Prosecutor-General v Esau and Another (SA 102/2024) [2025] NASC 23 (11 July 2025)

# Prosecutor-General v Esau and Another (SA 102/2024) [2025] NASC 23 (11 July 2025) [ __](https://api.whatsapp.com/send?text=https://namiblii.org/akn/na/judgment/nasc/2025/23/eng@2025-07-11) [ __](https://twitter.com/intent/tweet?text=https://namiblii.org/akn/na/judgment/nasc/2025/23/eng@2025-07-11) [ __](https://www.facebook.com/sharer/sharer.php?u=https://namiblii.org/akn/na/judgment/nasc/2025/23/eng@2025-07-11) [ __](https://www.linkedin.com/sharing/share-offsite/?url=https://namiblii.org/akn/na/judgment/nasc/2025/23/eng@2025-07-11) [ __](mailto:?subject=Take a look at this document from NamibLII: Prosecutor-General v Esau and Another \(SA 102/2024\) …&body=https://namiblii.org/akn/na/judgment/nasc/2025/23/eng@2025-07-11) [ Download DOCX (96.9 KB) ](/akn/na/judgment/nasc/2025/23/eng@2025-07-11/source) Toggle dropdown * [Download PDF](/akn/na/judgment/nasc/2025/23/eng@2025-07-11/source.pdf) Report a problem __ * Share * [ Download DOCX (96.9 KB) ](/akn/na/judgment/nasc/2025/23/eng@2025-07-11/source) * [Download PDF](/akn/na/judgment/nasc/2025/23/eng@2025-07-11/source.pdf) * * * * * Report a problem __ ##### Prosecutor-General v Esau and Another (SA 102/2024) [2025] NASC 23 (11 July 2025) Copy citation * __Document detail * __Related documents * __Citations 3 / - Citation Prosecutor-General v Esau and Another (SA 102/2024) [2025] NASC 23 (11 July 2025) Copy Media Neutral Citation [2025] NASC 23 Copy Hearing date 30 April 2025 Court [Supreme Court](/judgments/NASC/) Case number SA 102/2024 Judges [Angula JA](/judgments/all/?judges=Angula%20JA), [Smuts AJA](/judgments/all/?judges=Smuts%20AJA), [Frank AJA](/judgments/all/?judges=Frank%20AJA) Judgment date 11 July 2025 Language English Summary Read full summary * * * Skip to document content **REPORTABLE** CASE NO: SA 102/2024 **IN THE SUPREME COURT OF NAMIBIA** In the matter between: **PROSECUTOR-GENERAL** | **Appellant** ---|--- | and | | **BERNHARDT MARTIN ESAU** | **First Respondent** **SWAMMA ESAU** | **Second Respondent** | **Coram:** ANGULA JA, SMUTS AJA and FRANK AJA **Heard: 30 April 2025** **Order: 30 April 2025** **Delivered: 11 July 2025** **Summary:** These are the reasons in respect of an order granted on 30 April 2025, dismissing the appellant’s appeal with costs. On 17 May 2023 a final restraint order in terms of the Prevention of Organised Crime [Act 29 of 2004](/akn/na/act/2004/29) (POCA) was granted by the High Court in respect of the joint estate of Mr Esau and his wife (second respondent) as they are married in community of property. During November 2023, Mr and Mrs Esau launched an application in the High Court pursuant to s 26 of POCA for the release from their restrained assets of funds for past and future legal expenses. In terms of s 26(2)_(a)_ of POCA, an applicant seeking funds for living or legal expenses must provide a ‘full statement of all assets and liabilities’. The judge _a quo_ found that once it is established that the applicant has met the requirements of s 26(2) she has no discretion but to make an order to release funds in respect of the expenses claimed. The court _a quo_ granted an order in favour of Mr and Mrs Esau with costs and it is this judgment and order that forms the subject matter of the appeal. The stance of the P-G in the court _a quo_ and in this appeal is that the respondent did not make full disclosure of his assets and liabilities and that this precondition was not complied with. The P-G disputed that full disclosure was made with reference to realisable property which was not valued and also in relation to money flows that were according to the P-G not disclosed and/or not classified as assets. Most, if not all of those issues were dealt with in reply but this was not accepted by the P-G on the basis of the trite principle that an applicant must make out a case in the founding affidavit and not in the replying affidavit. _Held that_ , as the evidence in reply was not struck out the court could have regard thereto subject to the general approach to factual disputes in application procedures and that it must also be borne in mind that if a reply is a legitimate answer or response to a defence raised and not such that it should have been included in the founding papers, it will not be struck out. _Held that_ , the respondents have disclosed their assets and liabilities. The alleged non-compliances with the requirements of full disclosure were fully explained by them and despositively resolved. _Held that_ , the net value of respondents’ estate (assets minus liabilities) based only on assets which were properly quantified and discussed in this judgment and taking into account the fact that the other assets must have some value, are such that the amounts claimed in respect of post and future legal expenses were eminently reasonable in the context of the nature of the trial facing Mr Esau in August 2025. **REASONS** FRANK AJA (ANGULA JA and SMUTS AJA concurring): _Introduction_ 1. Because of the urgency of the matter as the criminal trial referred to in this judgment below was set down in the High Court to commence in August 2025, this appeal was expedited and this Court made an order in the terms set out at the end of this judgment on the day of the hearing of the appeal and it was indicated to the parties that the reasons for the order would be provided in due cause. What follows are the reasons for the order: 2. The first respondent (Mr Esau) is an accused person in an upcoming criminal trial together with others. He has been an awaiting trial person from 27 November 2019 and the criminal trial is set to commence in August 2025. 3. On 17 May 2023, a final restraint order in terms of the Prevention of Organised Crime [Act 29 of 2004](/akn/na/act/2004/29) (POCA) was granted by the High Court in respect of the joint estate of Mr Esau and his wife (second respondent) as they are married in community of property. It should be stated that the restraint order is very extensive and covers all the realisable property of the Esau couple. 4. As part of the final restraint order Messrs Bruni and McClaren were appointed as curators _bonis_ (the curators) subject to the applicable provisions of the Administration of Estates [Act 66 of 1965](/akn/na/act/1965/66), the provisions of the restraint order and the supervision of the Master of the High Court. The curators were tasked in general to take possession of all realisable property of the joint estate with the powers provided in POCA and the court order appointing them. The curators were, as per court order, instructed to, within three months of the court order, file with the Registrar of the High Court and copy this to the Master, a description and sworn valuation (market value as well as fire-sale-value) of each item of property they have taken possession of, the manner in which they dealt with or intend to deal with the property and any recommendation they may see fit relating to the realisable property. They were also required to file supplementary reports where necessary. 5. The curators filed the initial report as well as supplementary reports and at some stage, seeing that farmland was involved which is used for livestock farming, agreed with Mrs Esau that she could conduct the ongoing farming activities but had to account to them in respect of this aspect on a monthly basis, which she did. It seems that some dispute arose between the curators and the Prosecutor-General (P-G) about how they managed these farming operations, and in particular the fact that they agreed that Mrs Esau could access and operate a bank account in which Mr Esau’s pension was paid and which pension they consented to be used to cover the farming expenses and her reasonable living expenses. These expenses were not static and differed on a monthly basis. In fact, Mrs Esau managed to have surplus funds available most months from this management although on occasion she also incurred deficits. The sale of cattle by her and the transfer of the monies so received to an investment account also raised issues as will become apparent below. The P-G did not agree that the pension money could be used as aforesaid and claimed this was unlawful. Be that as it may, Messrs Bruni and McClaren approached the High Court to be relieved as curators at the time the application that forms the subject matter of this appeal was prepared. For completeness, I mention that Messrs Bruni and McClaren were released from their duties as curators and other persons were appointed as curators. 6. Per Notice of Motion dated 23 November 2023, Mr and Mrs Esau launched an application pursuant to s 26 of POCA for the release from their restrained assets of funds for past and future legal expenses. 7. The court _a quo_ granted an order in favour of Mr and Mrs Esau with costs and it is this judgment and order that forms the subject matter of the appeal. 8. It should be noted that this was the first time that the High Court had to deal with such a s 26 POCA application. _Issues on appeal_ 9. Section 26 of POCA which formed the basis of the application before the High Court for legal expenses to be covered from the restrained property reads as follows (I quote the portion relevant to this judgment): ‘26(1) . . . the High Court, when it has made a restraint order may, on application by a person against whom the order is made, make provision as the court may think fit for the payment from the property of that person which is subject to the restraint order – 1. of reasonable living expenses for that person and any person whom he or she is legally liable to support or maintain; and 2. of reasonable legal expenses for that person in connection with any proceedings instituted against him or her in terms of this Chapter or any criminal proceedings to which those proceedings may relate. (2) A court must not make provision for the payment of any expenses under subsection (1) unless the court is satisfied that – 1. the person applying for the payment of those expenses, and every other person whom he or she is legally liable to support or maintain, has disclosed under oath or affirmation all their interests in the property from which such a provision is to be made and has submitted to that court a sworn and full statement of all their assets and liabilities; and (b) neither the person applying for the payment of those expenses nor any other person whom he or she is legally liable to support or maintain, can meet the expenses concerned out of their unrestrained property.’ 10. Counsel for the parties are in agreement with the approach by the court _a quo_ that the powers of the High Court to make funds available for living or legal expenses from the restrained property is conditional on the applicant for such order satisfying the requirements as set out in s 26(2)_(a)_ and _(b)_. The court _a quo_ in a thorough and comprehensive judgment with reference to similar provisions in the equivalent South African Act and the relevant case law in that country came to the conclusion that the provisions of s 26(2)_(a)_ and _(b)_ created preconditions to the exercise of the power created in s 26(1). I cannot add anything useful to this approach save, maybe, to emphasise that the approach, in my view, is the only way to give meaning to the phrase ‘A court must not make provision (for the said expenses) unless the court is satisfied’ that the _provisos_ of s 26(2)_(a)_ and _(b)_ have been complied with. 11. The stance of the P-G in the court _a quo_ and in this appeal is that Mr Esau did not make full disclosure of the joint assets and liabilities of the respondents and that this precondition was not complied with. Insofar as s 26(2) is concerned, this is the only issue that this Court has to deal with. 12. The judge _a quo_ found that once it is determined that the applicant has met the requirements of s 26 _(2)_ she has no discretion but to make an order to release funds in respect of the expenses claimed. The P-G takes issue with this finding. The ground of appeal in this regard reads as follows: ‘The court erred in law in finding that it has no discretion under s 26(1) of POCA in respect of the question as to whether or not to make an order for the payment of the expenses, once the jurisdictional facts were met on the papers.’ 13. It should be noted that the application under consideration did not seek funding for living expenses, but only in respect of past and future legal expenses. This is of relevance as s 95 of POCA makes provision for the limiting of such legal expenses to those ‘taxed in accordance with the prescribed rules’ where the P-G applies for such order which was done in this case. The judge _a quo_ thus qualified the order she made in favour of the respondent to include only taxed costs. This aspect of the order is not subject to a cross-appeal and hence does not warrant further discussion. _Disclosure by applicants as to their assets and liabilities_ 14. In terms of s 26(2)_(a)_ , an applicant seeking funds for living or legal expenses must make a ‘full statement of all assets and liabilities’. 15. Full disclosure is needed because without such disclosure a court will not be able to ascertain what expenses would be reasonable in any given situation. It is also necessary so as to avoid persons hiding assets from which they can cover the expenses sought and hence water down the extent of the restrained property, that may be forfeited to the State at a later stage. It goes without saying that liabilities need also be disclosed for a court to know to what extent funding should be made available without unduly prejudicing existing creditors. The more the liabilities, the more careful a court will be in respect of the funding to be allowed and conversely, the less liabilities the more prepared the court should be to release funding for the expenses. 16. The fact that the full disclosure by an applicant is necessary so as to ensure such applicant cannot cover the expenses sought from unrestrained or hidden assets and to determine what would be a reasonable amount in the circumstances was accepted by the South African Constitutional Court when it dealt with the interpretation of a similar section in the equivalent South African Act. Thus, in _National Director of Public Prosecutions v Elran_ ,1 Cameron J stated that the purpose of the preconditions set out in the equivalent section in the South African POCA Act, ‘is to discourage defendants who face criminal prosecution from hiding their assets’2 and Zondo J emphasised the fact that the full statement of assets and liabilities were needed to enable a court ‘to decide how much of the preserved property should be made available to enable him or her to meet the expenses in issue’.3 17. It thus follows that the reference to a ‘full statement’ of assets and liabilities means that the disclosure must be such that it does not raise any suspicion in the mind of the court that an applicant is hiding assets from which the expenses sought can be defrayed and to determine what a reasonable amount would be in the circumstances.4 18. It needs to be pointed out that where only certain assets are the subject matter of a restraint order it goes without saying that the possibility exists that the person affected by such restraint order may have other property than those mentioned in the restraint order. Where such person seeks to recover living or legal expenses from the restrained property such person must establish that the said expenses cannot be covered by unrestrained property. It is in this context that the remarks of Cameron, J referred to above must be seen. Where, as in this case, all the property of the Esau couple have been made the subject matter of the restraint order the starting point with regard to the expenses sought is that there is no unrestrained property from which the expenses can be covered. The focus then shifts to whether the financial position in respect of the properties restrained is such that a court can sanction the payment of the expenses sought and what would be reasonable in the circumstances. 19. In terms of the restraint order in the current matter, the report of the curators, who were tasked with taking possession, of the whole joint estate is important. This is so because the curators had to make a list of all the property taken possession of by them and to provide a value in respect of each item of such property. As will become apparent below, they even discovered that a membership of a close corporation was wrongly attributed to Mr Esau. There is no suggestion by the curators that in taking possession of the restraint property they had reason to suspect the Esaus were hiding assets which they have not declared to them. As pointed out above, the P-G has raised an issue that there has not been compliance with the requirement to make full disclosure. I deal with the aspect below. 20. Mr Esau, on behalf of the applicants, in his founding affidavit, listed assets to the value of N$27 149 894,16 and liabilities to the value of N$3 536 531,24. In the founding affidavit he also referred to his disclosure of the assets and liabilities in terms of the court order restraining all the applicants’ property. This initial disclosure was made to the curators’ who reported on this to the Master of the High Court and who also filed a second curators’ report on 17 August 2023. 21. As will become apparent below, the P-G disputed that full disclosure was made with reference to realisable property which was not valued and also in relation to money flows that were according to the P-G not disclosed and/or not classified as assets. Implicit in the stance of the P-G was an allusion that the Esaus were hiding money or assets that did not form part of the restrained assets. Most, if not all of the issues raised by the P-G, were dealt with in reply but this was not accepted by the P-G on the basis of the trite principle that an applicant must make out a case in the founding affidavit and not in the replying affidavit. 22. Where there is no application by a respondent to strike out new matter in reply (provided it is supported by admissible evidence), a court can accept that the respondent cannot in any meaningful manner rebut such evidence or is of the view that such matter does not prejudice him or her. Where an application to strike out is made, a court may in its discretion, either strike out the new matter pursuant to the general rule or allow the respondent to answer to the new matter prior to deciding the application. It must also be borne in mind that if a reply is a legitimate answer or response to a defence raised and is not such that it should have been included in the founding papers, it will not be struck out.5 23. In short, when an application is determined, a court must have regard to all the evidence presented to it. Where a genuine dispute of fact arises in an application it is to be dealt with on the papers and the approach is that it is determined on the facts of the applicant not disputed by the respondent together with the facts of the respondent.6 As the ‘new’ evidence was not struck out and is such that it is virtually unassailable, does not raise a genuine dispute of fact and is also a legitimate response to the allegations of non-disclosure by the P-G it must be considered as part of the evidential material before the court. 24. I now turn to deal with the alleged failures to comply with the required obligation to make full disclosure. _Monthly reports by Mrs Esau to be considered_ 25. Mrs Esau was given consent to use a Standard Bank current account to conduct farming operations on the farm of the respondents which formed part of the restrained property. For this purpose it was agreed that the monthly pension of Mr Esau would be paid into this account and that this money would be used to cover the farming expenses as well as the living expenses of Mrs Esau and the couple’s disabled daughter. Mrs Esau had to account for this by providing the curators with monthly statements in this regard. 26. In one of the reports by the curators to the Master of the High Court, attached to the founding papers, satisfaction is expressed as to how Mrs Esau dealt with the farming operations and the way she accounted for this. A number of these monthly statements were annexed to the founding affidavit and as pointed out above, there was normally a small monthly surplus and sometimes a small deficit. In the founding affidavit mention is made of the fact that monthly accounting was done and that the rest of the statements would be forthcoming from the curators should they become necessary. 27. The P-G took issue with this monthly accounting and submitted that what was not disclosed was what happened to the surpluses mentioned in the accounts and the cumulative surpluses should have been disclosed as an asset. 28. Whereas there may be some merit in the contention that at the date that the founding affidavit was signed there must have been either a cumulative surplus or deficit which would constitute either an asset or liability at that date, I cannot agree that this is fatal to the requirement of full disclosure. The bank involved (Standard Bank) as well as its credit balance was disclosed to the court and it was clear that the balance on this account would change depending on the surpluses or deficits. In short, the arrangement with the curators relating to the operation of this account, the existence of the exact amount with reference to its number and its credit balance at a certain date were disclosed as well as the fact that flowing from the monthly statements, the balance in the account could change from time to time as a result of the farming operations conducted through this account. _Sale of cattle_ 29. In the course of Mrs Esau’s conducting the farming business as agreed with the curators, cattle were sold and the P-G further took issue with the non-disclosure of two such sales namely a sale totalling N$1 656 790,24 and a sale totalling N$348 735. 30. The evidence is that, in the course of the conducting of the farming operations and in view of the fact that Mrs Esau turned out to be a competent farmer, the bank manager dealing with the account that Mrs Esau utilized recommended that surpluses arising on the account should be transferred to a call account at the same bank. This would ensure that interest would be earned on such amounts. This recommendation was accepted by the curators and a further Standard Bank account, no 600001675949 was created in respect whereof the curators had the signing authorities. Such surpluses were thus effectively removed from the control of Mrs Esau. This account was disclosed in the founding affidavit with a credit balance of N$621 424,25. As with all the bank accounts disclosed in the founding affidavit this was subject to the following caveat: that the balances indicated could turn out not be correct as the deponent (Mr Esau) did not have access to their current balances. 31. In the answering affidavit it is pointed out that an amount of N$1 656 790,29 reflected in the account managed by Mrs Esau in respect of cattle sales and transferred to this account was not dealt with in the founding affidavit and was thus not disclosed in the court _a quo_. In reply, these sales are admitted and it is explained that this money was transferred to the call account as agreed with the curators. Copies of the statement of the call account were attached indicating that the call account balance had increased to N$2 635 993,42. 32. The judge _a quo_ pointed out that the existence of the call account was disclosed and found that Mr and Mrs Esau were not required to disclose transfers from the ordinary account to the call account. I am not sure that the complaint by the P-G in this regard could so robustly be dismissed. I do however agree that this alleged failure, seen in context, was not such as to not satisfy the requirement of disclosure. The existence of the account was disclosed. The disclosure was qualified as it was stated that due to the lack of access, the balance of just over N$621 000 could not be verified but it was also stated by Mr Esau that ‘due to the restraint of the accounts, I have no reason to believe that the values . . . have changed significantly’. As pointed out above, the value of the call account is significantly different from the balance mentioned in the founding affidavit and in fact about N$2 million more than that disclosed in the founding affidavit. 33. The amount in respect of the sale is of such magnitude that, at least Mrs Esau should have known that the amount mentioned in the founding affidavit of Mr Esau was materially misstated. The reality however is that when this discrepancy was brought to the attention of the Esaus it was dealt with dispositively in a sense that there can be no doubt that the proceeds of the sale became part of the restrained assets. The explanation does not in any manner raise any doubt as to whether it formed part of some other undisclosed fund which could be used to defray expenses or to minimise the effect of the restraint order. I am thus satisfied that the Esaus effectively through their disclosure rebutted any suggestion that the manner in which the sale was dealt with can be said to raise any inference that they were attempting to hide assets from the court. 34. As far as the sale of cattle totalling N$348 735 is concerned, Mr Esau explained that this sale was sanctioned by the curators and that payment was effected to them and not to the account managed by Mrs Esau. The Esaus were effectively not parties to this sale, but once again there cannot be any doubt that the proceeds of the sale were not used to bolster some source of funds available to the Esaus which was not disclosed as per the restraint order. I am also satisfied that this alleged non-disclosure was not such as to give rise to an inference that the Esaus are hiding the fact that they have sources outside of the restrained property which could cover legal expenses. _Interests in close corporations_ 35. Mr Esau disclosed interests in four close corporations. He declared that in respect of one close corporation, namely Otjiwarongo Plot Fifty One CC, was informed during a bail application that he was a member of this CC but that he did not have any knowledge of this. In a report from the curators it is indicated that on inspection at the offices of the Business and Intellectual Property Authority (BIPA) it turned out that he is not a member of the CC. 36. As far as the other CC’s are concerned he stated that they were all dormant corporations. The P-G insisted that he should have provided their financial statements. Mr Esau stood by his founding affidavit and averred that as they were dormant there were no financial statements for these entities. There is no suggestion on the papers whatsoever that the CC’s are not dormant and hence Mr Esau made full disclosure in respect of these CC’s. The question of the value of membership interests in these CC’s (even if dormant) I address below where I deal with the stance of the P-G in this regard. _Tax liability_ 37. The Esau couple is criticized for not making mention off the tax liability arising from the sale of cattle which produced an increase of N$2 458 609 to the assets. 38. The court _a quo_ held as follows: ‘(Mr Esau) explains that the tax liability has not occurred yet, no tax assessment has been issued, the applicant’s accounting officer was not provided with details of sales and livestock sale books, and there is an inability to determine the tax liability for livestock sales. The applicants cannot disclose what they do not know.’ 39. Unfortunately Mr Esau never said what is attributed to him by the court _a quo_. What he said in his replying affidavit is the following: ‘I am aware that there ought to be a tax liability in respect of farming operations and sale of livestock. My bookkeeper, Grand Namibia are in the process of doing the tax returns, but are unable to complete it due to the fact that the Anti-Corruption Commission has removed from my farm all my employee remuneration bundles and livestock list which included the sale lists. The second applicant (Mrs Esau) is only in possession of the said documents commencing from the year 2020 and onwards.’ 40. In the founding affidavit Mr Esau disclosed that the Namibia Revenue Agency (NamRA) maintains that he owes them N$2 300 592,80 in taxes, interest and penalties. He further attaches a letter from the Ministry of Fisheries and Marine Resources dated 15 March 2022 addressed to him in respect of a payment due to him by this Ministry. From this letter it appears that the Ministry sought a tax directive from NamRA as to the tax to be withheld from this amount when making payment to Mr Esau. According to the letter, NamRA declined to furnish such tax directive because he did not file income tax returns from 2015 to 2020 and the Ministry encouraged him to submit his income tax returns as soon as possible. 41. Mr Esau’s response to the tax liability in respect of the livestock seems to deal with the issue raised by NamRA and with regard to the tax directive as he mentioned that Grand Namibia had difficulties to complete his returns up to 2020 and Mrs Esau is only in possession of the relevant information post 2020. 42. The aforesaid answer tendered by Mr Esau does not address the issue of the tax liability incurred in respect of the livestock sales raised by the P-G as these sales took place from June 2023 to November 2023, when on the version of the Esaus, Mrs Esau was in possession of all the information. 43. It seems that the reference to no assessment having been made and hence that a tax liability had not yet been established must have been based on legal submissions which were not foreshadowed in the non-defence raised in respect of the allegation by the P-G that this tax liability was not disclosed. The issue of when a tax liability arises is also raised in this Court with reference to the Income Tax [Act 24 of 1981](/akn/na/act/1981/24) read with provisions in respect of the assessment made by the Minister pursuant to s 56 of the Income Tax Act. The submission is that up to the date of assessment there is no tax liability. It is further submitted that it is the duty of the curators to see to the tax compliance which they have not done and hence no tax liability had accrued when the application was launched and that, as the court _a quo_ found, the Esaus had no duty to disclose what they did not know. 44. The submission raised based on s 56 of the Income Tax Act and that the tax liability only arises subsequent to an assessment is not necessarily correct. Firstly, for the determination of tax and the payment thereof, reference must be made to s 27 of the Income Tax Act. Furthermore a farmer is normally regarded as a provisional taxpayer as defined in Schedule 2 of the Income Tax Act. Every provisional taxpayer must make payments in the manner provided in the said schedule in respect of every year of assessment which includes tax payable as estimated by such taxpayer (Schedule 2 paras 17(1) and 19(1)). In respect of all farmers, this estimated payment is due on ‘the last day of the year of assessment in question’ (para 13 of Schedule 2). In general, the last day of assessment is the last day of February of that year. I have used the phrase ‘ordinarily’ or ‘in general’ because the Income Tax Act provides for exceptions to these requirements by the Minister. The problem is that the Esaus did not provide sufficient information to determine when the liability for the payment of tax in respect of the year in which the livestock was sold would arise. 45. Assuming however that they were regarded as provisional taxpayers and that the last day of the year of assessment in respect of the sale of the livestock in 2023 would be the last day of February 2024 (as would ordinarily have been the case), then the liability to make a payment had not yet arisen when the application was launched in November 2023. As it is clear from the founding affidavit that Mrs Esau was tasked with the management of the farming operations, it follows that the sale of the livestock constituted income in respect of farming operations, it further follows by necessary implication that the income would have to feature in the tax calculations when it came to the farming operations. It is also clear from the monthly accounts of Mrs Esau that there were expenses that would be legitimate deductions from the income when tax would be calculated. The detail of the deductions and whether the livestock was carried at standard values or market values and whether purchases of livestock were contemplated prior to the year of the assessment is not disclosed. It was and is thus not possible to assess the extent of the future tax liability. 46. It follows implicitly from the facts that the income from the livestock sales would have to be taken into account for the purpose of establishing the taxable income of the farming activities. This was a potential liability in a yet to be determined amount that would only be payable on the last day of February 2024. On the facts, the potential tax liability was disclosed as it was inherent in the admission of the livestock sales although the extent of the potential liability could not be ascertained. _Value of assets and liabilities_ 47. Mr Esau in the founding affidavit disclosed the values of some of the assets. He however did not specify how he arrived at the values. The P-G contends that he should have provided sworn valuations and supporting documents in this regard. 48. The court _a quo_ pointed out that s 26(2)_(a)_ and _(b)_ do not require an applicant to disclose the value of the assets and further pointed out as far as the assets and liabilities are concerned, the disclosures must be such to enable a court to make a decision relating to the orders sought for either living or legal expenses. This Court would not be able to without being informed of the effect of the expenses sought on the restrained property. It is not necessary to dwell on this aspect. Even if a full list of assets and liabilities are set out without placing a value on such assets and liabilities, a court will be unable to exercise its discretion to grant an order relating to either living or legal expenses because it would not know what the effect of such order would be on the restrained property or the creditors or owner(s) of the restrained property. It thus follows that the requirement relating to the full disclosure of assets and liabilities includes the values in respect thereof so as to give the court a full picture of what would be reasonable expenses taking into account the net value of the estate so disclosed. The fact of the matter is that a list of the assets and liabilities without their monetary values is an exercise in futility as no court would be able to exercise a discretion as to what expenses would be reasonable relative to the net value of the assets. It is thus implicit in the requirements of s 26 that such values must be disclosed, at least to the extent that a court is satisfied that it has enough before it to consider what would be reasonable living or legal expenses from such an estate. 49. Whereas a credit balance or a bank balance is clear proof of the value of such asset at the date mentioned in the bank statement, when it comes to other values, the position is not that simple. Whereas it may not be necessary to provide sworn valuations there must be at least something more than a mere say-so of the deponent. Sworn valuations in respect of immovable properties would normally be needed. When it comes to motor vehicles, the basis for such values should be given even if only with reference to their insured values. The same approach should apply in respect of other movable property such as furniture and fittings. The values of shares or membership interests in corporations should be dealt with by reference to the financial statements of such corporations, preferably by the accounting officer of such corporations. When it comes to shares in listed corporations, the prices of such shares on a specific day may be referred to. When it comes to liabilities, the extent of the liabilities (including contingent liabilities) should be disclosed and only if there is some uncertainty as to the full extent of the value of such liability the need to explain with reference to relevant documentation where available arise. 50. Mr Esau in the founding affidavit listed three immovable properties namely a farm, a third undivided share in a property in Swakopmund and a property in Windhoek. He stated that his properties are fully paid and valued at N$17 900 000, N$40 000 and N$3 800 000, respectively. 51. From an interim report of the curators filed on 6 December 2022, the farm and the house in Windhoek were burdened with bonds. The house in Windhoek with five bonds and the farm with two. What debts or potential debts are covered by the bonds and the value of the bonds were not disclosed. We know from a report from the curators that the debt in respect of the farm had been discharged. As far as the home is concerned, Mr Esau simply stated that nothing was owed to the bank in respect of the house and I thus accept the bond was registered in respect of an indebtedness to the bank. I point out that the above facts were not disputed by the P-G. 52. The farm was valued at the request of the curator and the market value was stated by the valuator to be N$17 930 000 who also concluded the forced sale value to be N$14 344 000. In this regard, at least, there is support for the contention from Mr Esau. 53. As far as the values given by Mr Esau in respect of other immovable properties no basis for the values is stated. Even if one accepts the word of Mr Esau that despite the bonds registered over their house in Windhoek, there is currently nothing owing to the bank and that these bonds were in favour of any liability that may arise to the bank, the value is nothing but the mere say-so of Mr Esau. There is no support for this value to work from such as an opinion of an estate agent who operates in the area or a reference to the municipal valuation that normally understates the market value to support a value a certain percentage above the municipal value or any supporting evidence to indicate that the estimate by Mr Esau is reasonable. The values given in respect of the vehicles are similarly flawed. 54. When it comes to the positive bank balances, they total up to over N$5 729 000 inclusive of the call account subsequent to the livestock sales being transferred into the account. (This also includes the amount of a pension payment of N$621 424,25 in the trust account of Mr Esau’s legal practitioners). Assuming for the moment that the disputed tax liability from NamRA is accepted, then the only other liability of Mr Esau is the ‘legal expenses’ already incurred and owing to his legal practitioners. These two items add up to N$3 536 331,24. The potential tax liability arising from the sale of cattle discussed above is not included in the aforesaid amount. Even if it is assumed that the tax liability in respect of the sale of cattle mentioned above would be 30 per cent of the value of such sales, which would be the high water mark from the perspective of the P-G as it would not take into account expenses or further cattle purchases during the year in question, this would add another N$737 582,70 to the liabilities. This does not materially alter the fact that the net asset value of the estate is such that the payment of the expenses claimed will not prejudice any of its creditors. _Discretion of court to grant or decline relief_ 55. In terms of s 26(1) of POCA, a court ‘may, on application . . . make provision as the court may deem fit for the payment from the property . . . subject to the restraint order’ for reasonable living expenses and reasonable legal expenses. 56. As indicated above, before the court can make the order contemplated in s 26(1), certain preconditions must be met. The question arises, that if an application satisfies the preconditions, does a court still have the power to refuse such application in its discretion? This question arises because of the word ‘may’ in the context quoted above. 57. The court _a quo_ with a reference to a judgment of the Constitutional Court of South Africa where it dealt with similar provisions in the South African equivalent of POCA and analysing the provisions and the interplay between the two subsections of s 26 concluded as follows: ‘The court finds that once the jurisdictional requirements are met, the court has no discretion, but to grant the order, but has the discretion, subject to s 95(3) and 96 read with reg 8 on the amount of expenses provided for.’ 58. On behalf of the P-G it is submitted that the court _a quo_ erred in this regard because it is clear from s 26(1) that even if the preconditions spelt out in s 26(2) are met, the court still has a discretion to determine whether to release funds for the payment of the sought expenses and if so, to what extent. As I read the judgment _a quo_ , this is in essence what it states in the latter part of the quotation mentioned above. Be that as it may, from the reading of s 26 it is intended that a court must first consider whether the preconditions mentioned in s 26(2) have been met, and if so, the court must then consider what would be a reasonable amount, if any, to be provided from the restrained assets in view of the assets and liabilities disclosed. It seems to me that this is exactly what the court _a quo_ did when it stated the amounts granted but qualified them in terms of s 95(6) to taxed costs. In other words, the court _a quo_ regarded the amounts mentioned reasonable but because of the application by the P-G made them subject to taxation and ordered that the lesser of these two amounts had to be provided to Mr Esau in respect of legal expenses. 59. Because of the high net asset value of the restrained property, the court _a quo_ had no difficulty in finding that the amount sought for legal expenses was reasonable (and correctly so) and to grant this amount subject to the provisions of s 95(6). It is in this context that the comment that ‘the court has no choice but to grant the order sought’ must be seen. Had the financial position been drastically different, eg where the liabilities (actual and contingent) equalled the value of the restrained property, the court might have been forced to, in its discretion, refuse the relief despite the full disclosure. Insofar as the impression was created that the court had no discretion to refuse the application sought where full disclosure was made, this is not correct. As indicated above, a full disclosure is required to establish that an applicant has no other resources from which the expenses can be sourced and to assess what amount (if any) the court (in its discretion) must order, taking into account the disclosed financial position. 60. From the abovementioned analysis it should be evident that a court’s discretion when it comes to s 26(1) where the application relates to legal expenses is further fettered by s 95(3) which section does not apply to living expenses. _Conclusion_ 61. The respondents had disclosed their assets and liabilities. The alleged non-compliances with the requirements of full disclosure were fully explained by them and despositively resolved. Even those assets and liabilities in respect of which the P-G raised questions did form part of the restraint estate to which they would not have access without leave of the court. Furthermore, on the facts, no inference or even a suspicion is raised indicative of the respondents hiding assets from the court which could be used to cover Mr Esau’s legal expenses. 62. Whereas the Esaus disclosed their assets and liabilities they did not value these properly and the P-G justifiably raised issues in this regard. As a result of the responses to her queries it turned out that the restrained estate of the Esaus is even more valuable than initially disclosed. The net value of respondents’ estate (assets minus liabilities) based only on assets which were properly quantified and discussed above and taking into account the fact that the other assets must have some value, are such that the amounts claimed in respect of past and future legal expenses was eminently reasonable in the context of the nature of the trial facing Mr Esau in August 2025. 63. For the above reasons the following order was made at the hearing of the appeal: ‘The appeal is dismissed with costs.’ **______________________** **FRANK AJA** **______________________** **ANGULA JA** **______________________** **SMUTS AJA** APPEARANCES APPELLANT: | M Boonzaier (with her A Keulder) Of Government Attorney ---|--- RESPONDENTS: | F Beukes (with him R M Avila) Of Metcalfe Beukes Attorneys 1 _National Director of Public Prosecutions v Elran_ 2013 (1) SACR 429 (CC) 2 Para 79. 3 Para 115. 4 See the similar approach taken by Zondo J in _Elran_ para 115. 5 _Reiter v Bierberg & others_ 1938 SWA 13. 6 _Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd_ 1984 (3) SA 623 (A). See also _Mostert v Minister of Justice_ 2003 NR 11 (SC) at 21G-I; _Permanent Secretary of Finance & another v Selfco Fifty-One (Pty) Ltd_ 2007 (2) NR 744 (SC) para 24. #### __Related documents ▲ To the top >