The 9th International Anti-Corruption Conference
Effective Use of Legal Remedies for
INDEXB. REMEDIES IN GENERAL C. CORRUPTION D. REMEDIES THROUGH CRIMINAL LAW D1. THE PLAYERS D2. THE REMEDIES D3. THE PREVENTION OF ORGANISED CRIME ACT E. REMEDIES THROUGH CIVIL LAW E1. ANTON PILLER ORDERS E2. MAREVA INJUNCTION E3. INTERDICTS E4. ACTION PROCEEDINGS F. CONCLUSION
Traditionally, the typical South African approach to combating corruption has been of a criminal justice nature focused on arrest, trial and incarceration upon conviction.
Corruption in South Africa has hardly been the easiest offence to prove. Historically and perhaps perceptively, practitioners such as investigators and prosecutors have interpreted legislation as limiting the offence of bribery to transactions between persons in the employ of the State and private persons.
The Corruption Act 94 of 1992 that came into operation in South Africa on 3 July 1992 had the comprehensive and unequivocal effect of casting the net much wider, allowing for prosecution in the case of transactions between private persons.
Arguably, this broader net will increase the probability of success in the application of the aforementioned criminal justice approach to combating corruption.
Up until October 1995, based on a report by the South African Justice College, there were no court decisions that could enlighten the practitioner on the interpretation of the Corruption Act. Today, the situation is a lot more positive although there is general consensus amongst legal practitioners that corruption is still not an easy offence to prove.
Taking the above into account, a more comprehensive approach extending beyond a criminal justice focus is therefore necessary to effectively combat corruption. One specific approach in pursuit of this comprehensiveness is the application of additional legal remedies, other than purely criminal prosecution.
This paper is designed to give a practical South African investigative perspective on effective legal remedies that could aid in the combating of corruption. As such it is also focused on giving a holistic approach to remedies in general which extends beyond the typical criminal justice approach.
From an investigative context, remedies in general include the following:
The following is an illustration of a comprehensive perspective to
remedies in general, stemming from a typical investigation into a
corruption scenario investigation:
Considering that this paper is aimed at primarily addressing legal remedies to combat corruption, the focus will now be on the top two tiers of Figure 1, namely remedies in criminal law and civil law. Before looking at these remedies, it is relevant to first give a definition of corruption within the South African context.
The statutory offence of corruption in terms of the Corruption Act of 1992 is created in section 1 of the said Act. This Act replaced the common law crime of bribery.
There are two types of corruption created in this section, namely active and passive corruption.
In simple terms, corruption is committed by:
In its most elementary form, corruption occurs when any undue compensation or benefit is given to a person for any conduct or omission related to his / her duty for which he / she is paid a salary.
Active corruption is created in section 1(1)(a) and is committed by the corruptor. The corruptor is the person who initiates the advance and makes the payment. Section 1(1)(a)(ii) refers to past corruption and section 1(1)(a)(i) to future corruption.
Passive corruption is created in section 1(1)(b) and is committed by the corruptee. The corruptee is the person who receives the payment and delivers the service. Section 1(1)(b) also refers to past corruption (section 1(1)(b)(ii)) and future corruption (section 1(1)(b)(i)).
The following are some of the players in the fight against corruption within South Africa:
The most fundamental remedy in criminal law is that of prosecution of the corruptor and / or the corruptee. South African case law on successful corruption prosecutions are inter alia the following:
As can be seen from the above, in South African case law, matters that have appeared before the courts are mostly elementary in nature. It appears that few of the higher profile and more complex corruption scenarios are prosecuted with success. The reason for this lies in the strongest criticism of the Corruption Act of 1992, namely that the act makes provision for prosecution of both corruptor and corruptee. Practically, this leaves even the potential witness susceptible to prosecution. Who is then left to testify?
Section 204 of the Criminal Procedure Act, Act 51 of 1977 (CPA) does, however, make provision for the indemnification of witnesses from prosecution. Section 204 provides that the Court may, on request by the prosecution, indemnify a witness from prosecution if the witness testifies frankly and honestly. However, in practice one would not, from an ethical perspective, resort to this option too frequently.
Additional tools to facilitate criminal law remedies
Various statutory provisions exist for financial recovery on behalf of the private citizen as well as the State in response to corruption.
Before reflecting upon financial recovery aspects, it is first necessary to look at certain legislative tools that can assist the investigator in gathering evidence when pursuing the route of criminal law as a remedy. Before embarking on this route, it is perhaps appropriate to also take into account that in many corruption scenarios, a great deal of the evidence involved is likely to be of a documentary nature.
In SA case law, a document has been defined in Seccombe v Attorney General 1919 TPD 270 as "any written thing capable of being evidence" and could include film and videotapes. The Civil Proceedings Act 25 of 1965 includes as a definition for a document "any book, map, plan, drawing or portrait".
Section 225(5) of the CPA provides that a document includes "any device by which information is recorded or stored". Section 246 and 247 of the CPA adds a newspaper, magazine or book, pamphlet, letter, list, record, placard or poster.
There are three different categories of documents:
As far as search and seizure is concerned, this aspect is generally provided for in South African law in the following legislation, amongst others:
It is important, however, to note that Chapter 2 (Bill of Human Rights) of the Constitution of South Africa, Act 108 of 1996, has to be continuously considered when applying the above-mentioned or other appropriate legislation. The relevant sections of the Constitution impacting on investigators in their day to day tasks will be:
An important cautionary note in the application of search and seizure legislation is that it is generally, but not exclusively, conducted by the SAPS under search warrants issued in terms of section 21 of the CPA. Articles that can be seized are mentioned in section 20 of the CPA.
Section 24 of the CPA provides that private parties (for example a private investigator), may seize items such as stolen stock or produce, articles contravening law relating to intoxicating liquor, dependence-producing drugs, arms and ammunition or explosives. It is a prerequisite that the aforementioned articles must be on a premises of which the private party is lawfully in charge.
In terms of section 205 of the CPA a person who can give material or relevant information may be obliged to appear before court and be questioned by the Director of Public Prosecutions or the Public Prosecutor with regard to this information. In practice, this section is often used in the investigation of crimes of a financial nature to secure documentary evidence such as bank statements and records of financial transactions.
It is important to note that the majority of players mentioned above are created by statute. They also have, in terms of the statute, the power to apply for search warrants and if authorised, to execute search and seizure operations.
In terms of section 297 of the CPA a court may impose a suspension of a sentence on certain conditions, one of which is compensation.
Because this most directly relates to the subject of legal remedies, we will elaborate in this regard. In accordance with section 297 of the CPA, a court presiding in a criminal matter may, after conviction of an accused, pass a sentence of imprisonment and / or a fine, or imprisonment and suspend the sentence on condition that the accused compensates the injured party. The requirements for this approach are the following:
Furthermore, section 300 of the CPA provides for the court before which an accused was convicted of an offence, to award damages to the injured party. The prerequisites for such an order is the following:
Important to note for the purposes of our next paragraph, is the fact that an order in terms of section 300 has the same effect as a civil judgement of a court with concurrent jurisdiction. Unless the person in whose favour the award has been made renounces the award within sixty days from date of the order, the person against whom the order was made shall not be liable for any other civil action in respect of the same cause.
A major shortcoming in this legislation, which is currently being amended, is that it rules out any future civil proceedings once the court has made a ruling on a certain set of facts.
Perhaps the most prominent legislation in South Africa in recent times aimed at combating organised crime, which includes corruption, is the Prevention of Organised Crime Act 121 of 1998 that came into operation on 21 January 1999. This act has already been amended twice, in April 1999 and August 1999.
In terms of Section 18(1) of the said Act, a court may, after conviction of an accused (of any offence), and upon application of the prosecutor, enquire into any benefit derived by the accused from the offence(s) of which he is convicted or any criminal activity related to that offence(s). If the court finds that the accused did indeed benefit, it may order that the accused pay the State an appropriate amount.
Section 19 - 22 are designed to assist the court in the determination of the value of the unlawful activities.
In terms of section 23 the confiscation order shall have the effect of a civil judgment for the amount of the order. Failure to comply with the order will, however, constitute a separate offence (section 75).
For the confiscation order to function effectively, it must be supported by a proactive measure to gain control over property, that may at a later stage have to be realised in order to satisfy a confiscation order. In the absence of such a measure, a defendant will be free to dissipate such property, thereby frustrating the confiscation exercise. Sections 25 and 26 of the Prevention of Organised Crime Act enables a High Court to make a restraint order, prohibiting any person from dealing with the property specified in the order. A restraint order may be granted when a confiscation order has been made but has not yet been effected, or where the High Court is satisfied that a person will be charged with an offence and that it is likely that a confiscation order will be made against him / her (section 25).
In making the restraint order the High Court may require the defendant to disclose certain information in respect of property and the location thereof. A restraint order may be effected by the seizure of the relevant property by a police official (sections 26(8) and 27), or by the appointment of a curator bonis in respect of that property (section 28). If there is immovable property that is subject to the restraint order the High Court may order the Registrar of Deeds to make certain endorsements on the title deed of that property (section 29). Failure to comply with the restraint order or any ancillary thereto will constitute an offence (section 75).
Realisation of property
Sections 30 and 32 of the Act provide for the powers of a curator bonis to realise any realisable property. Section 31 provides for the application of the money obtained from the realisation of the relevant property. The money should firstly be used to make such payments as the High Court may direct and thereafter for the satisfaction of the confiscation order. In the process of the realisation of property and satisfying the confiscation order, it is necessary to protect the rights of innocent creditors. In order to achieve this, the payments that the High Court may order, may include payments in respect of obligations which were found to have priority when the extent of the realisable property had been determined under section 20.
Recovery of Property
According to section 37 of the Act all proceedings under Chapter 6 are civil proceedings and not criminal proceedings. Further that the rules of evidence applicable in civil proceedings shall apply to proceedings under Chapter 6.
Section 38 - 47 provides for a preservation of property order. Section 38 determines that such a preservation of property order is issued by a High Court upon application by the National Director of Public Prosecutions. It prohibits any person subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property. A High Court shall make such a preservation of property order if there are reasonable grounds to believe that the property concerned is:
Note that no conviction of any offence is required. A High Court may at the same time authorise the seizure of the property concerned by a police official. Section 39 determines that notice of the issue of a preservation of property order must be given to all persons affected thereby. In order to prevent property subject to a preservation of property order from being disposed of or removed contrary to such order, any police official may seize any such property, if he / she has reasonable grounds to believe that such property will be imposed of or removed (section 41).
A curator bonis may be appointed by the High Court in respect of property subject to a preservation of property order (section 42). Immovable property is also subject to a preservation of property order (section 43).
Forfeiture of property (section 48 - 57)
Section 48 provides that if a preservation of property order is in force, the National Director of Public Prosecutions may apply to a High Court for an order forfeiting to the State all or any of the property that is subject to the preservation of property order.
Section 50 makes provision for the court to order the forfeiture of property if it finds, on a balance of probabilities, that the property is:
In South African Law civil proceedings are conducted by either:
Generally, by application to crime, the term "containment" refers to the stopping of the crime and preventing it from moving any further. Using criminal law terminology, this could be loosely interpreted to mean "search and seizure".
The jurisdiction to grant an Anton Piller order was first upheld by the Court of Appeal in a case called Anton Piller KG v Manufacturing Process (1976) Ch55.
An Anton Piller order is often described as a civil search warrant. It is a draconian order which requires the defendant to permit the plaintiff's representatives (including the plaintiff's attorney) to enter the defendant's premises for the purpose of searching for and removing into safe custody articles, documents, evidence, assets or other material as specified in the order. The order generally includes a range of other mandatory orders requiring the defendant to provide other assistance to make the search effective, and to enable the subject matter of the order to be found and removed from the premises. Orders requiring the printing out of information held on computer and the provision of keys to locked filing cabinets, is a prime example of an Anton Piller order.
The Basis for Anton Piller Relief
Anton Piller relief is an exceptional remedy, only granted in exceptional circumstances. There are effectively four essential preconditions for the making of such an order:
The plaintiff has to undertake to the Court to issue and serve a writ on the defendant as soon as practicable, as a condition of obtaining the order.
The Court will have particular regard to the fact that the order makes serious inroads into the defendant's civil liberties, such as:
The Court's approach is not to make an order unless it concludes that, without the order, the plaintiff will suffer a greater injustice than that which the Court will be inflicting on the defendant by making the order.
Anton Piller: South African Perspective
The Anton Piller principle, and the requirements for the operating of such an order, has been applied in various High Court cases in South Africa.
The requirements for an Anton Piller order in terms of the English Law reveals a close parallel with the requirements in terms of the South African Law for a similar order. It is to be observed that these requirements accord with common principles and common logic.
The essence of the procedure is twofold:
The aim of the order is preservation of evidence. This aim must be achieved before the incriminating material is removed.
The application is brought by way of a notice of motion requesting inter alia the following:
The notice of motion is based on a founding affidavit of the applicant or a person representing the applicant.
It was decided in the South African High Courts that the object of an Anton Piller order is not to sanction a search for evidence, which might or might not exist and, which might or might not go to found a cause of action.
The object is to preserve specific evidence, which was known to exist and, which prima facie constituted vital substantiation of a known case of action, and whose concealment, loss or destruction was feared by the applicant for the order. (The MV Urgupowers of the MV Urgup v Western Bulk Carriers (Australia) (Pty) Ltd and others 1999 (3) SA 500 (C)).
The Appellate Division of the High Court decided that Anton Piller orders directed at discovery and preservation of evidence are a part of the South African law. The honourable court held that the applicant, in support of an order obtained in camera and without notice to the respondent, must prima facie establish that:
The honourable court distinguished the Anton Piller order from a rule nisi operating as an interim interdict. The Anton Piller grants immediate relief whereas the rule nisi contemplates that the relief sought will only be granted at some future date after the respondent has had time to show cause that it should not be granted. (Shoba v Officer Commanding, Temporary Police Camps, Wagendrift Dam 1995 (4) SA 1 (AD).
Failure to comply with order
In the Shoba Case, Corbett CJ stated that "(t)he courts would be careful to ensure that the Anton Piller procedure is not used indiscriminately or as an instrument to harass defendants". To prevent abuse the court should insist on safeguards. These may include an explanatory notice to the respondent and the presence of both a "supervising attorney" and the sheriff. Where a respondent does not comply with an Anton Piller order the sanction for failure is contempt of court.
Disclosure and freezing orders against defendants
The first Mareva Injunction was granted by the Court of Appeal in 1975 in the case of Mareva Compania Naviera SA v International Bulkcarriers SA (1975) 2 Lloyd's Rep 509. A Mareva Injunction is an order of the Court, which has the effect of freezing a party's assets, pending the determination of the plaintiff's claim at trial. A Mareva Injunction can also be granted or extended post-judgement, pending enforcement over the defendant's assets. The injunction does not confer on the plaintiff a pre-trial attachment, or any form of security, but it does prevent the defendant from dissipating his assets so as to defeat any later judgement.
An order for a Mareva Injunction will only be granted where the applicant has shown on affidavit that:
As applications for Mareva Injunctions are almost inevitably made on an ex parte basis, the plaintiff is under a duty to give full disclosure of all relevant facts in the supporting affidavit.
Mareva: The South African Perspective
The Appellate Division of the High Court of South Africa remarked that it is unacceptable to describe an interlocutory interdict, which has the effect of restraining a respondent from concealing or dissipating assets pending an outcome of an action for damages, as a Mareva Injunction. According to the honourable Grosskopf JA the description of "Mareva type interdict" carries misleading connotations (Knox D'Arcy and Others v Jameson and Others 1996 (4) SA 348 (AD)).
The rules relating to the prerequisites for the granting of an interdict are founded upon Roman-Dutch law. The practical application of those rules has been affected by English judgments dealing with injunctions. The English law relating to injunctions is very similar to South African law but there are some important, although discrete, differences.
An interdict is an order of court, ordering the respondent to refrain from doing something or to do something specifically. The first type of order is referred to as a prohibitory interdict and the second type as a mandatory interdict. The distinction has little practical value except that a court, when exercising its discretion whether or not to grant an interdict, will have regard to the fact that it is more difficult to enforce a mandatory interdict. The requirements for obtaining the two types of interdicts are the same.
All courts possess the jurisdiction to grant interdicts. A court will have the same jurisdiction in this respect as it does in other civil proceedings. If the requirements for the granting of an interdict are satisfied by facts within the territorial jurisdiction of a High Court, that court will possess territorial jurisdiction to decide the matter.
An interim interdict is a court order preserving or restoring the status quo, pending the final determination of the rights of the parties. It does not involve a final determination of these rights and does not affect the final determination by the court.
An interim interdict is always sought by way of application. The relief sought in the application can be for:
The requisites for the right to claim an interim interdict are:
An interdict is final if the court order is based upon a final determination of the rights of the parties to the litigation. The requisites for the right to claim a final interdict are:
For the purpose of this paper, and because our focus is on a crime, that is corruption, we will limit our commentary with regard to pleadings which form part of action proceedings. Generally speaking, a pleading is a document which sets out the facts upon which the legal relief a party claims, is based. It is for this reason that the rules require that every pleading must contain a clear and concise statement of the facts upon which the pleader relies for his claim, defense or answer to any pleading, as the case may be. The pleading must also contain sufficient particularity to enable the opposite party to reply thereto.
A trial action may be initiated by either a simple or a combined summons. If the claim is in respect of a debt or liquidated demand, a simple summons will suffice but in all other instances a combined summons must be used.
A combined summons must be used if the claim is not in respect of a debt or liquidated demand. The annexure must contain a statement of the material facts upon which the plaintiff relies. Generally speaking the annexure must set forth:
The summons is followed by various other pleadings, which need not to be dealt with in this paper. It is however important to note that following the intended trial, the court may find in favour of the plaintiff and award the relief sought.
All aspects of corruption are deplorable and governments, regulatory agencies, law enforcement agencies, the business sector and the public should join efforts to combat it.
Clearly in our modern society with its infinite crime risks that facilitate corruption, perhaps the most effective tool we can bring to bear on this potential nemesis is the application of all available legal remedies. These must be effected through the enforcement of partnerships aimed at applying a holistic multi-disciplinary approach to combating corruption founded on the platform of the REMEDIES IN GENERAL as illustrated in "Figure 1" of this document.
1. Asset Recovery : Succeeding on an International Scale - Janet Legrand.
2. Civil Procedure in the Supreme Court - Harms, LTC.
3. Detection, Investigation and Prosecution of Financial Crimes - Richard Nossen and Joan Norvelle.
4. Fighting Corruption: Strategies for Prevention - Stan Sangweni and Darryl Balia.
5. Constitution of the Republic of South Africa, Act 108 of 1996.
6. Criminal Procedure Act, Act 51 of 1977.
7. Corruption Act, Act 94 of 1992.
8. Prevention of Organised Crime Act, Act 121 of 1998.
9. S v Mtsi 1995 (2) SACR 206 (W)
10. S v Davids 1998 (2) SACR 313 (C).
11. S v Mogotsi 1999 (1) SACR 604 (W)
12. The M V Urgupowers of the MV Urgup v Western Bulk Carriers (Australia) (Pty) Ltd and Others 1999 (3) SA 500 C
13. Shoba v Officer Commanding, Temporary Police Camps, Wagendrift Dam 1995 (4) SA (1) AD
14. Knox D' Arcy and Others v Jameson and Others 1996 (4) SA 348 AD.