IN C.OF
A.(CRI)of 1988

THE COURT
OF APPEAL OF LESOTHO

In the
matter between:-

EDWARD
HAE PHOOFOLO Appellant

and

REX
Respondent

JUDGMENT

MAHOMED
J.A.

The
Appellant was charged in the High Court on 17 counts of contravening
the Exchange Control Regulations of 1975, ("the Regulations")

and one count of contravening the Central Bank of Lesotho Act of 1978
("the Act"). Several of these counts were, however,
in the
alternative, and the Appellant was eventually found guilty on Counts
2, 4, 6, 8, 10, 12, 13, 15 and 18 of the Indictment.

The
allegation made on Count 18 was that whilst the Appellant was an
officer or employee of the Central Bank of Lesotho (hereinafter

referred to as "the Bank") he accepted certain gifts or
advantages, the acceptance of which would

2

result or
give the appearance of resulting in the diminishment of the
Appellant's impartial devotion to his duties under the Act.
The
remaining counts on which the Appellant was found guilty all
constituted contraventions of the Regulations.

THE FACTS

The
following facts emerged during the trial:

1. At
   all relevant times during the period covered by the Indictment, the
   Appellant was the first Deputy Governor and a Director
   of the
   Central Bank.

   
   

2. On
   various dates during the period 1982 to 1987, the Appellant
   introduced within the Kingdom of Lesotho various amounts of foreign

   exchange, and on each such occasion when he did so, he filled in a
   Form E declaring how he had come to acquire the right to the
   foreign
   exchange concerned.

   
   

3. Subsequently
   on the 4th September 1987, the Appellant made a further statement to
   Mr. Charles Van Staden pertaining to the same
   transactions.

   
   

3

4. There
   was a conflict between the original declarations made on the
   relevant Form E and the subsequent explanation given by the

   Appellant to Mr.Van Staden in respect of each transaction. This was
   the basis of the conviction of the Appellant on Counts 2,
   4, 6, 8,
   10 and 12 in terms of Regulation 22 of the Regulations which made it
   an offence for any person to make any incorrect
   statement in any
   declaration made for, the purposes of the Regulations (read with
   Regulation 19 (2), which provides that if a
   person makes a statement
   pursuant to an order in terms of Regulation 19 (1) which is in
   conflict with any other statement previously
   made by him, he shall
   be deemed to have made an incorrect statement in terms of Regulation
   22).

   
   

5. In
   respect of Counts 13 and 15, in his statement to Mr. Van Staden, the
   Appellant also admitted that he had various monies to
   his credit in
   certain bank accounts in the United Kingdom. It was common cause
   that he did not within the period provided for
   in Regulation 7,
   declare that he had become entitled to procure the assignment of
   these credits, and the trial Court held that
   this constituted a
   contravention of Regulation 7 (2) (read with Regulations 7 (9), 7
   (11), 7 (12) and 7 (13)).

   
   

6. In
   respect of Count 18, the Appellant also admitted in his statement to
   Mr. Van Staden, that he had received a payment of some
   £9 000
   from Mr. Knights of Bradbury Wilkinson PLC. The undisputed evidence
   was that Mr. Knights was the sales representative
   of Bradbury
   Wilkinson

   
   

4

PLC,
which had entered into a substantial contract with the Central Bank
for the printing of Lesotho currency notes. The trial Court
held that
the receipt of this money, in the circumstances, amounted to the
acceptance of a gift or an advantage which would result
or give the
appearance of resulting in a dimintshment of the Appellant's
impartial devotion to his duties under the Act.

The
Relevant Regulations and Statutory Provisions.

The
relevant provisions are contained in Regulations 7, 8, 19, and 22 of
the Exchange Regulations and Section 19 (3) and Section
19 (4) of the
Act. These are 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 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

5

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 purpose 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.

    
    

11. 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 Band 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 person is entitled
    to assign or to procure the assignment of such a right as is
    referred to in the said sub-regulation (2).

    
    

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11. If
    in any criminal proceedings against any person for a contravention
    of sub-regulation (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 of 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

7

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

    
    

8

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 read
as follows:-

"(3) No director, officer or employee of 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 thereof 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
years' imprisonment."

The
Relevance and the Admissibility of the Statements made by the
Appellant to Mr. Van Staden.

The
statement made by the Appellant to Mr. Van Staden was a crucial part
of the case made on behalf of the Crown. Appreciating this,
Mr. Mall,
who appeared for the Appellant, attacked the authorisation of Mr. Van
Staden's appointment in terms of Regulation 19
(1). In the course of
an able argument, Mr.Mall. contended that this appointment was ultra
vires.

The terms
of Mr. Van Staden's appointment in terms of Regulation 19 (1) by the
Minister of Finance are as follows:-

9

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.

Signature
of E.R.Sekhonyana E.R.Sekhonyana Minister of Finance."

The first
submission made by Mr. Mall was that Mr.Van Staden's authorisation
was ultra vires because the authority which the Minister
of Finance
purported to confer on him was not limited to what could be
authorised in terms of Regulation 19 (1) but extended to
all the
powers which the Minister of Finance could himself exercise in terms
of the Exchange Control Regulations.

The
second and alternative submission made was that the purported
authorisation of Mr. Van Staden constituted a "delegation"

of the Minister's powers and that where such "delegation"
took place, the Interpretation Act contemplated notice of such

"delegation" to be published in the Gazette, unless the
contrary intention appeared in the relevant legislation. (It
was
common cause that Mr.Van Staden's appointment was in fact never
gazetted in the instant case).

10

In my
view, the judgment of this Court in the case of Phoofolo v. The
Minister of Finance and the Attorney-General (C.of A. (CIV)
25/I987)
is inconsistent with both these submissions.

1. On page 13 of the unreported judgment in the case of Phoofolo
(supra), Schutz P. held that whilst the authority of Mr. Van
Staden
had been "inaptly worded", properly interpreted, it meant
that the Minister was conferring on Mr. Van Staden only
those of the
powers of the Minister which were contained in Regulation 19 (1) and
no others.

The
learned judge drew attention to the phrase -

"...and
under powers vested in me by Regulation 19 (1)..." and then
concluded as follows:

"This phrase indicates that the Minister was directing himself
only to those powers and serves sufficiently to limit the powers

actually conferred. The phrase is there and must be given a meaning".

This
conclusion is clearly fatal to Mr.Mall's first submission.

2. On page 12 of the judgment in the case of Phoofolo (supra),
Schutz P. also dealt with judicial and dictionary meanings of the

word "delegation", and on page 13 he expressly held that
the authority conferred on Mr. Van Staden by the Minister of
Finance,
did not

11

constitute
a "delegation" of the Minister's powers with the result
that Section 35 and 36 of the Interpretation Act had
no application.
This conclusion is equally fatal to Mr. Mall's second submission.

Faced
with these difficulties, Mr. Mall was driven to contend that the
judgment of this Court in Phoofolo's case was wrong and ought
not to
be followed. In support of this contention he strongly contended
that, even if the authority conferred upon Mr. Van Staden
by the
Minister of Finance was to be limited to the exercise of the powers
which the Minister himself had in terms of Regulation
19 (1), this
would, (on the terms set out in the written authority), include also
the power to appoint other persons to perform
the very powers which
the Minister had entrusted to Mr. Van Staden. Counsel contended that
this could never have been contemplated
either by the enabling Act or
by Regulation 19 (1) and that this difficulty had never been
considered by this Court in Phoofolo's
case.

During
the course of argument, Mr. Mall conceded that the foundation for his
argument rested on the last three lines of the written
authority of
Mr. Van Staden, (which I have previously quoted), to the effect that
Mr.Van Staden was -

"to exercise on behalf of the Minister of Finance the powers
conferred on him by Exchange Control Regulations 1975".

12

If these
last lines had not been added, there would be nothing objectionable
in simply making an appointment in terms of Regulation
19 (1). The
question which therefore arises is whether these words could be
severed from the remainder of the document leaving
intact a simple
appointment in terms of Regulation 19 (1).

Since the
question of "severability" was raised for the first time by
the Bench during the course of oral argument, Counsel
were given the
opportunity of making further written submissions. Pursuant thereto,
helpful written submissions were received from
both Counsel.

The
classical case on the test of "severability" is the
decision in Johannesburg City Council v. Chesterfield House (Pty)

Ltd. 1952 (3) SA 809 in which it was stated that:

"Where it is possible to separate the good from the bad in a
statute and the good is hot dependent on the bad, then that part
of
the statute which is good must be given effect to, provided that what
remains carries out the main object of the statute.

Where, however, the task of separating the bad from the good is of
such complication that it is impracticable to do so, the whole

statute must be declared ultra vires."

(At page
822 D-F). The written authority of Mr. Van Staden contains two parts.
In the first

13

part the
Minister of Finance, acting in terms of Regulation 19 (1), makes an
appointment of Mr. Van Staden and identifies him as
a person who is
employed in the Exchange Control Department of the South African
Reserve Bank. In the second part contained in
the last three lines of
the written authority, the Minister goes on to say that Mr. Van
Staden was to exercise on behalf of the
Minister of Finance the
powers conferred on him by the Exchange Control Regulations of 1975.

Notionally,
these are two separate matters. In my view, they are conceptually and
notionally severable. (Baines Motors v.Piek,1955
(1) SA 534;
S.v.Prefabricated Housing Corporation (Pty) Ltd & Another. 1974
(1) SA 535 (A); S.v.Ockers & Another. 1974
(2) SA 523; S.v.
O'Malley & Another. 1976 (1) SA 469).

If the
excision of the second part of the written authority left undefined
what the purpose of Mr. Van Staden's appointment would
be, there
might be some merit in resisting the notional severance because there
might be some doubt as to whether, in its truncated
form, the
authority would give effect to the intention of the Minister or
enable the main object of the appointment to be carried
out. (S. v.
Prefabricated Housing Corporation (Pty) Ltd & Another (supra);
Johannesburg City Council v. Chesterfield House
(Pty) Ltd (supra):
Markowitz & Sons Trust Co.(Pty) Ltd v. Bassous. 1966 (2) PH (A)
65 (C)).

14

Mr.Mdhluli,
who appeared for the Crown, contended, however, that the written
authority makes it perfectly plain that the appointment
was being
made in terms of Regulation 19 (1) and that the powers of a person so
appointed could be determined in terms of the Regulation
itself. The
appointment could only be made for the purposes of authorising the
person appointed to order any person,to furnish
any information which
the appointee deems necessary for the purposes of the Regulations and
which is at the disposal of such person.
In my view, Mr. Mdhluli is
correct in these contentions and the words in the last three lines of
the written authority conferred
upon by Mr.Van Staden, relied upon by
Mr.Mall, are and should be severed from the remainder.

In his
supplementary argument on "severability", Counsel also drew
attention to the fact that his argument did not involve
a challenge
to the validity of a Regulation or a Government Notice; the attack,
he , said, was on a "private document"
recording certain
powers.

Whilst
the doctrine of juridical severability has very often been applied in
the field of subordinate legislation, its operation
is not confined
to that field. It has with the same logic and effect been applied in
the field of contract (the case of Markowitz
& Sons (supra) in
the adjudication of administrative Acts (S.v.Ockers (supra): S.v.
Kleingeld, 1975 (3) SA 779 (C);) and in
the construction of
administrative documents such as permits (Transair (Pty) Ltd v.
National Transport Commission. 1977 (3)

15

SA 784
(A) at p. 795 F-H). The document sought to be attacked in the instant
case is a letter of appointment for public purposes
and I can see no
reason why the doctrine of severability should not be applied to its
contents.

The
Consequences of Admitting the Statements made by the Appellant to
Mr.Van Staden.

1. With
   respect to Counts 2, 4, 6, 8, 10 and 12, there was a clear conflict
   between the relevant declarations made by the Appellant
   in respect
   of these Counts as to the source of the funds introduced by him and
   the corresponding explanation subsequently given
   in respect of each
   of these matters in the statement which the Appellant made to Mr.
   Van Staden. The conviction of the Appellant
   in terms of Regulation
   22 read with Regulation 19 (2), therefore, became unavoidable.
   Mr.Mall did, at one stage, faintly suggest
   that there could be no
   conviction in terms of these Regulations unless both the statements
   relied upon were made pursuant to
   an order under Regulation 19 (1).
   He could suggest no basis for this submission which he wisely and
   correctly abandoned during
   the course of argument.

   
   

2. No
   argument was addressed to us in respect of the convictions on Counts
   13 and 15. In my view, the Appellant was correctly convicted
   on
   these counts by the trial judge.

   
   

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2. With
   respect to Count 18, the statement made by the Appellant to Mr. Van
   Staden clearly established that the Appellant had, indeed,
   received
   substantial sums of money from Mr. Knights who was working for
   Bradbury Wilkinson PLC. It was contended on behalf of
   the Appellant
   that this evidence did not -

   
   

"exclude the possibility that the money so received was as a
result of a ' purely personal relationship between the Appellant
and
Mr. Knights and that the company had nothing to do with it."

It is not
disputed that Mr. Knights was the sales representative of Bradbury
Wilkinson PLC and the Appellant gives no explanation
whatever as to
why Mr. Knights should be giving to him such substantial sums of
money. At the very least, the acceptance of such
monies by the
Appellant would give the appearance of resulting in the diminishment
of the Appellant's impartial devotion to his
duties under the Act.
This is sufficient for a contravention in terms of section 19 (3) and
in my view, therefore, the Appellant
was correctly convicted on Count
18.

Sentence

No appeal
was lodged against the sentence imposed by the trial Court.

17

Conclusion

In the
result, I would order that the appeal be dismissed.

I.MAHOMED

JUDGE OF
APPEAL

I agree

For

J.J.TRENGROVE

JUDGE OF
APPEAL

I agree

LW.H.ACKERMANN

JUDGE OF
APPEAL

Delivered
at MASERU this 23rd day of January, 1990.