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[2015] ZAGPPHC 218
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Ntsoko v National Director of Public Prosecutions (A737/13) [2015] ZAGPPHC 218; 2016 (1) SACR 103 (GP) (23 April 2015)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
[REPUBLIC
OF SOUTH AFRICA]
CASE NUMBER:
A737/13
DATE: 23 APRIL
2015
REPORTABLE
SOLOMON SELLO
NTSOKO
..................................................................................................
APPELLANT
AND
NATIONAL DIRECTOR
OF PUBLIC
PROSECUTIONS
................................................
RESPONDENT
JUDGMENT
MAVUNDLA J,
[1]
This is an appeal, with the leave of the Court
a quo,
against the judgment and forfeiture
order delivered by Preller J in terms of section 48 of Prevention of
Organized Crime Act 121
of 1998 ("POC4") on 30 January
2013, declaring various properties of the appellant forfeited to the
State as benefits
of criminality.
[2]
The crisp issues to be determined in this appeal are: whether the
decision of the respondent to apply for the preservation and
forfeiture order in terms of chapter 6 of Act 121 of 1998 infringed
on the appellant's Constitutional rights to a fair trial and
to
property; and whether the Court
a quo
failed
to protect the applicant's aforesaid rights to property.
[3] It is common
cause that the appellant is a medical practitioner in the North West
Province. During 2009 the appellant submitted
1919 (one thousand nine
hundred and nineteen) claims to the Workman's Compensation Fund, in
respect of services he allegedly rendered
to 49 patients who suffered
from occupational injuries and or diseases and were entitled to be
compensated. An amount of R12 million
was subsequently paid into the
bank account of the appellant by Workman's Compensation Fund.
[4] It is also
common cause that immediately after payments from the Fund, the
appellant started making internet and or bank cheque
payments and
purchased immovable property Erf No 1596 Amandasig Extension, 44
Magaliesberg Country Estate, Gauteng as well as three
x 3-series BMW
and a Mini Copper which he registered in the name of his sister Ms.
Ida Ntsoko (Ms Ntsoko).
[5] It is common
cause that the respondent first obtained a preservation order in
terms of s38 of POCA on the 11 October 2010 in
respect of the
following property:
5.1Cash amount of
R1500 000 and all positive interest accrued on the said amount held
at First National Bank under investment account
number [...];
5.2 Cash amount of
R1 500 000 and all positive interest accrued on the said amount held
at First National Bank under investment
account number [...];
5.3 BMW 320IM motor
vehicle with registration number TPT138 GP;
5.4 BMW 320A motor
vehicle with registration number VSV 452 GP;
5.5 BMW 320IM motor
vehicle with registration number YJP 795GP;
5.6 Mini Cooper
motor vehicle with registration number XPV 425 GP.
[6] On the 21
October 2010 the appellant filed a rescission application in which he
requested the court to rescind and vary the
preservation order
granted against him on 11 October 2010. Tuchten J on 22 October 2010
varied the aforesaid preservation order
permitting the appellant the
use of the aforesaid vehicles.
[7] The items that
were the subject of the preservation order belonged to the appellant
who applied to this Court to set aside the
preservation order and not
to grant a forfeiture order in terms of s48 of POCA.
[8] In opposing the
forfeiture appellant chose not to fully disclose his defence on the
criminal charges, which had the effect that
he was not able to
convince the Court not to grant the forfeiture order.
[9]
The purpose of
POCA
is
chiefly designed to combat the spiraling wave of organized crime and
to provide legislative mechanism of depriving criminals
in general,
of the proceeds of unlawful activity. The mechanism for such
deprivation of the benefits of criminal activity is either
through
chapter 5, which is dependent on, arguably a protracted and arduous
process of a successful prosecution and conviction
of the offender,
when only then the proceeds of unlawful activity can be declared
forfeited to the State; or through chapter 6
which is not
conviction-based but may be invoked even when there is no
prosecution;
vide
National Director of Public Prosecutions v Mohamed
NO.
1
[10] It was
submitted on behalf of the appellant that in respect of chapter 6, it
is a requirement if an affected person wished
to oppose the
forfeiture that such person must set out facts under oath, the basis
of his defence. A person facing criminal prosecution,
such as the
appellant, has a Constitutional right not to be forced to disclose
his defence. It was further contended that in respect
of a person
suspected of criminal activities, a forfeiture order should be
obtained in terms of Chapter 5, so as not to compromise
or infringe
his right to a fair trial and forced to forego his right to silence.
[11]
It was further submitted on behalf of the appellant that the
respondent was aware that
POCA
is
draconian, invasive on the constitutionally enshrined rights of the
appellant, in respect of his right to silence and his right
to
property. The respondent was aware that
POCA
obliges
the appellant to forgo his right of silence by compelling him to
place facts before the court to persuade it to release
the property
placed under the preservation order. In exercising its discretion, so
it is contended, the respondent should have
resorted to the less
invasive option presented by chapter 5, which only permits forfeiture
upon conviction; relying on the
Gaertner
and others v Minister of Finance and others.
2
It
was further contended that Chapter 6 should be employed in the case
of the so-called innocent bystander, which the appellant
was not,
because he is yet to be prosecuted for alleged fraud. It was further
submitted that the decision to resort to Chapter
6 violated the
appellant's rights and therefore the forfeiture order granted should
be set aside for the aforesaid reasons as well,
because the court
failed to protect the appellant against such a draconian forfeiture
legislative mechanism.
[12]
The preamble of
POCA
provides,
inter alia,
as
follows: "measures to combat organized crime, money laundering
and certain criminal gang activities, to provide for the
recovery of
the proceeds of unlawful activity; for the civil forfeiture of
criminal property that has been used to commit an offence,
property
that is the proceeds of unlawful activity".
[13]
In
National
Director of Public Prosecutions v Van Staden and Others
3
dealing
with the provisions of Chapter 6 of the Act, Nugent JA remarked that:
"It
has been said, at times, that the purpose of the
Prevention of
Organized Crime Act 121 of 1998
is to combat the special evils that
are associated with organized crime, but that is not entirely
correct. That is certainly one
of its purposes, and perhaps even its
principal purpose, but as pointed out by this Court in
National
Director of Public Prosecutions v R 0 Cook Properties (Pty) Ltd;
National Director of Public Prosecutions v 37 Gillespie
Street Durban
(Pty) Ltd and Another; National Director of Public Prosecutions v
Seevnarayan
4
,
its
provisions are designed to reach far beyond organized crime and apply
also to cases of individual wrongdoing."
[14]
In order to meet the legislative objectives of
POCA,
the
respondent is provided with the mechanism in chapter 5, or 6. The
process of forfeiture, under chapter 5 would commence through
a
restraint order which quarantines such proceeds of crime from being
disposed of pending the outcome of the prosecution, if successful,
then and only then the order of forfeiture may be granted by the
Court. On the other hand, under chapter 6, forfeiture would be
preceded by a preservation order in terms of
s38
and followed by the
forfeiture order, irrespective whether there is a prosecution or not
. The State need only place before the
Court facts which on a balance
of probability show that the property sought to be forfeited as
proceeds of unlawful activity should
be declared forfeited to the
State in terms of s50 of the Act
5
.
[15]
That
POCA
is
draconian
6
and invasive, was reiterated and confirmed by Bosielo AJA (as he then
was) writing for the Court in the matter of
Mazibuko
and another v National Director of Public Prosecutions
7
,
through
the following remarks:
"[22]
It is generally acknowledged that the effects of forfeiture are
draconian and potentially invasive of the rights of people
to their
properties. There is an ever-present threat of a serious conflict
between the right to property as provided for in s 25(1)
of the
Constitution and an order for the forfeiture of property under s
50(1) of
POCA
which
can result in far-reaching consequences if not managed with care. I
agree with Nkabinde J in Prophet v National Director of
Public
Prosecutions
8
where she expressed the following caution:
'While
the purpose and object of ch 6 must be considered when a forfeiture
order is sought, one should be mindful of the fact that
unrestrained
application of ch 6 may violate constitutional rights, in particular
the protection against arbitrary deprivation
of property particularly
within the meaning of s 25(1) of the Constitution, which requires
that no law may permit arbitrary deprivation
of property. In
first
National Bank of SA Ltd t/a Wesbank v Commissioner, South African
Revenue Service and Another; First National Bank of SA Ltd
t/a
Wesbank v Minister of Finance
(FNB)
9
this Court held that arbitrary in s 25(1) means that the law allowing
for the deprivation does not provide sufficient reason for
the
deprivation or allows deprivation that is procedurally unfair. The
Court said:
"(F)or the
validity of such deprivation, there must be an appropriate
relationship between means and ends, between the sacrifice
the
individual is asked to make and the public purpose this is intended
to serve. It is one that is not limited to an enquiry into
mere
rationality, but is less strict than a full and exacting
proportionality examination.'
[16]
In the
Prophet
matter
10
,
it was also held that: "the general approach to forfeiture, once
it had been established that the property was an instrumentality
of
an offence, was to embark on a proportionality inquiry--- weighing
the severity of interference with individual rights to property
against the extent to which the property had been used in commission
of the offence." This approach, with respect, in my view,
also
holds well in instances of the innocent bystander as well as in
dealing with proceeds of crime.
[17]
In the matter of
S
v Kelly
11
it
was held that there is no rule of practice compelling the State to
call a witness. The State has an unfettered discretion of
choice as
to who to call. The same discretion, in my view, attains also in
respect of what charges to prefer against an accused.
The NDPP
exercises an administrative decision when he decides to prosecute. It
is trite that an administrative decision is reviewable
in terms of
PAJA.
On
face value, the taking of a decision to prosecute, is an
administrative decision, therefore should fall within the ambit
of
PAJA.
However,
in the matter of
Kaunda
& others v President of the Republic of South Africa
& others
12
it
was held that in terms of
PAJA
a
decision to institute a prosecution is not subject to review. This is
so because a decision to prosecute is excluded by the definition
of
si (ff) of the
National Prosecuting Authority Act 32 of 1998
, through
which the NDPP acts.
13
[
18]
Similarly, the decision by the NDPP to proceed in terms of chapter 5
or chapter 6, is an administrative decision, however, in
my view,
axiomatically, falling outside the purview of
PAJA.
This
does not mean, nonetheless, that such decisions are placed well
beyond the scrutiny of the Courts. Such decisions fall to be
reviewed
in terms of the principle of legality. In this regard, in the matter
of
National
Director of Public Prosecutions and Others v Freedom under Law
14
Brand JA held as follows:
"[28]
The legality principle has by now become well established in our law
as an alternative pathway to judicial review where
PAJA
finds
no application. Its underlying constitutional foundation appears, for
example, from the following dictum by Ngeo bo J in
Affordable
Medicines Trust and Others v Minister of Health and Others
15
:
'The
exercise of public power must therefore comply with the Constitution,
which is the supreme law, and the doctrine of legality,
which is part
of that law. The doctrine of legality, which is an incident of the
rule of law, is one of the constitutional controls
through which the
exercise of public power is regulated by the Constitution.'
[29]
As demonstrated by the numerous cases since decided on the basis of
the legality principle, the principle acts as a safety
net to give
the court some degree of control over action that does not qualify as
administrative under PAJA, but nonetheless involves
the exercise of
public power. Currently it provides a more limited basis of review
than PAJA. Why I say 'currently' is because
it is accepted that
'(l)egality is an evolving concept in our jurisprudence, whose full
creative potential will be developed in
a context-driven and
incremental manner' (see
Minister of Health and Another NO
v New Clicks South Africa (Pty) Ltd and Others (Treatment Action
Campaign and Another as Amici
Curiae)2006
(2)
SA 311 (CC)
(2006 (1) BCLR 1
;
[2005] ZACC 14)
para 614; Cora Hoexter
op cit at 124 and the cases there cited). But for present purposes it
can be accepted with confidence that
it includes review on grounds of
irrationality and on the basis that the decision-maker did not act in
accordance with the empowering
statute (see
Democratic
Alliance and Others v Acting National Director of Public Prosecutions
and Others
2012 (3) SA 486
(SCA)
paras 28-30).
16
[19]
In the matter of
Booysen v Acting National Director of
Public Prosecutions and Others
17
Gorven J held that:
"[15] In turn,
the principle of legality requires that the exercise of public power
'must be rationally related to the purpose
for which the power was
given'. 23 This is the rationality test. It has been held that
rationality is a minimum requirement applicable
to the exercise of
all public power. 24 'Decisions must be rationally related to the
purpose for which the power is given, otherwise
they are in effect
arbitrary and inconsistent with this requirement.' 25 A rational
connection means that —
'Objectively viewed,
a link is required between the means adopted by the [person
exercising the power] and the end sought to be
achieved'. 26
The test is
therefore twofold:
'Firstly, the
[decision-maker] must act within the law and in a manner consistent
with the Constitution. He or she therefore must
not misconstrue the
power conferred. Secondly, the decision must be rationally related to
the purpose for which the power was conferred.
If not, the exercise
of the power would, in effect, be arbitrary and at odds with the rule
of law.'
[20]
I am equally of the same view that the same discretion attains in
respect of choice to resort to chapter 5 or chapter 6, in
order to
achieve the legislative purpose and object of
POCA.
I
am unable to find that the decision to resort to chapter 6 was
irrational and not connected with the aforesaid legislative object
of
POCA.
[21]
The
DPPP is duty bound, when exercising the discretion of choice,
balancing societal interest encapsulated in the objects of
POCA
and
that of the appellant;
vide
Mazibuko
18
matter.
In doing so, the respondent must, invariably take into account the
circumstances of the case and the proximity of the proceeds
of crime
to the offending action of the appellant.
[22]
In casu,
the evidence
presented by the respondent was that during 2009, the applicant, a
medical practitioner, defrauded the Department of
Workman's
Compensation Fund ("the Fund") of R 12 143 417. 92 by
submitting 1919 claims to the Fund in respect of services
he
allegedly rendered to 49 patients who suffered from occupational
injuries and or diseases. Investigations revealed that both
Ms.
Ronell Matshika (Ms Matshika) and Ms. Priscila Makhaza, former
employees of the Fund assisted him in processing and paying
the said
claims.
[23]
The
modus operandi
followed
was that applicant would submit fictitious and grossly inflated
claims to the Fund through the assistance of his messenger,
Mr. Sello
Mahlangu and other employees of the Fund. He would claim exorbitant
amounts for procedures which he ostensibly rendered.
The said claims
would be submitted directly to Ms. Matshika to process the claim and
later Ms. Makhaza for approval and payment.
In order to claim
compensation from the Fund, the employer must complete an accident
report reflecting full information on the injury
sustained by the
employee, which form must be submitted to the Fund. The employee must
then be treated by a doctor/ medical officer
"service provider")
who will submit necessary reports. The services provider will then
claim all the relevant expenses
from the Commissioner.
During the
investigation, affidavits were obtained from 30 persons purportedly
treated by the appellant, but denied neither any
knowledge of nor
being treated by the appellant. Most of the purportedly treated
persons had minor occupational related injuries
and were treated by
different doctors other than the appellant. The investigation further
revealed that there were legitimate claims
submitted by various
doctors in relation to the treatment of the aforesaid persons and
payments were made in consequences thereof.
The applicant never
consulted with any of the 49 patients/ persons mentioned above and as
such all his claims from the Fund were
unlawful. Furthermore, the
appellant inflated the said claims in that he would, in most
instances, claim not less than R4 000 for
a single consultation,
which claims are ludicrous for a general practitioner.
[24] It is common
cause that the claims were paid electronically by bank transfer to
the appellant's bank account on different dates
for a period of four
months to the total of R12 143 417. 92. Before the payment,
investigation revealed that before the first payment
from the Fund,
the applicant's bank account stood at a negative balance of R57 655.
72. It is common cause that immediately after
payments from the Fund,
the appellant started making internet and or bank cheque payments and
purchased immovable property Erf
No 1596 Amandasig Extension, 44
Magaliesberg Country Estate, Gauteng as well as three x 3-series BMW
and a Mini Copper which he
registered in the name of his sister Ms.
Ntsoko. The investigation further revealed that Ms Ntsoko was
employed as a receptionist
by the appellant but there was no evidence
of any salary transfer into her bank account. It was submitted by the
respondent that
it is highly likely that Ms Ntsoko received a small
salary from cash on hand, as such it is highly unlikely that she
would have
afforded substantial amounts to purchase the property
registered in her name. The respondent submitted that the property
was registered
in Ms Ntsoko's name, in an effort by the appellant to
conceal or disguise the nature and source, location, disposition or
movement
of the property or ownership as he knew that it is proceeds
of unlawful, criminal activity, or purchased with proceeds of
unlawful
activities by the appellant, namely theft and or fraud.
[25] According to
the respondent, when seeking both the preservation order as well as
forfeiture, the amounts in the bank accounts
of the appellant were
proceeds of criminal activity, and could be wiped out through use by
the appellant, to the detriment of the
Fund. Similarly too, the
vehicles, which were purchased through proceeds of criminal activity,
stand to be devalued through use,
is left in the control of the
appellant, again to the detriment of the Workman's Compensation Fund.
The house too having been purchased
through proceeds of criminal
activity, should be preserved and forfeited as proceeds of criminal
activity. It needs mention that
Ms. Ntsoko never filed any claim in
respect of all the aforesaid property registered in her name.
[26] It needs
mention that the appellant did not make a full disclosure of his
defence to the allegations mentioned herein above.
The essence of his
defence was a denial of being involved in any criminal activities and
that the properties mentioned are proceeds
of criminal activities and
that failure to deal specifically with the allegations by the
respondent is in no way to be construed
as an admission thereof. He
further pointed out that the investigations were made in 2010 but he
is yet to be arrested and charged.
[27] In my view,
regard being had to the above evidence placed before the Respondent,
and before the Court, and the response of
the appellant to the
allegations leveled against him, the inference to be drawn is that
the evidence was overwhelming and making
it irresistible to infer and
conclude that the properties and the amounts in the bank accounts of
the appellant were indeed proceeds
of criminal activities.
[28]
The amounts claimed, no sooner than they were deposited into the bank
accounts of the appellant were immediately utilized to
purchase the
aforesaid immovable property and the vehicles, thus making them in
terms of time very proximate to the commission
of the fraudulent
claims. In my view, there was also a potential risk that, left longer
in the hands of the appellant, the money
would be further depleted
and the properties either devalued by usage. In respect of the house,
left longer in the hands of the
appellant or his sister, would be
indirectly permitting them to further enjoy the spoils of the
appellant's criminal activity,
while awaiting finalization of a
criminal trial, were chapter 5 to be employed, which, as already
pointed out earlier, is a long
process. I am therefore of the view
that the decision of the respondent to resort to chapter 6 of
POCA,
cannot be faulted. In my view, in
the circumstances of this case, the need to curb the evil of crime,
benefiting from the proceeds
of criminality, placed on a balancing
scale, outweighs the constitutionally enshrined rights of the
appellant.
[29]
It is common cause that the respondent obtained an
ex parte
preservation order with a
rule
nisi,
calling upon the appellant
or any person with a legal interest, to show cause why the reserved
properties, should not be declared
forfeited. The court called upon
to decide the forfeiture issue, is not called upon to decide the
veracity of the evidence placed
before it. It suffices, if the
evidence satisfies the Court that there is a reasonable ground to
believe that, the affected properties
are proceeds of unlawful
activities. On the other hand the appellant had to satisfy the Court
on a balance of probabilities that
it is not necessary to grant a
forfeiture order. Towards acquitting the requirement placed on the
appellant, it is not enough,
in my view, to make bold statements of
denial of criminality. The appellant must at least place facts which
demonstrate that the
properties were not procured out of criminality.
In this regard, I am of the view that the appellant was quite
correctly found
lacking by the Court
a quo.
I
am further of the view, that in as much as the Court must protect the
constitutionally enshrined rights of the appellant, it must
do so on
factual grounds. The Court must also balance those rights of the
appellant based on factual grounds, against the legislative
object of
POCA.
In this
instance, for the same reasons as pointed out herein above, I am of
the view that, the rights of the appellant are by far
outweighed by
the legislative objects of
POCA.
The
Court
a quo
remarked
that it might be unfair to expect of the appellant to give his
explanation at this stage of the application of forfeiture
before he
knows what charges are to be preferred against him, but nonetheless
proceeded, quite correctly so in my view, to grant
the forfeiture
order. The fact of the matter is that both chapters (chapter 5 and 6)
are remedies placed in the statute book available
to the choice of
the respondent. The trial Court quite correctly in my view rejected
the contention of the appellant that both
chapter 5 and 6 were
unconstitutional. The Supreme Court of Appeal has to date,
notwithstanding the plethora of
POCA
related
cases before it, not found
POCA,
in
particular chapter 5 and 6 unconstitutional.
[33]
In the result I conclude and order that the appeal must fail and it
is dismissed with costs.
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
I agree
W. R. C.
PRINSLOO.
JUDGE OF THE HIGH
COURT
I agree
A.A. LOUW
JUDGE OF THE HIGH
COURT
HEARD ON THE : 25
/ 02 / 2015
DATE OF JUDGMENT
: 23/04/2015
APPELLANTS ATT :
OLIVIER, CRONJE & STIGLINGH ATTORNEYS
APPELLANT'S ADV :
ADV. SJ. COETZEE
RESPONDENT'S ATT
: STATE ATTORNEYS PRETORIA
RESPONDENT'S
ADV : ADV. T. MASHALANE.
1
[2002] ZACC 9
;
2002 (4) SA 843
(CC) at 850E-851D.
2
2014 (1) SA 442
(CC).
3
2007 (1) SACR 338
(SCA) at paragraph [1].
4
Ft n2:
2004 (2) SACR 208
(SCA)
(2004) (8) BCLR 844
;
[2004] 2 ALL SA
491).
5
Vide National Director of Public Prosecutions v Mohamed (supra) at
851E-F.
6
Prophet v National Director of Prosecutions
[2006] ZACC 17
;
2006
(2) SACR 525
(CC)
(2007 (2) BCLR 140)
IN PARA [46].
7
2009
(2) SACR 368
(SCA) at 378A-G
8
Prophet
v National Director of Prosecutions
[2006] ZACC 17
;
2006
(2) SACR 525
(CC)
(2007 (2) BCLR 140)
para 61
9
[2002] ZACC 5
;
2002
(4) SA 768
(CC)
2002 (7) BCLR 702
para 100.
10
Supra
at
paragraph [58] at 548g.
11
1980
(3) SA 301
(AD).
12
2005
SA (4) 231 (CC) at 263 para 84.
13
Vide
National Director of Public Prosecutions and Others v Freedom Under
Law
2014
(4) SA 306
(SCA) para [21].
14
Supra.
15
2006
(3) SA 247
(CC)
(2005 (6) BCLR 529
;
[2005] ZACC 3)
para 49.
16
Supra
paras 28-30).
17
2014 (2) SACR 556
(KZD).
18
Supra
at 378g.