National Director of Public Prosecutions v Andrew Lionel Phillips and Others

On 22 December 2000, the NDPP obtained a provisional restraint order against the first to 15th respondents under section 26 of the Prevention of Organised Crime Act 121 of 1998. The order was made final on 30 July 2001 and upheld on appeal on 4 September 2003. The first respondent (Phillips) owned and operated a brothel business known as the Ranch on premises owned by the 16th respondent. A curator bonis was appointed to take possession and control of the restrained property. Following appointment, the curator bonis stopped the businesses from operating, causing them to cease generating income. This led to numerous applications against the curator bonis for failing to pay municipal charges and maintain the properties due to lack of funds. On 19 June 2003, the respondents applied for rescission of the restraint order based on alleged impossibility of the curator bonis to perform his duties. The High Court (Louw AJ) granted the rescission on 12 December 2003. The NDPP appealed.

• Whether a High Court has inherent jurisdiction to rescind or vary a restraint order granted under section 26(1) of the Prevention of Organised Crime Act 121 of 1998 on grounds other than those prescribed in the Act
• Whether section 26(10)(a) of the Act is merely a locus standi provision or whether it circumscribes the grounds upon which a restraint order may be rescinded or varied
• Whether the impossibility of implementing a restraint order is a ground for rescission under common law principles
• The distinction between a restraint order under section 26(1) and orders appointing a curator bonis under section 28(1) of the Act

The appeal was upheld with costs, including costs of two counsel. The order of the court a quo was set aside and substituted with an order dismissing the application for rescission with costs, including costs of two counsel.

A High Court which grants a restraint order in terms of section 26(1) of the Prevention of Organised Crime Act 121 of 1998 has no inherent jurisdiction to rescind or vary that order. Subject to the recognized common law grounds for rescission which must have existed when the restraint order was granted (such as fraud, common mistake, or instrumentum noviter repertum), the court's power to rescind or vary a restraint order is circumscribed by the Act and limited to the grounds set forth in section 25(2) and section 26(10). Section 26(10)(a) prescribes exhaustively the circumstances in which a High Court may vary or rescind a restraint order, whether at the instance of the defendant or any other person affected by it. A restraint order is unalterable absent the requirements for variation or rescission laid down in section 26(10)(a) and leaving aside orders obtained by fraud or error.

The court made several obiter observations: (1) It distinguished restraint orders from curator bonis orders, noting that the latter may be varied or rescinded on good or sufficient cause shown under section 28(3)(a), and that courts would be entitled to have regard to 'a number of disparate and incommensurable features' when exercising that power. (2) The court observed that in the absence of an order under section 28(1)(b), the impact of a restraint order would in most cases be minimal, particularly for immovable property, as defendants could continue living on property, receiving rent, or running businesses without 'dealing in' the property. (3) The court expressly refrained from expressing any view on the correctness of the various orders granted against the curator bonis during the proceedings. (4) The court noted that the difficulties in the case arose from 'a woeful lack of co-operation between the respondents and the curator bonis' and that the root problems lay in the curator's lack of power to generate funds, which could have been addressed by granting the curator power to let the properties. (5) The court observed that once a curator bonis is appointed, any good or sufficient cause would suffice for variation of the curator's appointment, and typical grounds would include the need to ameliorate or resolve administrative difficulties.

This judgment is significant as it definitively establishes the limits of judicial power in relation to restraint orders under the Prevention of Organised Crime Act. It confirms that the statutory scheme is exhaustive and excludes common law inherent jurisdiction to rescind or vary restraint orders except on the grounds specifically provided in the Act (sections 25(2) and 26(10)) or on recognized common law grounds that existed at the time the order was made (fraud, common mistake, etc.). The judgment clarifies the important distinction between restraint orders (section 26) and curator bonis orders (section 28), with the latter being susceptible to variation on broader grounds. It reinforces the principle of statutory interpretation that where Parliament has specifically prescribed circumstances for variation or rescission, courts cannot invoke inherent jurisdiction to expand those grounds. The case is important for asset forfeiture practitioners and provides guidance on the proper approach to addressing administrative difficulties in implementing restraint orders - namely through variation of curator bonis appointments rather than rescission of the restraint order itself.