Stemele and Another v National Director of Public Prosecutions (3428/2015) [2017] ZAECPEHC 44 (14 September 2017)

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[2017] ZAECPEHC 44
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Stemele and Another v National Director of Public Prosecutions (3428/2015) [2017] ZAECPEHC 44 (14 September 2017)

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IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION, PORT ELIZABETH
Case No.:
3428/2015
Date
Heard:  7 September 2017
Date Delivered:
14 September 2017
In
the matter between:
SIYABONGA
SAMORA
STEMELE
First Applicant
SIPHOKAZI
EUNICA
STEMELE
Second
Applicant
and
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
JUDGMENT
EKSTEEN,
J:
[1]
The
applicant seeks the rescission of a forfeiture order granted in
favour of the respondent pursuant to section 48 of the Prevention
of
Organised Crime Act, 121 of 1998 (POCA) on 20 October 2015.
Background
[2]
The
respondent obtained a preservation order on 8 September 2015
prohibiting the first respondent or any other person with knowledge

of the order from dissipating, taking possession of or control over,
diminishing the value of or otherwise dealing in any manner
with the
amount of R120 879 in cash (the money) which was held under
Kwanobuhle CAS 256/8/2015.  In its founding papers
the
respondent contended that there were reasonable grounds to believe
that the money concerned is the proceeds of unlawful activity
as
envisaged in section 38(2)(b) of POCA.  The applicant relied on
an affidavit by one Elroy Ferekelen May.  May declared
that on
21 August 2015 he obtained a search warrant for premises situated at
[...] B. S., Kwanobuhle, Uitenhage to search the premises
for dagga
and other drugs.  He and Constable Mentoor proceeded to the
property.  May proceeds to declare:
“
On
our arrival at above mentioned address the gate was locked with a
padlock and Cst Mentoor cut the padlock with a equipment (bolt

cutter).  We then went to the backdoor of the house and we
orderly knocked on the door and he Cst Mentoor identified himself
and
I as police officials.  An unknown African male opened the door
and we identified ourselves.  We then gave a copy
of the search
warrant after he requested to see it first.  He was wearing a
sleep short and a black T-shirt.  He then
opened the burglar
guard and he granted us permission to enter the house.  We then
entered the house, we then noticed an African
female present at the
house.  We then conducted the search room by room.  While
we searching in one of the rooms in the
presence of Mr SAMORA
STEMELE, all the time and we found a transparent plastic bag in one
of the side cupboards draws next to the
bed containing loose MANDRAX
tablets and loose powder in his presence.
Furthermore while we were searching in
the room we noticed a big chest of drawer lock with a padlock.
Cst Mentoor ask him
(Mr Samora Stemele) to open the drawer and he
said that he do not have a key for it.  Cst Mentoor told him
that he have to
cut the padlock and he agree.  Cst Mentoor then
cut the padlock and we open the drawer and we searched it.
While we search inside the drawer we
find a black cooler bag Amstel Lite, containing transparent plastic
bags of Mandrax tablets,
a Viceroy Box containing coins unknown
amount, Grey Castle Lite bag containing notes of an unknown amount
and a red Rage bag with
a Old Buck box containing cash notes
undisclosed amount to us.
Cst Mentoor ask Mr Samora Stemele to
who does the mandrax and the money belong to.  He did not answer
Cst Mentoor.  On
this grounds Cst Mentoor explain verbally to Mr
Samora Stemele and Ms S Mnikina of their constitutional rights and
all was understood
by both.”  (
Sic
)
[3]
He proceeds
to state that the coins and notes found in the chest of drawers were
later counted and that this represents the money.
An affidavit
of similar import was attested to by Mentoor.
[4]
The
preservation order directed the applicant to cause a copy of the
order to be published in the Government Gazette and to give
notice in
terms of section 39(1) of POCA to the respondent and to all persons
who become known to the applicant to have an interest
in the matter.
The notice directed the first respondent to file a notice of his
intention to oppose, if he chose to do so,
in terms of section 39(3)
and (5) of POCA.    The order was duly published in
the Gazette and the respondent caused
the preservation order to be
served on the first applicant.  A return of service was procured
from the sheriff who recorded
that he had “served this
preservation order upon Nobesutu Stemele, daughter apparently a
responsible person residing at the
place of residence of the
defendant and not less than 16 years of age.”
[5]
In these
circumstances the respondent proceeded to obtain the forfeiture
order.  The first and second applicants now seek the
rescission
of the forfeiture order on three grounds:  Firstly, in terms of
rule 42(1)(a) of the Uniform Rules of Court (the
rules);
secondly, in terms of the common law;   and thirdly, in
terms of section 53(3) and (4) of POCA.
Rule
42(1)(a)
[6]
Rule
42(1)(a) provides that a court may
mero
motu
or
upon the application by any party affected, rescind or vary an order
or judgment erroneously sought or erroneously granted in
the absence
of any party affected thereby.  It is common cause that the
forfeiture order was granted in the absence of both
the first and
second applicants.  In order, however, to obtain rescission of
judgment in terms of the rule an applicant is
required to show that
the order was “erroneously sought or erroneously granted”.
A judgment is erroneously granted
if there existed at the time of its
issue a fact of which the court was unaware, which would have
precluded the granting of the
judgment and which would have induced
the court, if aware of it, not to grant the judgment.  (See
Nyingwa
v Moolman NO
1993 (2) SA 508
(Tk) at 510D-G;
Naidoo
and Another v Matlala NO and Others
2012 (1) SA 143
(GNP) at 153C;
Thomani
and Another v Seboka NO and Others
2017 (1) SA 51
(GP) at 58C-E.)
[7]
The
applicants allege that they are married to one another in community
of property. On this basis it is argued on behalf of the
applicants
that the respondent ought to have joined the second applicant as a
party to the preservation and subsequent forfeiture
proceedings from
the outset.  The failure to do so, so it is argued, renders the
proceedings fatally flawed and amounted to
a non-joinder which would
have precluded this court from granting a forfeiture order had the
marriage been disclosed to the judge.
[8]
At first
glance the argument is attractive.  Where parties are married in
community of property they are joint owners of the
property.
Ordinarily therefore they can only be sued jointly where litigation
relates to such property.  Upon careful
consideration of the
submissions made to me during argument, however, I do not consider
that the argument is sound.
[9]
ction 38(1)
of POCA authorises the respondent to make application
ex
parte
to a High Court for an order prohibiting any person subject to such
conditions and exceptions as may be specified in the order
from
dealing in any manner with any property. Section 38(2) stipulates
that the court “shall” make an order referred
to in
subsection (1) if there are reasonable grounds to believe that the
property concerned is the proceeds of unlawful activities.
In
making an order as envisaged in section 38(1) the court is also
enjoined to make an order authorising the seizure of the property

concerned.
[10]
In
authorising the respondent to bring an application
ex
parte
,
it seems to me, that where the respondent is unaware of who the owner
(or owners) of the property is, a preservation order may
be granted
without citing any respondents at all and the court is obliged, in
those circumstances, to make a preservation order
provided that there
are reasonable grounds to believe that the property concerned is the
proceeds of unlawful activities.
A
fortiori
the respondent is authorised to bring the application against one of
several joint owners where, in the circumstances, he is unaware
of
the identity or existence of other joint owners.
[11]
Section
39(1) of POCA provides that the respondent is to give notice of the
preservation order granted by the court “to all
persons known
to the National Director” (the respondent) to have an interest
in property which is subject to the order and
to publish a notice of
the order in the Gazette.  Section 39(3) proceeds to provide
that any person who has an interest in
the property which is subject
to the preservation order may enter an appearance by giving notice of
his or her intention to oppose
the making of a forfeiture order and
to apply for an order excluding his or her interest in the property
concerned from the operation
of the order.  Section 39(4) of
POCA prescribes that an appearance as envisage in subsection (3)
shall be delivered to the
respondent:  (a)  in the case of
a person upon whom a notice has been served under subsection (1)(a)
(i.e. a person known
to the respondent to have an interest in the
property concerned), within 14 days after such service;  or (b)
any other
person (i.e. a person not cited and not known to the
respondent to have an interest in the property concerned) within 14
days after
the date upon which a notice under subsection (1)(b) was
published in the Gazette.
[12]
As a matter
of interpretation, therefore, it seems to me that where there are
reasonable grounds to believe that property (in this
case the money)
is the proceeds of unlawful activity the respondent is entitled to
bring an application for the preservation of
the property.
Where the respondent is aware of persons who have an interest in the
property they should be cited and notice
of the order should be
served upon them.  The fact that the respondent is unaware of
any or further persons who may have an
interest in the property does
not preclude the granting of the preservation order.  Such
persons are nevertheless entitled
to enter an appearance to oppose
the granting of a forfeiture order pursuant to the publication in the
Gazette.  The publication
in the Gazette serves as an invitation
to any such persons to join in the proceedings.  In these
circumstances I do not think
that the preservation order was
erroneously sought or erroneously granted.  Knowledge of a
marriage in community of property
would not, in my view, have had any
impact upon the granting of the preservation order.   The
only effect which knowledge
of the marriage may have had is on the
form of the order.  The respondent would then have been required
to serve notice of
the preservation order on the second applicant
too.
[13]
The
forfeiture order was granted pursuant to the provisions of section 48
of POCA.  There is no challenge to the procedural
compliance by
the respondent.  The sole challenge under rule 42(1)(a) is the
fact that the parties are married in community
of property and that
the second applicant accordingly has an interest in the property.
Section 50(1) of POCA prescribes that
the court “shall”
subject to the provisions of section 52 of POCA, make an order in
terms of section 48(1) if
the court finds on a balance of probability
that the property concerned is the proceeds of unlawful activities.
The court
is accordingly obliged to make the order in these
circumstances.  Section 50(3) of POCA specifies, moreover, that
the absence
of a person whose interest in property may be affected by
a forfeiture order does not prevent the High Court from making the
order.
The constitutionality of section 50(3) of POCA  is
not challenged in these proceedings.
[14]
Section 52
of POCA provides for a court making an order of forfeiture to exclude
certain interests in the property which is the
subject of the order,
from the operation of the order on an application by a person who has
given notice of opposition in terms
of section 39(3) of POCA or who
has entered a late entry of appearance as envisaged in section 49 of
POCA for such purpose.
When no such application is made the
order of forfeiture will be granted in terms of section 50 of POCA.
The forfeiture order
granted in terms of section 50 of POCA must
again be published in the Gazette (see section 50(5)) and will not
take effect for
a period of 45 days.  The purpose of the
suspension of the order is to be found in section 54 of POCA which
provides for any
person affected by the forfeiture order who was
entitled to receive notice of the application for the order under
section 48 of
POCA, but did not receive such notice, to apply for an
order excluding his/her interests in the property concerned from the
operation
of the order of forfeiture.  The second applicant has
not at any stage made an application for her interest in the property

to be excluded from the forfeiture order nor does she seek such an
order in these proceedings.  On the contrary, the applicants
in
the present application seek the rescission of the entire judgment on
the basis that the money does not constitute proceeds
of unlawful
activities.  In the circumstances, on a proper interpretation of
POCA, I do not think that the main application
can be said to be
defective by virtue of the non-joinder of the second applicant.
It follows that the preservation order
and the subsequent forfeiture
order were not sought or granted erroneously.
Rescission
in terms of the common law
[15]
In order to
succeed under the common law in an application for rescission of a
judgment granted in default the applicants are required:
1.
To provide
a reasonable explanation for their default;  and
2.
To show
that they have a
bona
fide
defence, which,
prima
facie
,
carries some prospect or probability of success.
[16]
In respect
of the explanation for their default the applicants contend that
notwithstanding the return of service rendered by the
sheriff they
did not receive notice of the preservation order and the application
for forfeiture.  The first applicant states
that he first became
aware of the preservation order at the end of November 2015 when he
discovered the preservation order lying
in the yard of his home near
his garage.  He discovered the document purely by chance and
handed it to his attorney for action.
The forfeiture order, as
set out earlier herein, was granted on 20 October 2015.  There
is nothing on the papers to gainsay
the first applicant’s
explanation in this regard.  These facts, in my view, constitute
a satisfactory explanation for
their default.
[17]
Before I
proceed to examine the defence advanced and the
bona
fides
thereof it is necessary to revert briefly to the affidavits of May
and Mentoor.  I have quoted the material portion of May’s

affidavit earlier herein.  Although it is not a model of
linguistic clarity the essence of the respondent’s case is
that
May, armed with a search warrant, obtained consent from the first
applicant to search his home.  Mandrax tablets and
loose powder
were found in a plastic bag stashed in the drawers of a side cupboard
in one of the rooms of the home.  Later,
during the search, with
May’s consent the padlock on a chest of drawers found in the
home was broken to obtain entry thereto.
In the chest of
drawers further bags of mandrax tablets and the money was found.
The search was conducted at all times in
the presence of the first
applicant and upon an enquiry from Mentoor as to whom the mandrax
belonged to, the first applicant did
not reply.  In these
circumstances, absent a cogent explanation, I think that there are
more than reasonable grounds to believe
that the money constitutes
the proceeds of unlawful activities.
[18]
In the
application for rescission the applicants contend that the first
applicant conducts a tavern from his home and that they
participate
in a stokvel where a number of people will contribute a sum of money
weekly to the stokvel.  It is contended that
the money found in
the drawer represented takings from the tavern and the stokvel
money.  These averments are not supported
by any documentary
evidence nor by evidence by third parties on affidavit.
Realising that the averments of the stokvel constitutes
a bald
statements the applicants sought leave in terms of rule 6(5)(e) of
the rules to file a further affidavit by one Knockpaal.
The
application was granted.  The supplementary affidavit declares
that Knockpaal is the organiser of a stokvel and he lists
the names
of a number of persons who participate in the alleged stokvel,
including the applicant.  He declares that the participants
pay
their contributions to him and that the total collected is paid to a
different participant each week.  Knockpaal does
not annex any
documentation nor does he state when last stokvel money was paid out
to the applicant before the search of the applicants’
home.
He states merely that he “became aware” that applicants’
stockvel money had been attached in August
2015.  Just how he
“became aware” or why he concluded that the money
attached constituted stokvel money remains
entirely unexplained.
This affidavit does not advance the debate at all.
[19]
The
requirement that an applicant for rescission is to show that he has a
bona
fide
defence requires of him to show the existence of a substantial
defence.   It does not mean that he must show a probability

of success and it suffices if he shows a
prima
facie
case, or the existence of an issue which is fit for trial.  (See
for example
PLJ
van Rensburg en Vennote v Dulk
1971 (1) SA 112
(W);  and
Sanderson
Technitool (Pty) Ltd v Intermenua  (Pty) Ltd
1980 (4) SA 573
(W).)  On the other hand, whilst the applicant
need not deal fully with the merits of the case the grounds of
defence must
be set out with sufficient detail to enable the court to
conclude that there is indeed a
bona
fide
defence.  In
Standard
Bank of South Africa Limited v EL-Naddaf and Another
1999
(4) SA 779
(W) at 786A Marais J emphasised that:
“…
bona
fides
cannot
be demonstrated by merely making a bald averment lacking in any
detail. To hold that such bald averment is sufficient
to demonstrate
bona
fides
is a classic oxymoron. It effectively negates the requirement that
the Court be
satisfied
that the applicant has a
bona
fide
defence. It could with equal validity be held that a mere statement
by an applicant that his defence is
bona
fide
would be sufficient, which is manifestly absurd.”
[20]
I
agree with these statements.  I do not consider that I can be
satisfied on the facts presented that the applicants have shown
a
bona
fide
defence to the forfeiture.  Even if I accept that the first
applicant does conduct a tavern from his home and that he
does
participate in a stokvel it would not, in my view, disturb the
conclusion that there are reasonable grounds to believe that
the
money, discovered in the manner and in the circumstances set out in
the affidavit of May is proceeds of unlawful activities.
This,
it seems to me,  the applicants recognise.  The essence of
their case for rescission is to be found not in the
existence of
other sources of income, but in their repeated allegations that both
May and Mentoor lied in their affidavits.
They deny that a
search warrant was produced and deny that they agreed to May
searching the premises.  The first applicant
denies that he was
ever present whilst the search continued and states that he was
forced to lie on the ground at gunpoint whilst
May and other police
entered into the house.  He denies that there was any mandrax in
his home or that any was found in the
home or in the chest of drawers
where the money was kept.  The defence raised lies in the attack
on the credibility of May
and Mentoor.
[21]
There
are a number of authorities, in this Division too, indicating that
claims for rescission of judgment on common law grounds
must be
brought by way of trial action, not on notice of motion.  (See
for example
Peel
v National Bank of South Africa Limited
1908
EDC 488
;
Ntodonke
v Zilani
1915 EDL 2
;  and
Motor
Marine (Edms) Bpk v Thermotron
1985 (2) SA 127
(SE) at 130G-H.)  Often it would be prudent to
do so.  The better view, however, in my view, is that motion
proceedings
can be used to claim any relief unless otherwise
stipulated by legislation or by rule of court, or unless otherwise
inappropriate
by reason, for example, of a dispute of fact.
(See
Santos
Erec v Cheque Discounting Co. (Pty) Ltd
1986 (4) SA 752
(W).)  I shall accordingly accept that as a
matter of principle, an application for rescission on common law
grounds may be
brought by way of application.  In
Room
Hire Co. (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155
(T) at 1161 it was held:
“
(1) There
are certain types of proceeding (e.g., in connection with insolvency)
in which by Statute motion proceedings are specially
authorised or
directed: … (2) There are on the other hand certain classes of
case (…  are matrimonial causes
and illiquid claims for
damages) in which motion proceedings are not permissible at all. But
between these two extremes there is
an area in which …
according to recognised practice a choice between motion proceedings
and trial action is given according
to whether there is or is not an
absence of a real dispute between the parties on any material
question of fact.”
(See
Herbstein and Van Winsen:
The
Civil Practice of the High Court of South Africa
(5
th
ed) vol 2 p. 292.)
[22]
It
is not possible on affidavit to determine disputes of fact and it is
therefore generally accepted that a court can entertain
proceedings
on motion only when there is no genuine dispute of fact.  Rule
6(5)(g) permits the hearing of oral evidence in
motion proceedings in
appropriate circumstances.  The rule, however, provides for the
court, in its discretion, to dismiss
an application where a real or
genuine dispute of fact arises.  The court will dismiss an
application if the applicant should
have realised when launching his
application that a serious dispute of fact incapable of resolution on
the papers, was bound to
develop.  (See
Room
Hire Co.
supra
at 1162 and 1168;
Carrara
& Lecuona (Pty) Ltd v Van den Heever Investments Ltd and Others
1973 (3) SA 716
(T) at 720C;
Campbell
v First Consolidated Holdings (Pty) Ltd
1977 (3) SA 924
(W) at 932B;
Elco
Steel Dealers v Blackwood Hodge (South Africa)(Pty) Limited
1979 (3) SA 1312
(T) at 1319F;
Standard
Bank of South Africa Limited v Neugarten and Others
1987 (3) SA 695
(W) at 699A;
HR
Holfeld (Africa) Limited v Karl Walter and Co. GmbH and Another (1)
1987 (4) SA 850
(W) at 860B;
Cullen
v Haupt
1988 (4) SA 39
(C) at 40E-41B;  and
Seloadi
and Others v Sun International (Bophutswana) Limited
1993 (2) SA 174
(BG) at 191C-192C.)  In the present instance the
fundamental issue for decision in the forfeiture proceedings is
whether or
not there are “reasonable grounds to believe”
that the money is the proceeds of unlawful activities.  The
inference
is to be drawn from the facts which pertained at the time
of the discovery of the money.  In their founding papers for
rescission
the applicants deny all the material facts which give rise
to this conclusion as set out in the affidavits of May and Mentoor.

This genuine dispute of fact was not only anticipated prior to
launching the application for rescission, but it forms the very

foundation of the application.  The defence which is raised to
the forfeiture application is in essence that reasonable grounds
do
not exist to believe that the money is the proceeds of unlawful
activities because the affidavits of May and Mentoor are untruthful

in almost every material respect.
[23]
In
the circumstances the application for rescission under the common law
fails both because the court cannot be satisfied, on the
averments
made in the founding papers, that the applicants have a “
bona
fide
”
defence and because there was clearly an anticipated dispute of fact
which the applicants knew and understood prior to launching
the
application for rescission.
Section
53(3) and (4) of POCA
[24]
Section
53(3) of POCA provides that any person whose interest in the property
concerned is affected by the forfeiture order or other
order made by
the court may, within 20 days after he or she has acquired knowledge
of such order or direction set the matter down
for a variation or
rescission by the court.
[25]
It
is common cause that the applicants received the notice of the
granting of the preservation order at the end of November 2015.

The first applicant declares that he handed the preservation order to
his attorney on 2 December 2015 who, in turn, immediately
made
contact with the attorney for the respondent and arranged to obtain
from the respondent’s attorneys copies of all relevant

documents to enable him to protect his interests.  Copies of all
the documents were received on 19 January 2016 including
a copy of
the preservation order and the forfeiture order.  The
application for rescission was launched on 15 February 2016.
[26]
What
the applicants astutely avoid in the founding affidavits is to take
the court into their confidence as to when they first learned
of the
granting of the forfeiture order.  There is simply no allegation
in this regard and the requirements for an application
in terms of
the provisions of section 53 of POCA are accordingly not met.
[27]
Even
if I accept that the applicants first learned of the existence of the
forfeiture order on 19 January 2016, it seems to me that
the
application was not launched within 20 days.  Where days are
laid down in legislation, as opposed to the rules, they are
calendar
days.  (Compare also section 4 of the Interpretation Act, 33 of
1937 in respect of the reckoning of the number of
days stipulated in
legislation.)
[28]
In
Hercules
Town Council v Dalla
1936 TPD 229
it was held that:
“
There
seems to be one rule that stands clear, and that is that provisions
with respect time are always obligatory, unless a power
extending the
time is given to the court.”
[29]
This,
as a general rule, is adhered to.  Thus, in
Le
Roux and Another v Grigg-Spall
1946 AD 244
at 249 it was stated:
“
The
passage from MAXWELL cited in
R
v Noorbhai
(1945, A.D. 58
at p. 64) makes it clear that by English law a provision as to the
time within which an application of this kind must be brought
would
be regarded as imperative ….  I have no doubt that in
Holland the position was the same in regard to the time
fixed within
which to note an appeal (the
fatalia
or fatale tyden).  …The Courts in Holland had power to
condone a breach of the rule as to time – but the possession
of
this power of itself goes far to show that the rule as to time was
imperative and not directory … .”
I
think that the same holds true for section 53(3). In the
circumstances the application in terms of section 53(3) and (4) of
POCA
cannot succeed.
[30]
In
any event, even if it is open to the parties to agree to extend the
period, as it is alleged in this case, an applicant under
section
53(3) and (4) of POCA is required to show good cause for the
rescission of the order.  For the reasons set out earlier
in
respect of rescission under the common law, I am not persuaded that
the applicants have demonstrated a
bona
fide
defence to the forfeiture application.  Good cause has therefore
not been demonstrated.
[31]
In
the result, the application is dismissed with costs.
J
W EKSTEEN
JUDGE
OF THE HIGH COURT
Appearances:
For
Applicant:
Adv  JD Le Roux instructed by Lessing, Heyns, Keyter
& van
der Bank Inc, Port Elizabeth
For
Respondent:      Mr W Myburgh instructed by
State Attorney, Port Elizabeth