THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Reportable

CASE  NO: 446/05
In the matter between :

NGENGELEZI ZACCHEUS MNGOMEZULU
First Appellant
NONTANDO MNGOMEZULU
Second Appellant
SECTION 13 THE AUGUSTUS CC
Third Appellant
NORDIC SAGA INVESTMENTS 203 CC
Fourth Appellant
SECTION 76 THE AUGUSTUS CC
Fifth Appellant
SECTION 21 ST JAMES CC
Sixth Appellant
SECTION 77 THE AUGUSTUS CC
Seventh Appellant
BASFOUR 481 (PTY) LTD
Eight Appellant
GREEN MILE INVESTMENTS 277 CC
Ninth Appellant
EMERALD DUNES INVESTMENTS 10 CC
Tenth Appellant
NUMBER 17 ST JAMES COURT CC
Eleventh Appellant
SECTION 29 ST JAMES CC
Twelfth Appellant
SWZ FILLING STATION CC
Thirteenth Appellant
SWZ PROPERTIES & DEVELOPMENT (PTY) LTD
Fourteenth Appellant

and

NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
_______________________________________________________________________
Before:
STREICHER, HEHER, COMBRINCK JJA, SNYDERS & MUSI AJJA
Heard:
19 FEBRUARY 2007
Delivered:
16 MARCH 2007
Summary:
Section 28 of the Prevention of Organised Crime Act 121 of 1998 –
curator bonis may be authorized to alienate property under
restraint in order to properly administer the assets under his
control.

Neutral citation: This judgment may be referred to as Mngomezulu v National
Director of Public Prosecutions [2007] SCA 11 (RSA)
________________________________________________________________________

STREICHER  JA

STREICHER JA:
[1] This is an appeal against the confirmation by the Witwatersrand Local
Division of a provisional restraint order against the appellants. The order had
been granted pursuant to an ex parte application in terms of s 26 of the
Prevention of Organised Crime Act 121 of 1998 (POCA). Leave to appeal
was granted by the court a quo.

[2] The application for a restraint order was directed against the first
appellant as defendant and the other appellants were joined as respondents
because of their interest in the matter, more particularly their interest in the
realisable property sought to be restrained. In opposition to the application
the appellants filed an answering affidavit deposed to by the first appellant.
He stated that he had been advised that it was unnecessary for him to deal
with the merits of the application and that his failure to respond to any of the
allegations contained in the founding affidavit should not be construed as an
admission of the contents thereof. He then raised two points in limine. The
first was that the provisional order should be discharged as a result of the
respondent not having drawn the attention of the judge who granted the order
to the fact that the order differed from previous orders granted in applications
for restraint orders in terms of s 26. The second was that paragraphs 1.7, 1.8,
1.20 and 4.3.2 of the provisional order conferred  powers on the curator bonis
appointed in terms thereof which could not be conferred on him lawfully.
These were the only points argued in the court a quo and also the only points
dealt with in the heads of argument filed on behalf of the appellants.
However, during the oral argument before us counsel for the appellants1
abandoned the first point in limine and submitted that the formulation of the
second point was wide enough to accommodate a submission, advanced in
the alternative, that no case had been made out for the appointment of a
curator bonis and for conferring on such curator the powers referred to.

1 Advocate Brassey SC had by then taken over as the leading counsel.

[3] The first appellant had been charged with dealing in drugs in
contravention of the Drugs and Drug Trafficking Act 140 of 1992. In terms of s
26 read with s 25 of POCA a High Court may grant an order prohibiting any
person from dealing in any manner with any property to which the order
relates when a prosecution for an offence has been instituted against the
defendant concerned, when it appears to the court that there are reasonable
grounds for believing that a confiscation order may be made against the
defendant and when the proceedings against the defendant have not been
concluded. As to when a confiscation order may be made, s 18 of POCA
provides that whenever a defendant is convicted of an offence the court
convicting the defendant may, on the application of the public prosecutor,
enquire into any benefit which the defendant may have derived from that
offence and, if the court finds that the defendant has so benefited, the court
may make an order against the defendant for the payment to the State of any
amount it considers appropriate, subject to the limit specified in s 18(2). Such
an order is referred to in POCA as a confiscation order.

[4] A restraint order may be made ‘in respect of such realisable property as
may be specified in the restraint order and which is held by the person
against whom the restraint order is being made’.2 Realisable property is
defined as:
‘(a)
any property held by the defendant concerned; and
(b)
any property held by a person to whom that defendant has directly or indirectly
made any affected gift.’3

[5] Where a High Court has made such a restraint order, that court may in
terms of s 28 of POCA at any time:

2 Section 26(2)(a).
3 Section 14.

‘(a)
appoint a curator bonis to do, subject to the directions of that court, any one or more
of the following on behalf of the person against whom the restraint order has been
made, namely –
(i)
to perform any particular act in respect of any or all the property to which the
restraint order relates;
(ii)
to take care of the said property;
(iii)
to administer the said property; and
(iv)
where the said property is a business or undertaking, to carry on, with due
regard to any law which may be applicable, the business or undertaking;
(b)
order the person against whom the restraint order has been made to surrender
forthwith, or within such period as that court may determine, any property in respect
of which a curator bonis has been appointed under paragraph (a), into the custody
of that curator bonis.’

[6] The restraint order made against the appellants relates to twelve
immovable properties, a number of Persian carpets, works of art, vehicles
and numerous bank accounts specified in a schedule attached to the order. It
also relates to all other property held by the appellants excluding clothing,
bedding, ordinary household furniture, kitchen and laundry appliances and
utensils and other articles (other than luxuries) that the curator bonis may
consider to be reasonably needed for the day to day use of the appellants.
The appellants did not contend that any of the property so restrained did not
constitute realisable property held by the first appellant within the meaning of
POCA.

[7] In terms of the order the appellants, and any other person with
knowledge of the order, were prohibited from dealing in any manner with the
property except as required or permitted by the order.4 In this regard the
order provided that the appellants had to surrender the restrained property to
the curator but that the curator could within his discretion release any of the
property back into the custody of the person who held such property, under

4 Para 1.3 of the order.

such conditions as the curator deemed appropriate, for the proper
administration and preservation thereof.5 In the event of a full disclosure
having been made by an appellant the curator was also authorised to release
such of the realisable property within his control as may be sufficient to meet
the reasonable current and prospective living expenses of the appellant
concerned as well as his reasonable current and prospective legal
expenses.6 Save as aforesaid the order did not allow the appellants to deal
with the property. Theodor Wilhelm van der Heever of Deloitte & Touche
Trust (Pty) Ltd was appointed as curator bonis subject to the provisions of the
Administration of Estates Act 66 of 1965 and subject to the supervision of the
Master of the High Court.7 He was authorized, after having obtained letters of
curatorship in terms of s 32(1) of POCA, to take the property into his
possession or under his control, to take care of such property and to
administer it.8 Such powers, duties and authority as provided for or implied in
the Act and such further powers as were specified or implied in the order
were conferred on him.9

[8] Paragraphs 1.7, 1.8, 1.20 and 4.3.2 of the restraint order, being the
paragraphs in issue, read as follows:
‘1.7
The particular curator bonis will be entitled to pay any expenses related to
restrained assets, which would ordinarily be carried by the estate out of any assets
under restraint. If no liquid assets are available to the curator bonis to pay these
expenses the curator bonis will have the power to sell assets under restraint in
order to properly administer the assets under his control. In such case, the owner of
the relevant restrained property has to be consulted as to which assets under
restraint should be sold.
1.8
The curator bonis will further be entitled to deal with any funds in any banking
accounts forming part of the property and is accordingly authorized to hold the

5 Paras 1.21 and 1.26.
6 Paras 1.35 and 1.36.
7 Para 1.4 of the order.
8 Para 1.5 of the order.
9 Para 1.6 of the order.

necessary signing powers of such accounts and to give directions to banking
institutions and other persons in control of any of those funds regarding the
utilization of such funds.’
‘1.20 In terms of Section 28(3)(c) of the Act, the fees of the curator bonis and, ex post
facto, expenses and disbursements reasonably incurred by the curator bonis in the
execution of his duties which have not been paid out of the estate in terms of
paragraph 1.7 supra, shall be paid from the proceeds of any confiscation order that
may be made against the Defendant failing which, by the State; provided that the
curator bonis is entitled to recover interest not exceeding the prime lending rate of
the major financial institutions on such expenses and disbursements.’
‘4
In terms of section 26(4)(a) of the Act, the Applicant is directed forthwith to give
notice of this order, by delivering a copy by hand, facsimile or by registered post, to
the following persons:

4.1
. . .

4.2
. . .

4.3
The Registrar of Deeds directing him to endorse the title deed of any
immovable property registered in the name of the Defendant and the
Respondents with the following restriction, namely, the property shall not,
without the consent of this Court:

4.3.1 . . .

4.3.2 Be attached or sold in execution (subject to the powers afforded to the
curator bonis in paragraph 1.7 and 1.17 above);

4.3.3 . . ..’

[9] The respondent correctly stressed in argument that :

‘(a)
Clause 1.7 merely permits the curator to use the resources of the estate to
pay expenses which meet two requirements. They must firstly relate to the
restrained assets. They must secondly be expenses “which would ordinarily
be carried by the estate”, that is, expenses which the estate would have
incurred and paid in the ordinary course if the confiscation order had not
been made.
(b)
Clause 1.8 merely allows the curator to operate the bank accounts of the
estate under his administration. It does not in any way extend the purposes
for which he may use the money in those accounts. He may only use the
money for purposes permitted by the remainder of the order. This clause

does not add to them. It merely says that he may operate the bank accounts
for purposes of the performance of his functions.’

[10] In terms of s 28(1)(a)(i) a High Court that has made a restraint order
may authorize a curator ‘to perform any particular act in respect of any of or
all the property to which the restraint order relates’. If interpreted according to
its ordinary meaning, the section empowers a High Court to authorize a
curator to, inter alia, sell property. However, the appellants argued that the
section, read in its context, should be interpreted restrictively so as to exclude
the power to alienate restrained property. They submitted that the purpose of
a restraint order was to preserve the property to which the order related and
that a provision in a restraint order entitling a curator bonis to sell or
encumber the restrained property would defeat the purpose of POCA. They
pointed out that even an eventual confiscation order would not in itself
deprive the owners of property of their right of ownership but would simply
constitute an order for payment of an amount of money to the State.

[11] In terms of s 33 the powers conferred upon the High Court by sections
26 to 31, or upon a curator bonis appointed in terms of s 28 are to be
exercised ‘with a view to making available the current value of realisable
property for satisfying any confiscation order made or which might be made’.
For the reasons that follow that purpose is not defeated by the provision
entitling the curator bonis to sell or encumber the restrained property ‘in order
to properly administer the assets under his control’ and ‘to pay any expenses
related to restrained assets, which would ordinarily be carried by the estate’.

[12] The curator bonis was entrusted with the administration of virtually the
entire estate of the appellants. Such administration would include the
maintenance of the restrained property and the payment of expenses in
respect thereof. The appellants conceded that in order to properly administer

the property entrusted to him the curator would have to incur expenses but
submitted that those expenses should be borne by the State. However,
s 28(3)(c) provides that a court which made an order contemplated in
subsection (1)(b) ‘may make such order relating to the fees and expenditure
of the curator bonis as it deems fit, including an order for the payment of the
fees of the curator bonis –
(i)
from the confiscated proceeds if a confiscation order is made; or
(ii)
by the State if no confiscation order is made.’
Again the appellants were constrained to argue for a restrictive interpretation
of the phrase ‘such order . . . as it deems fit’. However, the phrase would not
have been used if the intention was that the curator’s expenses up to the time
that a confiscation order was made could only be recovered from the State.
Furthermore, the appellants will be benefited by the payment of ‘expenses
related to the restrained assets, which would ordinarily be carried by the
estate out of any assets under restraint’. In the circumstances it is unlikely
that the legislature intended to exclude an order that the curator’s expenses
relating to the restrained assets may be recovered from the restrained assets
themselves.

[13] The legislature, by using the phrase ‘such order . . . as it deems fit’
clearly intended to confer a wide discretion on the High Court as to the source
from which the curator could recover his expenditure in respect of the
administration of the property entrusted to him. There is no reason why the
High Court in the exercise of that discretion should not, in order to enable the
curator bonis to properly administer the realisable property entrusted to him,
authorize him to utilise the liquid assets in the estate or to turn non-liquid
assets into liquid assets to the extent that there are insufficient liquid assets.
It may be that the value of the realisable property will as a result diminish but
the purpose of allowing the curator to utilize and alienate assets is to restrict
that diminution in value. Should the restrained property not be administered

properly and should expenses such as rates and taxes and expenses relating
to maintenance not be incurred the diminution in the value of the property of
the appellants would in all probability be much greater than the amount
expended. The power to sell assets under restraint is therefore required to
preserve the value of the property under restraint and serves the purpose of a
restraint order.

[14] Property may also depreciate in value at such a rate and to such an
extent that the proper administration of an estate may require the sale
thereof. Not to allow the curator bonis in these circumstances to alienate the
property so as to preserve the value thereof would defeat the
abovementioned purpose of POCA and may be unfair to the defendant
concerned.

[15] For these reasons it is not surprising that it has become standard
practice for a court, when appointing a curator to administer the property of a
minor or of a person not able to manage his own affairs, to confer on the
curator the power to alienate movable and immovable property (see Ex parte
Hulett 1968 (4) SA 172 (D) at 175D to 176C and Ex parte Thompson 1983 (4)
SA 392 (E) at 393E-G). Fannin J, in Ex parte Hulett10, referred to this power
as a power ‘which a curator would normally require in order fully to administer
his ward’s estate’. Being a power which a curator would normally require in
order fully to administer his ward’s estate the legislature probably intended to
empower the High Court to confer this power on a curator bonis appointed in
terms of s 28.11

[16] The appellants placed reliance on the provisions of s 30 of POCA. That
section provides that a High Court may, on the application of the National

10 At 175C.
11 Cf Hughes and others v Customs and Excise Commisioners [2002] 4 All ER 633 (CA) at 648h-i.

Director, authorise the curator bonis to realise any realisable property when a
confiscation order has been made, when such confiscation order is no longer
subject to review or appeal and when the proceedings against the defendant
concerned have not been concluded. The order may, however, only be made
if all persons known to have an interest in the property concerned have been
afforded an opportunity to make representations to the court in connection
with the realisation of that property. The court may also allow a person
directly affected by the confiscation order or a person who suffered damage
to or loss of property or injury as a result of an offence or related criminal
activity committed by the defendant concerned, to make representations.
They submitted that the fact that these qualifications are not to be found in s
28 indicated that the intention was not that a curator bonis could be
empowered to alienate restrained property.

[17] It is true that the provisions referred to are not to be found in s 28.
However, the section contains other safeguards against abuse of his powers
by a curator. Notice of a restraint order has to be given to persons affected by
the order12 and in terms of s 28 any person affected by an order for the
surrender of property into the custody of a curator may apply for the variation
of the terms of the appointment or for the discharge of the curator. In addition
the actions of a curator are at all times subject to the directions of the court.13

[18] Confirmation that a curator bonis appointed in terms of s 28 may be
authorised to alienate or utilize property which he has been appointed to
administer is to be found in the Administration of Estates Act 66 of 1965.
Section 32(2) of POCA provides that save as is otherwise provided in
Chapter 5, ie sections 12 to 36 thereof, the provisions of the Administration of
Estates Act shall with the necessary changes apply in respect of a curator

12 Section 26(4)(a).
13 Section 28(1)(a).

bonis appointed under the Chapter. Section 80 of the Administration of
Estates Act provides as follows:
‘80(1)
No natural guardian shall alienate or mortgage any immovable property
belonging to his minor child, and no tutor or curator shall alienate or mortgage
any immovable property which he has been appointed to administer, unless he
is authorized thereto by the Court or by the Master under this section or, in the
case of a tutor or curator, by any will or written instrument by which he has been
nominated.’
Section 82(c)(ii) of the Administration of Estates Act provides that every
curator, whenever he receives any money belonging to the person concerned
from any person other than the Master, must forthwith pay the money into the
hands of the Master except, inter alia, if the money is immediately required for
the preservation or safe custody of any property of the other person.

[19] For these reasons I am of the view that a High Court may in terms of s
28(1)(a) authorize a curator bonis appointed in terms of that section to
alienate property under restraint in order to properly administer the assets
under his control. It follows that the attack on clauses 1.7 and 1.8 was
correctly dismissed by the court a quo. The appellants confined their attack
on clauses 1.20 and 4.3.2 to their reference to clause 1.7. Inasmuch as
clause 1.7 has been held to be valid the attack on clauses 1.20 and 4.3.2
similarly has to fail.

[20] The appellants submitted in the alternative that the respondent, in his
founding affidavit, had not made out a case for the appointment of a curator
bonis and for conferring on the curator bonis the powers referred to.
However, the respondent did make out a case for the granting of a restraint
order in respect of virtually all of the first appellant’s realisable property
including a number of immovable properties, movable property and numerous
bank accounts and stated that it would be in the interests of justice for the
court to appoint a curator bonis to administer the restrained property. In terms

of the restraint order sought the appellants were prohibited from dealing with
the restrained property which constituted almost the entire estate of the
appellants. The nature of the restrained property is such that it requires
administration. The restraint order therefore necessitated the appointment of
a curator bonis to administer the property and the conferral on him of the
powers referred to.

[21] The appeal is dismissed with costs including the costs of two counsel.

___________________
P E STREICHER
JUDGE OF APPEAL

CONCUR:
HEHER JA)
COMBRINCK JA)
SNYDERS AJA)
MUSI AJA)

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA STATEMENT – CASE HEARING IN SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
16 March 2007
Status:
Immediate

N Z MNGOMEZULU & OTHERS v NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal.

* * *
The appellant appealed against a restraint order granted by the WLD in terms of which a
curator bonis appointed to administer the restrained property of the appellant was authorised
to pay any expenses related to the assets which would ordinarily be carried by the estate of
the appellant out of any assets under restraint and if no liquid assets were available, to sell
assets under restraint in order to properly administer the assets under his control.

The appellant submitted that the order was beyond the competence of a High Court. The
SCA held that in terms of s 28(1)(a) a High Court may authorise a curator bonis appointed in
terms of that section to alienate property under restraint in order to properly administer the
assets under his control.