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2022
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[2022] ZANCHC 6
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Yanfang v National Director of Public Prosecutions (2746/2017) [2022] ZANCHC 6 (4 February 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE DIVISION, KIMBERLEY)
Case
No: 2746/2017
Reportable:
YES/NO
Circulate
to Judges: YES/NO
Circulate
to Magistrates: YES/NO
Circulate
to Regional Magistrates: YES/NO
In
the matter between:
YANFANG
QUI
Appellant
and
THE
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
Respondent
Coram:
Lever J, Nxumalo J & Nobanda AJ
JUDGMENT
LEVER
J
1.
This appeal comes before the full Court of
this division by way of leave granted to the appellant by the Supreme
Court of Appeal
(SCA) on the 23 September 2020. The appeal is against
the judgment and order of Mamosebo J handed down on 12 July 2019 in
this
matter. In terms of the said judgment, Mamosebo J made an Order
declaring the relevant property forfeited to the State. The relevant
portion of such Order reads as follows:
“
[1]
That in terms of s50 of the Prevention of Organised Crime Act 121 of
1998 (POCA) the VW Polo with registration
numbers and letters CL 16
YR GP, chassis number WVWZZZ6RZDY137775 and engine number CTH033333
currently in the custody of the police
at the Colesburg Police
Station and the cash amount of R2 448 240.00 booked into the
Colesburg SAP 13 and deposited in the South
African Police Services
(SAPS) ABSA bank designated account with reference number 686018 is
declared forfeit to the State with
immediate effect.
…
(the
omitted portions of the Order deal with procedural aspects of a
forfeiture order which are not relevant to the current appeal)
…
[6]
The respondents are ordered to pay the costs of the suit the one
paying the other to be absolved.”
2.
The underlying facts that eventually led to
the above forfeiture order are to a large degree, not really in
dispute. Accordingly,
they will not be dealt with in any great
detail. To the extent that it is necessary to give context to this
judgment an outline
of such facts will be set out in this judgment.
3.
In the early hours of the morning on 21
September 2017 Jermaine Johnson (Johnson Jnr) and his cousin, one of
whom was driving the
relevant vehicle at that time, were stopped just
outside Colesberg by the South African Police Services (SAPS) at a
roadblock.
The vehicle was searched. A locked briefcase, which was
ultimately found to contain an amount of R2,430,000.00 (two million
four
hundred and thirty thousand Rand), was found in the said
vehicle. Also, a plastic bag containing R18,240.00 (eighteen thousand
two hundred and forty Rand) was found in the vehicle.
4.
Johnson Jnr was to transport the briefcase
and the funds contained therein from Pretoria to Cape Town and
deliver the locked briefcase
containing the cash to a specified
person. The R18,240.00 mentioned above was part of R20,000.00 (twenty
thousand Rand) where R5,000.00
(five thousand Rand) was intended for
fuel and other expenses and the R15,000.00 (fifteen thousand Rand)
was intended to pay Johnson
Jnr for his troubles.
5.
Johnson Jnr and his cousin were arrested
and charged with money laundering. The criminal matter was reportedly
struck off the roll.
The charges against the two were withdrawn and
to date hereof have not been reinstated. To date hereof, no one else
has faced any
criminal charges related to the relevant cash and VW
Polo.
6.
In papers filed in both opposing the
preservation order as well as the forfeiture order proceedings, the
appellant stated that she
was approached by two individuals, Yehong
Wu and Yexing Wu, collectively referred to as the Chinese nationals
in the papers, to
assist them in sourcing oysters and exporting them
to China.
7.
The appellant had contact with a private
company referred to as Salmar in the papers that formed the record in
this appeal. Salmar
was represented by Tsz Cheung who was also
referred to as Gabriel in the papers. The appellant contacted the
said Tsz Cheung and
for the specified tonnage of oysters a required
price of R2,430,000.00 (two million four hundred and thirty thousand
Rand) was
agreed.
8.
The Chinese nationals enquired if they
could pay this amount in United States of America Dollars (US
Dollars). The position of the
company Salmar was that only South
African Rands paid to them in advance and in cash would be
acceptable. These terms were agreed,
and the Chinese nationals left
the cash with the appellant so that she could finalise the
transaction on their behalf.
9.
The Chinese nationals brought a large sum
of money in the form of US Dollars into the country and after staying
at and gambling
in various casinos in the country where they had
allegedly won large sums of money. This on their version is the
source of the
funds that ultimately found its way into the relevant
locked briefcase. On the appellant’s version there was nothing
illegal
or unlawful in relation to the way the funds came to be the
property of the Chinese nationals. These contentions and
circumstances
set out above were verified by way of affidavits from
the Chinese nationals and Tsz Cheung. By virtue of the Order that it
made
in the matter, clearly the court
a
quo
did not accept this version.
10.
There are three questions to be considered
in this appeal:
10.1.
Firstly, does appellant have a right to
oppose the application for forfeiture or stated differently, a right
and interest to prosecute
this appeal in respect of the said sum of
money in particular. It is clear that as the owner of the VW Polo she
has a direct interest
in the said vehicle;
10.2.
Secondly,
interpretation of s50(1)(a) of POCA
[1]
and its application to the facts of this matter, i.e. whether the
motor vehicle concerned was an instrumentality of an offence;
and
10.3.
Finally, interpretation of s50(1)(b) of
POCA and its application to the facts of this matter, i.e. whether
the sum of money concerned
was the proceeds or derived from unlawful
activity.
11.
Turning to the first question, it was never
in dispute that the vehicle concerned was registered in appellant’s
name. In regard
to the relevant sum of money, the appellant deposed
in her opposing affidavits that the Chinese nationals entrusted the
money to
her. That in accordance with their business practice and
custom she would be obliged to reimburse the said Chinese nationals
if
the money was lost whilst in her care.
12.
In debating this issue with Ms Van Dyk who
appeared for the respondent in this matter, she correctly conceded
that this would give
the appellant an interest in the relevant sum of
money sufficient to prosecute this appeal. This effectively disposes
of the first
question set out above.
13.
Turning to the second and third questions
set out above. Section 50(1)(a) of POCA deals with property that is
an instrumentality
of an offence referred to in Schedule 1 of the
said Act and section 50(1)(b) of POCA deals with property that
constitute the proceeds
of unlawful activity. Both the court
a
quo
and the respondent in arguing this
appeal approached the issue of dealing with the question of whether
the relevant vehicle was
an instrumentality of an offence first. This
is how it appears chronologically in the POCA. However, on the facts
of the present
case, the question of the status of the said vehicle
as an instrumentality in committing an offence depends upon the
question of
whether the relevant sum of money is tainted by
criminality.
14.
It therefore makes sense, on the facts of
the present matter, to first determine whether the respondent has
established on a balance
of probabilities that the money concerned is
the proceeds of any unlawful activity.
15.
It is important to note that forfeiture
proceedings under the provisions of s50 of POCA are civil proceedings
as provided for in
s37 of POCA. Specifically, s37(2) of POCA provides
that the rules of evidence applicable in civil proceedings apply to
such forfeiture
applications.
16.
The
respondent relies on the following grounds, as set out in paragraph 7
of its founding affidavit in the forfeiture application
[2]
to establish that the relevant sum of money is the proceeds of
unlawful activities and that the relevant vehicle was an
instrumentality
of an offence:
“
7.
For reasons that will be dealt with below, it is submitted that the
property (sic) are instrumentalities
of an offence or the proceeds of
unlawful activities referred to in schedule 1 i.e. items 26 (any
offence relating to exchange
control), 32 (any offence referred to in
chapter 3 or 4 of POCA), 33 (any offence the punishment wherefore may
be a period of imprisonment
exceeding one year without the option of
a fine i.e.
section 64
of the
Financial Intelligence Centre Act 38 of
2001
) and/or 34 (any conspiracy, incitement or attempt to commit any
offence referred to in Schedule 1 of POCA)(the offences).”
17.
It is evident from the passage quoted above
that at least to some extent, the respondent, has mixed and matched
the concepts of
what is an instrumentality of an offence and what are
the proceeds of unlawful activities. In the context of
s50
of POCA,
Schedule 1 of POCA relates only to property that is an
instrumentality of an offence. On the facts of this case, this
would
only relate to the relevant vehicle.
18.
However, also in the context of the facts
of the present case, the grounds upon which the respondent alleges
that the vehicle is
an instrumentality of a crime also informs us of
the basis upon which the respondent relies for contending that the
sum of money
concerned is derived from or is the proceeds of unlawful
activity.
19.
In summary, the respondent in the
forfeiture application, relied on the following contentions in
asserting that the sum concerned
derived from or was the proceeds of
unlawful activity:
19.1.
It derived from any offence relating to
exchange control;
19.2.
On the facts of this case chapter 3 of POCA
and specifically the offence of money laundering as defined in
s4
of
POCA is relevant. Chapter 4 of POCA would on the facts of this case
not be relevant;
19.3.
There
was a contravention of s64 of the Financial Intelligence Centre
Act
[3]
(FIC Act) on the basis
that such offence would attract a sentence exceeding the period of
one year as set out in item 33 of Schedule
1 to POCA; and
19.4.
The contention of a conspiracy, incitement
or attempt to commit any offence contemplated in Schedule 1 of POCA
was not seriously
pursued by the respondent and need not enjoy any
further consideration in this judgment.
20.
Mr Hodes SC, who appeared for the appellant
in this matter, submitted that the basis upon which the respondent
contended in the
forfeiture application that the property concerned
was an instrumentality of an offence or the proceeds of unlawful
activity does
not stand up to scrutiny.
21.
The court
a
quo
found that the said sum of cash was
the proceeds of a contravention of s64 of the FIC Act.
22.
Mr Hodes submitted that the court
a
quo
erred in making such a finding for
the following reasons:
22.1.
On a proper interpretation of s64 of the
FIC Act, the said section was intended to address the issue of
“smurfing”.
Smurfing involves breaking up larger sums so
that they do not exceed the reporting threshold. That the said
section applies to
banks, being accountable institutions or other
accountable institutions or reporting institutions as defined in
schedules 1 and
3 of the FIC Act. That the relevant cash was not
broken up into smaller parcels and paid to an accountable
institution, such as
a bank. Therefore, s64 of the FIC Act had no
application in the present case;
22.2.
The
cash was being transported to Cape Town so that it could be paid to
Salmar to procure oysters for export to China. Mr Hodes
pointed out
that the court
a
quo
correctly found that in and of itself the act of transporting a large
sum of money by road was not an offence
[4]
.
Consequently, Mr Hodes submitted that considering such finding of the
court
a
quo
,
there was no logical basis for the court
a
quo
to find that the relevant sum of cash was the proceeds of unlawful
activities;
22.3.
On
the interpretation of the phrase “proceeds of unlawful
activity” provided by the SCA in the R O COOK PROPERTIES
case
[5]
, the question arises
whether the cash accrued to the appellant as a result of a
contravention of s64 of the FIC Act. Mr Hodes submitted
that this
question must be answered in the negative. He further submitted that
the cash did not accrue to the appellant as a result
of the offence
contemplated in s64 of the FIC Act, which in any event could not be
committed without a transaction with a reporting
institution in terms
of the FIC Act;
22.4.
Therefore, Mr Hodes argued that even if the
appellant had committed the offence created by s64 of the FIC Act,
which appellant denied,
the cash could not be the proceeds of such an
offence since the cash would have been the subject of, as opposed to
being the consequence
of an offence created in terms of s64 of the
FIC Act.
23.
Ms Van Dyk for the respondent argued that
s64 of the FIC ACT had application on the facts of the present
matter, as it appears from
the version of Johnson Jnr that was given
to the police after being stopped at the roadblock and the evidence
given by his father
who is a General in the police that the Polo was
used by Johnson Jnr to transport cash on more than one occasion. That
the use
of the vehicle in this way on more than one occasion brought
the conduct of Johnson Jnr and the appellant within the ambit of s64
of the FIC Act.
24.
It is convenient to deal with the
submission of Ms Van Dyk on behalf of the respondent first. Section
64 of the FIC Act reads as
follows:
“
64
Any person who conducts, or causes to be conducted, two or more
transactions with the purpose in whole or in
part, of avoiding giving
rise to a reporting duty under this Act, is guilty of an offence.”
25.
In the context of dealing with this
submission by the respondent, it is important to remember that the
relevant roadblock took place
on the 21 September 2017. On that date
the FIC Act included a definition of the term “transaction”.
The said definition
read as follows:
“‘
transaction’
means a transaction concluded between a client and an accountable
institution in accordance with the type of
business carried on by
that institution.”
26.
Accountable institutions are as listed and
defined in Schedule 1 of the FIC Act. On the facts of the present
case no such institution
was involved in the purported transaction
relied upon by the respondent.
27.
The
said definition of “transaction” was deleted from the FIC
Act by Act 1 of 2017. Such deletion came into effect on
the 2 October
2017
[6]
.
28.
The roadblock in which Johnson Jnr and the
briefcase with the money was discovered occurred on 21 September
2017. Any unlawful activity
that the respondent wishes to rely on
must have been completed by that date.
29.
There
are two presumptions in interpreting legislation that would apply in
these circumstances. Firstly, the presumption against
retrospective
or retroactive operation of legislation. Secondly, the presumption
that the legislature concerned intended fair treatment
to be meted
out to those subject to the relevant law.
[7]
It is an important consequence of this second presumption that any
person is entitled to regulate her or his conduct in accordance
with
the law as it stood on the relevant date. On the facts of the present
matter, the relevant date is 21 September 2017 before
the definition
of “transaction” was deleted from the FIC Act. Ms Van
Dyk’s submission is not compatible with
the definition of
“transaction” which was still applicable on the relevant
date. Accordingly, we cannot find in favour
of the respondent on such
submission.
30.
The definition of “transaction”,
which we have found to have still been of application on the relevant
date supports
Mr Hodes’ first submission summarised in para
22.1 above. In the circumstances, we uphold such submission.
31.
In the present circumstances, it is not
necessary to make a finding on the submissions made by the appellant
which are summarised
in para 22.2 above, i.e. that there was no
rational basis for finding a contravention of s64 of the FIC Act
after the court
a quo
found that it was not unlawful to transport a large sum of money in a
suitcase. Accordingly, we make no finding in that regard.
32.
On
the submissions in relation to the SCA’s application and
interpretation of the phrase “proceeds of unlawful activity”
in the R O Cook case
[8]
, we
respectfully agree with and are bound by the position adopted by the
SCA and believe it is applicable to the facts of the present
appeal.
The respondent has not established a connection between the cash
concerned and any unlawful activity contemplated in s64
of the FIC
Act. Accordingly, on the facts of this appeal we find that the
respondent has not established that the relevant cash
accrued as a
result of an offence contemplated in s64 of the FIC Act.
33.
For all of these reasons we find that the
respondent has in relation to the cash sum concerned not established
that such cash sum
is derived from or is the proceeds of an offence
as contemplated in s64 of the FIC Act.
34.
Turning
to the question contemplated by item 26 of Schedule 1 of POCA, being
that the cash is derived from or is the proceeds of
any offence
relating to exchange control. The court
a
quo
found that the then respondents (one of whom is the present
appellant) stood to be charged of any offence relating to the
Exchange
Control Act based on their own version as was placed before
the court
a
quo
[9]
.
35.
Mr Hodes, on behalf of the appellant,
submitted that the court
a quo
,
erred in making such a finding for the following reasons:
35.1.
Firstly, there is no legislation known as
the “Exchange Control Act”;
35.2.
Secondly, even if such legislation existed,
no specific provision of that legislation was relied upon by the NDPP
or the court
a quo
to be able to find that there was a contravention of the relevant
legislation;
35.3.
Thirdly, the cash was in South African
Rands and not in US Dollars which would have been subject to any
declaration in terms of
the “Exchange Control Act”;
35.4.
Fourthly, failure to declare foreign
currency could not have resulted in any amount in cash being derived
from such a failure to
declare, because when the conduct of failing
to declare took place the cash would have been in the possession of
the person who
would have been obliged to declare. In other words,
the cash would have been the subject of the failure to declare and
not the
consequence of the failure to declare; and
35.5.
Finally, it is not a criminal offence to
win and be paid out in South African Rands in cash by a casino.
36.
There is indeed no single piece of
legislation known as the “Exchange Control Act”. This
assertion by Mr Hodes ties
into the second argument on this point,
being that the NDPP and the court
a quo
did not rely on any specific provision of the exchange control
legislation.
37.
In
the R O Cook Properties case
[10]
and in the context of a fixed property being utilised as an
instrumentality of an offence, the SCA stated:
“
We
do not think that the NDPP can claim forfeiture of property by an
oblique invocation of statutory infractions, still less by
mistaken
allusions to them. If our approach seems technical, we think this is
rightly so. Assets forfeiture is a serious matter.
Where an owner
stands to lose property because the asset was ‘concerned in the
commission of an offence’, the papers
must set out clearly the
case he or she is called to answer.”
[11]
38.
The appellant dealt with the matter on the
basis that this same principle will apply when the “proceeds of
unlawful activity”
are in issue. The respondent did not raise
any factual or legal basis to counter this approach. In our view it
is axiomatic that
on whatever basis the appellant stood to lose an
asset under the provisions of POCA she was entitled to know with the
requisite
precision what case she had to meet.
39.
Although the respondent, in the founding
affidavit specifically relied upon item 26 of Schedule 1 of POCA,
which relates to any
offences in relation to exchange control, no
factual basis is set out at all in the founding affidavit for relying
on or invoking
item 26 of Schedule 1 of POCA.
40.
To place this aspect in its proper context
it is important to note that the founding affidavit was deposed to by
the respondent’s
representative on 6 March 2018. At that stage
the preservation application had not yet been disposed of. The
appellant had filed
her answering affidavit in the preservation
application on 25 January 2018. Therefore, at the time that the
respondent deposed
to the founding affidavit in the forfeiture
application it knew of the Chinese nationals bringing US Dollars into
the country.
Yet in such founding affidavit this is not dealt with at
all.
41.
What
happens next is that the respondent then files a Notice in terms of
Rule 35(12) of the Uniform Rules of Court (the Rule/s)
seeking access
to certain documents. The said request in terms of Rule 35(12) can in
no sense be seen as a legitimate and valid
request under and in terms
of Rule 35(12)
[12]
. Rule
35(12) allows for access to documents mentioned generally or
specifically in an opponent’s pleadings or affidavits.
It does
not need a detailed or descriptive reference to the relevant document
but the document itself must be referred to. The
rule cannot be
invoked if it is only through a process of reasoning or inference
drawing that a conclusion may be reached that
the documents concerned
do or may exist.
[13]
42.
However, the appellant did not object to
the Rule 35(12) Notice but responded thereto. In these circumstances
despite the illegitimate
request under the provisions of Rule 35(12)
the request and the response thereto form part of the record in these
proceedings.
The preservation proceedings were incorporated by
reference in the founding affidavit of the forfeiture application.
43.
The material issue in the present appeal is
that despite the appellant raising the issue of the Chinese nationals
bringing US Dollars
into the country and despite the response to the
Rule 35(12) Notice and the subsequent affidavits, the appellant still
does not
know which specific legislation was allegedly transgressed
nor does the appellant know which specific provision of such
legislation
was allegedly transgressed. In these circumstances, it
cannot be said that appellant has been fairly and properly appraised
of
the case she had to meet, nor has she been given a fair
opportunity to meet such case. On this ground alone the appellant
should
succeed on this aspect of the appeal.
44.
Respondent has not established an
infringement based on item 26 of Schedule 1 of POCA that would taint
the relevant cash concerned
as being the ‘proceeds of unlawful
activity’ in relation to exchange control violations. In these
circumstances, it
is not necessary to deal with the other arguments
raised by Mr Hodes.
45.
The next aspect of this appeal to consider
is whether the respondent has established on a balance of
probabilities that either the
appellant, Johnson Jnr or any other
persons were engaged in money laundering in respect of the relevant
cash concerned. This is
an offence as provided for in s4 of POCA.
46.
For the purposes of POCA, money laundering
is defined in section 4 thereof. The said definition
inter
alia
requires or presumes: prior
unlawful activities from which the funds concerned are derived;
direct knowledge of, or circumstances
where the persons involved
ought to have known of such ‘unlawful activities’;
conduct which amounts to an agreement,
arrangement or transaction
whether legally enforceable or not, which has or is likely to have
the effect – of concealing
or disguising the nature, source,
location, disposition or movement of the property or the ownership
thereof or concealing the
interest any person may have in such
property, or enables any person who has committed or commits an
offence to either avoid prosecution
or enables such person to remove
or diminish any property acquired directly or indirectly as a result
of the commission of an offence,
any person engaging in such
activities shall himself be guilty of an offence.
47.
In respect of money laundering the
respondent would have to prove the above elements that are applicable
on the facts of the present
case, on a balance of probabilities. The
question on appeal is whether the respondent had indeed established
the required elements
of the offence of money laundering on a balance
of probabilities.
48.
Mr Hodes submitted that the court
a
quo
erred in finding that the cash is
the proceed of money laundering. In support of such submission, he
raised the following arguments:
48.1.
Firstly, s4 of POCA requires that it must
be shown that the cash concerned is the proceeds of unlawful
activity;
48.2.
Secondly, it must be shown that the person
dealing with the cash concerned knew or ought to have known that the
cash was the proceeds
of unlawful activities; and
48.3.
Finally, that on the basis that the
respondent had not shown that the money concerned derived from a
contravention of s64 of the
FIC Act or that such money was derived
from a violation of the “Exchange Control Act”.
Accordingly, it was submitted
that there can be no violation of s4 of
POCA without the predicate offence from which the cash whose origin
or source is sought
to be concealed has been derived. That this had
not been established on the papers.
49.
Ms Van Dyk for the DPP sought to establish
that money laundering had taken place on the basis of,
inter
alia
the following submissions:
49.1.
The fact that the money was concealed in a
locked briefcase;
49.2.
Allegations that the vehicle concerned had
been used on more than one occasion to transport money in similar
circumstances. That
the statement to the SAPS by Johnson Jnr at the
time of the roadblock and the statement by the General (Johnson Snr)
to the SAPS
supports this submission;
49.3.
That both Johnson Jnr and the appellant
knew that there was a large amount of money in the suitcase and that
it was transported
in the vehicle concerned for an illegal purpose;
49.4.
The fact that the Chinese nationals and the
appellant in the relevant answering affidavits set out a list of
casinos that the Chinese
Nationals stayed at, gambled and apparently
won sufficient funds to finance the oyster export transaction to
China. Then Ms Van
Dyk points out that in response to the Rule 35(12)
request another list of casinos was provided that does not properly
correspond
to the first list; and
49.5.
Submitted that on the basis of the
contentions summarised in paragraphs 49.2 and 49.4 above that the
appellant’s version was
fabricated and false.
50.
Ms
Van Dyk referred this court to the case of S v De Vries
[14]
in support of her contentions. However, the facts of the De Vries
case clearly establish that as a fact the persons concerned in
that
case knew of the underlying criminal activity. It is however our
view, that this is not the case in the appeal before us.
The facts in
the appeal before us do not establish the underlying unlawful
activity (or predicate offence).
51.
In and of itself the fact that the money
concerned was in a locked briefcase does not take the matter any
further. Even if one looks
at this undisputed fact in conjunction
with all of the other evidence put before the court
a
quo
, as reflected in the record on
appeal, it does not establish the underlying unlawful activity
necessary to establish that money
laundering as defined in s4 of POCA
took place. This is so even when one reminds oneself that the lesser
burden of proof being
on a balance of probabilities is applicable in
this case.
52.
Certainly, the appellant knew that there
was a large sum of money being transported in the locked suitcase.
Johnson Jnr’s
version was that he wasn’t aware of the
cash and that his job was to transport the locked case to Cape Town.
There is no
evidence to show that both the appellant and Johnson Jnr
knew that the cash transported in this manner, was transported for an
illegal purpose. At best what is contained in the respondent’s
papers on this aspect amounts to no more than suspicion and
supposition.
53.
Mr
Hodes submitted that the rule in Plascon-Evans was applicable in this
matter. On reading the restatement of the rule in the Plascon-Evans
case
[15]
by Corbett JA (as he
then was), I think Mr Hodes is correct. A forfeiture application
under POCA is clearly an application brought
on Notice of Motion for
final relief. Where disputes of fact arise in such application they
fall to be determined in terms of the
said rule.
54.
The
full Bench of what was then the Witwatersrand Local Division in the
matter of NDPP v ZHONG
[16]
stated that the rule in Plascon-Evans should apply in considering a
forfeiture order. This is also the position of the High Court
of
Namibia Main Division, Windhoek
[17]
.
The Namibian POCA legislation appears to be similar to ours and in
particular the provisions of their Act relating to money laundering
are almost identical to the provisions of our legislation.
55.
For the reasons set out in paragraph 53
above, it is our view that the rule in Plascon-Evans does apply in
the case of an application
on Notice of Motion for a forfeiture order
under the provisions of POCA.
56.
The rule in Plascon-Evans provides:
“
It
is correct that, where proceedings on notice of motion disputes of
fact have arisen on the affidavits, a final order, whether
it be an
interdict or some other form of relief, may be granted if those facts
averred in the applicant’s affidavits which
have been admitted
by the respondent, together with the facts alleged by the respondent,
justify such an order.”
[18]
57.
There
are two provisos to the Plascon-Evans Rule, which I paraphrase as:
Firstly, where the denial of the respondent may be such
as not to
raise a real, genuine or bona fide dispute of fact. Plus, the
respondent has not sought to have the dispute referred
to oral
evidence in terms of the Rules and the court is satisfied with the
inherent credibility of the applicant’s factual
averment.
[19]
Secondly, where the allegations or denials of the respondent are so
far-fetched that the court may reject them simply on the papers.
[20]
58.
Although Ms Van Dyk did not expressly argue
that the appellant and Johnson Jnr’s denial that the car was
used on several occasions
for the transport of money was so
far-fetched and untenable that this court would be justified on
dismissing such denial on the
papers alone, I accept that in raising
these issues, she intended to do so.
59.
A bare denial can in certain circumstances
be a real and
bona fide
dispute of fact. I believe that in this case the denial of Johnson
Jnr and the appellant does constitute a real and bona fide dispute
of
fact. In the circumstances, and having regard to where the onus lies,
what more could they do than simply deny the contentions
of the
Investigating Officer and Johnson Snr (the General) if they honestly
believe their version to be correct. The respondent
on the other hand
could have applied to lead the oral evidence of the Investigating
Officer and the General. They would have given
their evidence in open
court. They would have been cross-examined by the appellant. The
Judge in the court
a quo
would then have been in a position to make a credibility finding. In
the circumstances we have to conclude that there is a real
and
bona
fide
dispute on this issue.
60.
On the issue of the apparently
contradictory statements on the casinos the Chinese nationals resided
at. When one looks at the source
documents Ms Van Dyk relied on for
asserting this apparent contradiction in her Heads of Argument, this
apparent conflict is not
nearly as impressive as presented in her
Heads of Argument.
61.
The relevant passage in the confirmatory
affidavit of Mr Yehong Wu reads as follows:
“
8.
During our stay in South Africa, Wu and I
visited
and stayed
at numerous casinos in South Africa to gamble,
including
Good (sic) Reef City Casino, Sun City Casino, Emerald Casino and
Emperors Palace Casino where we often won substantial sums of
cash
exceeding R2 500 000.00”
[21]
(our emphasis)
62.
Then in its request to ostensibly have
access to certain documents relevant to the appellants version, under
Rule 35(12) the respondent
asks for:
“
15.
Proof of the
accommodation
at the various casinos as referred to by Wu in paragraph 8 of his
affidavit.”
[22]
63.
To which the appellant’s attorney
responded:
“
16
AD PARAGRAPH 15
The Chinese Nationals
stayed at the following hotels during their stay in South Africa:
16.1 Sun City;
16.2 Grand West
Casino;
16.3 Sibaya Casino.
Proof
of accommodation could not be secured at the time of finalising this
response as the Chinese Nationals are in China at such
time.”
[23]
64.
Presumably, the appellant’s attorney
provided such information on instructions from the appellant and/or
Wu. It seems to us
that in the context of a request for access to
documents, that the appellant’s attorney focused on the
gambling institutions
where the Wu’s were accommodated as that
would be the most likely places where documentation would be issued.
Further, that
is precisely what the respondent asked for in its Rule
35(12) request. If one merely visited a casino, and even if one
gambled
in such casino there would not necessarily have been any
paperwork or documentation to substantiate the fact that a visit had
taken
place.
65.
If one looks at the first passage
highlighted by us in Wu’s affidavit as quoted above, it seems
that Wu intended to distinguish
between casinos visited and those
where they stayed over. At the very least this issue is ambiguous and
capable of different meanings.
Further, by indicating that they
visited and stayed at numerous casinos
including
those set out in paragraph 8 of his affidavit, this was not intended
to be a closed and definitive list of the casinos they visited
and
stayed at. Also, the respondent’s Rule 35(12) request was not
aimed at obtaining a definitive list of all the casinos
visited by or
where the Wu’s took up accommodation. Nor could it be having
regard to the purpose and provisions of Rule 35(12).
66.
The appellant’s case is not without
any difficulties or problems. These difficulties and problems are of
concern to us but
at the same time it must be remembered that the
appellant does not seek to merely establish an interest in the
property to be excluded
in terms of POCA. She challenges the very
basis upon which the respondent seeks the forfeiture order. The
respondent has the onus
of establishing this basis albeit only on a
balance of probabilities.
67.
A
lie, inaccuracy and in certain circumstances even an inconsistency in
the statement of a person opposing a forfeiture order does
not
necessarily and/or automatically mean that the applicant for a
forfeiture order has established a factual basis for such an
order.
This is the approach adopted by the full Court in Zhong’s
case
[24]
. We respectfully
agree with this approach.
68.
We accordingly find that the respondent had
not established a factual basis for asserting that the relevant cash
sum is the proceeds
of any unlawful activity. The predicate or
underlying offence that would be required to establish the crime of
money laundering
has not been established on a balance of
probabilities. The FIC Act and in particular s64 thereof cannot apply
in this case. The
exchange control legislation cannot be invoked on
the facts of this case. In the circumstances of this case and for the
reasons
set out above we find that the respondent has not established
that the cash sum of money concerned is the proceeds of unlawful
activity as contemplated in s50(1)(b) of POCA.
69.
It follows that if the cash money has not
been established to be the proceeds of unlawful activity and this
being the only basis
alleged for the said Polo vehicle being an
instrumentality of an offence set out in Schedule 1 of POCA, that the
respondent has
not established that the said vehicle is an
instrumentality of an offence in s50(1)(a) of POCA. In short, the
respondent has not
established the jurisdictional requirements for a
forfeiture order under s50(1) of POCA.
70.
In these circumstances the order of the
court
a quo
stands to be set aside.
71.
There is one loose end that needs to be
considered. The court
a quo
ordered that the entire cash amount of R2,448,240.00 was to be
forfeited under s50 of POCA. This amount was made up of two amounts.
The R2,430,000.00 claimed by the appellant and the R18,240.00 found
separately in a plastic bag in the vehicle. This was part of
the
amount paid to Johnson Jnr for expenses and his wages. Johnson Jnr
did not seek to establish an interest in the said sum as
contemplated
in POCA and he is not an appellant in the present appeal. However, he
did oppose the forfeiture application on the
basis that the present
respondent in this appeal had not established the jurisdictional
basis for a forfeiture order.
72.
We have found that the respondent has
indeed not established the jurisdictional basis for a forfeiture
order. In these circumstances
the forfeiture order in respect of the
R18,240.00 can also not stand and that this sum of money must also be
returned. In this
case to Johnson Jnr.
73.
Insofar as costs are concerned both parties
approached the matter on the basis that costs should follow the
result. In our view
there is no reason to depart from this general
rule.
In
the circumstances, the following order is made:
1)
The appeal succeeds.
2)
The order of the court
a
quo
is set aside and is replaced with
the following order:
a.
The application for forfeiture brought by
the applicant (in that application) under Notice of Motion dated the
7 March 2018 is dismissed.
b.
The applicant (in that application) is to
pay the costs of such application.
3)
The respondent (in the present appeal) is
to pay the costs of the appeal.
______________________
LG
Lever
Judge,
Northern
Cape Division, Kimberley
I
agree,
_____________________
APS
Nxumalo
Judge,
Northern
Cape Division, Kimberley
I
agree,
_____________________
LP
Nobanda
Acting
Judge,
Northern
Cape Division, Kimberley
APPEARANCES:
APPELLANT:
Adv LM HODES (SC) & Adv G NGCANGISA oio Ian Levitt Attorneys
c/o
Duncan & Rothman
RESPONDENT:
Adv L VAN DYK oio Office of The State Attorneys
Heard:
18
October 2021
Delivered:
04 February 2022
[1]
Prevention
of Organised Crime Act 121 of 1998
.
[2]
Page
299 of the record on appeal.
[3]
Act
38 of 2001.
[4]
Para
23 of the Judgment of the Court a quo in the forfeiture matter to be
found in vol.4, p 409 of the appeal record.
[5]
NDPP
v R O Cook Properties (Pty) Ltd; NDPP v 37 Gillespie Street Durban
(Pty) Ltd and another; NDPP v Seevnarayan
[2004] 2 All SA 491
SCA
particularly at para [72].
[6]
Government
Notice No. 563 in Government Gazette 40916 of 13 June 2017.
[7]
A
succinct statement of both presumptions is set out in LAWSA., 2
nd
Ed., Vol 25 (Part 1) para 341.
[8]
Above.
[9]
Para
[18] of the court a quo judgment, appeal record Vol. 4 pp 407-408.
[10]
Above.
[11]
Above
at para [44].
[12]
The
said Notice is to be found at pp 270-273 of Vol 2 of the appeal
record.
[13]
Penta
Communication Services (Pty) Ltd v King and Another
2007 (3) SA 471
(C) at 476C.
[14]
2012
(1) SACR 186
[15]
Plascon-Evans
Paints v Van Riebeeck Paints
[1984] ZASCA 51
;
1984 (3) SA 623
(AD) at 634E to 635C.
[16]
NDPP
v Zhong
[2005] ZAGPHC 47
;
2005 (2) SACR 544
at 550 a-b.
[17]
The
Prosecutor-General v Paulo (POCA 13/2015) [2021] NAHCMD 112 (17
March 2021)
[18]
Above
at 635H.
[19]
Above
at 634I to 635A.
[20]
Above
at 635C.
[21]
Appeal
record pp222 to 223.
[22]
Appeal
record p272.
[23]
Appeal
record p279.
[24]
NDPP
v Zhong, above, particularly at paras [12] to [13].