Another DCEC Appeal Against Phiri Fails

Monkagedi Gaothobogwe | Monday May 15, 2017 16:03

Last week, Justice Isaac Lesetedi of the Appeals Court, threw out the appeal for stay of execution of the granting of limited access to the funds, after the State’s attempt to appeal Justice Michael Leburu’s High Court judgement that granted Khato Civils a variation order.

The appeal for stay of execution comes hardly one month before the order for the limited access to the moneys comes before the High Court for review n June.

In light of the fact that the review of the restraint order is due next month, Justice Lesetedi ordered the High Court not to extend the continued access without a full enquiry into the matter and a detailed workout on the figures to ensure that whatever order is made does not render the merits of the appeal let alone the restraint orders nugatory without a full and balanced analysis.

Stating his reasons for refusing the stay of execution pending the appeal, Justice Lesetedi said there was a difficulty arising from paucity of evidence on both parties’ court papers.

He lambasted both parties’ lawyers for failure to provide the High Court or the Court of Appeal with information on the amounts currently held in the accounts affected by the variation order so as to enable the Appeals Court to make an informed view as to the nature of the prejudice which will be suffered more particularly by the State if a stay of execution is not granted.

“It was very important both in this Court and the High Court for the individual and aggregate amounts held in the affected accounts to be disclosed such that whatever amounts are going to be withdrawn from those accounts can give the court an informed picture as to the level and extent of the diminution of the value of the restrained amount.

That the restraint was varied at the given amounts without evidence on the affected accounts is unfortunate.

The High Court seemed to have contented itself on the global amount of all the restrained accounts. That was insufficient to help the court to make an informed view of the extent of the depletion to be caused by the variation,” Lesetedi said.

While both parties agreed that the matter was urgent, Justice Lesetedi said that alone was not a yardstick for an expedited appeal, as it ought to be demonstrated that the matter meets the requirements set out in Court of Appeal directive no.1 of 2015.

The state questioned the nature and extent of the power granted to the High Court in an application to vary a restraint order, and whether the High Court in granting the variation order properly exercised its discretion by taking into account and properly weighing the relevant factors.

Lesetedi noted that the grant of access to the restrained funds depletes the security. In such case the restraint and limited access are competing interests and the court must have regard to the tension between the two. It can, in such a situation only properly exercise its discretion as to whether to grant access and if so, to what extent, where full facts are placed before it to enable it to carry out an informed exercise of discretion so as to achieve the fine balancing line between not sacrificing one object for the other.

According to Justice Lesetedi the considerations will include among others the reasonable needs of the applicant for a variation order, the nature and complexity of any investigations, which are being carried out, the pace at which the investigations are proceeding. Where such investigations are proceeding at painfully slow pace, the nature of the prejudice which may be suffered by the State in the event of the limited access being of a continuing nature and likely to substantially erode the amount restrained.

The Appeals Court also said the onus lies upon an applicant for a variation order, to demonstrate on its papers, by way of evidence, its real needs, the reasonability thereof, absence of other means to meet the expenses concerned and the nature and hardship that is likely to be occasioned by the refusal to the variation.

Justice Lesetedi also observed that the High Court ruling on the variation order complained of is quite detailed notwithstanding that the application for variation itself relied on a short affidavit deposed to by Ismael Maposa of Khato Civils Botswana in which figures were set out in support of the variation sought.

However Justice Lesetedi observed that there were clear gaps in terms of explaining some of the expenses such as the failure to provide a break down of the particulars and details on the staff and salaries/wages being sought; the kind of jobs they are performing and what income result there from.

The Judge also observed that the respondent’s bank statements were not provided to demonstrate financial activity to support its case for the needs for limited access to the restrained funds.

Justice Lesetedi further noted that some of the figures like the legal fees were not supported by any detailed fee notes with corresponding descriptions of services rendered from the respondents’ attorneys, to justify the reasonableness of the amounts claimed

Justice Lesetedi also observed that there was no explanation of Khato Civils’ act of loaning out P6 million while faced with the restraint application.

Justice Lesetedi also observed that there were also other issues upon which the applicants may be said to have a reasonably arguable case with prospects of success, “but for purposes of this application… I am satisfied that the Applicants have reasonable prospects upon which an appellate court may find for it on the question of whether the high court properly exercised its discretion”.