Scholtz v The National Director of Public Prosecutions

The first to seventh applicants were convicted in the Northern Cape Division of the High Court on counts of corruption and money laundering. Following the convictions, an enquiry was held in terms of section 18 of the Prevention of Organised Crime Act 121 of 1998 (POCA) and on 6 December 2016, the court made a confiscation order totalling R59,806,982.00 against all the applicants jointly and severally. The first applicant was sentenced to 15 years imprisonment (ultimately reduced to imprisonment only on count 8 corruption after appeal). The second to seventh applicants were each sentenced to fines. The applicants had arranged with the NDPP to apply for leave to appeal against convictions, sentences and the confiscation order on 6 February 2017. However, only the application for leave to appeal against convictions and sentences was filed on that date. The application for leave to appeal against the confiscation order was only filed on 10 October 2017, approximately 10 months late. The applicants blamed the delay on a misunderstanding by a candidate attorney who allegedly believed a hearing date had to be arranged before filing the application. The High Court dismissed both the application for condonation and the application for leave to appeal.

• Whether condonation should be granted for the late filing of an application for leave to appeal against a confiscation order
• Whether there were reasonable prospects of success on appeal against the confiscation order
• Whether the settlement agreement between the parties required proof that each entity received proceeds of crime, or whether proof that any of them received such proceeds was sufficient
• The proper interpretation of the settlement agreement concluded between the parties in relation to the confiscation order

1. The application for condonation of the late filing of the application for leave to appeal was dismissed. 2. The application for leave to appeal was struck off from the roll.

The binding legal principles established are: (1) The unavailability of a specific Judge does not constitute a valid reason for failure to file court papers within prescribed time limits, as applications can be filed and later allocated to another Judge by the Judge President or Deputy Judge President. (2) In applications for condonation, where there are no reasonable prospects of success on the envisaged appeal, condonation will not be granted regardless of other considerations. (3) Settlement agreements concluded in the context of section 18 POCA confiscation proceedings must be interpreted objectively according to the plain meaning of the words used. (4) Where a settlement agreement provides for joint and several liability and uses the phrase 'any of them' in relation to defendants receiving proceeds of crime, this does not require proof that each defendant individually received such proceeds, but only that any of them did. The State is not required to prove the case against each entity separately where joint and several liability has been agreed.

The court made observations about the context in which the settlement agreement was concluded, noting that both parties foresaw that attempting to determine the applicants' benefit accurately would result in protracted litigation due to huge discrepancies between the calculations of the respective auditors and the failure to provide complete financial documents. The court also observed that it is common practice in all high courts for the Judge President or Deputy Judge President to allocate matters to other Judges when the original Judge is temporarily unavailable, and noted that this alleged unavailability was never brought to the attention of the Judge President or Deputy Judge President. The court further observed that where a matter involves millions of rands and is of such importance to the applicants, it should not be entrusted to a candidate attorney without proper supervision and the file should be diarised for follow-up.

This case reinforces important principles regarding condonation applications in South African law, particularly that: (1) technical or administrative difficulties such as the unavailability of a Judge do not excuse non-compliance with filing deadlines; (2) attorneys bear responsibility for proper supervision of candidate attorneys, especially in matters of significant importance; (3) prospects of success on appeal are a critical factor in condonation applications - where there are no reasonable prospects of success, condonation will ordinarily be refused; and (4) settlement agreements in the context of confiscation proceedings under POCA must be interpreted objectively according to their clear wording, and courts will not substitute words to change the plain meaning of such agreements. The case demonstrates the court's strict approach to condonation applications where the explanation for delay is inadequate and there are no prospects of success on the merits.