Paul Abraham Janse van Rensburg and Others v The National Director of Public Prosecutions

The respondent (National Director of Public Prosecutions) applied for a restraint order in terms of section 26 of the Prevention of Organised Crime Act 121 of 1998 (POCA) against the first to fourth appellants. The application was based on allegations that they were to be charged with fraud or theft. The respondent alleged that the appellants operated through six close corporations that were registered in the names of black individuals (PDIs/HDIs) in order to fraudulently obtain tenders from the Gauteng Department of Education. The corporations involved were: Johannes Maja CC, Mathekga & Olivier CC, Thandi NG CC, T N T Trading 60 CC (Techni Paint), Micromath Trading 112 CC and Ali Builders CC. The total amount involved was R19,181,330.20. The respondent alleged that the appellants controlled the close corporations, had access to their bank accounts, and benefited from the tender payments, while representing to the GDE that the entities were genuinely black-owned to take advantage of preferential procurement policies. The court a quo granted the restraint order. The appellants appealed, contending that the court erred in finding there were reasonable grounds for believing that a confiscation order might be made against them.

• Whether the respondent alleged sufficient facts from which it appeared there were reasonable grounds for believing that the first to fourth appellants might be convicted of fraud or theft
• Whether the requirements of section 25(1)(b)(ii) of POCA for a restraint order were satisfied
• Whether an applicant for relief must make out a case in the founding affidavits themselves, rather than relying on facts contained only in annexures not referred to in the founding affidavit
• What constitutes a proper basis for alleging misrepresentation in fraud cases

The appeal was upheld with costs including costs of two counsel. The order of the court a quo was set aside and replaced with an order discharging the rule nisi and dismissing the application with costs.

In applications for restraint orders under section 26 of POCA, the applicant must allege sufficient facts in the founding affidavit itself from which it appears there are reasonable grounds for believing that the respondent might be convicted of the alleged offence and that a confiscation order might be made. An applicant cannot rely on facts contained in annexures to the founding affidavit that are not referred to and not relied upon in the founding affidavit itself. A respondent is not called upon to deal with such facts, and the court will not search through voluminous documentation to construct a case on behalf of the applicant. The essence of established motion procedure requires that portions of documentation relied upon must be identified and the case sought to be made out must be indicated, so that the opposing party knows what case must be met.

The court provided a definition of fraud: 'Fraud consists in unlawfully making, with intent to defraud, a misrepresentation which causes actual prejudice or which is potentially prejudicial to another' (citing Burchell). The court noted the tendering process employed by the Gauteng Department of Education, including the Preferential Procurement Policy Framework under the Preferential Procurement Policy Framework Act 5 of 2000, which awarded preference points to companies owned by Historically Disadvantaged Individuals (HDIs). The court observed that although 475 pages of documents were attached to the founding affidavit, the specific tender documents allegedly containing misrepresentations were not referred to in the affidavit, with only two exceptions: one tender document attached as an example, and another attached to support an allegation regarding Techni Paint's registration status.

This case is significant in South African law for establishing important principles regarding the evidentiary requirements for restraint orders under POCA, specifically section 26 read with section 25. It reinforces the fundamental principle of motion proceedings that an applicant must set out the full factual basis for relief in the founding affidavit itself, clearly identifying what allegations are made and what evidence supports them. Courts will not search through voluminous annexures to construct a case on behalf of an applicant. The judgment provides important procedural guidance for applications under POCA, requiring the National Director of Public Prosecutions to properly plead the factual basis for allegations of fraud, including specifying when, where, how and to whom alleged misrepresentations were made. It serves as a check on the potentially draconian powers of asset restraint and forfeiture under POCA, ensuring that such orders are only granted when there is a properly pleaded basis for believing criminal offences may have been committed.