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[2023] ZAFSHC 27
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National Director of Public Prosecutions v Muyambo and Another (2434/2022) [2023] ZAFSHC 27 (8 February 2023)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 2434/2022
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
In
the matter between:
NATIONAL
DIRECTOR OF PUBLIC
PROSECUTIONS
Applicant
and
TAFADZWA
MUYAMBO
1
st
Respondent
INOQUE
ZIEZIE
MUCHANGA
2
nd
Respondent
In
re: R 1 399 900.00 seized on 26 November 2021 and held
under Kroonstad
CAS
398/11/2021
HEARD
ON:
26 JANUARY 2023
JUDGMENT
BY
:
MHLAMBI,
J
DELIVERED
ON:
This judgment was handed down
electronically by circulation to the parties’ legal
representatives by email and released to
SAFLI. The date and time for
the hand-down are deemed to be 08h30 on 8 February 2023.
[1]
This is an
application brought by the National Director of Public Prosecutions
(NDPP) for civil forfeiture under s 48(1) of the
Prevention of
Organised Crime Act 121 of 1998 (the Act). A preservation order in
terms of s 38(2) of the Act was granted by Van
Rhyn J on 2 June 2022
preserving the property being an amount of R1 399 900.00
seized by the South African Police Service
under Kroonstad Cas
398/11/2021 and held under the effective control of the Station
Commander of the Kroonstad Police Station.
[2]
If a preservation order is in
force, the NDPP may apply to the High Court for an order
for the
forfeiture of all or any of the property concerned.
[1]
The High Court shall make a forfeiture order applied for by the NDPP
if it finds on a balance of probabilities that the property
concerned
is an instrumentality of an offence referred to in Schedule 1 or is
the proceeds of unlawful activities.
[2]
[3]
The applicant is of the view that the property is both proceeds as
well as an instrumentality
of the contravention of illegal gold
smuggling activities, money laundering as well as contravention of
section 4(1)(b)(ii) read
with section 1, 2, 4(2), 24, 25, 26(1)(a) of
the Prevention and Combating of Corrupt Activities Act 12 of 2004
(giving a benefit)
and contraventions of the exchange control
provisions, particularly section 3(1), section 10(1) of the Exchange
Control regulations
1961, made under the Currency and Exchange Act 9
of 1933.
[4]
The applicant’s case is founded on the affidavits of Captain
Daniel Motshoeneng,
Warrant Office Charles Molefi and Nkosiphendule
Mradla, a senior financial investigator attached to the assets
forfeiture unit,
Bloemfontein. The two policemen were on roadblock
duties on 26 November 2021 at a vehicle checkpoint on the
Kroonstad-Vredefort
road when they noticed a VW Polo stopping 500m
from the roadblock. They approached it, introduced themselves, asked
the two male
occupants to alight, searched the vehicle with their
consent and found a green carrier bag containing a Sasol Delight
plastic containing
sixteen (16) bundles of R 100.00 notes and a brown
bag behind the front passenger seat which also contained bundles of R
100.00
notes. On enquiry from Captain Motshoeneng as to the origin of
the money, the driver of the vehicle, the first respondent, said
that
they must talk. On being asked the reason for the talks, the
respondents said that they got the property from the illegal
sale of
gold in Gauteng and that they earned a living by selling gold.
[5]
The respondents answered in the negative when they were asked whether
they had a licence
to sell gold. They said that the total cash in the
motor vehicle was R 1 500 000.00 and offered the policemen
the amount
of R 500 000.00 provided they set them free. Both
respondents were placed under arrest for money laundering and
bribery. Their
rights were read to them and the property was seized.
[6]
In opposition, the first respondent stated that he was a major
shareholder and a director
of Nyaboko Trading (Pty) Ltd, a company
duly incorporated in terms of the Companies Act of Zimbabwe with its
main place of business
situated at Stand 17094, Damofalls Park,
Zimbabwe. Although a citizen of Zimbabwe, he was resident with his
family at Virginia,
Free State, where he owned immovable property.
[7]
On 6 November 2021, he, as a representative of Nyaboko Trading (Pty)
Ltd (“Nyaboko”),
entered into a memorandum of
understanding with Atcofield (Pty) Ltd, a registered company in terms
of the Company laws of the Republic
of South Africa with its main
place of business situated at 32 Van Buuren Road, Bedfordview,
Gauteng, to promote a co-operative
and mutually respectful
relationship concerning transport and related services of diamond
mining projects in the midlands of Zimbabwe.
The purpose of the
memorandum of understanding was to establish the terms and conditions
under which the parties would function,
whereby Atcofield would
invest a sum of R 1 500 000.00 as operational capital in
Nyaboko. Nyaboko’s responsibilities
were to receive the
capital, use it to run the business and acquire trucks and
trailers.
[3]
[8]
On the morning of 26 November 2021, he travelled to Parys, Free
State, in order to
fetch the R 1 500 000.00 due to the
company as referred to in the memorandum of understanding. It was
arranged between
a certain Mr Oelofse, a director of Atcofield, and
himself that a representative of Atcofield would meet him in Parys
where the
monies would be handed to him. He received the money from a
certain Mr David Jacobus Nagel, a representative of Atcofield who
resided
at Plot 87, Lindley district, Lanseria, Gauteng.
[9]
On his way back to Welkom, he gave a lift to the second respondent
who was also on
his way to Welkom. They were friends and resided in
the same area of Welkom. He drove and stopped the vehicle next to the
road
to urinate when they were approached by police officers who
immediately searched the vehicle without their permission. When the
police found the money, which was not hidden, it was as if they had
“
won the jackpot
”. They immediately accused them
of bribery and never gave them an opportunity to explain their lawful
possession of the money.
They were arrested and charged with
corruption in the amount of R 500 000.00. The money was not
sealed in their presence.
He was surprised to learn that the money
seized was only R1 399 000.00 and not R1 500 000.00.
The only explanation
is that the missing money was taken by the
police officers.
[10]
Mr Johan Oelofse filed a confirmatory affidavit in
which he stated that he was a businessman and the director
of
Atcofield which was involved in the mining industry in Zimbabwe and
had entered into business dealings with Nyaboko. He represented
Atcofield when it entered into a memorandum of understanding on 6
November 2021. He knew the first respondent for the past five
years
as Nyaboko transported building material for his company to a mine in
Gweru, Zimbabwe. He confirmed the contents of the first
respondent’s
opposing affidavit and that Mr Nagel met the first respondent at
Parys on the morning of 26 November 2021 to
hand over the amount of R
1 500 000.00 as stated in the memorandum of understanding.
It was a term of the agreement in
terms of the memorandum of
understanding that the first respondent would utilise that amount for
the acquisition of trucks/and
or trailers to render a service to his
company.
[11]
A written acknowledgement of receipt dated 26 November 2021 and
styled re: PAYOUT NYABOKO TRADING,
T MUYAMBO, signed by JJ Oelofse as
director of Atcofield and the first respondent as a director of
Nyaboko Trading and the receiver,
was annexed to the papers as
annexure “TM7”. It reads as follows:
“
Johan
Oelofse hereby certifies that an amount of R 1 500 000.00
(One million five hundred thousand rands) is hereby handed
over to
Tafadwa Muyambo, representative of Nyaboko Trading (Pty) Ltd as per
the signed MOU dated 6 November 2021.”
[12]
The applicant contended that there was no need for the first
respondent and a representative
of Atcofield to meet in Parys to
exchange such a huge amount of money in cash except to hide the
illicit nature of the property,
especially in a period when
electronic banking is the order of the day. No legitimate business
executive would travel in the darkness
of the early hours of the
morning to meet in a neutral venue in the middle of nowhere, without
adequate protection and risk their
lawfully acquired income.
[13]
It was submitted that the first respondent, Oelofse, and David Nagel
had the intention to contravene
the foreign exchange control
regulations without the consent of the National Treasury and received
payment for goods outside the
Republic of South Africa without the
necessary exemption from the National Treasury. Furthermore, the
respondents panicked when
they noticed the police vehicle checkpoint
on the Vredefort-Kroonstad road and brought their vehicle to a
standstill, which made
members of the police services suspicious and
approached the vehicle.
[14]
The respondents oppose the application on the basis that there is a
genuine and bona fide dispute
of fact due to the following main
reasons:
1.
On the
discovery of the cash in the motor vehicle the police never indicated
that they had a suspicion that the monies were stolen.
The
respondents were never warned of their constitutional rights before
they allegedly divulged that the money was derived from
illegal gold
transactions. If the version of the police officers is correct, the
respondents should have been warned of their constitutional
rights
before they were questioned in detail.
2.
The
respondents produced supporting documentation to corroborate that the
money was lawfully received in terms of a valid memorandum
of
understanding from Atcofield (Pty) Ltd. The police officers only
booked the amount of R 1 399 900.00 instead of R
1 500 000.00.
3.
The charge
sheet shows that the respondents are only charged under the
Prevention and Combating of Crime Activities Act 12 of 2004
and no
other charges alluded to by the applicant.
4.
It is not
illegal to be in possession of a large amount of cash and it was
therefore unnecessary for the respondents to have offered
monies to
the police for their release.
[15]
A preservation order is granted in terms of section 38(2) of the act
if there are reasonable
grounds to believe that the property
concerned is an instrumentality of an offence or is the proceeds of
unlawful activities. In
National
Director of Public Prosecutions vs Mohammed & Others
[4]
it was stated that:
“
[17]
Section 38 forms part of a complex, two-stage procedure whereby
property which is the instrumentality of a criminal offence
or the
proceeds of unlawful activities is forfeited. That procedure is set
out in great detail in ss 37 to 62 of the Act, which
form chap 6 of
the Act. Chapter 6 provides for forfeiture in circumstances where it
is established, on a balance of probabilities,
that property has
been used to commit an offence, or constitutes the proceeds of
unlawful activities, even where no criminal proceedings
in respect of
the relevant crimes have been instituted. In this respect, chap 6
needs to be understood in contradistinction to
chap 5 of the Act.
Chapter 6 is therefore focused, not on wrongdoers, but on property
that has been used to commit an offence or
which constitutes the
proceeds of crime. The guilt or wrongdoing of the owners or
possessors of property is, therefore, not primarily
relevant to the
proceedings.”
[16]
In light of the above, the present case resorts under chapter 6 of
the Act in that the applicant relies on the evidence of
the police
that the money constitutes both the proceeds of crime and has been
used to commit an offence. The guilt or wrongdoing
of the owners or
the possessors of the property is not relevant to the proceedings.
The applicant has to establish, on a balance
of probabilities, that
the property has been used to commit an offence or constitutes the
proceeds of unlawful activities. The
respondent submitted that its
version raised a real and genuine dispute of fact which could not be
rejected merely on the papers.
[5]
[17]
I
n
Wightman
t/a J W Construction v Headfour (Pty) Ltd and Another
[6]
it
was held that:
“
A
real, genuine and bona fide dispute of fact can exist only where the
court is satisfied that the party who purports to raise the
dispute
has in his affidavit seriously and unambiguously addressed the fact
said to be disputed. There will of course be instances
where a bare
denial meets the requirement because there is no other way open to
the disputing party and nothing more can therefore
be expected of
him. But even that may not be sufficient if the fact averred lies
purely within the knowledge of the averring party
and no basis is
laid for disputing the veracity or accuracy of the averment. When the
facts averred are such that the disputing
party must necessarily
possess knowledge of them and be able to provide an answer (or
countervailing evidence) if they be not true
or accurate but, instead
of doing so, rests his case on a bare or ambiguous denial the court
will generally have difficulty in
finding that the test is satisfied.
I say ‘generally’ because factual averments seldom stand
apart from a broader matrix
of circumstances all of which needs to be
borne in mind when arriving at a decision. A litigant may not
necessarily recognise or
understand the nuances of a bare or general
denial as against a real attempt to grapple with all relevant factual
allegations made
by the other party. But when he signs the answering
affidavit, he commits himself to its contents, inadequate as they may
be, and
will only in exceptional circumstances be permitted to
disavow them. There is thus a serious duty imposed upon a legal
adviser
who settles an answering affidavit to ascertain and engage
with facts which his client disputes and to reflect such disputes
fully
and accurately in the answering affidavit. If that does not
happen it should come as no surprise that the court takes a robust
view of the matter.”
[18]
The essence of the first respondent’s version is that he was in
lawful possession of the money which he received from
Atcofield on
behalf of his company which was doing business in Zimbabwe. The
circumstances surrounding the route that the money
travelled are
quite peculiar. The transaction is between two corporates or
companies and the amount involved is not trivial. According
to the
papers, both companies are doing business relating to mining outside
of South Africa even though Atcofield has its main
offices in the
country. The purpose of the property, according to the memorandum of
understanding, was to serve as operational
capital in Nyaboko and an
investment for Atcofield. The former would use the property for the
acquisition of trucks and trailers.
[19]
The question that arises is whether the transfer of the money took
place in the ordinary course of business as suggested by
the
respondent. In my view, it is not. The respondent received the money
hundreds of kilometres away from Zimbabwe where the two
companies do
business. The rendezvous is at Parys in the Free State far away from
Gauteng where Messrs Oelofse and Nagel reside
in the very early hours
of the morning of 26 November 2022. Instead of the money travelling
north to Zimbabwe, it was southbound
in the Free State as the
respondents were arrested near Kroonstad. Companies have bank
accounts and monies are ordinarily transferred
amongst each other
electronically for,
inter alia,
record keeping purposes.
[20]
In an endeavour to prove the legitimacy of the transaction, a typed
acknowledgment of receipt
dated 26 November 2021 was annexed to the
papers. The wording of the document gives the impression that the
director of Atcofield,
Mr Oelofse, was present at the alleged
handover of the money at Parys; not to mention that it is unclear
when was the document
typed and signed by him. In his affidavit, he
prays for an order that the money is returned to Nyaboko.
[21]
In the respondent’s written heads of argument, it was
emphasised that the police officers
never indicated that “
as
a result of this large stack of money that was discovered that they
had any suspicion that the monies were stolen and/or that
the
respondents were warned of their Constitutional rights before they
divulged the damning facts of the monies being derived from
illegal
gold transactions. It is submitted that if the version of the police
is correct the respondents would have been warned
of their
constitutional rights before the respondents were questioned in
detail.”
There is no record and the papers do not say that
the respondents were questioned in detail. The police version is that
on finding
the money and enquiring about its origin, the respondents
said they sold gold in Gauteng and earned a living selling it. As
they
could not produce a licence for selling gold, they were arrested
after offering the police a bribe.
[22]
If the respondents were in lawful possession of
the money which was received from Mr Nagel as alleged, surely
they
could have produced and shown the police the acknowledgment of
receipt (annexure TM 7) received from him by the first respondent.
I
am unable to accept the version of the respondents and find it to be
palpably implausible and so far-fetched that it deserves
to be
rejected merely on the papers. I, therefore, find that a dispute of
fact as raised by the respondents does not exist. I also
find that
the amount of R1 399 000.00 was the proceeds of the offence
of the illicit selling of gold, R500 000.00
of which was used in
an attempt to bribe the police.
[23]
Consequently, I make the following order:
1.
An order is granted in terms of the provisions of section 50(1)(b) of
the Prevention
of Organised Crime Act 121 of 1998 (the POCA),
declaring forfeit to the state R1 399 000.00 seized on 26 November
2021 and held
under Kroonstad CAS 398/11/2021 (the property) which is
presently subject to a preservation of property order granted by this
court
under the above case number on 2 June 2022.
2.
In terms of section 50(6) of POCA, paragraph 5 below shall take
effect 20 days
after publication of a notice thereof in the
Government Gazette unless an Appeal is instituted before this time in
which case this
order will take effect on the finalisation of the
appeal.
3.
The applicant as per Selina Letuka (Letuka), is hereby directed to
take control
of the property for purposes of this order.
4.
On the date on which this order takes effect, to wit 20 days after
publication
in the Government Gazette, Letuka shall deposit the
property into the Criminal Asset Recovery Account established under
section
63 of POCA, account number 80303056 held at the South African
Reserve Bank, Vermeulen Street, Pretoria.
5.
The applicant is further directed to publish a notice of this order
in the Government
Gazette as soon as possible.
MHLAMBI,
J
On
behalf of the applicant:
Adv. Dykman
Instructed
by:
The State Attorney
11
th
Floor
Fedsure
Building
Charlotte
Maxeke Street
Bloemfontein
On
behalf of the respondent:
Adv. M van Wyngaard
Instructed
by:
Kruger Venter Inc
66A
Kellner Street
Westdene
BLOEMFONTEIN
[1]
Section
48.
[2]
Section
50.
[3]
Memorandum of Understanding, clauses 1 and 2.
[4]
2002 (4) SA 843 (CC).
[5]
Respondent’s Heads of Argument, para 4.
[6]
[2008] ZASCA 6
;
2008
(3) SA 371
(SCA), para 13.