THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Not reportable

CASE  NO: 75/06

In the matter between :

PAUL ABRAHAM JANSE VAN RENSBURG
1st Appellant
WILLEM JACOBUS JANSE VAN RENSBURG
2nd Appellant
LEON LODEWIKUS OLIVER
3rd Appellant
MELISSA DE BRUTO
4th Appellant
INVICTA KONSTRUKSIE CC
5th Appellant
LAMSO CONSTRUCTION CC
6th Appellant
ANNAMARIE OLIVER
7th Appellant
PAUL ABRAHAM JANSE VAN RENSBURG
8th Appellant
WILLEM JACOBUS JANSE VAN RENSBURG
9th Appellant
WILLEM JACOBUS JANSE VAN RENSBURG
10th Appellant

and

THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS Respondent
___________________________________________________________________
Before:
STREICHER, HEHER, COMBRINCK JJA, SNYDERS
& MUSI AJJA
Heard:
20 FEBRUARY 2007
Delivered:
23 MARCH 2007
Summary:
Section 26 of the Prevention of Organised Crime Act 121 of 1998
– no facts alleged from which reasonable grounds for believing
that a confiscation order might be made appear - case for relief to
be made out in founding affidavits – respondent not called upon
to deal with facts contained in attachments not referred to and not
relied upon in the founding affidavit.
Neutral citation:
This judgment may be referred to as Janse van Rensburg v
NDPP [2007] SCA 23 (RSA)
___________________________________________________________________

STREICHER  JA

STREICHER JA:
[1] The appellants appeal against a restraint order in terms of s 26 of the
Prevention of Organised Crime Act 121 of 1998 (POCA) granted against
them in the Transvaal Provincial Division upon an application by the
respondent. Leave to appeal to this court was granted by the court below.

[2] In terms of s 26 read with s 25 of POCA a competent High Court
may upon an application by the National Director of Public Prosecutions
(the respondent) make a restraint order prohibiting any person from dealing
in such realisable property as may be specified in the order and which is
held by the person against whom the order is being made, when that court
is satisfied that a person is to be charged with an offence and it appears to
the court that there are reasonable grounds for believing that a confiscation
order may be made against such person. A confiscation order means an
order in terms of s 18. The section provides that whenever a defendant is
convicted of an offence and the court convicting him upon enquiry finds
that he has derived a benefit from that offence, or from any other offence of
which he has been convicted at the same trial and from any criminal
activity which the court finds to be sufficiently related to those offences,
the court may make an order against the defendant for the payment to the
State of any amount it considers appropriate.

[3] Upon the application of the respondent for a restraint order against
the first to fourth appellants the court below was satisfied that the first to
fourth appellants were to be charged with fraud alternatively theft and that
a case had been made out from which it appeared that there were
reasonable grounds for believing that they might be convicted and that a
confiscation order might be made against them. The court below therefore
confirmed a rule nisi in terms of which a provisional restraint order had

been granted and granted the restraint order. The order was granted in
respect of all realisable property1 held by the first to fourth appellants,
excluding such realisable property as the curator bonis appointed in terms
of the order might certify in writing to be in excess of R19 181 330.202 and
‘expenses related to restrained assets which would ordinarily be carried by
the estate’. The appellants contend that the court below erred in finding that
there were reasonable grounds for believing that a confiscation order might
be made against them, more particularly in finding that there were
reasonable grounds for believing that any of the first to fourth appellants
might be convicted of the offences of fraud or theft.

[4] In the application for the restraint order the first to fourth appellants
were cited as defendants and the fifth to tenth appellants, being persons
who may be affected by the restraint order, as respondents. The first
appellant, P A Janse van Rensburg and the second appellant, W J Janse
Van Rensburg, each hold a 50% member’s interest in the first respondent,
Invicta Konstruksie CC. The third appellant, L L Olivier, holds a 20%
member’s interest and the seventh appellant, A Olivier, who is married in
community of property to the third appellant, holds an 80% member’s
interest in the sixth appellant, Lamso Construction CC. The fourth
appellant is married to the first appellant. The first and second appellants,
in their capacities as trustees of the Nicpaul Trust, are cited as the eighth
and ninth appellants respectively and the second appellant in his capacity as
trustee of the Willem Jacobus Janse van Rensburg Trust is cited as the tenth
appellant.

1 Realisable property is defined in s 14 as:
‘(a)
any property held by the defendant concerned; and
(b)
any property held by a person to whom that defendant has directly or indirectly made any
affected gift.’
2 Adjusted to take into account fluctuations in the value of money as calculated in terms of sections 15
and 20 of POCA.

[5] In regard to the contention that there are reasonable grounds for
believing that the first to fourth appellants may be convicted of fraud or
theft, the respondent relies on an affidavit by Skuto David Mfopha a special
investigator in its employ attached to the Directorate of Special Operations
(DSO). The DSO instituted an investigation in order to investigate
suspected fraudulent conduct in respect of tenders issued and awarded by
the Gauteng Department of Education (GDE) and that investigation gave
rise to these proceedings.

[6] The offences of fraud alternatively theft with which the first to fourth
appellants were charged were allegedly perpetrated in connection with
tenders submitted by and awarded to six close corporations namely
Johannes Maja CC, Mathekga & Olivier CC, Thandi NG CC, T N T
Trading 60 CC (trading as Techni Paint), Micromath Trading 112 CC and
Ali Builders CC. In the light of the conclusions to which I have come I
will, unless indicated otherwise, set out the facts as alleged by the
respondent.

[7] Johannes Maja Construction CC was registered in the names of
Johannes Maja and his wife Disego Julia Moseri. Each of them held a 50%
member’s interest in the close corporation. The registration was attended to
by the third appellant who had encouraged Maja to register a close
corporation. The third appellant accompanied Maja and Moseri to a bank
where they opened a bank account for the close corporation. Although they
were the only signatories on the account the third appellant kept the cheque
book and controlled the account. The third appellant assisted them to
complete the tender documents. Tenders were awarded to the close
corporation. An allegation that Maja and Moseri had not benefited
financially from the tenders is disputed by the appellants.

[8] Mathekga and Olivier Construction CC is a close corporation in
which Jeffrey Phuti Mathekga held 80% and the third appellant 20% of the
members’ interest. The third appellant suggested to Mathekga that a close
corporation be formed and that they should share the profits of the
undertaking in the ratio 80/20. The third appellant provided the funds
initially required and he was responsible for managing the close
corporation while Mathekga was going to be in charge of the employees on
the sites where work had to be done. They opened a bank account in
respect of which they were to be co-signatories but the third appellant
controlled the chequebook in respect of the account. The third appellant
completed tender documents and arranged for Mathekga to sign them but at
times signed such documents on behalf of Mathekga. A tender or tenders in
respect of two projects at the Moretele School were awarded to the close
corporation. One project was for renovations in the amount of R1 091 139
and the other for the erection of a palisade fence in the amount of
R165 834. According to Mathekga money was paid into the close
corporation’s bank account but he has no knowledge as to how the money
was utilised. He was at times asked to sign cheques which were blank or
had the figures inserted concealed.

[9] Encouraged by the first and fourth appellants to start her own
business, Thandi Nokulunga Nkosi acquired a close corporation and
changed its name to Thandi NG Construction CC. She did so with the
financial assistance of the first and the fourth appellants. A bank account
was opened on behalf of the close corporation and Nkosi, the only member
of the close corporation, was also the only signatory on the account. With
the assistance of the first appellant Nkosi submitted a tender by the close
corporation for the renovation of Tenekolonga Primary School in

Katlehong. The tender was awarded to the close corporation and the
security required by the GDE, being 2% of the tender value, was provided
by the fifth appellant. The fifth appellant did part of the work for which it
submitted an invoice to the GDE. As a result R220 000 was paid into the
close corporation’s bank account. An amount of R200 000 was thereupon
transferred to the bank account of the fifth appellant. Notwithstanding the
allegation by the respondent that Nkosi was the only signatory on the close
corporation’s bank account the respondent alleges that it was the first
appellant who transferred the amount to the fifth appellant’s bank account.
The relationship between Nkosi and the first appellant was thereafter
terminated due to the fact that Nkosi was not actively involved in the work.
Nkosi thereupon entered into an agreement with one Lunga in terms of
which it was agreed that Lunga would complete the work and that payment
for the work would be shared between Lunga and Nkosi on an equal basis.

[10] Techni Paint is the name under which T N T Trading 60 CC traded.
Each of the fourth appellant and Thomas Mtsweni held a 50% interest in
the close corporation. Although it is alleged that Mtsweni was not advised
of the interest he held in the close corporation it is clear that he knew that
he and the fourth appellant were co-owners of Techni Paint and that their
purpose was to obtain tenders from the GDE. The fourth appellant tendered
for work on behalf of Techni Paint and a tender in an amount of
R945 864,84 for work in respect of the Monde Primary School was
awarded to it. Techni Paint used the equipment, material and staff supplied
by the fifth appellant to execute the work. Again an allegation that Mtsweni
did not benefit from the awarding of the tender is disputed by the
appellants.

[11] Micromath Trading 112 CC is a close corporation in which Kgosi
Jack Kgare holds a 75% member’s interest and Catherine M E van
Nieuwenhuizen a 25% interest. Kgare, an employee of the fifth appellant,
must have signed the necessary documents when he, at the request of the
first appellant, during 2000, accompanied Van Nieuwenhuizen to the
registrar of companies but he does not know that he became a member of
the close corporation. The close corporation obtained a tender to renovate
Bhukuleni Secondary School in Soweto. The first appellant promised him a
bonus in respect of the work that was being done at the school. He had no
control over the close corporation and did not know that it had a bank
account.

[12] Ali Building Construction CC is a close corporation in which
Alpheus Legutso (later called Lehutso) holds a 100% member’s interest.
According to the respondent the first appellant registered this close
corporation in Lehutso’s name without Lehutso being aware thereof.
Lehutso eventually got control of the close corporation. Tenders in an
amount of R3 767 700 were awarded to the close corporation but it is not
stated when that happened.

[13] Mfopha explained the tendering process that was employed, as
follows: An invitation to tender was advertised in newspapers whereupon
tenders were submitted. Upon receipt of tenders they were taken to a
compliance office where they were checked for compliance with the
requirements set out in the tender documents. Thereafter the tenders were
submitted to a tender committee. Only tenders within 10% of the estimated
cost of the project were considered. They were evaluated in terms of
criteria based on price, technical competence and a preference point system
in accordance with the Preferential Procurement Policy Framework

(‘PPPF’) introduced in terms of the Preferential Procurement Policy
Framework Act 5 of 2000 and its regulations. In terms of the PPPF a
company that was wholly or partly owned by black people or which had
appointed a female or a disabled person as a shareholder scored additional
points on the basis of their status as ‘Historically Disadvantaged
Individuals’ (‘HDI’s). It was standard procedure that in all tender
documentation submitted to the GDE the tendering company should
declare all partners, proprietors and shareholders by name, identity number,
home address, citizenship, previously disadvantaged individual (‘PDI’)
status, shareholding percentage and date of acquisition, time devoted to the
entity, interests in other entities and length of service of individuals. The
price tendered was allocated 90% of the total score and preference points
made up the balance. Only the tender with the highest score could be
selected. The tender committee’s selection was then submitted for approval
to the GDE’s Acquisition Council headed by the Chief Executive Officer of
the GDE.

[14] The names of the members of the close corporations and the amount
allegedly involved in respect of each close corporation are set out by
Mfopha in a table called Schedule A, as follows:

COLUMN 1
COLUMN 2
COLUMN 3
Name of the CLOSE
CORPORATION
Owner(s)
Amount involved
Johannes Maja Close
Corporation
Johannes Maja & Disego
Moseri

4 324 983.28
Mathekga
&
Olivier
Close Corporation
Jeffrey Mathekga & Leon
Olivier

1 742 650.62
Thandi
NG
Close
Corporation
Thandi Nkosi

883 094.00
Techni-Paint
Close
Corporation
Melissa
De
Bruto
&
Mtsweni

7 613 166.30
Micro Maths Trading
112 Close Corporation
Cathrine Niewenhezen &
Kgoshi Kgare

849 736.00
Ali
Builders
Close
Corporation
Alpheus Lehutso

3 767 700.00
Total

19 181 330.20

[15] Numerous documents comprising 475 pages, including extracts from
the record of the investigation conducted by the respondent were attached
to Mfopha’s affidavit. He concluded:
‘55
Throughout the investigation, I have established that the First Respondent
through the Defendants employed a number of people, most of whom were
African, and most of whom were current or previous employees of First
Respondent.
The Defendants would facilitate the creation of a close corporation in which
some of their African employees would be the sole members or would hold
at least a 50% member’s interest.
The Defendants would then use the status of the black owned companies to
secure tenders with the GDE.

The First Respondent would in turn perform the work as per the tender
specifications and payment from the GDE would then be made to “the black
owned entity which they had formed”.
The Defendants would then withdraw the money from the bank account of
the respective close corporations.
I respectfully submit that there are reasonable grounds to conclude that
FRAUD has been committed by the Defendants in that3:
58.1
They did have de facto control of the entities listed in Column 1 of
Schedule A, which were used to apply for certain tenders from the said
GDE; and/or
58.2
The Defendants had financial control and/or control of the bank accounts
and/or access to the bank accounts and/or access to the finances that were
paid by GDE to the entities mentioned in Column 3 of Schedule A which
were owned by their black employees; and/or
58.3
That the entities mentioned in Column 1 of Schedule A were owned
and/or controlled wholly or in part by persons mentioned in Column 2 of
Schedule A; and/or
58.4
That the monies paid by GDE would be used to the benefit of persons
mentioned in Column 2 of Schedule A; and/or
58.5
That the money paid to the GDE as security for the tenders awarded, to
at least one of the entities mentioned in Column 1 of Schedule A were
monies paid by the Defendants; and/or
58.6
The Defendants through the tenders submitted to the GDE stated that the
entities mentioned in Column 1 of Schedule A were the owners of
resources such as machinery and trucks, financial independence and
operational structures in order to perform the work that they were
tendering for.
58.7
The Defendants through the tenders submitted to the GDE stated that the
entities mentioned in Column 1 of Schedule A implied that they had
staff, financial independence and independent operational structures in
order to perform the work that they were tendering for.’

3 I retained the following incorrect numbering.

[16] In order to satisfy the requirements of s 25(1)(b)(ii) it was necessary
for the respondent to allege facts from which it appeared that there were
reasonable grounds for believing that the first to fourth appellants might be
convicted of the offences of fraud or theft and that a confiscation order
might be made against them.  ‘Fraud consists in unlawfully making, with
intent to defraud, a misrepresentation which causes actual prejudice or
which is potentially prejudicial to another.’4  It is not contended that a case
had been made out in respect of theft and nothing further need be said in
this regard. In regard to the charge of fraud, and in the light of the
conclusion that I have reached, only the question of misrepresentation
needs be addressed.

[17] Paragraphs 58.1 and 58.3 are contradictory. Mfopha probably
intended to say that the first to fourth appellants misrepresented the
ownership and control of the entities mentioned in Column 2 of Schedule
A. However, no factual basis for that conclusion is to be found in his
affidavit. That the first to fourth appellants used the close corporations
concerned in order to secure work from the GDE is clear but it does not
follow that they misrepresented the ownership and control of the
corporations to the GDE.

[18] The mere fact that the first to fourth appellants had financial control
and/or control of the bank accounts of the close corporations and that they
had access to the funds that were paid by the GDE to the entities
concerned, as alleged in paragraph 58.2, did not constitute a fraud. Mfopha
probably intended to allege that the first to fourth appellants misrepresented
to the GDE that the people mentioned in column 2 had such control and

4 Jonathan Burchell Principles of Criminal Law 3ed p 833.

access. Again no factual basis for that conlusion is to be found in the
founding papers.

[19] In paragraph 58.4 it is alleged that the first to fourth appellants
committed a fraud in that ‘the monies paid by GDE would be used to the
benefit of persons mentioned in Column 2 of Schedule A’. Mfopha
probably intended to say that the first to fourth appellants committed a
fraud in that they misrepresented that the monies paid by the GDE would
be used for the benefit of those persons. Again no factual basis for that
conclusion is to be found in Mfopha’s affidavit. Nowhere in the affidavit
does he say when, where, how and to whom this alleged misrepresentation
or the misrepresentations alleged in paragraphs 58.1, 58.2 and 58.3 were
made.

[20] In paragraph 58.5 it is alleged that defendants committed a fraud in
that ‘the money paid to the GDE as security for the tenders awarded, to at
least one of the entities mentioned in Column 1 of Schedule A were monies
paid by the Defendants’. No basis for an allegation that such action would
have been fraudulent is to be found in Mfopha’s affidavit.

[21] The misrepresentations alleged in paragraphs 58.6 and 58.7 are not
relied upon in a provisional charge sheet served on the appellants. In
argument before us counsel for the respondent nevertheless relied upon
them. In paragraph 58.6 Mfopha alleges that express representations were
made by the appellants in tender documents submitted to the GDE ‘that the
entities mentioned in Column 1 of Schedule A were the owners of
resources such as machinery and trucks, financial independence and
operational structures in order to perform the work that they were tendering
for’. In paragraph 58.7 he probably intended to allege that the appellants by

implication misrepresented in the tenders to the GDE that the entities
mentioned in Column 1 of Schedule A ‘had staff, financial independence
and independent operational structures in order to perform the work that
they were tendering for’.

[22] However, although there are a number of tender documents among
the 475 pages attached to Mfopha’s affidavit, neither the tender documents
in which these representations are alleged to have been made nor the
passages in these tender documents relied upon by the respondent, are
referred to in the affidavit. With two exceptions the tender documents
attached to the affidavit are attachments to other documents and are not
referred to in the affidavit. One of the exceptions is a tender document
attached as an example of a tender document. The other exception is a
tender document which is attached in support of the allegation that ‘Techni
Paint submitted a tender to the GDE and gave out that it is a registered
close corporation’. Like the other alleged misrepresentations no basis for
the representations alleged in paragraphs 58.6 and 58.7 are therefore to be
found in the affidavit.

[23] The respondent submits that a basis for Mfopha’s conclusion of
fraud appears from passages in the 475 pages annexed to his affidavit.
However, an applicant for relief has to make out a case for the relief he is
seeking in his founding affidavits ie he should, in his founding affidavits,
set out the facts relied upon by him. A respondent is not called upon to deal
with facts contained in attachments to the founding affidavits not referred
to and not relied upon in the founding affidavits. For this reason an
applicant cannot be allowed to rely on such facts. In this regard I fully
agree with the following statement by Joffe J in Swissborough Diamond

Mines (Pty) Ltd v Government of the Republic of South Africa 1999 (2) SA
279 (T) at 324F-G:
‘Regard being had to the function of affidavits, it is not open to an applicant or a
respondent to merely annexe to its affidavit documentation and to request the Court to
have regard to it. What is required is the identification of the portions thereof on which
reliance is placed and an indication of the case which is sought to be made out on the
strength thereof. If this were not so the essence of our established practice would be
destroyed. A party would not know what case must be met. See Lipschitz and Schwartz
NNO v Markowitz 1976 (3) SA 772 (W) at 775H and Port Nolloth Municipality v
Xahalisa and Others ; Luwalala and Others v Port Nolloth Municipality  1991 (3) SA
98 (C) at 111B-C.’
In Lipschitz and Schwartz NNO at 775H-776 Coetzee J said:
‘A litigant cannot, as it were, throw a mass of material contained in the record of
an enquiry at the Court and his opponent, and merely invite them to read it so as to
discover for themselves some cause of action which might lurk therein, without
identifying it. If this were permissible, the essence of our established practice which is
designed and which still evolves as a means of accurately identifying issues and
conflicts so that the Court and the litigants should be properly apprised of the relevant
conflicts, would be destroyed.’

[24] The respondent failed to allege facts from which it appears that there
are reasonable grounds for believing that the first to fourth appellants may
be convicted of fraud or theft. The respondent therefore failed to make out
a case that there are reasonable grounds for believing that a confiscation
order may be made against them. If follows that the appeal should succeed.

[25] The following order is made:
The appeal is upheld with costs including the costs of two
counsel.
The order of the court a quo is set aside and replaced with the
following order:

‘The rule nisi is discharged and the application is dismissed
with costs.’

____________________
P E STREICHER
JUDGE OF APPEAL

CONCUR:

HEHER JA)
COMBRINCK JA)
SNYDERS AJA)
MUSI AJA
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
23 March 2007
Status:
Immediate

P A JANSE VAN RENSBURG & 9 OTHERS v NATIONAL DIRECTOR OF
PUBLIC PROSECUTIONS

Please note that the media summary is intended for the benefit of the media and does
not form part of the judgment of the Supreme Court of Appeal.

* * *
The Supreme Court of Appeal today upheld an appeal against a restraint order in
terms of s 26 of the Prevention of Organised Crime Act in respect of the appellants’
property.  The Supreme Court of Appeal held that the respondent failed to allege facts
from which it appears that there are reasonable grounds for believing that a
confiscation order may be made against the appellants.