The National Director of Public Prosecutions v Wouter Basson

The respondent (Wouter Basson) was indicted on numerous charges of fraud and theft allegedly committed before the Prevention of Organised Crime Act 121 of 1998 came into operation. The charges related to alleged misappropriation of approximately R45 million from a top secret military project of the former South African Defence Force, which Basson allegedly channeled to private companies and accounts under his control. On 3 August 1999, the National Director of Public Prosecutions applied ex parte to the High Court at Pretoria for a provisional restraint order under the Act to prevent Basson from dealing with various properties, including houses in Pretoria, Paarl and England, company interests, and bank accounts. The application was supported by affidavits from Mr Fouche and Mr Ackerman stating they believed there was a reasonable prospect of conviction and a confiscation order. The day before the application, Basson's legal advisers contacted Mr Ackerman offering to place all property (except his house, two vehicles and personal belongings) under State control voluntarily. This offer was not disclosed to the court when the ex parte application was moved. Cassim AJ granted the provisional restraint order, appointing a curator bonis to control the property. On the return day, Roux J set aside the provisional order with costs on an attorney and client scale.

• Whether section 18(1) of the Prevention of Organised Crime Act 121 of 1998 operates retrospectively to permit confiscation orders for offences committed before the Act came into operation
• Whether a restraint order could be granted where the underlying offences were committed before the Act came into effect
• Whether the ex parte application was properly brought and whether material facts were disclosed to the court
• What evidence is required to satisfy the court that there are 'reasonable grounds' for believing a confiscation order may be made
• Whether the punitive costs order was appropriate

The appeal was dismissed with costs, including the costs of two counsel. The punitive costs order made by the court a quo (attorney and client costs) was upheld.

Section 18(1) of the Prevention of Organised Crime Act 121 of 1998 (prior to amendment by Act 38 of 1999) does not operate retrospectively and therefore does not permit confiscation orders to be made in respect of offences committed before the Act came into operation. A statute will be construed as operating prospectively only unless the legislature has clearly expressed a contrary intention. The express reference in sections 12(3) and 19(1) to events preceding the Act's commencement, and the absence of similar language in section 18(1), indicates that the legislature deliberately did not intend section 18(1) to operate retrospectively. Where section 18(1) does not permit a confiscation order, section 25(1) does not permit a restraint order to be granted because there can be no reasonable grounds for believing a confiscation order may be made. In ex parte applications for restraint orders, the utmost good faith must be observed and all material facts must be disclosed; the withholding or suppression of material facts entitles a court to set aside an order even if non-disclosure was not willful or mala fide.

The Court noted but did not decide whether the imposition of a confiscation order upon a convicted person constitutes 'punishment' as envisaged by section 35(3)(n) of the Constitution (citing Welch v United Kingdom 20 EHRR 247), which would have constitutional implications for retrospective application. The Court observed that section 25(1) requires that it should appear to the court itself (not merely to the appellant or his staff) that there are 'reasonable grounds' for believing a confiscation order may be made, which requires at least disclosure of the nature and tenor of available evidence - not merely a summary of allegations and opinions of the prosecutor's staff. However, the Court declined to determine precisely what evidence is required and in what form it should take, as this was unnecessary to decide the case. The Court noted that a statute purporting to create an offence or prescribe punishment with retrospective effect would conflict with sections 35(3)(l) and (n) of the Constitution and might be invalid unless justified under section 36(1), but did not need to decide this question.

This case established important principles regarding the interpretation of the Prevention of Organised Crime Act, specifically that the confiscation provisions in section 18(1) do not apply retrospectively to offences committed before the Act came into operation. It affirmed the strong presumption against retrospective operation of statutes in South African law and the requirement for clear legislative intention before courts will interpret statutes retrospectively. The case also reinforced the duty of utmost good faith in ex parte applications and the consequences of failing to disclose material facts to the court. It provided guidance on what constitutes sufficient evidence to satisfy a court that there are 'reasonable grounds' for believing a confiscation order may be made when seeking restraint orders under the Act. The judgment was significant in the context of one of South Africa's most high-profile prosecutions relating to apartheid-era crimes.