERHARDUS PELSER DEFENDANT

BELINDA PELSER 1^ST RESPONDENT

SIZOKHULA ENGINEERING &

CONSTRUCTION (PTY) LTD 2^ND RESPONDENT

AIRELEC MAINTENANCE PTY (LTD) 3^RD RESPONDENT

CHRISTIAAN GERHARDUS PELSER 4^TH RESPONDENT

(EX OFFICIO)

as trustee of the CHRIST TRUST

KWENA MANAGEMENT SERVICES CC 5^TH RESPONDENT

PROTEA PLANT HIRE PTY (LTD) 6^TH RESPONDENT

SIZABANTU PRESTIGE DEVELOPMENT

PTY (LTD) 7^TH RESPONDENT

VECTO TRADE 256 PTY (LTD) 8^TH RESPONDENT

HENVER EIENDOMME PTY (LTD) 9^TH RESPONDENT

JUDGMENT

______________________________________________________

BOSIELO J:

1. INTRODUCTION

1.1 On the 4 November 2005, my brother Bertelsmann J issued a restrain order ex parte against the defendant and the various respondents, restraining them, inter alia from dealing in any manner with any property to which the restraint order relates. Simultaneously with the restraint order, a rule nisi was issued calling upon the defendant and the respondents to show cause on 26 January 2006 why the provisional order should not be made final. By agreement between the parties, the rule and interim order were extended to 3 May 2006, on which date a further extension was granted to the opposing roll of 22 June 2006 with the costs being reserved.

1.2 This is the return date of the rule nisi. The parties have filed all the necessary affidavits. After condonation was granted, the applicant’s belated replying affidavit was admitted as part of the papers to considered by the court.

2. The Parties

2.1 The applicant is the National Director of Public Prosecutions, (NDPP) duly appointed in terms of section 10 and 5(2) (a) of the National Prosecuting Act, No 32 of 1998 read with section 179(1) of the Constitution of the Republic of South Africa Act, No 108 of 1996 (The Constitution).

2.2 The defendant, is a business personality who is involved in the business of construction and electrical and civil engineering. In the course of his business, he entered into a joint venture with one Sello Simon Mokwena (Mokoena) the details whereof will become much more clearer later in my judgment, as this entire case revolves around the joint venture agreement.

2.3 The respondents are persons and /or companies in which the defendant held an interest, who, in one form or another are alleged to have been involved with the joint venture referred to above.

3. THE FAGUAL BACKGROUND

3.1 I find it necessary to state that, to a large extent, the facts of this case are common cause. Sello Simon, Mokoena (Mokoena), through his close corporation called Labudi Projects CC was awarded four tenders by the Department of Housing, in Johannesburg, during

2003 as follows:

• Orange farm Extension 6 for the construction of water and sewer reticulation. The value of this tender was R5 579 809,03;

• Orange Farm Extension 3 for the construction of water and sewer reticulation. The value of the tender was R5 198 287,85;

• Orange Farm Extension 3 for the construction of toilets. The value of the tender was R4 986 755,90;

• Orange Farm Extension 4 for the construction of toilets was R2 081

• 345,09.

3.2 During the implementation of these projects one Mr Hamman, who was appointed to design and supervise the project, had some complaints about the manner in which Labudi Projects CC was performing or implementing the projects. Hamman confronted Mokoena and recommended that he takes Airelec Maintenance (PTY) LTD, which is one of the defendant’s companies, as joint partner in these various projects to assist him with the effective performance of the tenders. On 12 May 2004, Mokoena, representing Labudi Projects CC and one Chris Pelser (the defendant) representing Airelec Maintenance (PTY) LTD signed a joint venture agreement pertaining to the four projects. In terms of the agreement, Mokoena and Pelser opened a banking account in the name of the joint venture with First National Bank-Menlyn,(FNB) to which both of them became the co-signatories.

3.3 It appears that matters ran smoothly for the joint venture until during December 2004, when there were problems with the auditing of the financial books of the joint venture. There were some meetings held where bitter and acrimonious exchanges took place. This culminated in Mokoena surreptitiously visiting FNB-Menlyn on, 2 December 2004 for bank statements pertaining to the joint venture. According to Mokoena, he was shattered to discover that Pelser (the defendant) had unilaterally and without his knowledge or consent issued cheque number 162 in the amount of R500,000,00 from the joint venture’s bank account. This cheque was made out to Sizokhula Engineering and Construction which is the second respondent in these proceedings. According to Mokoena, his signature which appeared on cheque number 162 was forged.

3.4 A further investigation of the joint venture’s bank statements revealed further irregular payments, according to Mokoena. He discovered that on 1 December 2004, Pelser (the defendant) drew a cheque in the of R1 157 282, 48 from the joint venture’s account which was subsequently deposited into Pelser’s private banking account number 62063421623. A copy of the cheque viz number 157, is attached to the papers as “Annexure 10”. Once again, Mokoena stated that this cheque was issued by Pelser unilaterally and without his knowledge or consent. He denies emphatically that the signature which appears on the cheque is his.

3.5 It again came to light that during 31 October 2004, Pelser had unilaterally and without Mokoena’s knowledge drawn a cheque from the joint venture’s account in favour of Airelec Maintenance, the third respondent, which is one of Pelser’s company. Mokoena stated that the signature on this cheque number 127, “Annexure NMM3” which purports to be his was forged. This cheque was in the amount of R152277-14.

3.6 Pelser for his part, does not dispute the various payments and/or withdrawals referred to above. However, he emphatically denies that there is any fraud, forgery or theft involved in these transactions. Essentially, his explanation is that the said cheques were, prepared by one Slabbert who was the joint venture’s bookkeeper. These cheques represented legitimate payments made in favour of his companies for services which his companies had rendered to the joint venture. According to Slabbert, Mokoena signed all these cheques in his presence after the purpose thereof was fully explained to him. Both Pelser and Slabbert seriously dispute any allegation that Mokoena’s signature was forged.

4.LEGAL SUBMISSIONS

4.1 Both counsel were agreed that the crisp legal issue before me is whether, on the available evidence there are reasonable grounds for believing that a confiscation order may be made. See Section 25(1) b(ii) of the Prevention of Organised Crime Act 121 of 1998 (POCA). It is not in dispute that, if I am persuaded that there are reasonable grounds to believe that a confiscation may follow after the criminal trial, I have a discretion to confirm the interim restraint order. On the contrary, if there are no such reasonable grounds for believing that a confiscation order may follow, then fairness and justice dictate inexorably that I should decline to confirm the interim restrain order and instead discharge the rule nisi. Needless to state that any decision to the contrary would be in conflict with the basic tenets of our judicial system i.e. fairness and justice. In order for me to arrive at such a decision, it is inevitable that I must carefully examine all the evidence placed before me so as determine, judicially, whether there is evidence which might, not shall, support a conviction and a consequent confiscation order. Self-evidently, I must also be satisfied that such evidence might and not will be believed by the trial court. The difficulties inherent in such a task should be manifest to all. I am clearly called upon to asses what might occur in the future not-with-standing my obvious lack of prophetic foresight or Solomonic wisdom.

4.2 Mr Celliers SC, appearing for the defendant and all the respondents unleashed a scathing attack against Mokoena and his handwriting expert, one Frik Landman. Essentially, Mr Celliers argued, on the strength of opposing affidavits by Pelser and Slabbert, that Mokoena is a mendacious witness. He argued with force that Slabbert’s affidavit is consistent with the practice which was used by the joint venture regarding the administration of their finances. Very interestingly, he submitted that there is no possibility that Pelser could be convicted in the criminal trial which is currently underway. According to both Pelser and Slabbert, Pelser had not prepared the cheques in issue. According to Slabbert, these cheques were prepared by him in his capacity as the bookkeeper and submitted to both Pelser and Mokoena for their signatures. According to Mr Celliers if ever anybody has to be prosecuted and possibly convicted, it will have to be Slabbert and not Pelser. In conclusion he contended that if there cannot be any conviction of Pelser in the criminal trial, it follows logically that there will be no confiscation order. Mr Celliers argued further that the evidence contained in Landman’s report is not credible, particularly as some serious flaws or shortcomings were exposed from his forensic report by the defendant’s expert, one Hendrik Lodewyk du Toit (du Toit). In conclusion, Mr Celliers contended that the cumulative effect of the evidence of Slabbert and du Toit is that the evidence of Landman will not be accepted in the criminal trial where the onus, unlike in these proceedings, is proof beyond reasonable doubt.

4.3 On the other hand, Mr Labuschagne SC, assisted by Adv. Ndala, argued that the standard of proof in these proceedings is simply proof on a balance of probabilities and not like in a criminal trial where proof beyond reasonable doubt is required. He submitted that the standard of proof is the one set out in section 25(1) (b) (ii) of POCA which requires the existence of reasonable grounds that a confiscation order may follow. Mr Labushagne proceeded to argue that it is common cause that defendant (Pelser) is currently standing trial on charges fraud, forgery, uttering and thefts emanating from the transactions involving the three cheques referred to above. Regarding the possibility of a conviction followed by a confiscation order, Mr Labuschague relied heavily on the authority of NDPP vs Kyriacou 2004 (1) SA 379 (SCA), particularly at p384 par9 where the learned Mlambo AJA (as he then was) enunciated the correct legal test as follows:

“[9] Furthermore, approaching Van Wyk’s disputed evidence relating to the further alleged criminal activity of the respondent in accordance with the principles set out in Stellenbosch Framers’ Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA234 (C) and Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51; 1984 (3) SA 623 (A), the learned Judge concluded that the order sought by the appellant could not be granted ‘if the truth cannot be established from the papers’. He went on to say that the ‘discretion to grant a restraint order is to be sparingly exercised and then only in the clearest of cases and where the considerations in favour substantially outweigh the considerations against’, relying in this regard on what was said in National Director of Prosecutions v Mcasa and Another 2000 (1) SACR 263 (Tk) at 275 e-f.

[10] In my view, the learned Judge’s approach to the matter was incorrect as was the Court’s approach in Mcasa case. Section 25(1) (a) confers a discretion upon a court to make a restraint order if, inter alia, ‘there are reasonable grounds for believing that a confiscation order may be made…’. While a mere assertion to that effect by the appellant will not suffice (National Director of Public Prosecutions v Basson 2002 (1) SA 419 (SAC) (2001 (2) SACR 712) para [19] at 428B-C (SA)), on the other hand the appellant is not required to prove as a fact that a confiscation order will be made, and in those circumstances there is no room for determining the existence of reasonable grounds for the application of the principles and the onus that apply in ordinary motion proceedings. What is required is no more than evidence that satisfies a court that there are reasonable grounds for believing that the court that convicts the person concerned may make such an order”. With respect, this is the test which I have to apply in this matter.

4.4 As regards the conflict between the version of the two handwriting experts, Mr Labuschague submitted that the importance of such conflict should not be exaggerated as this court is not called upon, at this stage, to determine issues of credibility and the veracity of the expert’s evidence. This, he submitted is a task which faces the trial court after it has had the benefit observing the various witnesses testifying in person, being cross- examined and their general behaviour and demeanour in the actual and real atmosphere of a trial. For this proposition Mr Labuschague relied on the authority of NDPP v Rautenbach and Another 2005 (4) SA 603 (SCA) where Nugent JA, writing for the majority, stated the approach to be the following: at p 613 paragraphs 25-27.

“Par[25] A Court from which such an order is sought is called upon to assess what might occur in the future. Where it is ‘satisfied that a person is to be charged with an offence’ and that there are ‘reasonable grounds for believing that a confiscation order may be made against such person’ (s 25 (1)) it has a discretion to make a restraint order.

“Par[26] The Court a quo approached the matter as follows:

“The Act requires that it must be shown that “grounds” exist which grounds appear to a Court to be of such a nature that they would support a future confiscation order. This means that, as a requirement, the applicant has to prove the existence of such “grounds”. That is a factual question and according to s 13 (5) of the Act, the onus of proving such facts must be discharged by the applicant on a balance of probabilities’.

[27] In my view, that is not correct. It is plain from the language of the Act that the Court is not required to satisfy itself that the defendant is probably guilty of an offence, and that he or she has probably benefited from the offence or from other unlawful activity. What is required is only that it must appear to the Court on reasonable grounds that there might be a conviction and a confiscation order. While the Court, in order to make that assessment, must be apprised of at least the nature and tenor of the available evidence, and cannot rely merely on the appellant’s opinion (National Director of Public Prosecutions v Basson 2002 (1) SA 419 (SCA) (2001(2) SACR 712 in para [19] it is nevertheless not called upon to decide the veracity of the evidence. It need ask only whether there is evidence that might reasonably support a conviction and a consequent confiscation order (even if all that evidence has not been placed before it) and whether that evidence might reasonably be believed. Clearly that will not be so where the evidence that is sought to be relied upon is manifestly false or unreliable and to that extent it requires evaluation, but it could not have been intended that a Court in such proceedings is required to determine whether the evidence is probably true. Moreover, once the criteria laid down in the Act have been met, and the Court is properly seized of its discretion, it is not open to the Court to then frustrate those criteria when it purports to exercise its discretion (cf Kyriacou, fn 6, in paras [9] and [10]). The misdirection by the Court a quo pervaded all its reasoning and was instrumental to the conclusion to which it arrived and I have approached the matter afresh.

4.5 It should now be abundantly clear that it is common cause that both Mokoena and Pelser were equal partners in a joint venture agreement. The joint venture opened a joint banking account with FNB Menlyn to which both Mokoena and Pelser were signatories. That during October 2004 and December 2004, Pelser withdrew from the joint venture’s banking account amounts to the value of R 1, 8 M. Pelser admitted that this amuont was paid into the accounts of companies in which he, Pelser (the defendant) is a shareholder. The only serious dispute is whether Mokoena had co-signed these cheques or not. According to Mokoena and the handwriting expert, Landman, the signature which appears on the three cheques and which purports to be that of Mokoena is forged. Furthermore Mokoena, asserts that due to serious problems he had with Pelser concerning the reconciliation of the joint venture accounts, they had agreed, at two different meetings with Pelser during December 2004 that no payments would be made from the joint venture’s bank account from December 2004 until business commenced in January 2005. Mokoena asserts accordingly that the above mentioned cheques were issued contrary to an express agreement with Pelser and without his authority and knowledge. On the other hand Pelser, relying on Slabbert and du Toit, his handwriting expert, asserts that there is no possibility that he might be convicted in the criminal trial. Furthermore, he stated that there will not be any confiscation order as the money which was deposited into his companies’ accounts cannot be described as proceeds of unlawful activities. He asserts that his companies were legally entitled to such payment for work done and service rendered to the joint venture.

6 CONCLUSION

6.1 I have given this matter very careful consideration. As I have alluded to above, I need not be satisfied that the defendant (Pelser) is probably guilty of an offence and that he probably benefited from the offence or other unlawful activity. All that I need to be satisfied of is whether it appears to this court, on reasonable grounds, as opposed to spurious and/or frivolous grounds that there might be a conviction and a confiscation order. See NDPP v Rautenbach et al (Supra). Based on the facts before me, I am satisfied that there are reasonable grounds that the defendant may be convicted of either forgery or uttering or theft of money in the criminal trial. Concerning a possible confiscation order, there is no dispute that his company or companies wherein he was the sole shareholder benefited from the money withdrawn from the bank accounts of the joint venture. In my view, the likelihood of a confiscation is more than real.

In the result and for the foregoing reasons, the provisional restraint order issued on 4 November 2005 is confirmed with costs. Such costs shall include the costs of both Senior and junior counsel.

L.O BOSIELO

JUDGE IN THE HIGH COURT

ON BEHALF OF THE APPLICANT: ADV L.C LABUSCHAGNE SC

ASSITED BY ADV E.N NDALA

INTSRUTED BY: THE STATE ATTORNEY

ON BEHALF OF THE DEFENDANT: ADV CELLIERS SC

AND RESPONDENTS

INSTRUTED BY: STRYDOM & BREDENKAMP INGELYF

DATE OF HEARING: 22-06-2006

DATE OF JUDGEMENT:

---