IN THE HIGH COURT OF LESOTHO
In the matter between
E H. PHOOFOLO
Delivered by the Chief Justice the Honourable Mr Justice B.P. Cullinan on the 25th day of November, 1987
The accused stands charged on 18 counts. The indictment runs to some 18 pages. The first 17 counts are expressed to be contrary to the Exchange Control Regulations 1975 (hereinafter referred to as “the Regulations” and by regulation) and the 18th Count is expressed to be contrary to the Central Bank of Lesotho Act, 1978 Eight counts however, that is, Counts 2, 4, 6, 8, 10, 12, 14 and 16 are laid in the alternative. In effect therefore the accused is charged with 10 offences.
The first 12 counts concern six transactions. In each of these transactions, represented in particular by Counts 1, 3, 5, 7, 9 and 11, stretching from 1982 to 1987, the accused is
alleged to have unlawfully made an incorrect statement, contrary to regulation 22, on a form (“Form E”) utilised for the purpose of declaring entitlement to sell foreign currency and for the purpose of offering such currency for sale to an authorised dealer in foreign currency. Subsequently, on 7th September, 1987, the accused made a statement, under the statutory compulsion of the provisions of regulations 19 and 22 (which I shall call “the Regulation 19 statement”) There are matters within that statement which are in conflict with the statements on the six Forms E.
Thus the accused is charged, in the alternative Counts 2, 4,
6, 8, 10 and 12, with making an incorrect statement contrary to Regulation 22, on the basis that one statement (the Form E or Regulation 19 statement) is incorrect, for which uncertainty, as will be seen, statutory provision exists.
Under Counts 13 and 15 the accused is charged, contrary to regulation 7(2), with failing to declare within 30 days his right to receive outside the Rand Monetary Area a credit or balance at a Dank. Under the alternative Counts 14 and 16, he is charged contrary to regulation 8(1) with failing to declare a foreign asset within 30 days, namely the respective bank credit or balance referred to in Counts 13 and 15.
Count 17 contains an allegation that the accused, contrary to regulation 22, refused to furnish information concerning two accounts maintained by him with foreign banks Finally, Count 18 is framed under section 19(3) of the Central Bank of Lesotho Act No.13 of 1978: it is alleged that the accused while an officer or employee of the Central Bank of Lesotho (“the Central Bank”) accepted a gift or advantage, the acceptance of which would result or give the appearance of resulting in a diminishment of his impartial devotion to his duties under the said Act.
It is necessary at this stage to set out the relevant legislation. Regulations 7 and 8 in part and regulations 19 and 22 read as follows
“7. (1) Every person resident in Lesotho who becomes entitled to sell or to procure the sale of any foreign currency, shall, within thirty days after becoming so entitled, make or cause to be made a declaration in writing of such foreign currency to the Ministry or to an authorised dealer.
(2) Every person resident in Lesotho
who becomes entitled to assign or to procure the assignment of any right to receive outside the Rand Monetary Area any credit or any balance at a bank, or payment of any amount in a foreign currency shall, within thirty days after becoming so entitled, make or cause to be made, a declaration in writing of such right to the Ministry or to an authorised dealer.
(3) Any person who has, in terms of sub-regulation (1) or (2), made a declaration in writing to the Ministry or to an authorised dealer, shall be deemed to have offered such foreign currency or such right, as the case may be, for sale to the Ministry or to such authorised dealer and the Ministry or such authorised dealer may purchase such foreign currency or such right ….
(9) For the purposes of this regulation any person who has at any time since the commencement of these regulations been in Lesotho shall be deemed, until the contrary is proved, to have been and still to be resident in Lesotho, provided that the Ministry may make such rules for temporary residents as it deems fit.
(11) If in any criminal proceedings against any person for a contravention of sub-regulation (1) of this regulation there is produced to the Court any document of which such person is proved or
has admitted himself to be the author and which contains a statement by such person from which it
may reasonably be inferred that any foreign currency is held by him or in his name or on his behalf, it shall be presumed, until the contrary is proved, that such person is entitled to sell or to procure the sale of the foreign currency in question.
If in any criminal proceedings
against any person for a contravention of sub-
regulation (2) of this regulation there is
produced to the Court any document of which such
person is proved or has admitted himself to be the
author and which contains a statement by such
person from which it may reasonably be inferred
that any amount is standing to his credit outside
the Rand Monetary Area or that he has any balance
at a bank outside the Rand Monetary Area, it shall
be presumed, until the contrary is proved, that
such parson is entitled to assign or to procure the
assignment of such a right as is referred to in the
said sub-regulation (2)
If in any criminal proceedings
against any person for a contravention of sub-
reguldtion (1) or (2) of this regulation, it is
proved that such person is entitled to sell or to
procure the sale of or to assign or to procure the
assignment of any foreign currency, it shall be
presumed, until the contrary is proved, that
a declaration in writing has not been made to the Ministry or to an authorised dealer within the period required by sub-regulation (1) or (2), as the case may be.
8. (1) Every person resident in Lesotho who is, or becomes, entitled to sell or to procure the sale of any foreign asset, shall within thirty days after becoming so entitled, make, or cause to be made, a declaration in writing in the form prescribed by the Ministry of such foreign asset to the Ministry or to an authorised dealer. Such declaration shall state when and how such foreign asset was acquired, where it is held and whether and to what extent it is held in cover for or in respect or any foreign liability.
19 (1) The Ministry, or any person authorised by the Ministry, may order any person to furnish any information at such person’s disposal which the Ministry or such authorised person deems necessary for the purposes of these regulations and any person generally or specifically appointed by the Ministry for the purposes may enter the residential or business premises of a person so ordered and may inspect any books or documents belonging to, or under the control of such person.
(2) If any person makes any statement on any information furnished in compliance with such an order which is in conflict with any other statement previously made by him in giving information required in connection with the subject matter of such order he shall be deemed to have made an incorrect statement in terms of regulation 22 and may, on an indictment, summons or charge alleging that he made the two conflicting statements, be convicted of making an incorrect statement in contravention of the said regulation 22 upon proof of the two statements in question and without proof as to which of the said statements was incorrect, unless he proves that when he made each statement he believed it to be true.
22. Every person who contravenes or fails to comply with the provisions of any of these regulations, or contravenes or fails to comply with the terms of any notice or order or direction issued or any permission or exemption granted under these regulations, or who obstructs any person in the execution of any power or function assigned to him by or under these regulations, or who makes any incorrect statement in any declaration made or return rendered for the purposes of these regulations (unless he proves that he did not know and could not by the exercise of a reasonable degree of care
have ascertained, that the statement was incorrect)
or refuses or neglects to furnish any information
which he is required to furnish under these
regulations, shall be guilty of an offence and
liable upon conviction to a fine not exceeding ten
thousand rand or to imprisonment for a period not
exceeding five years or to both such fine and such
imprisonment, provided that where he is convicted
of an offence against any of these regulations in
relation to any security, foreign currency, gold,
bank-note, cheque, postal order, bill, note debt,
payment or goods the fine which may be imposed on him
shall be a fine not exceeding ten thousand rand or a
sum equal to the value of the security, foreign
currency, gold, bank-note, postal order, bill, note,
debt, payment or goods, whichever shall be greater.”
(Presumably there should be a comma between the words “note debt”)
Section 19(3) and (4) of the Central Bank of Lesotho Act 1978 reads as follows
“(3) No director, officer or employee of the the Bank shall accept any gift or advantage for himself or, on his behalf, for any person with whom he may have family, business, or financial connections if the acceptance there-of would result, or give the appearance of resulting, in a diminishment of his impartial devotion to his duties under this Act.
(4) Any person who contravenes this section shall be guilty of an offence and liable on conviction to a fine of M5,000 and to three
In order to better comprehend the various transactions involved in the indictment,I have found the following table to be of assistance –
The accused was first Deputy Governor and a Director of the Central Bank, that is, until his suspension from office on 5th May, 1987, and subsequent removal from office on 25th September, 1987 While he was thus on suspension, on 25th August, 1987, at about 7 a.m., a police officer Capt. Malefane, accompanied by nine other police officers, arrived at the accused’s house in Maseru. Capt. Malefane bore with him a written authorization by the Minister of Finance (“the Minister”), made out under the provisions or regulation 19(1) Capt. Malefane, accompanied by Lieutenant Moknele and Lieutenant Letsunyane, entered the home of the accused at the invitation of his wife. Seven police Troopers remained outside their purpose was quite clearly, if not to prevent persons leaving and entering the house, then to ensure that nothing was removed from the house without the knowledge of the police.
The police remained in the accused’s house for four to five hours,departing at 11 a.m – 12 noon. During that time they found two documents. Further, the accused made a statement, a single word in the negative, in response to a question asked by Capt Malefane. Lieutenant Mokhele also recorded an admission made by the accused on a document, on which he also recorded the progress of the operation at the accused’s home, and which the accused signed.
That was 25th August Capt Malefane testified that the accused agreed to come to his office to obtain a photocopy of the document signed by him. The accused arrived at Capt. Malefane’s office later that day, when the latter gave him a copy of the particular document. He “asked him to come and make a written statement about the two documents taken from his home.” The accused wished to first consult his Attorney. About three days later he met the accused, when the latter said that he had reached no decision with his Attorney in the matter.
On 3rd September Capt. Malefane addressed the following letter to the accused
“In terms of the authorization dated 19th August, 1987 granted to me by the Honourable Minister of Finance under Regulation 19(1) of the Exchange Control Regulations, I LESETELI MALEFANE order you to present yourself at the Police Headquarters at 0800 hours (8.00 a.m.) on Monday 7th September 1987, for the purpose of furnishing information which I deem necessary for the purposes of the Exchange Control Regulation.
You can bring your Attorney if you so wish and he be present during the exercise
Please note that should you fail to attend as aforesaid and furnish the required information you are liable to be prosecuted for an offence contrary to Regulation 22 of the said Regulation”
The accused received that letter on 4th September. He duly attended at Police Headquarters on Monday 7th September, accompanied by
his Attorney. The Attorney inter alia challenged Capt. Malafane’s Ministerial authorisation Capt. Malefane informed the accused and his Attorney that the meeting with the accused was scheduled for 9 a m , not at Police Headquarters, but at the Boardroom of the Central Bank. The Attorney conferred with his client in private outside Police Headquarters The accused returned about 20 minutes later, without the Attorney, explaining that the latter was engaged in a court appearance, apparently in another District. The accused agreed that he would proceed to the Boardroom at the Central Bank after he had first gone home to collect a jacket and tie.
When the accused arrived at the Boardroom he found there the Governor of the Central Bank, Mr. Karlsson, Capt. Malefane, a Col. Saayman and also a Mr Charles van Staden, accompanied by a Mr. Michael Bronn. Upon the accused’s arrival, the first three mentioned left, leaving the accused with Messrs. Van Staden & Bronn in the Boardroom. Mr. Van Staden was in fact the Manager of the Exchange Control Department of the Reserve Bank of South Africa, whose services had been engaged in the matter as a result of a request from Lesotho, made at Ministerial level. On his arrival in Lesotho on Sunday 6th September, he had received, from Mr. Karlsson, a written authorisation by the Minister under the provisions of regulation 19(1). Mr. Bronn was an Inspector in the Exchange Control Department of the Reserve Bank of South Africa and had been instructed by his superiors to accompany Mr. Van Staden to Lesotho for the purpose of interviewing the accused.
The accused was well known to Mr. Van Staden, who nonetheless
formally introduced himself by showing the Ministerial document of authorisation, as well as a document of identity. At Mr. Van Staden’s request, the accused read regulations 19 and 22. Mr. Van Staden stated that he wished to obtain information from him in terms of regulation 19. The accused objected on the grounds that he would require legal representation, and secondly that any information supplied might be used against him from a political point of view.
Mr. Van Staden said he wasn’t concerned with political matters, and that he had no objection to legal representation. The accused stated however that his Attorney was engaged out of Maseru that day.
Mr. Van Staden testified that the accused and he then agreed that
Mr Van Staden could proceed to ask questions of the accused, but
should the accused at any stage feel the necessity to consult his
legal adviser in respect of any question, he would be free to do so.
The accused’s agreement in the matter was nonetheless qualified
by his statement that he agreed to continue as he put it, “under
the threat of the Exchange Control Regulations”, a reference to
the provisions of regulations 19 and 22, and to Mr. Van Staden’s
statement that should the accused give a false answer to, or
refuse to answer, any question put to him, that would be a contravention
of the Regulations.
Mr. Van Staden advised the accused that he wished to record the interview on a tape recorder, out the accused did not agree to this. The answers to Mr. Van Staden’s questions were then written down by the accused himself.
Mr. Van Staden testified that he would have agreed to defer any question until the accused had had legal advice thereon, had the accused so requested. Towards the end of the interview he indicated that he would have to have access to the records of any foreign banking account held by the accused. The latter preferred to first seek legal advice in the matter, before complying with such request, to which Mr. Van Staden agreed.
During the course of the interview Mr. Van Staden left the Boardroom and went to Lesotho Bank in Maseru, to consult documents there relating to the accused’s account with that bank, that is, with the accused’s authority. He was absent from the Boardroom for 45 minutes approximately. For the first 20 minutes or so, the accused was engaged in writing down information required by Mr. Van Staden, but thereafter Mr. Bronn and he engaged in general conversation irrelevant to the subject of the interview.
Mr. Bronn’s evidence corroborated that of Mr. Van Staden. He reckoned Mr. Van Staden was absent for about one hour. The balance of the evidence indicates that the interview finished in the Boardroom about 2 p m., and as some time was spent in taking
pnotostatic copies of certain documents, including the accused’s
statement, the interview proper lasted about 3½hours.
Quits, obviously the accused was surprised at meeting Messrs. Van Staden and Bronn and upon learning that Capt. Malefane would not conduct the interview. Mr. Van Staden described the atmosphere as being initially “tense”. Mr Bronn in particular testified that the accused was initially “somewhat upset and slightly angry but he calmed down” In cross-examination he added that the accused was “excited, trembling slightly and even raised his voice”. Both officers testified that as the interview progressed the atmosphere became more cordial. Tea and cooling drinks were served and the accused did not appear tired or disheartened. At the conclusion of the interview the accused requested Mr. Van Staden not to make use of the statement supplied until he had had the opportunity of consulting his Attorney. Mr. Van Staden however declined, replying that he had been appointed by the Minister and it was his duty to report back to the Minister in the matter.
The prosecution then sought the admission of
(i) the two documents found at the accused’s home on 25th August, 1987,
(11) two admissions made by the accused on that
(iii) the statement made by him to Mr. Van Staden on 7th September, 1987, (the Regulation 19 statement).
In a ruling delivered at the close of a trial within the trial, at which almost all of the evidence above recounted was adduced, I admitted in evidence the items under the first and third categories above, reserving my reasons in the matter which I now give.
At this stage I wish to express my sincere thanks to
Mr Luttig and Mr. Weinstock for the formidable body of authority which they have placed before me and for all the assistance which they rendered throughout the trial. I have studied all of such authority and if I do not refer to all of it, it is because I do not wish to add to what I regret is a very long judgment.
The learned Counsel for the accused Mr. Weinstock submits that the authorisation of Capt. Malefane and Mr. Van Staden under regulation 19 was invalid on the basis that,
(i) regulation 19 itself is ultra vires, in that it does not specify the person or persons to whom the Minister may delegate his powers,
neither authorisation was published in the
Gazette, and further, that
the authorisation of Mr, Van Staden is
invalid as it is far too wide in its
The respective authorisations read as follows
EVARISTUS RETSELISITSOE SEKHONYANA
The Minister of Finance in the Kingdom of Lesotho, in the exercise
of the powers vested in me by Regulation 19(1) of the Exchange Control Regulation 1975 hereby authorise CAPTAIN LESETELI MALEFANE of the Royal Lesotho Mounted Police to order any person to furnish any information at the person’s disposal or which the aforesaid authorised person deems necessary for the purposes of the Exchange Control Regulation and I also authorise the aforementioned person to enter the residential or business premises of the person so ordered, and inspect any books or document belonging or under the control of such person.”
R “TO WHOM IT MAY CONCERN
I, the undersigned, E.R. Sekhonyana, in my capacity as Minister of Finance and under powers vested in me by Regulation 19(1) of the Exchange Control Regulations, 1975, hereby appoint Charles Robert van Staden who is employed in the Exchange Control Department of the South African Reserve Bank, to exercise on behalf of the Minister of Finance the powers conferred on him by Exchange Control Regulations 1975.”
Both authorisations were signed by the Minister. That of Capt Malefane is dated 19th August, 1987 that of Mr. Van Staden is undated, but on the evidence I am satisfied that it was signed a few days before 5th September, 1987. Mr. Weinstock refers to the provisions of the Exchange Control Act, 1975, under which the Regulations were made. Sections 3 and 4 thereof read as follows
“3. (1) The Minister is hereby empowered to make regulations prohibiting or restricting dealings in or possession of gold, goods, currency or securities and for purposes incidental thereto and connected therewith.
(2) Without prejudice to the generality of the foregoing, the regulations may –
require any person to make
statements or produce
documents for the purposes of
provide for the entry of any
premises and the search of any
premises or persons for the purpose
of giving effect to any of the
empower such authorities or persons
as may be specified in the regulations to make orders, rules or directions for giving effect to any of the regulations,
prescribe the form of any document
required for the purpose of giving
effect to the regulations or the
generally, as to all matters which he
considers it necessary or expedient
to prescribe in order that the objects of this Act may be achieved.
(3) Different regulations, orders, rules or directions may be made under this section for, or in relation 10, different classes of persons, gold, goods, currency or securities or different countries, or generally, in relation to anything in respect of which provision is made under this section
4. Any person convicted of an offence under this Act shall be liable to a fine not exceeding ten thousand rand or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.”
With regard to his first submission, Mr. Weinstock relies on the provisions of section 3(2)(c) above, and in particular on the opening words of regulation 19(1), that is,
“The Ministry, or any person authorised by the Ministry,
may order any person to furnish any information at such
person’s disposal “. (emphasis supplied)
Thereafter it will be seen that the sub-regulation refers to “a person so ordered” The learned Crown Counsel Mr. Luttig submits that, on the basis of the ejusdem generis rule, the word “orders” in section 3(2)(c) equates to “rules or directions”, and that such word is there used as a noun, and not as a verb in regulation 19. With that I agree. In my view section 3(2)(c) caters for what is usually termed sub-delegated legislation. Those provisions may be regarded as an exception to the rule delegatus non potest delegare, but if so, it is a statutory exception. Its validity (as contained in section 9(5)(a) of the Currency& Exchanges Act, No.9 of 1933 of the Union of South Africa) was confirmed by the Appellate Division of the Supreme Court of South Africa in the case of S v De Blom 1977 (3) SA 513. Indeed, in that case it was held that as the State President, who was empowered to make regulations, was authorised by section 9(5)(a) to designate by regulation a person with the authority to issue orders and rules, such person also had authority to nominate,by orders and rules, institutions and persons to assist him in the exercise of his powers. The Exchange Control Regulations of South Africa confer discretionary powers upon the Treasury. The “Treasury” is given practically the same definition as the “Ministry” under our Regulations (regulation 2(2)), namely, it
“means the Minister of Finance, and in respect of any power or function assigned to the Ministry by those regulations, includes any person authorised by the Minister to exercise or to
perform such power or function.”
It seems to me therefore that it is the Minister of Finance himself, or “any person authorised by the Minister”, who constitute
the “authorities or persons specified in the regulations
to make orders, rules, or directions “. Thus under regulation
3(2)(b) the Ministry may “by order prohibit all authorised dealers
. .. from selling .. .. to any foreign
government foreign currency or gold”, under regulation 5(3) the Ministry may “by notice in the Gazette, direct in respect
of persons resident in a particular country” that all
monies due to them by residents be paid into a blocked account, under regulation 9 the Ministry may from time to time prescribe by notice in the Gazette or by instructions to authorised dealers the currency or the manner in which payment may be made in connection with transactions between persons in Lesotho and persons outside the Rand Monetary Area.
By such orders, directions, instructions etc., the Ministry,
in the words of section 3(2)(c), is thus “giving effect to the
regulations” The above enabling provisions in the Regulations are based on the South African Exchange Control Regulations, where the appropriate authority is the “Treasury”. On the same date as the said
Regulations were published (1st December, 1961) “Orders And Rules Under The Exchange Control Regulations” were published in the Gazette. As far as I can determine, those “Orders & Rules” were published by the Minister of Finance himself, although the various orders and rules were in turn made by the Minister or the Treasury. As I see it, it is to such sub-delegated legislation that section 3(2)(c) of our Act applies, and not to an order by an authorised person under regulation 19, made to another person to furnish information required. The latter order, as I see it, constitutes a special executive action whereas the “orders” referred to in section 3(2)(c) constitute instructions of a general legislative nature. In my judgment therefore there was no obligation upon the Minister to specify any authority or person under regulation
19, nor can I imagine how, in terms of convenience, it could have been done.
It is then said that the authorisations of Capt Malefane and Mr. Van Staden were invalid, as they were not published in the Gazette Mr. Weinstock relies upon the provisions of section 36(1)(d) of the Interpretation Act 1977. The provisions of section 35(2) are also relevant Those provisions read as follows
“35. (2) A Minister may delegate to any public officer the exercise of any power, other than the power to make subsidiary legislation, and the performance of any duty, conferred or imposed upon him by any Act.
36. (I) Where a Minister has delegated powers and duties under section 35(2), or where an Act confers power upon any person to delegate the exercise on his behalf of any of the powers or the performance of any of Che duties conferred or imposed upon him under any Act –
(a) the delegation shall not preclude
the Minister or the person so
delegating from exercising or performing at any time any of the powers or duties so delegated,
the delegation may be conditional,
qualified or limited in such manner
as the Minister or the person so
delegating may think fit,
the delegation may be to a named
person or to the person for the
time being holding any office
designated by the Minister or by
the person so delegating,
notice of such delegation shall be
published in the Gazette, and
(e) the delegation may be amended by the Minister or the person so delegating.”
The word “Act” is defined in section 3 of the Interpretation Act as including subsidiary legislation. It seems to me however that “the contrary intention” (see section 2 of the Act) appears in places in the Interpretation Act, for example under Part III thereof dealing with “General Provisions As To Act”, where it speaks of every Act being a public Act and of the title and short title of, and the preamble to an Act. As to section 35(2), the power to make subsidiary legislation
can only be conferred by an Act as such Nonetheless the subsection speaks of “any power” and “any duty” and again “any Act”. I do not see therefore that the word “Act” in section 35(2) should be given the restricted meaning in all cases. Similarly I see no reason why that word should be interpreted in section 36 so as to exclude subsidiary legislation, and as I see it the legislature intended section 36 to be applied to the delegation of all statutory powers or duties, whether their source be main or delegated legislation, that is, unless, in the words of section 2 of the Act, a contrary intention appears from the context of the enabling legislation.
It will be seen that section 36(1)(a) provides that despite delegation, the Minister may nonetheless at any time himself exercise the particular powers While the Minister under regulation 19 may himself require persons to furnish information I consider that the definition of the word “Ministry”, and its use in regulation 19, emphasises the executive nature of the power involved. Indeed, I observe that the power to enter premises and inspect books and documents may only be exercised by persons authorised by the Ministry and not by the Ministry itself.
The only power conferred upon the Minister under the Act is the power to make regulations, though such power obviously embraces other powers, that is, within the framework of the Act. Thereafter, under regulation 19, the power to require persons to furnish information is conferred upon the Minister. Only that power is delegated to others under regulation 19 there is no delegation in respect of the power to enter premises and inspect documents there is but the enabling provision to confer such power on others, which enabling provision finds its basis in section 3 of the Act itself.
I pause here to say that Mr. Luttig submits that there is no question of any “delegation” as such under regulation 19, but merely an administrative appointment. Indeed he points to the use of the word “appointed” in regulation 19(1). The powers contained in section 3 of the Act and in regulation 19 are very wide and indeed arbitrary. The regulation confers a power upon the Minister in the first instance, even though the Minister himself made the Regulations. The power to
require persons to furnish information, under the compulsion of penal
sanction, is quite clearly a statutory power. Where the Minister authorises another to exercise that power, I can only regard such authorisation as a “delegation” for the purposes of section 36(1) of the Interpretation Act.
Mr Luttig then submits that an intention contrary to the provisions of the Interpretation Act appears in the Exchange Control Act. He points to the wide terms of the Exchange Control Act and in particular of section 3 thereof. The Act is expressed to be an enactment “to provide for the control of dealings in or possession of gold, goods, currency and securities and provide for matters incidental thereto”. Mr. Luttig places emphasis on the latter phrase and on the phrase “for purposes incidental thereto and connected therewith”, found in section 3(1), the provisions of section 3(2) serving but to emphasise the generality or such phrase. The provisions of subsection (2) confer, as I have said, wide arbitrary powers upon the Minister. They are however no wider than similar powers contained in Exchange Control legislation elsewhere in the world to day. The need for such legislation was described by Boshoff AJP in S. v Temple (1978)3 SA 185 at pp. 186/188 in terms which I respectfully adopt.
Suffice it to say that the severity of the penalty imposed under section 4 of the Exchange Control Act stresses the view of the Legislature in the matter. The words “this Act” contained in section 4 are defined in section 2 as including “any regulation made under section 3” It will be seen that under section 3(2)(e) (some wording seems to have been omitted from the paragraph) the Minister may under the Regulations provide for
“all matters which he considers it necessary or expedible to prescribe in order that the objects
of this Act may be achieved.”
Quite clearly then the Minister is empowered to create offences and impose penalties (within the framework of section 4) in respect of failure to observe the requirements contained in the Regulations.
In particular, section 3(2)(a) and (b) enables the Minister to require that persons make statements and produce documents, and again to provide for the entry into and search of premises and even persons.
Mr Luttig then submits that in view of such legislation, in view of the need for investigation, and the necessity to act promptly, the Legislature cannot have intended promulgation under Regulation 19. I can see no reason incidentally, for subsequent promulgation, as surely the object of promulgation is to notify those immediately concerned. Mr. Luttig stresses that the very act of promulgation, apart from the delay involved, would perhaps remove the element of surprise and vitiate an investigation. In short, he says, the objects of the Exchange Control Act would never be achieved if it and the Regulations did not have teeth.
Mr. Luttig refers to the case of R v Koenig (1917) CPD 225. In that case Juta J.P in speaking of the promulgation of “a law” as such, observed at pp 230/231
“Where from a consideration of the Act itself it is manifest that the very object for which the Legislature provided for would be frustrated and rendered nugatory by a promulgation in the Gazette it is a reasonable inference that the Legislature must have intended that some other mode should be adopted of bringing the law to the notice of persons against whom it was directed and who are affected by it”.
In Koenig the five-member Court distinguished the earlier decision of R v Tatton (19(3) CPD 390, where the Court held that the non-promulgation of a Magisterial order generally prohibiting the sale of intoxicating liquor after a certain hour,invalidated a conviction for breach of such order. In Koenig a similar order prohibited any sale of liquor during a period of 19 hours, the order was not promulgated in the Gazette out was served on the appellant some hours before the relevant period. As Kotze J. (a member of the Court in Tatton) observed at p 236
“We have, therefore, here, on the face of it to
deal with a case of emergency not admitting of any delay .. .
it is possible that circumstances, requiring
immediate action by a magistrate, may suddenly and unexpectedly arise, which will not brook the delay, which must occur, if a magistrate’s order …. has first to be promulgated by means of a publication
or notice in the Gazette.”
Earlier in the Tatton case Koetze J. had referred at Pp.393
to “the rule of to common law” saying that
” . .. no matter in what shape it may be conceived whether it be in the form of an ordinary Act of Parliament whether it be in the form of a by-law, or whether it be in the form of an order, whenever it prescribes a rule of conduct to the public and creates a penalty for any violation of any one of the provisions thereof, in such a case it has the effect of a law and it must be duly promulgated.”
Gardiner J. in Koenig considered that the particular order in chat case “enjoined no course of conduct it merely prohibited the supply of liquor on one particular day.” He observed that under the legislation an order could be directed at one particular licensed premises, leaving others untouched. The learned Judge considered therefore that the Magisterial order in Koenig amounted to no more than an administrative direction and promulgation in the Gazette was not necessary.
Mr. Weinstock submits that Koenig is not an authority for the proposition, advanced by Mr. Luttig. that the provisions of section 36(1)(d) of the Interpretation Act are directory, rather than mandatory, in respect of publication under regulation 19. Certainly the Court in Koenig was there dealing with the common law situation, and was not faced with the provisions of section 36(1)(d). Nonetheless there are dicta in Koenig and indeed in Tatton which are relevant to the proposition.
Koenig was followed in Byers v Chinnn & Anor.(1928)AD 322 where the five-member Court held that the resolution of a statutory Board allocating water to 13 adjoining land owners did not constitute a law, and did not require promulgation in the Gazette, the land owners being presumed to have had direct notice. In the case of Jajhay v Rent Control Board (1960)3 SA 189 Williamson J. considered the provisions of section 15 of the Interpretation Act No.3 of 1957, which provided that when anything is authorized to be done by, inter alia, a Minister, notification that such thing has been done may be by notice in the Gazette unless some other form of notification has been prescribed by law. Legislation
provided for the appointment by the Minister of members of a Rent Board the legislation did not prescribe promulgation of such appointment Williamson J observed at p.195 that the particular provision in the Interpretation Act did “not provide for notification as a prerequisite to the validity of all acts done by Ministers”.
In construing the above dicta I am guided in turn by those of Stratford J.A in the Byers case at p.329, namely,
“that one must look to the enabling enactment to see whether the necessity for promulgation is or is not excluded.”
That dictum in turn must be considered in the light of provisions of section 36(1)(d) of the Interpretation Act Mr. Weinstock points to the fact that neither authorisation in this case referred to any particular person required to give information, and thus prior publication would not have prejudiced any investigation The evidence indicated that the accused had been the subject of a judicial enquiry at that stage. Mr. Van Staden in particular was well known to him since 1984, and the notification, that is, on or before Friday 4th September, of the latter’s pending arrival in Maseru and his authorisation even in the terms contained therein, might well have served as a warning, at least as to the likely nature and intensity of the forthcoming interview Again the specific authorisation of Capt. Malefane to enter premises etc , which in my view required no publication, might in any event have well served also as a warning to the accused.
Mr Weinstock submits that there was no emergency, Capt. Malefane having written to the accused as early as 3rd September, the interview with Mr. Van Staden taking place four days later. It seems to me that, considering that a request was made for Mr Van Staden’s services at Ministerial level, little time was lost in his arrival in Maseru. Again, the period between the signing of Capt Malefane’s authorisation and his acting chereon, did not permit or publication. Quite clearly publication in the Gazette would have caused much delay in a master, which considering the post held by the accused and his suspension therefrom, required urgent attention.
Where, for example, the Minister had generally authorised, say, the Central Bank under regulation 19 to order any person to furnish information, I would consider that such delegation should be published in the Gazette. For example, the Minister of Finance in the Republic of South Africa has so authorised the Reserve Bank of South Africa and a number of authorised dealers, such authorisation appearing under the “Orders and Rules Under the Exchange Control Regulations” published in the Republic in the Gazette on 1st December 1961. In the present case however where, despite the terms of the authorisations, the evidence indicates that they were intended only to refer to the accused, in the interests of the advancement of an investigation, that is, the public interest. I cannot but see that the requirement to publish in the Gazette was directory and not mandatory.
As Mr. Luttig submits, the Interpretation Act imposes no sanction in the matter. The necessity, at lease in a case such as this, to achieve the objects of the Exchange Control Act, must indicate a “contrary intention” in that Act. The object of general publication is to inform the public at large there was here in effect but a specific authorisation, and as I see it, the only person concerned was the accused himself. He was shown both authorisations and acted accordingly. In my view, failure to publish such authorisation to the accused would have rendered nugatory the provisions of regulations 19 and 22 There was such publication however, and I cannot then see that the fact that such authorisations were not published in the Gazette invalidated such authorisations in any way.
Mr. Weinstock then submits that the authorisation of Mr. Van Staden is far too wide in its terms. There is no doubt that the latter phrase in the authorisation is extremely wide, namely, the words
“to exercise on behalf of the Minister of Finance the powers conferred on him by Exchange Control Regulations 1975.”
Those words certainly give such impression at first glance. But the authorisation expressly refers to the enabling “powers vested in (the Minister) by Regulation 19(1) of the Exchange Control
Regulations, 1975″. The reference to such enabling powers immediately contained the authorisation thereto In view of such precise reference, the word “powers”, where it appears for the second time in the authorisation, can only be construed to refer to the powers conferred upon the Minister, and which the Minister might in turn delegate,under regulation 19(1), namely the power to
“order any person to furnish any information at such person’s disposal which the Ministry or such authorised person deems necessary for the purposes of these regulations”.
Thereafter however, as I observed earlier, the Minister himself had no further powers under regulation 19, that is, further than the ordering of persons to furnish information. Thus the authorisation went no further than that, as Mr. Van Staden was not “generally or specifically appointed by the Ministry for the purposes” of entering premises and inspecting documents. In brief therefore I consider that the authorisation of Mr. Van Staden can only be construed to be limited (more limited than the authorisation of Capt. Malefane), rather than too wide
I turn then to consider the admissibility of the various items Capt Malefane was cross-examined at length on his conduct of the proceedings at the accused’s home on 25 August, 1987. It will be seen that the particular Ministerial authorisation, in terms of regulation 19, empowered him in effect “to inspect any books or documents belonging to or under the control of” the accused. Capt. Malefane was at pains to resile from the word “search”, but suffice it to say that I am satisfied that what occurred, if it was not a thorough search, was in any event a starch rather than an inspection.
It will be seen that section 3(2)(b) of the Act empowers the Minister to provide by way of regulation for the “search” of premises and persons. Regulation 19 however speaks only of inspection of books and documents. For my part I can see little effect in empowering entry into premises if there is thereafter no power of search. None-the less the word “search” in section 3(2)(b) has not been repeated in regulation 19(1) and I can see no good reason for giving the word
“inspect” any extended meaning. In brief I find that Capt. Malefane was not authorised to search the accused’s house, and the two documents found therein were thus illegally obtained.
Mr. Weinstock concedes that such documents are nonetheless, strictly speaking, admissible in evidence. That situation can be traced as far back as 1861 to the case of R v Leatham (1861)8 Cox C.C.498 where Crompton J, said at p.501
“It matters not how you get it, if you steal it even, it would be admissible in evidence.”
That dictum was quoted in the Privy Council case of Kuruma, Son of Kaniu v R (195G)1 All E.R 236, where Lord Goddard C.J said at p.239
“In their Lordships’ opinion, the test to be applied in considering whether evidence is admissible is whether it is relevant to the matters in issue If it is, it is admissible and the court is not concerned
with how the evidence was obtained,”
in the case of R v Sang (1979)2 All E.R. 1222 Lord Diplock at p.1231 stated the following formula, adopted by four of the five Law Ords in that case.
“(1) A trial judge in a criminal trial has always a discretion to refuse to admit evidence if in his opinion his prejudicial effect outweighs its probative value. (2) Save with regard to admissions and confessions and generally with regard to evidence obtained from the accused after commission of the offence, he has no discretion to refuse to admit relevant admissible evidence on the ground that it was obtained by improper or unfair means. The court is not concerned with how it was obtained.”
The first document found at the house of the accused in this case was in fact a torn part of a letterhead, apparently of a Bank in London, with the name “E. Haae Esq” typed thereon. The second document was a bank statement of another branch of the same Bank in London, bearing the accused’s name. I consider both documents to be highly probative and I cannot say that their prejudicial effect in
any way outweighed their probative value There was then no basis for the exercise of my discretion and I admitted the documents in evidence.
As to the Regulation 19 statement, it proves convenient to first consider the aspect of statutory compulsion Mr. Luttig refers to the Case of R v Scott (1856) Dears & Bell 47, 169 E R. 909, where Lord Campbell CJ and three other Judges in the Court for Crown Cases Reserved held that the public examination of a debtor, under which he was obliged under pain of committal to answer questions, although the answers might incriminate him, could be used as evidence against him in criminal proceedings That decision was followed by Lora Russel, of Killowen CJ in the Queen’s Bench in the case of R v Erdheim (1896)? Q.B. 260, though ( observe that there the particular legislation provided that the public examination of a debtor “may thereafter be used in evidence against him” There Followed the case of R v Pike (1902)1 KB 552 where Lord Alverstone CJ and four other Judges in the Court for Consideration of Crown Cases Reserved held that a debtor’s statement of affairs before the Official Receiver was admissible in evidence against him in a criminal trial there however section 27(2) of the Bankruptcy Act, 1890 provided that the debtor’s public examination was not admissible in evidence against him, the Court observing that the statement of affairs was not part of the hearing on such examination.
These decisions were adopted by the Appellate Division of the Supreme Court of South Africa in the case of R v Moiloa (1956)4 SA 824 in that case an admission made by a driver of a vehicle to a police officer, under statutory compulsion, was admitted in evidence Fagan JA in delivering his judgment (which contains an exhaustive review of the authorities, and with which the other four Judges concurred) observed at pg 833/834
“The fact then that admissions are contained in replies to questions which have to be answered under legal compulsion would not, in English law as set forth in the authorities I have mentioned, render them inadmissible in evidence against the person who made them when the latter is being tried on a criminal charge. The effect of the statutory compulsion is merely to remove the protection embodied in the maxim nemo tenetur se ipsum
accusare, leaving the question of admissibility in other proceedings to be decided by the principles applicable to that branch of the law, and these have been so construed as not to make the statutory compulsion a ground for ruling the statements to be inadmissible.”
There followed the cases of R v Cebetha (1959)2 SA 337 and
S v Ismail & Ors (1965)1 SA 446, to both of which Mr. Weinstock refers He points to the dictum of the learned Schreiner J.A. (dissenting from Hoexter, Steyn Malan & Ogilvie Thompson JJ.A) at p.345 where he said
“Parliament facilitated investigation but not compulsion to self-crimination”.
That dictum was said in respect of provisions now found in section 229(2) of the Criminal Procedure & Evidence Act 1981, that is, with reference to whether evidence of a “pointing at”, rather than a “pointing out” (resulting in discovery), arising out of an inadmissible confession or statement, is itself admissible. I do not see however that such provisions or circumstances give rise to any question of statutory compulsion as such The dictum was repeated by Milne JP in the Natal Provincial Division in the Ismail case at p 448 where he nonetheless observed that the dictum had been “used in a different context”. In Ismail the learned Judge President rejected a confession made under the compulsion of the provisions of the 90-day detention clause in section 17 of the General Law Amendment Act 37 of 1963 In the case of S v Hlekani (1964)4 SA 429 however, three Judges of the Eastern Cape Division (per Wynne J.) disagreed with Milne JP and admitted such a confession in evidence
As I see it, everything depends on the wording of the particular legislation. This emerges from the dicta of Lord Reid in the case of Commissioners of Customs and Excise v Harz & Anor. (1967H All E.R 177. There The learned Law Lord was dealing with the power of Commissioners of Customs & Excise to require information, and of customs, officers to demand the production of documents, under the provisions of section 20(3) of the Finance Act, 1946 (replaced by section 24(6) of the Purchase Tax Act 1963). Those provisions read as follows
“Every person concerned with the purchase or importa-
tion of goods or with the application of goods to any process of manufacture or with dealings with imported goods shall furnish to the commissioners within such time and in such form as they may require information relating to the goods or to the purchase or importation thereof or to the application of any process of manufacture thereto or to dealings therewith as they may specify, and shall, upon demand made by any officer or other persons authorised in that behalf by the commissioners, produce any books or accounts or other documents of whatever nature relating thereto for inspection by that officer or person at such time and place as that officer or person may require.”
As to those provisions Lord Reid had this to say (at p.181)
“There is here a clear distinction between the right of an officer to demand production of documents and the right of the commissioners to require information to be furnished at such time and in such manner as they may require. The right of the officer is to require immediate production of documents, and, if the trader fails to produce documents in his possession of the kind demanded, he can be prosecuted. No doubt the officer can ask questions relating to documents of the kinds which he has demanded, and the trader’s answer or refusal to answer may be admissible in evidence, out the prosecution will not be for refusal to answer questions, it will be for refusal to produce documents, and I can see nothing to require the trader to give answers which may incriminate him.
The right of the commissioners to require information is quite different. If a demand for information is made in the proper manner the trader is bound to answer the demand within the time and in the form required whether or not the answer may tend to incriminate him, and if he fails to comply with the demand he can be prosecuted If he answers falsely he can be prosecuted for that, and, if he answers in such a manner as to incriminate himself, I can see no reason why his answer should not be used against him. Some statutes expressly provide that incriminating answers may be used against the person who gives them and some statutes expressly provide that they may not. Where, as here, there is no such express provision the question whether
such answers are admissible evidence must depend on the proper construction of the particular statute. Although I need not decide the point, it seems to me to be reasonably clear that incriminating answers to a proper demand under this section must be admissible if the statutory provision is to achieve its obvious purpose.”
Those dicta are regarded as obiter, as customs officers acted beyond the scope of the legislation, there was prolonged interrogation.
and the respondents’ statements were held inadmissible. Nonetheless, I find great assistance in the learned Law Lord’s dicta. Regulations 19 and 22 fall within the wide scope of section 3 of the Act, Thy Act makes substantive provision for little more than the maximum penalty which may be imposed, and thereafter empowers the Minister, under section 3, to legislate. The Act clearly contemplates the imposition of penal sanctions under the Regulations. If the Act contemplates that “the regulations may …….. require any person
to make statements”, then “in order that the objects of (the) Act may be achieved”, it must also contemplate that such requirement can only be enforced by way of penal sanction. It cannot have been the intention of the Legislature that persons could avoid such sanction by the device of making incorrect statements. In my judgment therefore the intentional making of an incorrect statement must equally attract a penal sanction, as much as the failure or refusal to make any statement.
Regulation 22 thus makes it an offence to refuse or to neglect to furnish information The regulation also makes it an offence to make an incorrect statement in any declaration made or return rendered for the purposes of the regulations. In this respect regulation 19(2) provides that if a person makes a statement under regulation 19(1), which is in conflict with any other statement previously made by him, he may then “on an indictment, summons or charge alleging that he made the two conflicting statements,” be convicted of having made an incorrect statement. The point is, how can such provision be given effect unless the statement made under regulation 19(1), as much as any statement made under the Regulations (and their penal sanctions), is admissible in evidence? How can the objects of the Act, and in particular section 3(2)(a) thereof, be achieved if it is not admissible?
As 1 see it, it was the clear intention under the Act, and in turn the Regulations, that it should be admissible.
All the authorities indicate that nonetheless the question of admissibility is to be ultimately determined by the usual principles applicable to that branch of the law There is no doubt that the accused was unhappy with the situation facing him in the Boardroom, as he might well be, but that arose from the aspect of statutory compulsion. I accept that he was free to obtain legal advice if necessary as Mr Luttig submits, his Attorney could but point to such statutory compulsion. Mr. Weinstock concedes that otherwise Mr. Van Staden behaved in a gentlemanly fashion. The accused remained silent in the trial within the trial. 1 cannot then see that, apart from the aspect of statutory compulsion, there were any grounds of involuntariness.
As to the Court’s residual discretion, I observe that while the accused was surprised to be met by Mr. Van Staden, he had received warning of an interview in Capt. Malefane’s letter, in which his attention was Directed to regulations 19 and 22, and in which indeed he had been invited to have his Attorney in attendance. As his Attorney was engaged elsewhere the accused was, as I see it, always free to engage another Attorney. In brief, I cannot see that the strict rules of admissibility operated unfairly against the accused and I admitted the Regulation 19 statement. declining in the exercise of my discretion to exclude it
As for the two statements made at the accused’s house on 25th August, I consider that they were voluntarily rendered. Nonetheless, they were renoered in the course of an illegal search. Furthermore, they were rendered in the presence of three police officers, with a further seven officers surrounding the house. In such circumstances I considered that the strict rules of admissibility operated unfairly against the accused and so, in the exercise of my discretion, 1 excluded the two statements.
I turn then to consider the evidence in respect of the offences charged. In the first 12 counts the accused is charged with unlawfully making an incorrect statement. In completing a Form E an applicant
is obliged to mark an appropriate column or box (there are 27 of them), indicating the nature of the transaction giving rise to the availability of the foreign currency which the applicant wishes to sell. The accused thus made declarations on six Forms E, which are in conflict with statements made by the accused with regard to the particular transactions, contained in the Regulation 19 statement made by him on 7th September, 1987. The conflict can be illustrated thus –
COUNT TRANSACTION ON FORM E TRANSACTION IN
REG. 19 STATEMENT
1/2 Gift Loan
3/4 Capital repatriation by RMA resident including sale proceeds of foreign assets
5/6 Ditto Loan
7/8 Ditto Loan
9/10 Ditto Loan
11/12 Gift (contradiction Gift
in origin and
purpose of gift)
Mr. Luttig submits that the statements contained in the Regulation 19 statement are correct, rather than the ones made on the Forms E. He submits that the accused had had occasion to reflect upon the provisions of regulations 19 and 22 and on the sanctions imposed thereby, and that he had, as Mr. Luttig put it, “realised that the game was up” Mr. Weinstock submits that the Court cannot be sure which statement is correct, nor for that matter that any of the statements ore correct. In this respect Mr. Weinstock concedes, because of the conflict in the various statements, that the prosecution has establish its case on counts 2, 4, 6, 8, and 12, but not on count 10, as, Mr. Weinstock submits, the evidence that the accused made the statement on the particular Form E is unreliable As I see it, the evidence will have to be examined in respect of each count
Counts 1 and 2
The evidence establishes that the accused completed a Form E on 4th March, 1982 offering to sell £2500. He declared that the originating transaction was a “Gift”. in the regulation 19 statement he said in reference to the £2500 that
“This is the amount given to me by a certain Mr. Knights who worked for the Company Braddbury Wilkinson as a loan that I could repay any time when I have the money. I have declared it as a gift on Form E because were not specific when I asked him for it how and how long he expects me to pay him back. Mr. Knights has since left the company which is now closed. I have not repaid anything in the interim The company was in England.”
The accused in effect made the same statement in respect of the amounts involved in counts 3/4, 5/6, 7/8 and 9/10. The accused thus admitted to receiving altogether five sums of money, totalling 117,425, over the period from 4th March, 1982 to 30th October, 1984, from Mr. Knights. The point is that Mr. Knights was the sales representative of the British company Bradbury Wilkinson PLC, which had entered into a contract with the Central Bank for the printing of Maloti currency notes. Mr. Makhupane, a Senior Accountant with the Central Bank testified that the Central Bank had paid a total of £788,000 approximately in four payments, over the period from 31st August, 1981 to 29th July, 1983, the payment on the latter date being £322.650.23. It seems that the contract terminated on 31st December, 1984.
Under the circumstances it may well be said that the accused might have considered an admission to having received, as Mr. Luttig put it, “a soft loan”, from Mr. Knights, less damaging than an admission to having received an outright gift. In brief, the declaration on the Form E dated 4th March, 1982, may well have been correct, there being no necessity on the form, that is, up to 1986/87, to state the name and address of the remitter. As against that, it may well be, in all the circumstances, that the gift, in order to avoid embarrassment might have been expressed by the parties to be a “loan”. For my part
I find it somewhat incredible that such large sums of money could be advanced in this way over a period of two and a half years without any agreement whatever as to the terms involved Nonetheless, it cannot be said beyond reasonable doubt that the statement on the Form E is correct.
There is of course the existing conflict, and the provisions of regulation 19(2) apply That being the case, the accused “shall be deemed to hove made an incorrect statement in terms of regulation 22” It will be seen however that under the latter regulation an accused is absolved if
“he proves that he did not know, and could not by the exercise of a reasonable degree of care have ascertained, that the statement was incorrect.”
Under regulation 19(2) however the burden (in view of word “proves”) falling upon the accused is that he may be absolved if
“he proves that when he made each statement he believed it to be true.”
Now it seems to me that where the prosecution rely on the provisions of regulation 19(2), the burden imposed on it is heavier Regulation 22 refers to “the exercise of a reasonable degree of care”, which suggests to me that the necessary mens rea involved amounts to no more than culpa. The defence under regulation 19(2) however, in my view, amounts to a subjective belief honestly held by the accused, but not necessarily reasonably so (see S v De Blom supra), that is, that he believed each statement to be true. The aspect of such subjective belief is relevant to dolus rather than culpa It seems to me therefore that the offence under regulation 22, where the provisions of regulation 19(2) are invoked, involves the mental element of dolus.
The onus however lies upon the accused, on a balance of probabilities, to prove that when he made each statement he believed it to be true. In this respect I observe that all the evidence indicated
that the accused is a highly intelligent person possessed of much ability The facts speak for themselves. The accused had risen to the post of first Deputy Governor in the Central Bunk. He was charged inter alia with the administration of Exchange Control. He had attended three or four courses overseas on banking. He had frequently attended quarterly Exchange Control meetings at the Reserve Bank of South Africa, whereby indeed he became well known to Mr Van Staden He was admitted as an Attorney before this Court.
He was obviously familiar with the Regulations – he initially declined to read regulations 19 and 22, on the basis of such familiarity, when requested by Mr. Van Staden to do so – and no doubt with the contents of Form E That form makes provision in columns 8 and 14 thereof for the respective entries of “Gift” and “Loan to RMA resident”.
Evidence was adduced by a number of witnesses that a loan involved an application to an authorised dealer, and ultimately the Central Bank, for permission to accept such loan overseas, involving as it well might, repayment in foreign currency, with interest, overseas. The accused had made no such application. Quite obviously any such application would have sparked off enquiry.
The accused remained silent in his defence and called no evidence in all the circumstances I cannot see how it can possibly be said that he honestly, even if mistakenly, believed each statement when made to be true Suffice it to say that I am satisfied beyond reasonable doubt that he did not entertain such belief and that he unlawfully and intentionally made an incorrect statement. Accordingly I find the accused not guilty on Count 1 but guilty on Count 2.
Counts 3/4, 5/6 and 7/8
In each case the accused marked the column on the Forms E entitled “Capital repatriation by RMA resident including sale proceeds of foreign assets” Mr Leuta, an Exchange Control Officer in the Central Bank testified that where an applicant marks the latter column, the authorities at the Central Bank “would like to know how he has acquired foreign currency as he ought to have declared any foreign assets”. One wonders therefore as to whether there was any such enquiry in the case of four Forms E (including
Counts 9 and 10) thus completed by the accused. As I see it, such column could only be appropriate to capital or assets in respect of which permission had been previously granted by the Central Bank. If the capita) or asset had been recently acquired, then the underlying transaction giving rise to the possession of such capital or asset in the first case, would have to be declared. Form E contains a certificate at the foot thereof which reads
“I/We declare that no balance of foreign currency due to me/us in respect of the underlying transaction is being withheld in contravention of the Exchange Control Regulations “
A study of the 27 columns contained in the Form leaves no doubt that an applicant is required to declare the underlying transaction involved, revealing how he came to acquire the foreign currency, that is, other tran say, an immigrant transferring his capital to Lesotho It must be remembered that in the first Form E completed by the accused on 4th March, 1982, he entered “Gift” in respect of monies received by him from Mr. Knights The question arises then as to why he should thereafter enter “Capital repatriation … etc” in respect of monies similarly received. When presented by Mr. Van Staden with the Form E completed on 5th April, 1983 (Counts 3/4) the accused in the Regulation 19 statement said
“I declared it as capital repatriation because it went into my account and I repatriated it to Lesotho as
required by law. I have not repaid anything because Mr. Knights left the company and I don’t know where he went thereafter.”
In response to a question concerning the loans which he said he had received, he replied,
“Since this money went into my account in London and I repatriated it here I regarded it as foreign capital repatriations.”
He was then asked why he had marked the relevant Forms E in
the “Capital repatriation etc” column, he replied:
“When I from time to time asked my friend to advance me with some, and he gave it to me under such loose arrangement, I honestly did not regard it strictly as a loan to be declared in terms of the law There were no specific repayment terms and no written agreement to facilitate a formal declaration in the C.M.A.”
(The Rand Monetary Area is now called the “Common Monetary Area” (CMA))
Nonetheless the accused as I have said, initially declared such monies as a “Gift”. I cannot but see that the admission by the accused that he received monies from Mr Knights whether in the form of a loan or a gift, must be true. Suffice it to say that I am satisfied beyond reasonable doubt as to the truth of such admissions, that is, of the receipt of the monies. That being the case, the underlying transaction to the acquisition of such funds was either a loan or a “gift” and the statements on the relevant Forms E must therefore have been incorrect.
The prosecution have adopted the position however that the Regulation 19 statement is correct. In Counts 3, 5 and 7 the prosecution thus allege that in fact the foreign currency was acquired by the accused as a result of a loan As I observed earlier, there is no proof beyond reasonable doubt that such is the case. What I said earlier however, in respect of Count 2, applies equally to Counts 4, 6 and 8. There is a clear conflict in the relevant statements I am satisfied beyond reasonable doubt that the accused could not have honestly, though mistakenly, believed that each statement when made was true, and that he unlawfully and intentionally made an incorrect statement Accordingly I find the accused not guilty on counts 3, 5 and 7 but find him guilty of counts 4, 6 and 8
Counts 9 and 10
On the relevant Form E the accused declared the underlying transaction to be a “Capital repatriation by R M A resident .etc” In the Regulation 19 statement he said that he had received the amount involved as a loan from Mr. Knights What I said in respect of
Counts 3 to 8 inclusive applies equally to Counts 9 and 10. There is only one point in issue: the accused did not sign the Form E it was signed by an official of the Lesotho Bank.
It appears that rules made by the Central Bank in the matter enable a bank official to complete a Form E on an applicant’s behalf In any case the practice of doing so is fairly prevalent. A Sub-Accountant at the Lesotho Bank, Mr. Makara, testified that he had completed and signed the relevant Form E on the accused’s behalf. He said that in the beginning of the month of November 1984 he was completing a summary of foreign exchange transactions for the month of October when he realised that no Form E had been completed in respect of a telex message dated 26th October, 1984 from their correspondent bank, the Bank of America in London, advising Lesotho Bank of a transfer of £930, apparently from the account of “Edward Haae”, with National Westminster Bank in London, to the credit of the latter’s account with Lesotho Bank Mr. Makara testified that he telephoned the accused to advise him of the credit transfer He asked him to indicate under what category the transfer fell. The accused said that “it was some funds he was introducing back home”. Mr. Makara then enquired whether the “Capital repatriation . .. ” column would be the appropriate column to mark, and the accused agreed thereto. Mr. Makara completed the form accordingly, and signed it, dating it for 30th October, 1984 Thereafter M2,309.65, representing the equivalent of £930, less bank charges, was transferred to the accused’s account with Lesotho Bank.
Mr. Makara was cross-examined vigorously on his evidence. He pointed out that he had even obtained the accused’s date of birth from him over the telephone and had entered it on the Form E. It was put to him that it was possible for him to have obtained the accused’s date of birth from earlier Forms E completed by the accused, with which he agreed, testifying however that it was much more convenient to have ascertained it from the accused himself. In making submissions Mr. Weinstock pointed to the fact that the accused’s date of birth on the relevant Form E reads “1947 12 11”, whereas four other forms, completed by the accused, read “1947 12 12”. As against that one Form E, signed by the accused, dated 5th April, 1983 appears to read
“1942 12 12”. In any event it appears that the latter date is incorrect. It seems to me that Mr. Makara would have been less likely to make a mistake as to the accused’s date of birth, as he apparently did, in copying that found in previous forms, than in speaking to the accused on the telephone. The point is that M2039 was credited to the accused’s account without him ever having raised a query in the matter, or ever having contested the particular Form E. Indeed, when it was presented to him by Mr. Van Staden on 7th September, 1987, he raised no objection thereto but said,
“It (2930) was obtained from the same person (Mr Knights) under same conditions and has not been repaid due to reasons above stated.”
There is no evidence before me to rebut that of Mr Makara. While he agreed that he had not specifically asked the accused’s permission as such to sign the Form, and while he may have been embarrassed thereby and no doubt at the apparent ante-dating of the Form, nonetheless I am satisfied that he was telling the truth and that in effect the accused authorised him to make the particular
entry under “Repatriation of capital by RMA resident ” and indeed
to complete the form on his behalf.
The prosecution did not allege that the accused had signed any of the Forms E in question in Counts 1 to 12 but simply that he had in the words of regulation 7(1). “made a declaration in writing” I am satisfied beyond reasonable doubt that the accused could not have honestly, though mistakenly, believed that each statement, that is the statement on the relevant Form E and the relevant portion of the Regulation 19 statement, when made was true, and that he unlawfully and intentionally made an incorrect statement. Accordingly, for the reasons earlier stated under Counts 3 to 8 inclusive, I find the accused not guilty under Count 9 but guilty under Count 10.
Counts 11 and 12
The accused stated on the particular Form E that he had received £2492.89 as a
“Gift for maintenance of my widowed mother from Anglican Congregation”
He gave the name of the “Remitter” as Rev. Timothy Towfey” of St. James Church, 16 James St , London. In the Regulation 19 statement he said
“This was money given to me by a certain Rev. Timothy Tovey who lives in England, and was one of my father’s friends. He gave it to assist me settle my legal fees here and to help my family erect a bomb stone for my father, which I have in fact deposited with a Company in Bloemfontein for the erection of the same. The address on the Form E is the address that he gave me.”
The accused’s mother gave evidence for the prosecution. She testified she had not received any money from Rev. Tovey Nonetheless she testified that the accused gave her money every month and helped with the education of her other children. She did say that preparations were in process for erecting a tombstone on her late husband’s grave, but she was unable to say whether or not any money had been deposited with a company in Bloemfontein for such purpose. In brief, as the accused would not necessarily have communicated to his widowed mother the receipt of the gift from Rev Tovey, nor the purpose thereof, there is no evidence before the Court to establish whether any of the two statements made by the accused is correct or incorrect. Nonetheless there is an obvious conflict. I am satisfied beyond reasonable doubt that the accused could not have honestly, though mistakenly, believed that each statement when made was true and that he unlawfully and intentionally made an incorrect statement. Accordingly I find the accused not guilty under Count 11 but find him guilty under Count 12
Counts 13 and 14
These counts are framed under the provisions of regulations 7(2) and 8(1). Regulation 7(2) requires a declaration within 30 days of the “right to receive outside the Rand Monetary Area any credit
or any balance at a bank” Count 14, framed in the alternative, invokes regulation 8(1), which requires a similar declaration in respect of the right “to sell or to procure the sale of any foreign asset”. As I see it,the Court is here concerned with a credit or balance at a bank and regulation 7 is the more appropriate regulation
In the Regulation 19 statement the accused admitted that
“I …. . . . opened a bank account in National
Westminster Bank in London, St. James Street
during 1983 and never utilised it and I still
have not yet closed it “
“The account with a Bank in St. James Street which is not yet closed still has an opening balance since 1983 of about £71.”
It is then alleged under Count 13 that during the period 1983 to 7th September, 1987, the accused became entitled to assign or to procure the assignment of the right to receive outside the Rand Monetary Area the credit or balance of £17 at the National Westminster Bank in St. James Street, London, and that, contrary to regulation 7(2), he wrongfully failed to make or cause to be made, within 30 days of so becoming entitled, a declaration in writing of such right
The presumptions contained in sub-regulations (9), (12) and (13) of regulation 7 establish some of the ingredients of the offence. With regard to sub regulation (13), of which I shall have more to say later on, clearly the period of 30 days was exceeded in any event.
Mr. Luttig submits that there is nothing in regulation 7 to indicate that culpa is sufficient and submits that dolus is necessary. With that I agree.
As I see it, Form E meets the provisions of regulation 7(1) When it comes to declaring a balance or credit at a foreign bank however,
Form E does not cater specifically therefor, but it could, in my view, be utilised for such purpose. Mr. Leuta an Exchange Control Officer at the Central Bank testified nonetheless that there was no prescribed form for such a purpose.
Mr. Weinstock points to the provisions of regulation 8(1), which refers to a prescribed form Regulation 7(2) does not do so however In any event section 29 of the Interpretation Act 1977 obviates strict adherence to statutory forms. Mr. Weinstock submits however that there can be no dolus on the part of the accused in the absence of a prescribed form under regulation 7(2).
Mr. Luttig submits that there is no need for any form, in view of the simplicity of declaration required For my part, I find it difficult to appreciate why the absence of a form in the matter should in effect relieve one of the burden of making a statutory declaration. While the decision in De Blom supra may have disposed of the unrealistic ignorantia juris non excusat rule, and while knowledge of unlawfulness must be established, nonetheless I do not see how it can be said that the Deputy Governor of the Central Bank was for some four years unaware of the provisions of regulation 7(2), or of the necessity to make a declaration in writing of the simple fact that he had a credit balance of £17 in a bank in London. I am satisfied beyond reasonable doubt indeed that he wrongfully and intentionally failed to make the necessary declaration. Accordingly I find the accused not guilty under Count 14 but guilty under Count 13.
Counts 15 and 16
The allegation here is similarly based on regulations 7 and 8. It is alleged that on or about 14th September, 1983 the accused became entitled to assign or to procure the assignment of the right to receive outside the Rand Monetary Area a credit or balance of £9,000 in a bank account with National Westminster Bank PLC, Brompton Square, Brompton Road, London, and wrongfully failed to make or cause to be made within 30 days of so becoming entitled a declaration in writing of such right.
In the Regulation 19 statement the accused said that
“In view of the distance from Marble Arch where I used to stay when I am in London, I decided to open an account at another branch of National Westminster Bank, Brompton Road in 1982. I have since closed this account in July this year (1987).”
and further on.
“The purpose of opening the accounts was –
Westminster Bank St. James Street – When I received money from anybody for my personal use in England or elsewhere I found it convenient to have it deposited therein and I immediately remit it home to be declared and exchanged for Rand. However as I earlier said I never used this account.
National Westminster Brompton Road – The purpose is the same as with St. James Street above “
The accused also said that the latter account was opened
“in the name of Edward Haae and the signing was in that name”,
“The Brompton account is the only account where deposits by other people were made”.
With regard to the relevant Form E the accused in the Regulation 19 statement said
“I now refer to Form E dated 14 September 1983 in respect of the introduction of £9000 This was obtained from the sameperson (Mr. Knights) under same conditions and has not been repaid for ransoms stated above.”
The conditions and reasons there referred to were those already given by the accused in reference to the amounts of £25000 and £3995 involved in Counts 1 to 4 inclusive. The £9000 was originally transferred to Lesotho by telex which is dated 12th September, 1983 It was sent by the Bank of America in London to Lesotho Bank. It reads
“For your information only we confirm crediting your account value 12th September 1983 Sterling Pounds 9.000 00 Instructions received from National Westminster Bank PLC overseas branch London in favour of Edward Haae by order of same Stop”
The use of the name “Edward Haae” and the words “by order of Same” establishes, on the accused’s own statement, that the funds had originated from the Brompton Road Branch of National Westminster Bank in London, where he held an account in that name There is again his statement that the latter account “is the only account whore deposits by other people were made”. The torn letterhead found at the accused’s house on 25th August, 1987, indicates that the address of the particular branch was “Brompton Square SW3 Branch, 186 Brompton Road, London SW3 1HH.”
Count 15 refers to “on or about” the 14th September 1983, As I see it, the date should have more correctly read “or or about the 12th September. 1983” but the provisions of section 154(2) of the Criminal Procedure & Evidence Act 1981 alleviate such aspect
Suffice it to say that I am satisfied that on or about 12th September, 1983 the accused was entitled to assign or to procure the assignment of a right to receive outside the Rand Monetary Area a credit or balance at the National Westminster Bank, Brompton Square, Brompton Road London. Thereafter the presumption contained in sub-regulation (13) of regulation 7 arises.
In this respect it will be seen that sub-regulation (13) speaks of a person being entitled
“to assign or to procure the assignment of any foreign currency”
The sub-regulation does not speak, as does sub-regulation (2) of regulation 7 of a right
“to assign or to procure the assignment of any
right to receive any credit or any
balance at a bank . . “
The latter sub-regulation is based on sub-regulation (2) of regulation 6 of the Exchange Control Regulations of South Africa. That sub-regulation reads as follows
“(2) Every person resident into the Republic who becomes entitled to assign or to procure the assignment of any right to receive outside the Republic, in respect of any credit or of any balance at a bank, payment of any amount in a foreign currency shall, within seven days after becoming so entitled, make or cause to be made, a declaration in writing of such right to the Treasury or to an authorised dealer ” (Emphasis supplied)
I observe that sub-regulation (13) in both sets of Regulations is in identical terms At first sight therefore it seems that the latter sub-regulation does not cater for a credit or balance at a bank But I am satisfied that in effect it does so. As 1 see it, the right to assign or procure the assignment of a right to receive outside the Rand Monetary Area any credit or balance at a bank, is in effect a right to assign or procure the assignment of a right to receive payment in a foreign currency the bank credit or balance can be realised in terms of currency I am satisfied in any event that, in its specific reference to sub-regulations (1) and (2), sub-regulation (13) was intended to apply to the provisions of sub-regulation (2).
Mr. Weinstock concedes, though without reference to the particular provisions which I have detailed above, that the presumption under sub-regulation (13) relieves the prosecution of proving the actus reus of failing to make a declaration within the 30 days. He submits however that it can raise no presumption as to the necessary
dolus Mr. Luttig concedes this point but points to the evidence raisins an
inference of dolus.
Mr. Leuta testified that no declaration had ever been received from the accused in the matter The accused has not rebutted such evidence. Mr. Luttig submits that regulation 7(2) requires a declaration whether or not the right has since been lost There is no evidence as to how long the accused had the £9,000 in his account in London It cannot be said therefore that he did not immediately cause it to be transferred to Lesotho The point is however that he did not, as he could have done, declared on the Form E the existence of the bank account in London and the credit or balance thereon. As I see it, he was obliged to make such declaration, on the Form E or otherwise. I cannot see that the accused was absolved in the matter by the transfer of the funds to Lesotho. He still continued to maintain the particular bank account (up to July of this year). It is reasonable to assume that a hank account will not be kept open by a bank over a long period without at least a minimal credit balance As I see it, regulation 7(2) is directed at inter alia the unauthorised maintenance of any foreign bank account. In brief, I consider that as from no later than 12th September, 1983, the accused was obliged to have declared the credit or balance of £9,000 on the particular bank account He did not do so until the statutory compulsion of the events of 7th September, 1987 Indeed,he had meanwhile closed the account in July.
Bearing in mind the evidence of dolus previously recounted, I am satisfied beyond reasonable doubt that the accused wrongfully and intentionally failed to make a declaration in the matter Accordingly I find him not guilty under Count 16 but guilty under Count 15
After the taking of the Regulation 19 statement had concluded Mr. Van Staden asked the accused for authority to gain access to his bank accounts with the National Westminster Bank in London, which Mr. Van Staden intended to visit at the end of September, The accused had told Mr. Van Staden that he had no records of bank accounts in his possession As to the request for access to the records in London, the accused wished to consult his Attorney in the matter. Mr Van
Staden subsequently met the Attorney On his return to Pretoria he spoke to the latter on the telephone the Attorney declined to furnish the authority requested, as his client intended to bring an action in this Court challenging Mr Van Staden’s appointment.
Count 17 alleges that the accused, contrary to regulation 22, unlawfully refused
“to furnish information at the accused’s disposal .. “. It is then alleged that Mr. Van Staden
“ordered the accused to furnish him, that is the said Van Staden, with full information as to the accused’s banking account, with the National Westminster Bank PLC branches at St. James Street and Brompton Road in London or to furnish him, that is the said Van Staden, with the necessary written authority to have access to and investigate the afore-said banking accounts and the accused unlawfully failed or neglected to furnish the said Van Staden either with the information or the authority referred to above,”
Regulation 19 enables an authorised person to
“order any person to furnish any information at such person’s disposal.”
A person generally or specifically appointed by the Ministry for the purposes may
“enter the residence or business premises of a person so ordered and may inspect any books or documents belonging to, or under the control of such person.”
As I said earlier, Mr. Van Staden did not have the latter authority. Mr. Weinstock submits that with regard to Mr. Van Staden’s
request for access,he acted outside the authority of regulation 19. While Mr. Van Staden was obviously not in any event authorised under the terms of regulation 19 to inspect a banker’s books of account, it is Mr. Luttig’s submission that the information as to the accused’s bank accounts was at the latter’s disposal and therefore he was required to furnish such information.
Count 17 however alleges at once a failure to supply information and a failure to supply authority to gain such information. As to the latter, such authority does not constitute “information at (the accused’s) disposal.” As to the former, the accused had stated that the Brompton Road account had been closed since July 1987 he had also declared that he had had a credit balance of (17 on the St. James Street account since 1983. He had also said that he had no bank records in his possession one had been found in his possession on 25th August, 1987, of which he had been dispossessed. There is no evidence before the Court however that the accused was
ordered by Mr. Van Staden “to furnish him with full information
as to the accused’s banking accounts with National Westminster Bank
PLC branches ” It seems to me that under regulation 19 Mr.
Van Staden could well have ordered the accused to furnish him with a detailed statement of the daily operation of the accounts, whether by way of bank statements or otherwise, since a particular date, within a given time, and the accused would have been obliged to comply. That was not the evidence of Mr. Van Staden however.
Regulation 19 provides,as I have earlier said, wide and arbitrary powers. The Courts must then interpret the regulation ensuring not to make such powers any wider than those plainly intended I am satisfied that regulation 19 and regulation 22 cannot impose a sanction in respect of a neglect, failure, or refusal to furnish access as such to a banker’s books. I am in no way satisfied that the accused was ordered to supply “full information” as to the two banking accounts, and accordingly I find him not guilty under Count 17.
I turn then to the final Count. It is alleged that the
accused while he was an officer or employee of the Central Bank, on or about 14 September, 1983, contrary to section 19(3) of the Central Bank of Lesotho Act 1978, accepted a gift or advantage
“the acceptance of which would result or give the
appearance of resulting in a diminishment of the
accused’s impartial devotion to his duties under
the Central Bank of Lesotho Act, 1978”
“a gift, alternatively, a loan of 9,000 (Nine Thousand) pounds sterling from one Knights who was. at that time, in employment of a company known as Bradbury Wilkinson, which loan was so made to the accused on the basis that he, the accused, could repay it at any time when the accused has the means, and which loan the accused has not repaid.”
The Count then goes on to allege that Bradbury Wilkinson had during the period from 1st January, 1979 to 31st December, 1984, for a consideration, printed Maloti currency notes under an agreement with the Central Bank. The accused when faced with the relevant Form E admitted to the receipt of £9,000 from Mr. Knights. He declared the money as “Capital repatriation by RMA resident . .” on the Form E. For the reasons stated previously in this judgment I am satisfied that the latter statement was incorrect. In the regulation 19 statement he declared it as a loan. The accused has formally admitted the receipt of M14.846.55 into his account with Lesotho Bank on 14th September, 1983, arising out of the transaction on Form E of the same date.
For the reasons earlier stated, I am satisfied beyond reasonable doubt that the accused received the £9,000 from Mr. Knights. Either he received it as a gift, or a loan, by whatever name such gift or loan was described I am of the view that the £9,000 fell into the first category I am not satisfied beyond reasonable doubt in the matter, however In either event a gift is, at once, a gift
and also an ‘advantage’ similarly a loan, particularly a loan without conditions or interest, is an ‘advantage’. I am satisfied therefore that the accused thus received an advantage.
There is the evidence previously recounted of the contract between the Central Bank and Bradbury Wilkinson PLC and of the large payments to that Company. The £9,000 was received during the course of such contract.
Sub-section (1) of section 19 provides that no director of the Central Bank “shall act as representative of any commercial, financial, agricultural, industrial or other interest”. Sub-section (2) obliges every director to disclose any interest in any matter and to refrain from voting thereon. Sub-section (3) therefore appears in a section clearly imposing high standards of integrity upon the Central Bank’s directors It will be seen indeed that under sub-section (3) the offence is committed not necessarily where there is an actual diminishment of an accused’s impartial devotion to his duties under the Act, but even where the acceptance of the gift or advantage would give the appearance of resulting in such diminishment. The offence may thus be committed even where there is in fact no such diminishment. Quite clearly the sub-section is aimed at conduct which, even by its external appearance, strikes at the integrity of and the confidence in the Kingdom’s foremost financial institution.
Mr. Luttig submits that there is no indication that culpa suffices, and the prosecution must prove dolus I agree. I consider there is ample evidence of such. There was the accused’s failure on Form E to disclose the real source of the £9,000. There is his special position as Deputy Governor, directly concerned, as a member of the Board if nothing else, with the printing of currency notes and the activities of Bradbury Wilkinson PLC. In all the circumstances it would, I consider, be naive to infer that the accused did not act unlawfully and intentionally and I am satisfied beyond reasonable doubt that he did so act. As I see it, the inference of diminishment of impartial devotion to duties is raised by the evidence, but it may not be the only reasonable inference. Suffice it to say however that I am satisfied beyond reasonable doubt that, in the least, the
acceptance of the £9,000 as an advantage would give the appearance of resulting in a diminishment of the accused’s impartial devotion to his duties under the Act. I accordingly find him guilty under Count 18.
Both Assessors agree with all of my findings in the main trial.
To sum up therefore, I find the accused not guilty of the offences charged under Counts 1, 3, 5, 7, 9, 11, 14, 16 and 17 and acquit him thereof.
I find him guilty however of the offences charged under Counts 2, 4, 6, 8, 10, 12, 13, 15 and 18 and convict him accordingly.
B.P. CULLINAN CHIEF JUSTICE
25th November, 1987.
For the Crown Mr. J. Luttig
Mr. J.R.G. Poison
For the Accused Mr. L.S. Weinstock S.C.
Mr. K. Mohau