CONSTITUTIONAL COURT OF SOUTH AFRICA .CONSTITUTIONAL COURT OF SOUTH AFRICA ...  ZACC 2 In the...
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CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 56/12
 ZACC 2
In the matter between:
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS Applicant
MEIR ELRAN Respondent
Heard on : 15 November 2012
Decided on : 19 February 2013
JAFTA J (Moseneke DCJ, Nkabinde J and Yacoob J concurring):
 The interpretation and application of section 44 of the Prevention of Organised
Crime Act1 (POCA) is at the heart of this application for leave to appeal. The National
Director of Public Prosecutions (NDPP) seeks leave to appeal against the judgment of the
1 121 of 1998.
Full Court of the South Gauteng High Court, Johannesburg (Full Court) which dismissed
the NDPPs appeal with costs. The NDPP had appealed against an order that directed her
to pay legal costs incurred by Mr Meir Elran (respondent) from property held in terms of
a preservation of property order.
 POCA authorises a High Court to grant a preservation order in respect of property
believed on reasonable grounds to be proceeds or instrumentalities of criminal offences.2
An order of this kind preserves property to which it applies until a forfeiture order is
granted, a request for forfeiture is refused or the preservation order lapses.3 The effect of
a preservation order is that no one may deal in any manner with property forming the
subject matter of the order unless authorised by the High Court which has issued the
2 Section 38(2) of POCA provides:
The High Court shall make an order referred to in subsection (1) if there are reasonable grounds
to believe that the property concerned
(a) is an instrumentality of an offence referred to in Schedule 1; or
(b) is the proceeds of unlawful activities; or
(c) is property associated with terrorist and related activities.
3 Section 40 of POCA provides:
A preservation of property order shall expire 90 days after the date on which notice of the making
of the order is published in the Gazette unless
(a) there is an application for a forfeiture order pending before the High Court in respect of
the property, subject to the preservation of property order;
(b) there is an unsatisfied forfeiture order in force in relation to the property subject to the
preservation of property order; or
(c) the order is rescinded before the expiry of that period.
 In terms of section 44 of POCA, a High Court may permit payment of reasonable
living and legal expenses from the property that is subject to a preservation order.
Facts and litigation history
 On 6 March 2006 the NDPP obtained an order that preserved property of the
respondent. The order was, however, not confined to the property described in it but
covered any other property held by [the respondent], whether in his own name or not,
including funds transferred from South Africa to any overseas account. This order
required the respondent to surrender his entire estate to a curator bonis. The order
authorised any person affected by it to approach the Court that granted it for its
reconsideration, provided the NDPP and other parties mentioned in the order are given
notice of no less than 72 hours. The preservation order afforded any party intending to
oppose forfeiture of property to the State, 14 calendar days within which to deliver a
notice of opposition to the NDPP.
 The respondent delivered to the NDPP and lodged at the High Court the notice to
oppose forfeiture. He then asked the curator bonis to provide him with reasonable living
and legal expenses. In response the curator demanded to be furnished with certain
information. The respondent submitted the information but the curator was not satisfied
by it. The curator pointed out that payment for expenses in question would be considered
once further information was submitted. This information related to a sale agreement in
respect of the respondents shares in the Mackenna Game Farm and the paperwork on
Body Rush LLC in which the respondent held half of the shareholding.
 Meanwhile the NDPP launched forfeiture proceedings in July 2006. The
respondent is yet to file opposing papers in those proceedings. Apparently the delay has
been caused by the curators failure to pay for legal expenses.
 The respondent instituted an application in the High Court seeking payment of his
monthly living expenses and a sum of R250 000 for legal fees. The NDPP opposed it. In
a judgment delivered in March 2007, the application was dismissed on technical grounds.
An appeal was not pursued because the respondent could not pay legal fees.
 The respondent engaged new attorneys and instituted a fresh application for the
same relief, except that he excluded the claim for living expenses. The second
application was launched in June 2009. In support of the claim for legal expenses, the
respondent relied on the affidavits which were used in the earlier, unsuccessful
application. These affidavits set out in detail his financial position as it was in 2006. The
respondent averred that he had acquired no assets since the date of the preservation order.
 In opposing this application, the NDPP disputed the need for the relief claimed and
raised a number of defences. First, the NDPP contended that the respondent has property
that is not subject to the preservation order and from which he could meet the legal
expenses. In support of this leg of the defence, the NDPP relied on inferential reasoning.
The NDPP pointed out that the respondent had been able to support himself and his
family for a period of three years since the preservation order was granted. With
reference to the respondents monthly living expenses, which were estimated at
R100 000, it was claimed that he could not afford these expenses without a substantial
source of income, which he has failed to disclose.
 Second, the NDPP asserted that the respondent had failed to make a full disclosure
of his interest in property. Specific reference was made to the following:
R5.4 million received by the [respondent] as part payment of the full purchase price of
R12.5 million for the sale of his shares in Mackenna Game Farm. Approximately R1.7
million deposited into the account of SA Homestead during the period June 2005 and
January 2006, with the [respondent] being the only signatory on the account. Foreign
transfers amounting to $22 000, transferred by the [respondent] to various bank accounts
in Israel, one of which is in the name of Ben Hamo, the original name of the
[respondent] prior to his name change. Approximately R1.1 million transferred into the
bank account of Daria Bachtas, the [respondents] wife.
 Third, the NDPP contended that the respondent failed to provide a sworn and full
statement of his assets and liabilities. She pointed out that the respondent had attached to
his founding affidavit a list of liabilities only, which excluded assets and that list, it was
contended, did not constitute a sworn statement as required by the relevant provision of
 Fourth, the NDPP submitted that the application should be dismissed on the
ground that the respondent failed to comply with the preservation order which required
him to continue making monthly payments under the mortgage bond he held at the time
the order was made. It was also stated that in non-compliance with clauses 10 and 14 of
the preservation order, the respondent failed to repatriate these properties: 1 000 shares in
Ciena valued at approximately R18 000; 300 shares in Oracle valued at approximately
R25 000; half of the shares in Body Rush LLC, the value of which was about
R1.6 million; and an amount of approximately $8 000 transferred to the account of one
 Regarding the assertion that he had property not covered by the preservation order,
the respondent replied as follows:
I reiterate that since the granting of the preservation order in March 2006 I have not
been in a position to pay my living and legal expenses and have been forced to live on
loans and charity from friends and family. All my bank accounts have been frozen and
all my worldly assets have been placed under preservation. The preservation order is all-
encompassing and includes all and any property held by me. . . . I am not in a position to
meet my living and legal expenses and since March 2006 I have lived off loans and
charity from my friends and family. . . . The living expenses detailed in my founding
affidavit relate to the living expenses which were incurred by me prior to the granting of
the preservation order. As a result of the preservation order I have been unable to pay my
monthly living expenses and have had to drastically reduce same. I cannot afford to
make payments of the amounts due in respect of my home loan and have fallen into
arrears in respect of water and electricity, rates and taxes, maintenance obligations and
other monthly expenses. I am in d