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[2017] ZAWCHC 87
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National Director of Public Prosecutions v Ivanov alias Novak and Another (6959/2015) [2017] ZAWCHC 87; [2017] 4 All SA 508 (WCC); 2017 (2) SACR 639 (WCC) (25 August 2017)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO: 6959/2015
In
the matter between:
THE
NATIONAL DIRECTOR OF PUBLIC
PROSECUTIONS
Applicant
and
ASEN
GEORGIEV IVANOV
alias
ALEX
NOVAK
First
Respondent
JANA
CIPKALOVA
Second
Respondent
Court
:
Justice J Cloete
Heard
:
6 and 7 June 2017
Delivered
:
25 August 2017
JUDGMENT
CLOETE
J
:
Introduction
[1]
On 23 April 2015 the applicant
(“NDPP”) obtained an
ex
parte
order against the
respondents in terms of s 38 of POCA
[1]
,
to preserve cash totalling some R2.6 million seized in rands and
foreign currency from an immovable property in Durbanville
occupied
by the first respondent, together with the immovable property itself
which is registered in the name of the second respondent.
[2]
Subsequently, on 28 July 2015 the NDPP obtained a forfeiture
order in respect of these assets in terms of s 50 read
with s 53
of that Act. The respondents thereafter launched an application to
rescind the forfeiture order, to which the NDPP
consented, and it was
thus the forfeiture application that was argued before me.
[3]
The NDPP’s case is that
the assets fall to be forfeited to the state because, on a balance of
probabilities, they constitute
the proceeds of unlawful activities,
namely the contravention of s 15(1)(a) of the Customs Act
[2]
,
regulation 2 of the Exchange Control Regulations
[3]
,
and money laundering in contravention of s 4 to s 6 of POCA
read with item 26 and/or 27 of Schedule 1 thereof.
[4]
More particularly, the NDPP contends that the cash seized is foreign
currency or the proceeds thereof smuggled into South Africa
by the
first respondent and/or his associates. It is also contended that the
Durbanville property was purchased with the proceeds
of diamonds,
jewellery or both, smuggled by the second respondent into this
country. The first respondent is a Bulgarian national
and the second
respondent is a Slovakian national. The first respondent no longer
resides in South Africa and the second respondent
has never resided
here.
[5]
The respondents deny these allegations. The first respondent’s
defence is that he was loaned some of the cash by a third
party, some
was legitimately exchanged by him, and that he was given the foreign
currency by others. The second respondent’s
defence is that she
entered South Africa with a diamond and gold bracelet, which was a
personal possession, and that she was therefore
not obliged to
declare it. She only decided to purchase immovable property after her
arrival. She subsequently sold the bracelet
and utilised the proceeds
to purchase the Durbanville property as an investment.
Background
[6]
On 24 February 2014
Warrant Officer Johann Combrinck of the DPCI
[4]
received information from a reliable source that mandrax was being
manufactured in the garage at the Durbanville property. He was
also
informed that the mandrax powder used in the manufacturing process
was being transported to the premises in a Toyota Hilux
bakkie with
registration number CA 214 030 and that foreign nationals
were residing there.
[7]
On the same day, at approximately 20h00, Combrinck went to the estate
complex where the Durbanville property is situated to
carry out an
observation. He saw the bakkie parked outside the premises. He
observed that the garage door was partially open and
that activities
were taking place inside the garage. He noticed that the garage
windows were covered with white plastic bags and
saw an individual
exiting the house wearing a white overall and safety mask. According
to Combrinck he also smelt a strong odour
of sulphur, which is
usually released during the manufacturing process of mandrax. The
mask and overall appeared similar to those
worn by him and his team
to protect themselves from dangerous substances when destroying
clandestine laboratories.
[8]
On 25 February 2014
Combrinck made enquiries from residents in the complex and
established that three foreign nationals were
residing at the
premises. He then obtained a search warrant from a magistrate to
conduct a search and seizure operation. The search
warrant authorised
the police to search and seize ‘
drugs,
documents, electronic equipment and manufacturing equipment’.
[5]
[9]
At approximately 16h30 on the same day Combrinck and his colleagues
executed the warrant. He knocked on the front door and it
was opened
by the first respondent, who informed Combrinck that he was in charge
of the premises.
[10]
Upon entering, Combrinck saw two men sitting in the living room, who
identified themselves as Kiril Kirilov and Asen Checharov.
In the
garage what appeared to be a hidden channel, approximately 2 metres
in depth, was being constructed on the floor. The first
respondent
told him that they were building a jacuzzi, although Combrinck
observed built-in panels inside the channel which he
considered to be
at odds with the explanation given by the first respondent.
[11]
Combrinck and his colleagues proceeded to the main bedroom. The first
respondent told him that its occupant was away in Europe
and that he
did not know his name. Combrinck opened one of the cupboard doors and
found a blue Karimor bag containing a large amount
of cash. In an
adjoining cupboard he found a black Fabia bag which also contained
considerable cash. Combrinck seized the bags
and cash because the
first respondent could not give him a reasonable explanation about
the owner and source thereof. He also seized
loose cash which he
found in the bedside drawer.
[12]
Combrinck then proceeded to one of the spare bedrooms which the first
respondent acknowledged that he occupied. There he found
a yellow
plastic bag also containing a large amount of cash which, according
to Combrinck, the first respondent said belonged to
him and was the
proceeds of foreign currency that he brought into South Africa.
Combrinck asked the first respondent where he had
exchanged the
foreign currency and requested that he furnish documentary proof
thereof. The first respondent replied that he had
exchanged the
foreign currency with a person somewhere in Sea Point but did not
know the person and had no proof of the transaction.
Combrinck then
seized this cash as well.
[13]
In the other spare bedroom Combrinck found further loose cash in a
bedside drawer. The first respondent told him that he did
not know
who it belonged to and that the bedroom was unoccupied. This cash too
was seized.
[14]
In the living room Combrinck found a laptop and yet more cash, which
the first respondent said belonged to him. This cash was
seized along
with other items including cellphones and laptops. The three men did
not want to disclose the owners of the cellphones.
[15]
Combrinck then searched an Audi
Q7 vehicle with registration number CA 510 743 parked in
front of the premises, after
the first respondent informed him that
he was the driver and handed over the keys. Cash found in the glove
compartment and boot,
which the first respondent identified as his,
was similarly seized. According to Combrinck, upon returning to the
house, he saw
a false R200 note lying at the front door. This too was
seized after the first respondent could not provide an
explanation.
[6]
Combrinck then invited the three men to attend at his office the
following day to provide a written explanation about the source
of
all the cash but they did not do so, or at any stage thereafter,
although he was contacted by an attorney who indicated that
it was
unlikely that the men would want to provide such an explanation.
[16]
The cash seized was thereafter counted at the Durbanville branch of
Absa Bank and found to be made up of South African currency
totalling
R2 032 040 and an undisclosed amount of foreign currency,
mainly in US dollars and Euros. On 10 March
2014 the foreign
currency was exchanged into South African currency totalling
R617 285.90.
[17]
In the preservation application Detective Constable Mandy Carelse of
the DPCI, who took over the investigation, set out the
basis for the
NDPP’s contention that the cash constitutes the proceeds of
unlawful activities as follows:
‘
64.
The evasive manner in which the first respondent acted when
confronted by warrant officer Combrinck during the search in his

explanations about the source of the money and the manner he chose to
act subsequent thereto, by failing to make a simple statement
setting
out the origin of the money, leads me to have reasonable grounds for
believing that the cash is the proceeds of unlawful
activities, to
wit, unlawfully bringing goods including foreign currency without
declaring it at point of entry into South Africa…’
[7]
[18]
Similar sentiments were expressed in the founding affidavit of
Mr Gcobani Bam, the regional head of the Asset Forfeiture
Unit
of the National Prosecuting Authority in the Western Cape, in that
application:
‘
73.
To me it seems very strange and indeed suspicious that people could
reasonably keep such huge cash in a residence.
74.
I submit that although on its own such conduct is not unlawful, in
the circumstances under which it was seized and the subsequent

investigations relating thereto, such conduct justifies reasonable
suspicions that such cash is the proceeds of unlawful activities
such
as the ones alleged herein, including the avoidance of the banking
system to conceal its origin and retention as well as tax

evasion.’
[8]
[19]
I will deal with the “subsequent investigations” below.
Regarding the false bank note allegedly found at the front
door Bam
stated:
‘
83.
I understand the latter to be a “fake” note that could
have been reproduced by what is known as a “black dollar”

scam that refers to the manufacturing of fake notes by use of,
amongst others, electronic equipment.
84.
I note that amongst the exhibits appearing in the copy of the photo
attached to Constable Carelse’s affidavit that there
is also a
cardboard
(sic)
depicting what appears
to be a card skimming device.
85.
This to me seems reasonably possible in the circumstances of this
case, more so that there was also electronic equipment seized
from
the premises.’
[9]
[20]
The electronic equipment to which Bam referred comprised only of
cellphones and laptops. It is common cause that no drugs,
drug
manufacturing equipment or materials, or any equipment which could be
identified as being used to generate fake currency,
were found at the
premises. None of the police officers involved in the raid made
mention of a strong smell of sulphur. There is
also no indication in
the papers that Combrinck, Carelse or any other SAPS member took
steps to ascertain the owners of the Toyota
bakkie and Audi Q7 motor
vehicle parked at the premises at the time of the raid, or whether
any forensic tests were ever carried
out on these vehicles, or indeed
at the premises searched. No evidence was produced by the NDPP as to
the authenticity or otherwise
of the “fake” note and
there is no indication that the built-in panels in the channel in the
garage were searched.
[21]
Carelse was handed a bag of
documents by Combrinck which had also been seized during the raid.
Among these documents she found an
original deed of transfer for the
Durbanville property, annexed to a covering letter from David Muller
Attorneys dated 1 November
2013 and addressed by hand to the
second respondent.
[10]
The deed of transfer reflects that the second respondent purchased
the Durbanville property on 21 July 2013 for the sum of

R3 175 000 and took transfer thereof on 1 November 2013.
Mr Muller was the conveyancing attorney.
[22]
Carelse was able to locate Muller who had since emigrated to
Australia. Under subpoena Muller informed her that the second

respondent paid the full purchase price with the proceeds of
jewellery sold to a Mr Andrzey Rachwal, a jeweller trading as

Shillings & Things (“S&T”). Rachwal paid over the
proceeds by way of electronic transfers to Muller’s
trust
account and provided him with the required documentation as proof of
the transaction. Muller did not receive any cash directly
from the
second respondent, who signed the transfer documents before him
personally and handed over her original passport for him
to copy.
Muller provided Carelse with copies of the passport, a VAT invoice, a
tax invoice from Rachwal for R3 174 000,
relevant bank
statements, final statements for both seller and purchaser, ledger
and journal entries for the transaction and proof
of the payments
that he could locate.
[23]
The documentation provided by
Muller showed that the purchase price was paid by Rachwal in 8
electronic fund transfers over the
period 24 July 2013 to
22 August 2013. The payments totalled R3 380 841.15
which, together with interest accrued
while held in Muller’s
trust account, increased to R3 391 065.90. The tax invoice
from S&T dated 24 July
2013 was addressed to the second
respondent at [….], Milnerton, and described the goods sold by
her as ‘
4 x diamonds
as per register number 15517’
[11]
for the sum of R3 174 000.
[24]
Carelse noted that the tax invoice from S&T made no reference to
‘
jewellery’
but to diamonds only, and that the
total of the electronic fund transfers made by Rachwal did not tally
with the amount reflected
in the tax invoice. Rachwal had transferred
R205 841.15 more than the purchase price of R3 175 000
and R206 841.15
more than the amount reflected on his tax
invoice.
[25]
Carelse also referred in
passing to the deed of sale.
[12]
This reflects that the second respondent made the offer to purchase
on 17 July 2013 (the seller accepted it on 21 July
2013).
The purchase price was to be paid by way of a deposit of R500 000
within 5 days of acceptance and the balance of R2 675 000

within 21 days thereafter, to be held in trust by Muller pending
registration of transfer which was to take place ‘
as
soon as possible, but not before 31 August 2013’
[13]
.
The second respondent was to pay the costs of the transfer. Her
domicilium
address was reflected as ‘[...]
,
Cape Town’
which is
similar to that on the S&T tax invoice. According to Carelse,
this address does not exist.
[26]
As regards these apparent discrepancies, Carelse stated:
‘
82.
In light of the above, I have reasonable grounds for believing that
the immovable property was purchased with the proceeds of
unlawful
activities, namely smuggled diamonds and not the sale of jewellery as
claimed by the second respondent to Muller, when
she was asked about
how she would pay for the immovable property…
83.
In addition to the above, I have reasonable grounds for believing
that the diamonds sold by the second respondent to Shillings
&
Things were smuggled by the second respondent to South Africa, when
she entered South Africa from abroad in contravention
of section
15(1)(a) of the Customs Act.
84.
The fact that the purchase price for the sale of diamonds was not
made directly to a bank account of the second respondent and
the
manner in which the payments were made, to wit, by several tranches
and not made in one lump sum is suspicious and gives me
reasonable
grounds for believing that the second respondent and/or any person
she might have been acting for in the sale of the
smuggled diamonds,
were determined to conceal the original source of the funds for the
[purchase]
of
the immovable property.
85.
Further, the second respondent in instructing the jeweller to
transfer the proceeds of the sale of the diamonds from his bank

directly to the trust account of the attorney dealing with the sale
and transfer of the immovable property instead of it being

transferred to her own account, indicates a modus operandi of
concealing the origin and the nature of the proceeds of unlawful

activities, to wit, illegal sale of smuggled diamonds, from being
able to be traced to herself through her bank account.
86.
As a consequence, I have reasonable grounds for believing that the
immovable property is the proceeds of unlawful activities
of
smuggling of diamonds into South Africa in contravention of section
15(1)(a) of the Customs Act and money laundering in contravention
of
section 4 of the POCA.’
[14]
[27]
Amongst the documents seized from the premises Carelse found some
containing personal information of various South African
citizens.
[28]
One of these was a document
bearing the heading ‘
Personal
Particulars’
[15]
containing the name, address, banking details, contact telephone
numbers and details of next of kin of a certain John Adams of

Mitchells Plain.
[29]
On 4 September 2014 she interviewed Adams at the Table Bay
Harbour police station. He told her that he was an engineer
working
on the ship “Defiant” which is owned by one Alex Novak,
who Adams identified as the first respondent from photographs

downloaded from the cellphones seized during the raid. He was also
shown a copy of the second respondent’s passport photograph
and
identified her as the first respondent’s wife.
[30]
Adams told Carelse that the Defiant was based in the Red Sea close to
Sudan and was used as a floating armoury (firearms and
ammunition)
for security companies operating in that zone. According to Carelse
messages downloaded from the seized cellphones
showed a number having
been sent from, or received by, a person named Alex. Adams told her
that Alex usually carried a bag of cash
with him, conducted most of
his business in cash and regularly paid the Defiant’s crew in
cash. On one occasion the first
respondent had invited Adams to visit
his house in Durbanville when his wife and daughter came to South
Africa, but at the time
of his interview with Carelse the visit to
this house had not yet materialised. Adams did not depose to a
confirmatory affidavit.
[31]
Carelse also received information that the first respondent was
renting a property in Saldanha Bay from one Hester Potgieter
who
resides in Pretoria. She interviewed Potgieter on 10 March 2015.
[32]
Potgieter explained that after
advertising the property for rental she was contacted towards the end
of April 2013 by a foreigner
who identified himself as Alex. He
expressed interest, informing her that he would be working in
Saldanha Bay, that his company
would lease the premises and pay the
rental, and that he would reside there with his wife and daughter.
After concluding the lease
an amount of R114 400, being the full
rental for the one year lease period (1 June 2013 to 31 May
2014) was paid
into her husband’s Absa Bank account with the
reference “Ilias Manolis” who also signed the lease and
was employed
at the time by Hellenic Shipping.
[16]
Carelse established from the copy of his passport annexed to the
lease that Manolis is a Greek citizen.
[17]
[33]
Carelse then obtained a statement from attorney Muller in relation to
the negotiations and signature of the sale transaction
in relation to
the Durbanville property. It appears that Muller acted as both agent
and conveyancer.
[34]
According to Muller in July 2013 he received a telephone call from a
man identifying himself as Alex. He told Muller that he
and the
second respondent, whom he referred to as his “friend”,
had seen his advertising board outside the estate complex.
The friend
was interested in purchasing a property in the complex and Alex was
assisting her as an interpreter as she was not fluent
in English.
[35]
The respondents then viewed the property together in Muller’s
presence. The second respondent expressed interest and
a few days
later submitted an offer for the asking price of R3 175 000
which was accepted. When the transfer documents
were ready for
signature the second respondent attended personally at his office to
sign them assisted by Alex as interpreter.
[36]
Further investigation by
Carelse also revealed that the first respondent contracted with one
Gerhardus Loubser of Western Screens
(Pty) Ltd for the installation
of roller shutters at the Durbanville property in October 2013 at the
quoted price of R73 618.62
and that it was the first respondent
(and not the second respondent) who made payment for the
installation.
[18]
[37]
Enquiries made by Carelse to a
Christine Steyn (also known as Penny Steyn) of the managing agents of
the complex revealed the following.
When the property was transferred
on 11 September 2013 a sum of R13 248.08 was received from
Muller’s trust account
towards future monthly levies for the
owner. Steyn was furnished with two email addresses to which she
transmitted the monthly
levy statement, namely [...]
@live.com
and [...]
@outlook.com
. She
was told that these were the owner’s email addresses. When the
levy account fell into arrears in March 2014 she sent
reminders to
these addresses and on 7 June 2014 an amount of R10 000 was
paid which covered the arrears plus the levy
for one month. In August
2014 the levy account again fell into arrears and on 21 October 2014
she sent a final reminder to the
same email addresses. On 3 November
2014 the owner settled the arrears by making payment of R5 740.
This was the last
payment that she received and at 27 March 2015
the account was again in arrears in the sum of R15 802.44.
According to
Steyn, the Durbanville property had been vacant since
the raid conducted by the police in February 2014.
[38]
Carelse also established from the movement control system of the
Department of Home Affairs that the first respondent regularly

entered South Africa from 2012 until 26 February 2015 when he
left the country through OR Tambo airport. The second respondent

arrived in South Africa through Cape Town International Airport on
4 July 2013 and left on 17 July 2013 to Botswana.
There is
no record of her returning to South Africa although she left this
country again on 25 July 2013, again through Cape
Town
International Airport. She then returned to South Africa on
13 September 2013 and left on 22 September 2013. The
second
respondent was not present in South Africa on 1 November 2013,
being the date upon which Muller addressed the letter
to her, for
delivery by hand, enclosing the original title deed to the
Durbanville property, which was found at those premises
during the
raid.
[39]
Carelse submitted that:
‘
107.
In light of
[this]
evidence,
it appears that it is the first respondent’s modus operandi to
avoid conclude a reasonable ground for believing
that the
[title
deed]
must
have been delivered to the first respondent for his safekeeping,
which he kept accordingly in order to secure his control over
the
property and its ownership.’
[20]
[40]
Referring to the different nationalities of the respondents as well
as Manolis, Carelse submitted that:
‘
149.
In the circumstances, I have reasonable grounds for believing that
the first respondent has connections beyond his Bulgarian

counterparts.
150.
I have reasonable grounds for believing that this benefits the first
respondent in that such connection would facilitate and
make it easy
for him to easily launder his proceeds of crime, irrespective of the
origins thereof, without easy detection, as at
first glance his
nominees may be found to be far and unrelated to him.’
[21]
[41]
During the course of her
investigation Carelse applied to the Bellville magistrate’s
court for a subpoena to secure certain
bank statements in terms of
s 205 of the Criminal Procedure Act.
[22]
A copy of her sworn statement in support of that application is
annexed to her affidavit and includes the following allegations:
‘
2.
I
am currently the investigating officer of Cape Town Central Organised
Crime Enquiry 20/02/2014. The aforementioned enquiry relates
to the
investigation of alleged dealing in drugs and possible money
laundering…
3.
The
suspects have been identified as Asen Georgiev Ivanov alias “Alex
Norvek” with Bulgarian ID […] and passport
number […],
Kiril Hristov Kirilov with Bulgarian ID […] and passport
number […] and Asen Checharov with Bulgarian
ID […] and
passport number […].
4.
The
suspect
[sic]
is
linked by means of information that was received under oath and
through Interpol. A search warrant was conducted and the suspect
[sic]
was
at the said premises at the time of the search.’
[23]
[42]
Carelse deposed to the sworn statement on 18 September 2014,
some seven months after the raid at the Durbanville property.
However
she did not deal pertinently with these allegations in these
proceedings, and they were only dealt with in passing by Bam
as
follows:
‘
144.
In the said statement Constable Carelse, apart from the facts dealt
with hereinabove, …specifies also that the suspects
including
the respondents
are under investigation under Cape Town Central Enquiry reference
number 20/02/2014 and that they have been linked by information

received through Interpol.’
[24]
[emphasis
supplied]
[43]
Subsequent to the preservation order the curator bonis, Mr Quintin
Joseph, established that the respondents had instructed
a Vily
Groudeva to market the Durbanville property after the February 2014
raid, but before the preservation application was launched
on
21 April 2015.
[44]
Email correspondence attached
to Joseph’s report
[25]
revealed that the mandate was given in late March 2015 by one Peter
with email address […]
@live.com
.
On 8 April 2015 he informed Groudeva that ‘[r]
egarding
the big hole in the garage as far as I know
[it]
was supposed to be
[a
]
wine cellar but
wasn’t completed. The house is for
[sale]
as it is with furniture…Jana
[i.e. the second
respondent]
will sign power
of attorney…’.
On 24 April 2015 Joseph provided Groudeva with a copy of the
preservation order granted the previous day. She consequently

informed Peter that she could no longer market the Durbanville
property.
[45]
Bam pointed out that the aforementioned email address is the same as
that of the first respondent. He submitted that:
‘
29.
It is important to bring to the attention of the honourable court
that the first respondent disguised his true identity to the
estate
agent and gave his name to the estate agent as “Peter”
and not by his real name set out hereinabove, using the
email of
[...]
@live.com
, which was one
of the addresses to which the preservation order and the supporting
papers were served.
30.
This resonates with the first respondent’s modus operandi, as
indicated in the preservation application papers whereby
he always
avoided entering into transactions in his own name but in the name of
other parties or his alias name “Alex Novak”
referred to
hereinabove.
31.
In the circumstances, it is submitted that the first respondent is
the central figure in the unlawful activities of money laundering

committed in relation to the property concerned in these proceedings.
32.
I submit that on a balance of probabilities the evidence set out in
the preservation papers and hereinabove indicates that the
first
respondent is used to committing unlawful money laundering activities
in order to build up his portfolio of properties and
seems to have
done so successfully in the past…
37.
It is further submitted that had the transaction of the sale of the
immovable property been completed before the preservation
order was
granted, the respondents would have completed their unlawful
activities of money laundering, as the source of the funds

repatriated from South Africa to the respondents wherever they are
overseas would have reflected as the proceeds of a sale of the

immovable property as the source thereof, instead of the diamonds
that were surreptitiously smuggled to South Africa and used to

finance the purchase of the property when the second respondent
acquired its ownership…
39.
In the circumstances, from all the evidence adduced to date in this
matter, I submit that the applicant has established on a
balance of
probabilities that the property is proceeds of the unlawful
activities referred to hereinabove.’
[26]
[46]
In her affidavit in support of
the rescission application the second respondent confirmed that the
first respondent uses the alias
Alex Novak. She also confirmed that
the email addresses of
[…]@live.com
and
[…]@outlook.com
are those of the first respondent. She denied that these addresses
were hers and stated that her email address is
[…]@gmail.com
.
Given the sequence in which their affidavits were filed, I will first
deal with the second respondent and then with the first
respondent.
[47]
The second respondent’s version is as follows. On 4 July 2013
she travelled to South Africa to join her husband, Robert
Cipkala, on
vacation and also met up with the first respondent, who is a close
friend. She had by then become interested in purchasing
immovable
property in South Africa as an investment. Given that the first
respondent had been in South Africa for some time, she
thought that
he would be able to assist her.
[48]
After viewing the Durbanville property the first respondent
accompanied her to Muller. She had in her possession a gold and

diamond bracelet which had been in her family for years, and was able
to sell it to purchase the Durbanville property. Muller advised
her
that it would be easier to sell the diamonds and gold separately.
[49]
The first respondent, who told her that he had previously rendered
this type of assistance to other foreign nationals, introduced
her to
Rachwal of S&T as a reputable dealer in precious gemstones and
jewellery. She has a poor command of the English language
and the
first respondent thus assisted her in her dealings with S&T.
[50]
The bracelet was presented to Rachwal for valuation and the four
diamonds removed and thereafter certified at the Gemological

Laboratory in order to verify their authenticity. The remainder of
the bracelet was sold separately.
[51]
After the diamonds were certified they were entered into S&T’s
second hand register and retained as legally required
for seven days.
Thereafter they were sold by Rachwal and she was provided with the
invoice dated 24 July 2013 for R3 174 000
annexed to
Carelse’s affidavit. She also received smaller amounts for the
remainder of the bracelet. She did not recall the
exact amounts but
the full proceeds of both the diamonds and the gold were paid by
Rachwal to Muller, on her instructions, on account
of the purchase
price of the Durbanville property. As a foreign national she did not
have a bank account in South Africa and it
seemed that this would be
the safest option.
[52]
Thereafter Muller made the
relevant enquiries with Rachwal regarding the source of the funds and
was provided with the necessary
documentation as well as a full
explanation for FICA purposes. She was unable to obtain any further
documentation from Rachwal
since he sold S&T in November 2014 and
it was thus no longer in his possession. She pointed out that despite
the documentation
given to Carelse after the raid no-one from her
unit (or the NDPP) ever contacted Rachwal in relation to the
transaction and its
validity. Rachwal deposed to an affidavit
confirming the second respondent’s version.
[27]
[53]
The second respondent left South Africa on 25 July 2013. The
first respondent asked whether he could make use of the Durbanville

property while he remained in Cape Town and she agreed. Given her
friendship with him and his assistance in the acquisition of
the
Durbanville property, they agreed that he could reside there rent
free but would pay all charges in relation to the property,
as is
evidenced by the monthly levy account emailed to the first respondent
and not to her directly, although the second respondent
also agreed
that any surplus due to her after payment of the purchase price and
transfer costs could be appropriated by the first
respondent towards
the charges at the property.
[54]
The second respondent again entered South Africa on 13 September
2013 to finalise the property transaction by attending
on Muller
personally to sign the transfer documents and to hand him her
original passport for copying. She was informed that she
had to sign
the documentation in person and she duly complied. She departed from
South Africa on 22 September 2013.
[55]
Given her position as landlord
vis-à-vis
the first
respondent she had no control over activities at the Durbanville
property nor, indeed, any knowledge thereof. She was
shocked when she
learned of the raid and only become aware of the construction in the
garage when she later received a copy of
the preservation
application. She confronted the first respondent who informed her
that he wanted to build a wine cellar and this
would not diminish the
value of the property in any way. He also told her that he had
improved its security by installing
inter alia
shutters and
she had no objection thereto.
[56]
She was not aware that anyone other than the first respondent was
residing at the property at the time of the February 2014
raid.
According to him the men present at the time of the raid lived nearby
and were only visiting him. She was unable to comment
on the cash
found other than to refer to the first respondent’s explanation
which I deal with later.
[57]
According to the second
respondent she and her husband stayed in a rented apartment at [...],
Milnerton during their Cape Town holiday
in 2013. She herself rented
the apartment through the website FZP.co.za.
[28]
[58]
The second respondent denied
that she was in any way a suspect or linked to information received
through Interpol. She pointed out
that Carelse herself made no
reference to her (but only to the first respondent, Kirilov and
Checharov) in her sworn statement
made in support of her application
in terms of s 205 of the Criminal Procedure Act.
[29]
[59]
The second respondent declared that she did not enter South Africa
with undisclosed diamonds with the intention of selling
them to
purchase an immovable property, but rather came to South Africa and
thereafter decided to sell jewellery in her possession
to enable her
to purchase the Durbanville property. She specifically sought the
assistance of Muller in this transaction and attended
personally to
the signature of all documentation to ensure that the transaction was
correctly and legally concluded. She confirmed
that she decided to
sell the Durbanville property after the raid and that she instructed
the first respondent to attend to this
on her behalf. She feared for
the security of her investment given the circumstances of the raid
and the events that followed.
Her intention is still to sell the
property (the contents belong to the first respondent) and she has
undertaken to take all lawful
steps in this regard including the
payment of any taxes attendant thereon. She denied that she has
abandoned the property.
[60]
Carelse deposed to a
supplementary affidavit after interviewing Groudeva who was mandated
to sell the Durbanville property on behalf
of the second respondent.
According to Groudeva she was mandated by a Peter Voites, who
informed her that he was acting as the
middle man between her and the
lawful owner who is Slovakian.
[30]
[61]
The first respondent confirmed the second respondent’s
allegations in relation to the Durbanville property. He did not

recall introducing or referring to himself as “
Peter”
during his interactions with Groudeva. His version is further as
follows.
[62]
One Marcel Kacvinsky is a friend of his who travelled to South Africa
during June/July 2013. Kacvinsky told him that he wanted
to sell some
personal jewellery whilst in South Africa. The second respondent
introduced him to Rachwal who made payment for the
jewellery items in
cash. The first respondent was uncertain of the exact amount but knew
that the sum paid was in excess of R2 million
as he was
personally involved in the transaction.
[63]
Neither he nor Kacvinsky had
any documentation relating to the transaction which, as far as he
knew, had been handed by Rachwal
to the South African attorney
previously appointed to represent the respondents to defend these
proceedings. Despite request the
attorney failed to hand it over to
the respondents’ current attorney. As far as the first
respondent knew the transaction
between Kacvinsky and Rachwal
complied with all legal requirements. This was confirmed under oath
by Rachwal.
[31]
[64]
According to the first
respondent Kacvinsky did not have a bank account in South Africa and
was unable to exchange the cash received
from Rachwal as he is not a
South African citizen. The first respondent thus offered him ‘
a
solution’
. This
entailed the conclusion of an agreement in terms of which the first
respondent would be entitled to use the cash and was
obliged to repay
Kacvinsky at a later stage with interest. This suited the first
respondent as he had potential business dealings
in South Africa (he
had previously applied for a business visa) and the cash would be of
considerable assistance in covering expenses.
He also did not have a
bank account in this country. The cash seized from the main bedroom
during the February 2014 raid was that
loaned to the first respondent
by Kacvinsky.
[32]
[65]
Kacvinsky deposed to an affidavit confirming the jewellery
transaction with Rachwal as well as the agreement with the first

respondent. The latter conceded that when he informed the search team
that the cash found in the main bedroom belonged to a friend
who was
currently in Europe this was ‘
not entirely correct’
,
but maintained that he had been placed under severe stress by the
search team who did not want to believe anything he had to say.
[66]
The first respondent also
conceded that he had foreign currency in his possession at the
Durbanville property at the time of the
raid which, according to him,
was given to him by the second respondent, Kacvinsky, Kirilov and
Checharov, but could not recall
how much or which amounts were given
to him by whom.
[33]
The second respondent however made no mention of handing over foreign
currency to the first respondent and neither did Kacvinsky;
Kirilov
and Checharov did not depose to affidavits. Although the first
respondent did not disclose the currency in which Rachwal
made
payment to Kacvinsky, it is fair to accept that it was in South
African rands.
[67]
According to the first respondent the cash found in the Audi Q7
parked at the Durbanville property was money for crew members’

wages. He had paid some of them that day but others had not arrived
at work to be paid.
[68]
Combrinck’s initial observations of the bakkie, plastic covered
windows, individuals dressed in protective clothing and
activities in
the garage all related to the construction of the wine cellar and
nothing more.
[69]
The first respondent was never questioned about a false bank note.
Kirilov and Checharov did not attend at Combrinck’s
office as
he requested because they had no involvement and had already
explained that they resided elsewhere, pursuant to which
their
premises had in fact also been searched. The first respondent himself
consulted with his previous attorney on the day following
the raid
and was given the assurance that he would take care of the matter on
his behalf. It was for this reason that the first
respondent did not
attend at Combrinck’s office.
[70]
The first respondent only
‘
helped’
Manolis to rent the Saldanha Bay property on his request.
[34]
Although he vacated the Durbanville property after the raid, the
first respondent returned to South Africa on four occasions
thereafter.
[35]
He uses the alias “Alex Novak” in South Africa simply
because his birth name is difficult to pronounce. According to
the
respondents, this is not uncommon amongst individuals from Eastern
Europe when travelling or conducting business in western
countries.
[71]
The first respondent managed the ship “MFV Defiant” on
behalf of its owners and made substantial cash payments,
not only to
its crew, but also for maintenance and supplies. Adams had been
dismissed by the first respondent and was apparently
nothing more
than a disgruntled former employee. The first respondent had only
referred to the Durbanville property as his house
because he occupied
it.
Discussion
[72]
Section 15(1)(a) of the Customs Act provides that:
‘
Persons
entering or leaving the Republic and smugglers.
---(1)
Any person entering or leaving the Republic shall, in such a manner
as the Commissioner may determine, unreservedly declare---
(a)
at the time of
such entering, all goods (including goods of another person) upon his
person or in his possession which---
(i)
were purchased or
otherwise acquired abroad or on any ship, vehicle or in any shop
selling goods on which duty has not been paid;
(ii)
were remodelled,
process or repaired abroad;
(iii)
are prohibited,
restricted or controlled under any law; or
(iv)
were required to
be declared before leaving the Republic as contemplated in paragraph
(b)…
and
shall furnish an officer with full particulars thereof, answer fully
and truthfully all questions put to him by such officer
and, if
required by such officer to do so, produce and open such goods for
inspection by the said officer, and shall pay the duty
assessed by
such officer, if any, to the Controller.’
[73]
Section 1 of the Customs Act
defines ‘
goods’
as including anything classifiable in terms of Part 1 of Schedule 1,
as well as currency. Part 1 of Schedule 1 in turn refers to
‘
articles
of jewellery and parts thereof, of precious metal or of metal clad
with precious metal as goods’
.
[36]
[74]
Rule 15.1 of the Customs and Excise Rules for Section 15 of the
Customs Act provides
inter alia
that where a traveller enters
the Republic and:
74.1 red and green channels are not
provided for processing travellers, he or she may, without declaring
any goods on forms TC-01
(Traveller Card) and TRD1 (Traveller
Declaration) exit the restricted area if the goods upon his or her
person or in his or her
possession are personal effects (rule
15.01(b)(i)(aa));
74.2 red and green channels are
provided for processing travellers, he or she may choose the green
channel to exit the restricted
area if the goods upon his or her
person or in his or her possession are personal effects, and shall
thus be regarded as declaring
that he or she has no declarable goods
(rule 15.01(d)(i)(aa) and (ii)).
[75]
Personal effects are defined in Rule 15.01 of these Rules as:
‘● “
personal
effects”
means subject to item 407.01 of Schedule No.4, goods (new or used) in
the accompanied or unaccompanied baggage of a traveller which
that
traveller has on or with him or her or takes along or had taken along
for, and reasonably required for, personal or own use,
such as any
wearing apparel, toilet articles, medicine, personal jewellery,
watch, cellular phone, automatic data processing machines,
baby
carriages and strollers, wheelchairs for persons living with
disability, sporting equipment, food and drinks and other good

evidently on or within that person for personal or own use, but
excludes goods that must be declared on forms TC-01 and TRD1 and

commercial goods;’
[76]
Schedule 4 (of Part 1) deals with specific rebates of customs duties.
It presents in tabulated form. Item 407.01 refers
inter alia
to personal effects imported by non-residents for their own use
during their stay in the Republic. Under the column heading “Extent

of Rebate” appear the words “Full duty”.
Accordingly therefore no duty is payable on personal effects,
including
jewellery.
[77]
Sections 81 and 83 of the Customs Act deal with the consequences of
non-declaration of declarable goods and/or irregular dealing
with, or
in, declarable goods and provide as follows:
‘
81.
Non-declaration in respect of certain goods.
---Any
person who contravenes or fails to comply with the provisions of
section 15, shall be guilty of an offence and liable on
conviction to
a fine not exceeding R8 000 or treble the value of the goods in
question, whichever is the greater, or to imprisonment
for a period
not exceeding two years,  or to both such fine and such
imprisonment, and the goods in question and any other
goods contained
in the same package as well as the package itself shall be liable to
forfeiture…
83.
Irregular dealing with or in goods.
---Any
person who---
(a)
deals or assists in dealing with any goods contrary to the provisions
of this Act; or
(b)
knowingly has in his possession any goods liable to forfeiture under
this Act; or
(c)
makes or attempts to make any arrangement with a supplier,
manufacturer, exporter or seller of goods imported or to be imported

into or manufactured or to be manufactured in the Republic or with
any agent of any such supplier, manufacturer, exporter or seller,

regarding any matter to which this Act relates, with the object of
defeating or evading the provisions of this Act,
shall
be guilty of an offence and liable on conviction to a fine not
exceeding R20 000 or treble the value of the goods in
respect of
which such offence was committed, whichever is the greater, or to
imprisonment for a period not exceeding five years,
or to both such
fine and such imprisonment, and the goods in respect of which such
offence was committed shall be liable to forfeiture.’
[78]
Section 87(1) of the Customs Act makes it clear that any penalty
(including forfeiture) imposed under that Act does not exclude
a
penalty or punishment under any other law, and accordingly POCA
nonetheless remains applicable.
[79]
Before dealing with the relevant provisions of POCA, regulation 2 of
the Exchange Control Regulations provides that:
‘
RESTRICTION
ON PURCHASE, SALE AND LOAN OF FOREIGN CURRENCY AND GOLD
2.
(1) Except with permission granted by the Treasury, and in accordance
with such conditions as the Treasury may impose no person
other than
an authorised dealer shall buy or borrow any foreign currency or any
gold from, or sell or lend any foreign currency
or any gold to any
person not being an authorised dealer.
(2)
(a) An authorised dealer shall not buy, borrow or receive or sell,
lend or deliver any foreign currency or gold except for such
purposes
or on such conditions as the Treasury may determine.
(b)
The Treasury may,
in its discretion, by order prohibit all authorised dealers or any
one or more of them –
(i)
from selling,
lending or delivering to, or buying, borrowing or receiving from, any
specified person, fund or foreign government
any foreign currency or
gold; or
(ii)
from so selling,
lending, delivering, buying, borrowing or receiving any foreign
currency or gold for any specified purpose or except
for such
purposes or on such conditions as the Treasury may determine.
(3)
Every person other than an authorised dealer desiring to buy or
borrow or sell or lend foreign currency or gold shall make
application to an authorised dealer and shall furnish such
information and submit such documents as the authorised dealer may
require
for the purpose of ensuring compliance with any conditions
determined under sub-regulation (2) of this regulation.
(4)
No person other than an authorised dealer shall –
(a)
use or apply any
foreign currency or gold acquired from an authorised dealer for or to
any purpose other than that stated in his
application to be the
purpose for which it was required; or
(b)
do any act
calculated to lead to the use or application of such foreign currency
or gold for or to any purpose other than that so
stated.
(5)
If a person has, as a result of an application in terms of
sub-regulation (3) of this regulation, obtained from an authorised

dealer any gold or foreign currency and no longer requires all or any
part of such gold or foreign currency for the purpose stated
in his
application, he shall forthwith offer for sale to the Treasury or an
authorised dealer that gold or foreign currency which
is not so
required, which may be repurchased at the price at which it was sold
to him or such other price as the Treasury may determine.’
[80]
Section 1(2) of POCA imputes knowledge of unlawful activities, or
knowledge of the proceeds of unlawful activities, to a person
if:
79.1 The person has actual knowledge;
or
79.2 A court is satisfied that (a) the
person believes that there is a reasonable possibility of the
existence of that fact; and
(b) he or she fails to obtain information
to confirm the existence of that fact.
[81]
Section 1(3) of POCA sets out the test to be applied to determine
whether a person ought reasonably to have known or suspected
a fact:
‘
(3)
For the purposes of this Act a person ought reasonably to have known
or suspected a fact if the conclusions that he or she ought
to have
reached are those which would have been reached by a reasonably
diligent and vigilant person having both-
(a)
the general
knowledge, skill, training and experience that may reasonably be
expected of a person in his or her position; and
(b)
the general
knowledge, skill, training and experience that he or she in fact
has.’
[82]
Sections 4 to 6 of POCA provide as follows:
‘
4.
Money laundering.
---Any
person who knows or ought reasonably to have known that property is
or forms part of the proceeds of unlawful activities
and---
(a)
enters into any
agreement or engages in any arrangement or transaction with anyone in
connection with that property, whether such
agreement, arrangement or
transaction is legally enforceable or not; or
(b)
performs any other
act in connection with such property, whether it is performed
independently or in concert with any other person,
which
has or is likely to have the effect---
(i)
of concealing or
disguising the nature, source, location, disposition or movement of
the said property or the ownership thereof
or any interest which
anyone may have in respect thereof; or
(ii)
of enabling or
assisting any person who has committed or commits an offence, whether
in the Republic or elsewhere---
(aa)
to avoid prosecution; or
(bb)
to remove or diminish any property acquired directly, or indirectly,
as a result of the commission of an offence,
shall
be guilty of an offence.
5.
Assisting another to benefit from proceeds of unlawful
activities.
---Any
person who knows or ought reasonably to have known that another
person has obtained the proceeds of unlawful activities,
and who
enters into any agreement with anyone or engages in any arrangement
or transaction whereby---
(a)
the retention or the control by or on behalf of the said other person
of the proceeds of unlawful activities is
facilitated; or
(b)
the said proceeds of unlawful activities are used to make funds
available to the said other person or to acquire
property on his or
her behalf or to benefit him or her in any other way,
shall
be guilty of an offence.
6.
Acquisition, possession or use of proceeds of unlawful
activities.
---Any
person who---
(a)
acquires;
(b)
uses; or
(c)
has possession of,
property
and who knows or ought reasonably to have known that it is or forms
part of the proceeds of unlawful activities of another
person, shall
be guilty of an offence.’
[83]
Given the nature of these
proceedings the
Plascon-Evans
rule applies.
[37]
I must be persuaded that the respective versions of the respondents,
taken together with the admitted facts, justify the orders
sought
(subject to the proviso that the respondents’ versions are not
so far-fetched or untenable that they fall to be rejected
on the
papers as they stand).
[84]
Mr Titus, who appeared for the NDPP, argued that the documentary
evidence produced by it, in particular that procured from
Muller, was
sufficient to show that the second respondent failed to raise a
genuine dispute of fact. He submitted that it was incumbent
upon the
second respondent – who was best suited to know what she sold
to Rachwal – to produce other documentary evidence
in the form
of a further invoice or invoices to support her version that she not
only sold diamonds but also gold to Rachwal. He
also argued that in
any event the only reasonable inference to be drawn from the papers
was that the second respondent entered
South Africa with diamonds,
without declaring them, for the specific purpose of purchasing
immovable property in order to promote
the first respondent’s
money-laundering activities. He referred to the movement control
records indicating that the respondent
left South Africa for Botswana
on 17 July 2013 (being the date that she signed the offer to
purchase the Durbanville property)
and that there is no record of her
returning to South Africa before her departure from this country on
25 July 2013.
[85]
On the other hand Mr Loots, who appeared for the respondents,
submitted – correctly in my view – that the central

question is whether the second respondent had a duty to declare the
goods on her arrival in South Africa through Cape Town International

Airport on 4 July 2013. This is because Carelse herself averred
in her supplementary affidavit filed in support of the forfeiture

application that:
‘
16.
It is reiterated that SARS had not raised any assessment relating to
any goods brought by the second respondent in South Africa
on
4 July
2013
, as the
second respondent had failed to make the requisite declaration.
17.
In the circumstances, I submit that an inference may be drawn that
the second respondent failed to comply with the provisions
of section
15(1)(a) in respect of any goods that she had brought with her in her
possession into South Africa when she entered
on
4 July 2013
,
as indicated in her movement control records.
18.
Therefore, it is submitted that the goods brought by the second
respondent into South Africa on
4 July 2013
, being
diamonds or any jewellery items, were not declared by her and fall
within the definition of proceeds of unlawful activities
as defined
in section 1 of the Prevention of Organised Crime Act, 1998 (POCA)
and are liable to be forfeited to the State both
in terms of POCA and
the relevant provisions of the Customs and Excise Act 94 of 1964
(Customs Act).’
[emphasis
supplied]
[86]
These averments were made
after
Carelse had scrutinised the
second respondent’s movement control records (and completed her
investigation) and this was accordingly
the case that the second
respondent was called upon to meet. It is also fair to accept that
Carelse, upon completion of her investigation,
placed no reliance on
the second respondent’s alleged trip to Botswana. Placing
reliance on this during argument –
as Mr Titus did – does
not assist the NDPP.
[87]
The second respondent’s version that she arrived in South
Africa with a bracelet, a personal effect, is supported by
the
following. Her allegation that it was Muller who advised her to sell
the diamonds and gold separately was never taken up by
Carelse with
Muller and thus stands uncontested. Muller himself confirmed that the
respondent paid for the Durbanville property
with the proceeds of
‘
jewellery’
. Rachwal confirmed the second
respondent’s version that he removed the diamonds from the
bracelet and sold them separately
from the gold.
[88]
It is also common cause that Rachwal paid over monies into Muller’s
trust account of some R200 000 in excess of
the amount paid for
the diamonds as reflected on the S&T invoice. There is no logical
explanation for this other than that
he must also have sold something
else for the second respondent. Moreover, if it had been the second
respondent’s intention
to conceal the transactions, it makes no
sense that she approached a reputable dealer (the NDPP conceded in
the heads of argument
that Rachwal is such a dealer) who, she must
have anticipated, would comply with all legal requirements, and in
addition, that
she willingly allowed an easily accessible paper trail
to be created and retained by both Rachwal and Muller. There is also
no
evidence to suggest that the second respondent could not have been
in possession of the bracelet when she entered South Africa on
4 July
2013.
[89]
In addition, the second respondent only made the offer to purchase
the Durbanville property about two weeks after her arrival
in South
Africa. It stands to reason that if she was conspiring with the first
respondent to launder money, the first respondent
– who, it is
common cause, had been in South Africa for some time – would
already have identified a suitable property
by the time that the
second respondent entered this country in order that the transaction
could be concluded immediately thereafter.
There would also have been
no reason for the second respondent to have viewed the Durbanville
property before making an offer to
purchase it if, as the NDPP
contends, she simply intended to hold it as the first respondent’s
nominee.
[90]
Furthermore, Groudeva herself (who was appointed as agent to sell the
property after the raid) stated that Peter Voites identified
himself
as the ‘
middle man’
between her and the lawful
owner who is Slovakian. Whether or not the first respondent used an
alias for this purpose does not
detract from the weight of the other
evidence in support of the second respondent’s version.
[91]
In
Tieber
v Commissioner for Customs and Excise
[38]
the court, in considering the Customs Act, held that:
‘
The
only purposes of declaring goods are:
(a)
to enable the
customs officer to determine whether duty is payable; and
(b)
to prevent
prohibited or restricted goods being brought into the country.
Goods
in transit do not fall into either of those two categories. No
purpose would be served in declaring goods in the hold of an
aircraft
or ship which are not to be brought into the Republic. An indication
that s 15(1) does not apply to such goods is
also to be found in
the provision there for a customs officer to require the person
declaring the goods to produce and open them
for inspection. In the
usual situation such a requirement would be impossible to fulfil in
respect of goods in transit and not
in the physical possession of the
traveller. It follows that the provisions of s 15(1) do not
apply to goods which remain
in a transit area.’
[39]
[92]
In
Capri
Oro (Pty) Ltd and Others v Commissioner for Customs & Excise and
Others
[40]
the second appellant entered South Africa through OR Tambo Airport,
carrying 77kg of jewellery in his hand luggage which was the
property
of the third appellant. He intended to fly to Namibia later the same
day to sell the jewellery to a third party who would
be responsible
for clearing it through customs. There was a 3 ½ hour delay
between the time of his arrival and the departure
of his flight to
Namibia. He arranged to meet his father at the airport and obtained
permission from an official at passport control
to leave the transit
area for that purpose. He went through the green ‘
nothing
to declare’
channel
and, after passing the customs point, he was detained by the police
who seized the jewellery. The Supreme Court of
Appeal found that the
second appellant had contravened s 15(1) of the Customs Act and
rejected his argument that the principles
set out in
Tieber
applied, holding, with reference to s 15(1) that:
‘
The
position under that section is that whether or not goods in the
possession of a person entering the Republic as the second
[appellant]
did
are,  in the long or the short term, intended by him to be
removed to another country, they have to be declared when they
are
brought into South Africa if they fall within one of the categories
specified in section 15(1)(a). Given the purpose behind
section 15(1)
as stated in the
Tieber
case
(
supra
)…it
is evident that the final destination of the goods is irrelevant: the
necessity for the declaration is triggered
by
the nature of the goods
and the fact that they are brought into South Africa as opposed to
remaining in transit or in bond.’
[41]
[emphasis
added]
[93]
Mr Titus argued, on the basis of
Capri Oro
, that the Supreme
Court of Appeal has confirmed that all jewellery constitutes goods
that must be declared at point of entry in
accordance with the
provisions of s 15(1)(a) of the Customs Act, and that
non-compliance with s 15(1) renders such jewellery
liable to
forfeiture under the provisions of s 87 thereof.
[94]
However it is clear from the facts in
Capri Oro
that it was
never suggested by the second appellant that the 77kg of jewellery in
his hand luggage was a ‘
personal effect’
and I do
not understand the Supreme Court of Appeal to have found that
jewellery, of any nature, attracts the forfeiture and similar

provisions of the Customs Act if it is not declared. As held in
Tieber
, the only purposes of declaring goods are to enable the
customs officer to determine whether duty is payable, and to prevent
prohibited
or restricted goods being brought into the country. In my
view, the evidence shows that the bracelet which the second
respondent
brought into South Africa does not qualify as prohibited
or restricted for purposes of the Customs Act; and in any event, no
duty
would have been payable even if she had declared it. I am thus
not persuaded that the second respondent’s failure to declare

the bracelet upon her arrival in South Africa through Cape Town
International Airport on 4 July 2013 was unlawful or constituted

a contravention of s 15(1)(a) of the Customs Act. Given that the
NDPP relied squarely on a contravention of this nature to
constitute
unlawful activity for purposes of POCA, it follows that its case
against the second respondent cannot succeed.
[95]
The first respondent’s position is different. Over the period
leading up to the raid he regularly moved across the borders
of South
Africa. He was known to carry large amounts of cash and, on his own
version, he conducted his various business activities
in cash. He
conceded that these activities occurred not only in South Africa but
also abroad (at least in the Red Sea zone near
Sudan). He was found
in possession of a considerable sum of money in rands and foreign
currency and was unable to provide any reasonable
explanation, either
to the police or to this court.
[96]
The first respondent lied to the police about the cash found in the
main bedroom in the Durbanville property. Despite his claim
that he
was pressurised and felt intimidated, he clearly did not have the
same difficulty as regards the other cash found. His
explanation for
the cash found in his bedroom is dubious to say the least. All that
he could tell Combrinck was that it was the
proceeds of foreign
currency that he exchanged with a person somewhere in Sea Point but
did not know the person and had no proof
of the transaction.
[97]
As to the foreign currency seized during the raid, his version that
he was given it by the second respondent, Kacvinsky, Kirilov
and
Checharov cannot be believed. He could not say which of these
individuals had given what amounts and in what currency. The
second
respondent made no mention of this and neither did Kacvinsky, despite
both of them deposing to affidavits. No evidence was
adduced that
Kirilov and Checharov supported his version. It is also difficult to
accept that if – as both he and Kacvinsky
later maintained –
there was a vague understanding between them concerning the “loan”,
that Kacvinsky would also
‘
donate’
foreign
currency to the first respondent.
[98]
Furthermore the first respondent’s credibility is tainted in
other ways. According to Combrinck the first respondent
told him that
he was constructing a jacuzzi in the garage at the Durbanville
property. The first respondent told the second respondent
that it was
a wine cellar. He confirmed that he told her this, yet in his
correspondence with Groudeva he stated that ‘
regarding the
big hole in the garage
as far as I know
it was
supposed to be a wine cellar…’
[emphasis supplied].
The first respondent pertinently failed to deal with the allegations
concerning the lease of the Saldanha
Bay property. He did not deny
Potgieter’s version and the best he could offer was that he had
‘
helped’
Manolis. The first respondent did not
suggest that Manolis had at any stage worked for the same company
which was ostensibly to
lease the Saldanha Bay property on the first
respondent’s behalf, and the lease itself shows that Manolis
was in fact employed
by another company, Hellenic Shipping, at the
time of conclusion of the lease.
[99]
Moreover, both Kacvinsky and the first respondent are silent on
whether Kacvinsky ever declared the jewellery which he purportedly

sold to Rachwal when he entered South Africa during June or July
2013. The first respondent had ample opportunity to obtain an

explanation from Kacvinsky and to take the court into his confidence
on this important aspect. That he failed to do so, and taking
all of
the above factors into account, leads me to conclude that the NDPP
has proven its case against the first respondent on a
balance of
probabilities.
[100]
During argument Mr Loots
addressed the issue of proportionality in the event of a forfeiture
order being granted in respect of either
respondent. There was some
debate between Mr Loots and Mr Titus about whether the
proportionality requirement applies outside of
cases where there is a
finding of instrumentality of an offence for purposes of POCA.
Mr Titus referred to a string of Supreme
Court of Appeal and
Constitutional Court decisions, all of which dealt with
proportionality within the context of a finding of
instrumentality.
He argued that where there is a finding of the proceeds of unlawful
activities, proportionality plays no role.
Mr Loots in turn
relied on
National Director
of Public Prosecutions v Salie and Another
[42]
where the court held at para [135] that proportionality is indeed a
requirement for the forfeiture to the state of the proceeds
of
unlawful activities under POCA.
[101]
Be that as it may, the first respondent did not deal at all with
proportionality in his papers, nor in heads of argument filed
on his
behalf. It was simply raised for the first time when Mr Loots
addressed the court. There is nothing to indicate, given
the
particular facts of this case, that it would be disproportionate to
order that the first respondent forfeit the full amount
of the cash
seized.
Conclusion
[102]
In the result the following order is made:
1.
In terms of
section 50 of the Prevention of Organised Crime Act 121 of 1998
(POCA) the property consisting of the following:
1.1
R2 032 040
in cash seized from the premises situated at[…], Vygeboom
Avenue, Durbanville, Western Cape; and
1.
R617 285.90,
which is the proceeds of foreign currency seized from the premises
situated at[…], Vygeboom Avenue, Durbanville,
Western Cape,
which has been converted by the South African Police Service (SAPS);
and held in the SAPS bank account at ABSA Bank,
i
s declared
forfeit to the state.
2.
The Chief
Accounting Clerk of the SAPS is directed to transfer the above
amounts to the Criminal Asset Recovery Account established
in terms
of section 63 of POCA, held at the Reserve Bank under account number
[…], within 45 (forty five) days of the date
of this order.
3.
The Registrar of
this court is directed to publish a notice of the forfeiture ordered
in terms of paragraph 1 above, in the Government
Gazette as soon as
practicable in compliance with section 50(5) of POCA, and the state
attorney is directed to draw the attention
of the Registrar to the
provisions of this paragraph.
4.
The application
for the forfeiture of the second respondent’s immovable
property situated at […], Vygeboom Avenue,
Durbanville, is
dismissed and the applicant is directed to pay the second
respondent’s costs, including any reserved costs
orders.
___________________
J
I CLOETE
For
Appellant
: Adv Mododa
Titus
– 4877070
Instructed
by: State attorney (asset forfeiture) Mr Z. Karjiker – 4419301
For
Respondents
: Adv Hanri
Loots
– 4261771
Instructed
by: De Waal Boshoff Inc. Charl Boshoff – 4245446
[1]
Prevention of Organised Crime Act 121 of 1998
.
[2]
Act 91 of 1964.
[3]
Of 1961, promulgated in terms of s 9 of the
Currency and Exchange Act 9 of 1933.
[4]
Directorate for Priority Crime Investigation.
[5]
Annexure MC2 Record p97.
[6]
Affidavit of Combrinck para 9 Record p127.
[7]
Para 64 Record pp73-74.
[8]
Paras 73 – 74 Record p28.
[9]
Paras 83 – 85 Record p30.
[10]
Record pp129 – 133.
[11]
Annexure MC32, Record p152. Compare Record p378 where the
second respondent refers to register number 11557 – this

appears to be a typographical error.
[12]
Annexure MC33, Record p153.
[13]
Clause 5 of the deed of sale, Record p154.
[14]
Record pp79 – 80.
[15]
Annexure MC34, Record p160.
[16]
Affidavit Carelse Record p83, Affidavit Potgieter Record
p161, Lease Agreement Annexure MC35 Record p166.
[17]
Copy of passport of Manolis Record p176.
[18]
Affidavit Carelse Record pp84-86, Western Screens quotation
Record p190.
[19]
Affidavit Carelse Record p84.
[20]
Affidavit Carelse Record p92.
[21]
Affidavit Carelse Record p93.
[22]
Act 51 of 1977.
[23]
Annexure MC36 to Carelse’s Affidavit, Record p177.
[24]
Affidavit Bam Record p41.
[25]
Record pp315-321.
[26]
Bam Affidavit Record pp282-285.
[27]
Record pp438-439.
[28]
According to this website FZP offers a comprehensive range of
self-catering Cape Town accommodation including luxury Cape
Town
holiday apartments and fully serviced holiday apartment rentals
throughout the city. It claims to be the leader in holiday
apartment
rentals, offering the widest choice in self-catering accommodation
from luxury to budget.
[29]
Record pp177-178.
[30]
Supplementary Affidavit Carelse Record p454, Affidavit
Groudeva Record p461.
[31]
Record pp438-9.
[32]
Affidavit first respondent Record pp431-2.
[33]
Affidavit first respondent Record p432.
[34]
Affidavit first respondent Record pp383-4.
[35]
Affidavit first respondent Record p430.
[36]
Item 71.13.
[37]
[1984] ZASCA 51
;
1984 (3) SA 623
(A) 634G-635C.
[38]
1992 (4) SA 844 (AD).
[39]
At 850H-851A.
[40]
[2002] 1 All SA 571
(A).
[41]
Para [17].
[42]
2015 (1) SACR (WCC).