Brief Summary

Malicious Prosecution — Wrongful seizure of property — Plaintiff claimed damages for malicious prosecution and wrongful attachment of liquor by police — Plaintiff, awaiting transfer of liquor licences, conducted business without valid licence — Police seized liquor without warrant or consent — Court held that plaintiff was not entitled to trade without a valid licence, thus seizure was lawful and not malicious prosecution — Defendants acted within their authority under the Liquor Act.

Comprehensive Summary

Summary of Judgment

1. Introduction

The proceedings took the form of a civil action for damages in which the plaintiff claimed compensation arising from an alleged wrongful attachment (seizure/impounding) of liquor and an alleged malicious prosecution. The matter initially commenced as an ordinary civil trial, but on the trial date the parties agreed that it would proceed as a stated case in terms of Uniform Rule 33(1) and (2) because the facts were, to a large extent, common cause.

The plaintiff was Pogiso Godfrey Kwagile, an adult male civil engineer and businessman. The defendants were the Minister of Safety and Security (cited as head of the South African Police Service) and Snr Superintendent E.S. Mofokeng, a police officer acting within the course and scope of employment at the relevant times.

Procedurally, the parties also agreed (and the court ordered) a separation of merits and quantum in terms of Uniform Rule 33(4). The judgment addressed merits only, with quantum having been postponed sine die. The general subject-matter was whether the plaintiff could lawfully trade in liquor while awaiting transfer of liquor licences, and whether the police acted unlawfully in seizing liquor without a warrant and subsequently charging the plaintiff.

2. Material Facts

The dispute arose from events connected to licensed liquor premises situated at site 3074 Selosesha, Thaba Nchu, which comprised a bar lounge and liquor store operated under licences issued in terms of the Liquor Act 27 of 1989. The property was sold in execution in February 2008, later sold again in August 2008, and the premises remained licensed premises throughout.

In October 2008 an application was made (in terms of section 113 of the Liquor Act) to transfer the relevant liquor licences to the plaintiff. At the time the plaintiff conducted business from the premises known as Tshwaraganang Lounge (Letabong Jazz Oasis). The licence documentation reflected a separation between the licensee entity and the holder of the licences, with the holder identified as Tshwaraganang Trading CC. During March 2009, following a judgment obtained by Bloemwater against Tshwaraganang CC, the sheriff attached the liquor licences.

In April 2009, the plaintiff launched a further application for a special licence in terms of section 19 of the Liquor Act. On 20 April 2009, the plaintiff purchased the liquor licences from the sheriff; on 23 April 2009, the sheriff applied to the Free State Liquor Board (in terms of section 113) to transfer those licences to the plaintiff. On 28 April 2009, the plaintiff’s attorney wrote to the second defendant confirming that an application for transfer of the liquor licence had been made.

On 21 June 2009, the second defendant, accompanied by other police officers, went to the premises and seized the plaintiff’s liquor stock. It was common cause that the seizure occurred without a warrant and without the plaintiff’s consent. No one was arrested during the operation. On the same day, the second defendant laid a criminal charge against the plaintiff for contravening section 154(1)(a) of the Liquor Act (selling liquor otherwise than under a licence or exemption).

In July 2009, both the public prosecutor and the Director of Public Prosecutions declined to prosecute. It was also common cause that, as at 21 June 2009, the application for transfer of the licences to the plaintiff had not yet been finalised. The transfer was only effected years later, on 21 September 2012, after the court issued a mandamus against the Free State Liquor Board.

A material factual dispute identified by the court concerned the plaintiff’s assertion that a practice had developed under the Liquor Act whereby prospective licence holders could trade pending finalisation of transfer applications. The judgment records that this alleged practice was disputed. The court further treated as significant that the plaintiff was not appointed as a “responsible person” in terms of section 39 of the Liquor Act.

3. Legal Issues

The court distilled the matter into two central legal questions.

The first was whether the police seizure (described as attachment/impounding of liquor stock) was wrongful, including whether the police were entitled to seize liquor from a person who was awaiting transfer of licences, and whether a warrant was required.

The second was whether the laying of the charge and ensuing process constituted malicious prosecution, which required determination of whether the defendants set the law in motion without reasonable and probable cause, with malice, and whether the prosecution failed.

These issues primarily concerned questions of law (statutory interpretation of the Liquor Act and application of the Criminal Procedure Act), together with the application of law to largely common-cause facts, particularly as to the plaintiff’s licensing status on 21 June 2009 and the lawfulness of warrantless seizure.

4. Court’s Reasoning

The court treated section 154(1)(a) of the Liquor Act 27 of 1989 as the central provision. It emphasised that the legislative purpose, derived from reading the Act as a whole, was to prohibit (and criminalise) the sale of liquor without an appropriate licence or exemption. On that approach, lawful sale required that the seller be a holder of a licence or enjoy an exemption under the Act.

Applying this to the common-cause position, the court reasoned that at the time of the police operation the plaintiff was not the holder of a liquor licence and did not have an exemption. The court rejected the plaintiff’s contention that purchasing the business as a going concern and applying for transfer of the licence justified trading pending transfer. It held that an application for transfer conferred only a spes (a mere hope or expectation) and did not create a right to trade, particularly because transfer was not automatic and remained subject to statutory requirements (the judgment referred to further qualifications, including those in section 25).

The court addressed the plaintiff’s alternative reliance on an alleged industry “practice” permitting continued trading pending transfer. It held that, on the facts, the plaintiff could not avail himself of such a proposition because he was not appointed by the licence holder as a responsible person in terms of section 39. The court considered an unreported decision relied on for the plaintiff (the Herman Ronald Richard matter), but distinguished it as involving a licence holder seller and issues tied to section 39(4), and found it did not support the plaintiff’s position on the present facts.

Turning to the lawfulness of the seizure without a warrant, the court approached the matter through sections 20 and 22 of the Criminal Procedure Act 51 of 1977. It reasoned that the statutory scheme authorises police, in defined circumstances, to seize articles concerned in the commission of an offence, articles which may afford evidence of the commission of an offence, or articles intended for use in the commission of an offence. In the court’s assessment, the liquor stock constituted an article used in the commission of the offence of selling liquor without a licence, and was also potentially evidentiary material (including because it could be required as exhibits). The court treated the consumable nature of liquor as relevant to the practicality and urgency of seizure, in the sense that the goods could readily be disposed of.

On that basis, the court concluded that the police did not act unreasonably in seizing the liquor without a warrant, and that the seizure was lawful under the Criminal Procedure Act. It rejected the plaintiff’s characterisation of the seizure as spoliation, holding that the police action was justified and authorised in the circumstances.

Regarding malicious prosecution, the court applied the well-known elements, citing Minister for Justice and Constitutional Development v Moleko [2008] 3 All SA 47 (SCA). Although it was common cause that the prosecutor and DPP declined to prosecute, the court treated that decision as, at best, “neutral” on the facts before it, and not indicative that the plaintiff’s conduct had been lawful. Because the plaintiff was, on the court’s interpretation of the Liquor Act, committing an offence at the time, the police had reasonable and probable cause to arrest and charge him. The court therefore held that the essential foundation for malicious prosecution—particularly the absence of reasonable and probable cause—was not established.

The court concluded that the plaintiff failed to make out a case on either claim (wrongful seizure/attachment and malicious prosecution), given its findings on the statutory prohibition on trading without a licence and the lawfulness of the warrantless seizure.

5. Outcome and Relief

The court dismissed the plaintiff’s claims on the merits. It ordered that the plaintiff’s claims be dismissed with costs.

Because the matter had proceeded with a separation between merits and quantum, and the merits were decided against the plaintiff, there was no determination of quantum in this judgment, and the earlier postponement of quantum sine die remained procedurally unnecessary to pursue further in light of the dismissal of the claims.

Cases Cited

Minister for Justice and Constitutional Development v Moleko [2008] 3 All SA 47 (SCA).

Herman Ronald Richard and 2 Other v Lieutenant Pieterse & 2 Others (Case No. 14363/93) (unreported), as referenced in the judgment.

Legislation Cited

Liquor Act 27 of 1989, particularly sections 19, 25, 39, 113, and 154(1)(a).

Criminal Procedure Act 51 of 1977, particularly sections 20, 21(1)(a), and 22.

Rules of Court Cited

Uniform Rules of Court, Rule 33(1) and Rule 33(2).

Uniform Rules of Court, Rule 33(4).

Held

The court held that, on a proper interpretation of section 154(1)(a) of the Liquor Act 27 of 1989, the sale of liquor is lawful only where conducted under a licence or exemption, and that a pending application for transfer of a liquor licence in terms of section 113 does not entitle a prospective transferee to trade. The plaintiff therefore committed an offence by selling liquor while not being the licence holder and without an exemption.

The court further held that the police seizure of the liquor stock without a warrant was lawful under sections 20 and 22 of the Criminal Procedure Act 51 of 1977, given that the liquor was concerned in the commission of an offence and the circumstances justified warrantless seizure.

On the claim of malicious prosecution, the court held that the defendants had reasonable and probable cause to prosecute (in the sense of laying a charge and setting the law in motion) because the plaintiff was contravening the Liquor Act, with the result that the plaintiff failed to establish the necessary elements of malicious prosecution.

LEGAL PRINCIPLES

The judgment applied the principle that the interpretation of legislation seeks to ascertain the legislature’s intention, including by identifying the mischief the statute is aimed at addressing, and by reading the enactment as a whole (with reference, where appropriate, to contextual indicators such as the preamble).

It applied the statutory principle (as derived from section 154(1)(a) of the Liquor Act) that the sale of liquor without a licence or exemption is an offence, and that an application to transfer a licence does not itself authorise trading; at most it affords a spes and remains subject to statutory requirements before transfer can occur.

It applied the principle that police may, in appropriate circumstances, seize articles without a warrant under the Criminal Procedure Act where the articles are concerned in the commission of an offence or may afford evidence, and where the statutory preconditions for warrantless seizure are met.

For malicious prosecution, it applied the established elements that a plaintiff must prove that the defendant set the law in motion, acted without reasonable and probable cause, acted with malice, and that the prosecution failed, as articulated in Minister for Justice and Constitutional Development v Moleko [2008] 3 All SA 47 (SCA).

Kwagile v Minister of Safety and Security and Another (378/2010) [2013] ZAFSHC 35 (28 February 2013)