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[2013] ZAFSHC 155
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National Director of Public Prosecutions v Silwana and Others (1157/2013) [2013] ZAFSHC 155 (19 September 2013)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 1157/2013
In the matter between:-
THE NATIONAL
DIRECTOR OF
PUBLIC PROSECUTIONS
.......................................................
Applicant
and
MZWANDILE GAILORD
SILWANA
..............................
.First
Defendant
ZONGEZILE ADAM
ZUMANE
...................................
Second
Defendant
MOTLALEPULE JACOB
THITHI
..................................
Third
Defendant
KEGOMODICOE
RETLATHOLA LEKONE
................
Fourth
Defendant
KEABECOE GAOPALELOE
LEKONE
..........................
Fifth
Defendant
LAETITIA GLADNESS
HOFFMAN
................................
Sixth
Defendant
EVODIA LENA KOK
.................................................
Seventh
Defendant
BUYELWA NOMBUYISELO
KHETHELO
...................
Eighth
Defendant
GIVENCHY LIDIA
HOFFMAN
.......................................
Ninth
Defendant
R AND B BED AND
BREAKFAST CATERING
AND EVENTS CC
.........................................................
Tenth
Defendant
BRIGITTE SILWANA
...............................................
Eleventh
Defendant
_____________________________________________________
HEARD ON:
12 SEPTEMBER 2013
_____________________________________________________
JUDGMENT BY:
KRUGER, J
_____________________________________________________
DELIVERED ON:
19 SEPTEMBER 2013
_____________________________________________________
[1] The applicant seeks
confirmation of a provisional restraint order in terms of section 26
of the Prevention of Organised Crime
Act 121 of 1998 (POCA) which was
granted against all the defendants on 28 March 2013. A final order of
restraint was granted against
the second to tenth defendants on an
unopposed basis. At this stage the application is only opposed by the
first and eleventh respondents,
Mr and Mrs Silwana. Mr Pieter Nel
from Legal Aid South Africa appeared on their behalf. The applicant
was represented by Mr K.J.A.
Ntimutse.
[2] The history of this
matter can be set out as follows:
2.1. On 22 October 2012
the nine defendants were convicted of fraud and related charges.
2.2. After conviction,
before sentence, a representative of the applicant handed in an
application for confiscation in terms of
section 18 of POCA. In that
application the applicant stated that it would file founding papers
on 13 December 2012 and the defendants’
opposing papers were to
be filed by 14 February 2013. The applicant’s replying papers
were to be filed by 14 March 2013.
That application was postponed
sine die
on 23 October 2012.
2.3. The applicant on 14
December 2012 filed its statement in terms of section 21 of POCA
setting out the offences of which each
defendant was convicted and
the amounts involved at each count.
2.4. The first and
eleventh defendants did not file any papers in that confiscation
application.
2.5. In March 2013 the
applicant issued the present restraint application.
2.6. On 28 March 2013 a
provisional restraint order was granted against all eleven
defendants.
2.7. The first and
eleventh defendants opposed the provisional restraint order and a
notice of opposition on their behalf was filed
on 19 April.
2.8. On 8 August 2013 the
provisional restraint order was made final against the second to
tenth defendants.
2.9. The opposed
application for a restraint order against the first to eleventh
defendants was argued before me on 12 September
2013.
[3] Mr Nel takes the
point that a restraint application cannot be granted, because the
criminal proceedings against the defendants
have been concluded.
Section 25(1)(b)(iii) lists as one of the jurisdictional requirements
for the granting of a restraint order
that the proceedings against
the defendant have not been concluded:
“
(1) A High
Court may exercise the powers conferred on it by section 26 (1)-
(a) when-
(i) a prosecution for an offence has
been instituted against the defendant concerned;
(ii) either a confiscation order has
been made against that defendant or it appears to the court that
there are reasonable grounds
for believing that a confiscation order
may be made against that defendant; and
(iii) the proceedings against that
defendant have not been concluded; or
(b) when-
(i) that court is satisfied that a
person is to be charged with an offence; and
(ii) it appears to the court that
there are reasonable grounds for believing that a confiscation order
may be made against such
person.”
Section 17 of POCA reads
as follows:
“
17
Conclusion of proceedings against defendant
For the purposes of this Chapter, the
proceedings contemplated in terms of this Chapter against a defendant
shall be concluded when-
(a) the defendant is acquitted or
found not guilty of an offence;
(b) subject to section 18 (2), the
court convicting the defendant of an offence, sentences the defendant
without making a confiscation
order against him or her;
(c) the conviction in respect of an
offence is set aside on review or appeal; or
(d) the defendant satisfies the
confiscation order made against him or her.”
Mr Nel relies on section
17(b) for his submission that a restraint order cannot now be made,
because the defendants were sentenced
without the court making a
confiscation order against them.
[4] In the scheme of POCA
a restraint application precedes a confiscation application. Mr
Ntimutse, for the applicant, informed
the court that there have been
a number of cases where restraint applications have been launched
where confiscation proceedings
are pending. In this case the
restraint application was launched because of the difficulty the
applicant had in tracing the defendants
and their assets. The
defendants are at present on bail pending the outcome of their
applications for leave to appeal to the Supreme
Court of Appeal.
[5] In
National
Director of Public Prosecutions v Kyriacou
2003 (2) SACR 524
(SCA) it appears from paragraph [1] of the judgment that the trial
judge convicted the appellant on 102 counts of receiving stolen
property and on the day after conviction commenced an enquiry to
determine whether a confiscation order should be made as contemplated
by section 18(1) of POCA. The trial judge found that the appellant
had benefitted from the offence and postponed further conduct
of the
enquiry to enable the parties to make submissions regarding the
amount of the benefit. The accused was sentenced to 15 years
imprisonment. No confiscation order was granted before sentence.
Then, on a date before the confiscation enquiry was concluded,
another judge granted an
ex parte
provisional restraint order
against the appellant. On the return day that provisional restraint
order was set aside. The Supreme
Court of Appeal dealt with an appeal
against the setting aside of the provisional restraint order. The
appeal succeeded. The point
now raised by Mr Nel, namely that a
restraint order cannot be granted after the defendant has been
sentenced, is not raised or
dismissed in any of the judgments of the
Supreme Court of Appeal in the
Kyriacou
case.
[6] The purpose of the
application for a restraint order is to secure property held by the
defendants which is likely to yield a
value sufficient to satisfy the
pending confiscation order (
National Director Public
Prosecutions v Kyriacou
2002 (2) SACR 67
(O) at 76b-c, being
the judgment of Cilliè J in the restraint application). In my
view the applicant cannot be non-suited
because the confiscation
enquiry has not been concluded. There is a need for the applicant to
secure its position. Properly interpreted,
section 17(b) of POCA
contemplates a situation where no restraint or confiscation order was
pending before sentence. Once a confiscation
application is pending,
the issues of both restraint and confiscation remain alive.
[7] Mr Nel in his heads
of argument raises the point that the curator might be in a position
of conflict of interest because the
proposed curator, Mr Shawn
Williams works for KPMG, which company did the forensic investigation
and drafted the forensic report
used in the criminal trial in which
the defendants were convicted. Mr Nel questions the impartiality and
lack of bias of the curator.
In his oral address in court Mr Nel
pointed out that the evidence in the criminal trial was given by
another person, and that there
is no indication that the proposed
curator, Mr Shawn Williams, was involved with the forensic
examination or the case against the
defendants. The work that
auditors do is a matter of record. If there are actions in the future
which in the view of the defendants
point to bias or a lack of
impartiality, the defendants can approach the court for appropriate
relief, setting out the facts and
circumstances that justify their
belief.
[8] The defence on the
merits is that applicant intends to restrain the assets of the first
and eleventh defendants on an incorrect
calculation. In the section
21 statement by State Advocate De Nysschen he states that the value
of the proceeds of the unlawful
activities of the first defendant was
R6 920 000, with reference to the convictions on counts 240
– 245. The same
amount of R6 920 000 is stated as
being the proceeds in respect of the eleventh defendant, with
reference to counts 240,
243, 244 and 245. Mr Ntimutse for the
applicant conceded that this refers to the same amounts.
[9] As to the
confiscation of specific items, the provisional order refers to the
affidavit of Phillip Claassen. Mr Ntimutse asks
for the following
assets to be restrained in terms of section 26:
First Defendant
(i) BMW 318i, black,
registration number DTF 376 FS, engine number A 027 H 150 (value
R80 000).
(ii) 100% member’s
interest in Sange-Lathitha Trading CC, registration number
2009/182872/23.
Eleventh Defendant
(i) BMW 325i,
registration number 723 BRG FS, engine number 022 678 34 (value
R250 000).
(ii) 100% member’s
interest in Lihle Marketing CC, registration number 2006/082703/23.
(iii) 50% member’s
interest in Red Purple Media CC, registration number 2007/116052/23.
[10] The defendants say
in their answering affidavit that they are both employed by Lihle
Marketing CC, one of the entities which
the applicant wishes to place
under restraint. The defendants say that attachment of Lihle
Marketing CC will be fatal for the survival
of the business as well
as their economic survival. In my view the curator should be directed
to make allowances for the defendants
in respect of their reasonable
living expenses out of the income of the restrained assets, in
particular Lihle Marketing CC, as
contemplated in section 26(6)(a) of
POCA.
[11] As to costs, Mr Nel
stated that the arrangement between the Asset Forfeiture Unit and
Legal Aid South Africa is that, because
both institutions are funded
by the state, no costs order should be made.
[12] The following order
is made:
1. A final restraint
order under
section 26
of the
Prevention of Organised Crime Act 121
of 1998
is made against the first and eleventh defendants in respect
of the following assets:
First Defendant
(i) BMW 318i, black,
registration number DTF 376 FS, engine number A 027 H 150.
(ii) 100% member’s
interest in Sange-Lathitha Trading CC, registration number
2009/182872/23.
Eleventh Defendant
(i) BMW 325i,
registration number 723 BRG FS, engine number 002 678 34.
(ii) 100% member’s
interest in Lihle Marketing CC, registration number 2006/082703/23.
(iii) 50% member’s
interest in Red Purple Media CC, registration number 2007/116052/23.
2. The curator is
directed to make allowances for the defendants in respect of their
reasonable living expenses out of the income
of the restrained
assets, in particular Lihle Marketing CC, as contemplated in
section
26(6)(a)
of POCA.
3. No order as to costs
is made.
____________
A. KRUGER, J
On
behalf of applicant: Adv K.J. A. Ntimutse
Instructed
by:
State
Attorneys
BLOEMFONTEIN
On
behalf of first and
eleventh
defendants: Adv Pieter Nel
Instructed
by:
Legal
Aid South Africa
BLOEMFONTEIN
/spieterse/wm