National Director of Public Prosecutions v Phillips and Others

First appellant Andrew Lionel Phillips owned and operated a business called the Ranch in Sandton, where he provided venue and facilities for sexual services by women sex workers. Women paid R450 per shift to access the premises and customers paid R250 admission, though Phillips received no portion of payments to the women for sexual services. He was charged under the Sexual Offences Act 23 of 1957 with keeping a brothel (s 2) and living off the earnings of prostitution (s 20(1)(a)). In December 2000, the National Director of Public Prosecutions applied ex parte for a restraint order under the Prevention of Organised Crime Act 121 of 1998 against Phillips and 14 companies/close corporations he controlled. Labe J granted a provisional restraint order which was executed, seizing property at his home. On the return day, Heher J confirmed the rule but granted leave to appeal.

• Whether a restraint order under the Prevention of Organised Crime Act 121 of 1998 is appealable
• Whether the National Director of Public Prosecutions failed to make material disclosures in the ex parte application
• Whether there were reasonable grounds to believe a confiscation order may be made against the appellant
• Whether the restraint order should be limited in value to assets acquired during the period of the charges
• Whether the execution of the restraint order violated the appellant's rights to privacy and dignity

The appeal was dismissed with costs, including the costs of two counsel. The restraint order confirmed by Heher J was upheld.

A restraint order made under section 26 of the Prevention of Organised Crime Act 121 of 1998 is appealable despite being interim in nature. While such an order is not definitive or dispositive of the rights of parties in the main proceedings (as contemplated in Zweni v Minister of Law and Order), it is nevertheless final in effect because, absent the limited grounds for variation or rescission in s 26(10)(a), it is unalterable by the court that makes it. The defendant is stripped of restrained assets and control over them in an unalterable situation pending trial, which constitutes finality sufficient for appealability. The Zweni formulation is illustrative rather than immutable, and a decision with final jurisdictional effect can be appealed even if not definitive or dispositive. For purposes of granting a restraint order under s 25(1) of the Act, 'sufficiently related' criminal activity under s 18(1)(c) can include earlier conduct of the same nature as the charged offences, allowing restraint of assets acquired prior to the period specified in the charges where there are reasonable grounds to believe such earlier activity occurred.

The court made several non-binding observations: (1) That properly applied limitations on appeals (requiring leave and permitting conditions under s 20(5)(a) of the Supreme Court Act) provide adequate protection to the state and will not necessarily undermine the purpose of the Act. (2) That the closure of the Ranch business was an inevitable concomitant of the restraint given its nature, and the curator could not seriously contemplate running it economically without prostitution or lawfully with prostitution. (3) That while appellant's case could have been stated without resorting to insinuation, baseless accusations or extravagant language, prosecutors operating in the tough environment of asset forfeiture should expect vehement protestations from those accused, who may well be criminals fighting for rich rewards. (4) The court noted that the admission by appellant that the Ranch was a brothel would likely be inadmissible at his trial due to failure to warn him of his right against self-incrimination, though this did not affect the reasonableness of grounds for believing he might be convicted. (5) The court observed that a large-scale removal operation would inevitably involve resultant disarray, and any unlawful conduct by employees or agents of the curator was not the responsibility of the respondent and was irrelevant to the appeal.

This case established important principles regarding the appealability of restraint orders under the Prevention of Organised Crime Act 121 of 1998. It clarified that such orders, though interim in nature and not definitive of the main issues, are nevertheless appealable because they are final in the sense that they create an unalterable situation for the defendant who is stripped of assets and control. The judgment provides guidance on the application of the Zweni test for appealability and confirms that decisions can be appealable based on final jurisdictional effect even if not definitive or dispositive. It also interprets the scope of 'sufficiently related' criminal activity under s 18(1)(c) of the Act, confirming that earlier conduct of the same nature can qualify, thereby potentially extending confiscation orders beyond the specific period charged. The case demonstrates the courts' willingness to uphold restraint orders where there are reasonable grounds to believe confiscation orders may be made, while maintaining appropriate procedural safeguards through the appeal process.