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[2011] ZAFSHC 214
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Khosana and Others v National Director of Public Prosecutions (5759/2009) [2011] ZAFSHC 214; 2012 (1) SACR 176 (FB) (30 June 2011)
FREE
STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC
OF SOUTH AFRICA
Case
No: 5759/2009
In
the matters between:
FIKIZOLO
NORMAN KHOSANA
........................................
1
st
Applicant
LOUIS
KHOSANA
...............................................................
2
nd
Applicant
ALVARO
PEDRO MACAMO
...............................................
3
rd
Applicant
M
L KHOSANA
....................................................................
4
th
Applicant
and
NATIONAL
DIRECTOR OF PUBLIC
PROSECUTIONS
..................................................................
Respondent
____________________________________________________
HEARD
ON
: 21 APRIL 2011
_____________________________________________________
JUDGMENT
BY
: KRUGER, J
_____________________________________________________
DELIVERED ON
:
30 JUNE 2011
[1]
The four applicants ask that the preservation of property order (the
preservation order) granted against them
ex parte
under
section 38 of the Prevention of Organised Crime Act 121 of 1998
(POCA) on 26 November 2009 at the behest of the respondent,
the
National Director of Public Prosecutions (“the NDPP”) be
set aside, alternatively that paragraph 20.4, which directs
the
applicants to state on oath in their notice of intention to oppose
the making of a forfeiture order whether the property concerned
is an
instrumentality of an offence or the proceeds of unlawful activities
and the basis for such defence, be set aside. Section
39(5)(c) of
POCA calls upon the respondent to set out in an affidavit the basis
of the defence upon which the respondent intends
to rely in opposing
the granting of a forfeiture order, there is no reference in it to
proceeds or instrumentality.
[2]
The property concerned comprises (1) a Mercedes Benz vehicle (2) a
Nissan vehicle (3) R204 000,00 cash (4) Hagoth Flats in Harlem
Street
Welkom. In its 39(1) Notice to the applicants, the NDPP also refers
to a Corsa bakkie, but in the Answering Affidavit it
says that is an
error, the Corsa bakkie was returned to Second Applicant.
A.
EX
PARTE
APPLICATION
[3]
The first ground upon which the applicants seek to have the
preservation order set aside is because it was obtained
ex parte
and in camera.
On
13 February 2007 the first and second applicants were arrested and
charged with offences relating to dealing in unwrought precious
metals, money laundering and other charges. The facts are set out as
follows in Mr Ploos van Amstel’s Supplementary Heads
of
Argument:
“
18.
On or about 13 and 14 February 2007
the Mercedes Benz ML vehicle with registration DPV 967 NW, the Nissan
Hardbody vehicle with
registration number CZS 993 FS, the Corsa
bakkie with registration number SXT 819 GP and the amount of
R204
000,000
in cash, all of which are subjects of the present
application, were seized and held by the South African Police
Services under
Welkom CAS 312/02/2007, pending the finalisation of
the criminal trial, and remain so seized.
19.
The current whereabouts of the
property is as follows:
the
Mercedes Benz ML is currently in the Welkom SAPS 13 store;
the
Nissan Hardbody is currently in the Welkom SAPS 13 store;
the
Corsa bakkie has been returned to the first applicant;
the
R204 000.00
was booked into the Klerksdorp Organised Crime
Unit’s SAPS 13-register under reference number SAP
13/31/2007.”
[4]
On 6 August 2007 the first applicant’s attorney addressed a
letter to the Director of Public Prosecutions in Bloemfontein:
“
Direkteur
van Openbare Vervolging
Privaatsak X20506
BLOEMFONTEIN
9300
Menere
NORMAN KHOSANA / MOONTLIKE
BESLAGLEGGING VAN BATES
Ons tree op vir Norman Khosana ‘n
besigheidsman van Welkom wie in die afgelope paar maande 2 (TWEE)
keer in verskillende sake
deur die Polisie gearresteer is welke sake
nou altwee uitgestel is na 11 September 2007 in die Landdroshof
Welkom. Klaarblyklik
gaan die sake en moontlik ook nog ander sake
saam gevoeg word en die sake dan verwys word na die Hooggeregshof
waar ons kliënt
en verskeie ander beskuldigdes gaan teregstaan
op Klagtes, onder andere Rampokkery, Geldwassery ens. Die inligting
is aan ons verskaf
deur die Staats Aanklaer en die Polisie betrokke
by die ondersoek van hierdie en die ander sake.
Dit het nou ook onder ons kliënt
se aandag gekom dat die Beslagleggings Eenheid van voorneme is en al
besig is om ‘n
Aansoek voor te berei vir die beslaglegging van
ons kliënt se bates.
Ons het opdrag om u daarop te wys dat
ons kliënt bereid is om sy volle samewerking te gee, bereid is
om ‘n Onderneming
te gee dat hy nie enige bates te gelde sal
maak nie.
Soos u weet is ons kliënt ‘n
Besigheidsman en sou daar op die bates beslaggelê word sal dit
nie net ‘n groot
ongerief nie maar ook ‘n geweldige groot
verlies aan inkomste beteken. Ons wil u dan uitnooi om eerder met ons
in verbinding
te tree ten einde samesprekings te hou in ‘n
poging om hierdie aangeleentheid op ‘n meer gepasde wyse op te
los.
Ons het ook opdrag van ons kliënt
om u daarop te wys en te versoek dat u nie ‘n
ex parte
aansoek in die verband moet bring nie, en indien u van voorneme is om
voort te gaan met die Aansoek vir die beslaglegging op sy
bates, dat
so ‘n aansoek op kliënt of dan ons beteken word ten einde
hom die geleentheid te bied om die aansoek te opponeer
indien nodig.
Ons wag dan om van u te hoor.”
[5]
In its Opposing Affidavit the NDPP says that the telefax could never
have been forwarded to the asset forfeiture unit. The NDPP
takes the
stance that it is not obliged
“
to accept
the word of a person such as the first respondent as to his future
conduct”.
It
is clear that the telefax was in fact received by the Asset
Forfeiture Unit. Applicants attach to their Replying Affidavit a
letter dated 15 August 2007, from the Asset Forfeiture Unit, signed
by Advocate Amanda Maree, who is at present working and living
in Abu
Dhabi:
“
Re:
Norman Khosana/Moontlike Beslaglegging Van Bates
In reply to your letter dated
06/08/2007, I would like to inform you that the case that you have
referred to has not been received
by our unit; therefore the request
is premature.
I trust you will find this in order.
Yours faithfully
Amanda Maree
Asset Forfeiture Unit (AFU)
Bloemfontein”
[6]
What Ms Maree did with the letter asking that no
ex parte
application be brought is not clear. There seems to be no system in
the office of the Asset Forfeiture Unit making provision for
future
or anticipated applications. It would not be difficult to create a
general file dealing with future or anticipated applications,
or to
create a system to avoid a situation like the present. The applicants
accept that the deponents to the Answering Affidavit
and Supporting
Affidavits had no knowledge of the letter and that there was no
intention by them personally to mislead the court.
The authorities
are clear on the duty of disclosure on an applicant in an
ex parte
application.
[7]
For the NDPP Mr Budlender submits that the NDPP is entitled to
proceed
ex
parte
in a section 38 application for a preservation order with reference
to
NATIONAL
DIRECTOR OF PUBLIC PROSECUTION AND OTHERS
[2003] ZACC
4
;
2003
(4) SA 1
(CC) para [27], [33] and [51]. Mr Budlender also points
out that the first applicant does not say he would have opposed the
application
if he had been given notice of it and he does not say the
application caused him prejudice.
[8]
In my view the conduct of the NDPP does not amount to intentional
misleading, but the NDPP, as institution, cannot simply ignore
a
letter sent to it and say it cannot be traced. A system should be put
in place to deal with situations where letters are sent
to the NDPP
before it has launched an application.
B.
CHAPTERS
5 AND 6 OF POCA
[9]
The main thrust of the application is that the NDPP is not entitled
to bring civil forfeiture proceedings under Chapter 6 of
POCA while a
criminal trial is pending, because restraint and confiscation orders
under Chapter 5 of POCA provide the appropriate
relief where a
criminal trial is pending. Counsel requested leave to file
supplementary Heads of Argument on this topic, and both
filed
comprehensive and helpful submissions.
Applicants’
contentions
[10] Mr Ploos van Amstel,
for applicants, sets out the chronology:
12 February 2007
search and seizure warrants issued under
section 21
of the
Criminal
Procedure Act 51 of 1977
.
13 February 2007
first and second applicants arrested and arraigned in the
magistrates’ court at Welkom.
13 and 14 February
2007
the two motor vehicles and cash seized and held by the
Police at Welkom, where the items still are.
22 February 2007
first applicant released on bail.
6 August 2007
first applicant’s attorneys requested to be informed of
possible application for a preservation order under Chapter 6.
15 August 2007
Asset Forfeiture Unit acknowledged receipt of the request.
19 March 2009
High
Court set aside the search warrants. The High Court directed that the
Nissan vehicle and the R204 000 cash remain in police
custody. The
Mercedes vehicle did not form part of the warrants and remained in
police custody.
21 August 2009
Criminal trial commenced and ran intermittently.
26 November 2009
Preservation order granted under
section 38
of POCA in the present
matter.
7 December 2009
Preservation order and Notice of the intended forfeiture application
served on applicants.
22 December 2009
Applicants filed a notice of their intention to oppose the proposed
forfeiture application.
10 February 2010
application for rescission of the preservation order lodged.
11 March 2010
Forfeiture Application lodged by NDPP without service on any of the
applicants, for a default forfeiture order in respect of two
vehicles, the cash and the flats.
17 March 2010
applicants gave notice of their intention to oppose the forfeiture
application.
Apparently the forfeiture
application is being held in abeyance pending the adjudication of the
present rescission application.
[11] The grounds are set
out as follows by Mr Ploos van Amstel:
“
66.
The question for adjudication raised
on behalf of the applicants is whether it is permitted and
constitutional to have civil and
criminal proceedings for forfeiture
run concurrently where the subject matter of the proceedings in the
civil application and in
the criminal trial is similar.
67.
It is common cause that there are
criminal proceedings pending against the applicants, the subject
matter of the alleged criminal
conduct being the very conduct the
preservation application was premised on.
68.
The issue now raised include whether
the NDPP was entitled to obtain any order at all.
69.
It is submitted that the proceedings
under Chapters 5 and 6 of the POCA are two separate, parallel but
distinctive aims and remedies.
70.
It is submitted that both proceedings
have a civil application but the one a criminal and the other a civil
design.
71.
The present application involves
Chapter 6 of the Act, of which sections 48 and 50 form part, and
which provides “
civil forfeiture”
as opposed to
“
criminal forfeiture
” which is, in turn, regulated
by Chapter 5.
72.
In contradistinction to Chapter 5,
which provides for orders directed at persons convicted of criminal
offences, Chapter 6, which
is headed “
civil recovery of
property”
, makes provision for orders to be made for the
forfeiture of property which is tainted because it is linked to the
commission of
crime either because it is proved, on a balance of
probabilities, to be “
an instrumentality of an offence
”
referred to in Schedule 1 of the Act or because it is proved,
according to the same standard of proof, to be “
the proceeds
of unlawful activities”.
”
Mr Ploos van Amstel
submits:
“
111.
It is submitted
that the provisions of the
Criminal Procedure Act and
Chapter 5 of
the
Prevention
of
Organised
Crime Act make
adequate provision for the forfeiture of
the
instrumentality of an offence
and
the
proceeds of lawful activities
in
criminal proceedings and that the procedure in Chapter 6 of the POCA
should be applied
only
for civil forfeiture where no criminal proceedings are contemplated
or pending.”
“
116.
It is contended that the utilisation
by the NDPP of the civil procedure in terms of Chapter 6 of the POCA
for civil forfeiture under
circumstances where the applicants are the
accused in a part heard criminal trial, makes serious and irreparable
inroads, invasions,
violations and challenges into the applicants’
fundamental rights entrenched in the Constitution and constitutes an
unreasonable
and unjustifiable limitation of the following rights of
the applicants enshrined in the Bill of Rights:
116.1 the right of a person who is
arrested for allegedly committing an offence, to remain silent
(section 35(1)(a));
116.2 the right of an accused person
who has been arraigned, to remain silent and not to testify during
the criminal proceedings
(section 35(3)(h));
116.3 the right of an accused person
not to be compelled to give self-incriminating evidence (section
35(3)(j));
116.4 the right of an accused person
to be presumed innocent until proven guilty beyond reasonable doubt
(section 35(3)(h));
116.5 the right of an accused person
to a fair trial (section 35(3));
116.6 the right of access to courts
(section 34);
116.7 the right not to be arbitrarily
deprived of property (section 25);
116.8 the right to privacy (section
14);
116.9 the right to dignity (section
10);
116.10 the right to equality (section
9).”
“
119.
In contradistinction to a restraint
order in terms of Chapter 5 (wherein the rights of an accused person
not to be compelled to
make any confession or admission that could be
used in evidence against him, are respected)
section 39
under
Chapter 6 in respect of preservation orders stipulates that
the
basis of a respondent’s defence
must be disclosed in the
form of an affidavit which shall be delivered to the NDPP.”
“
121.
Section 39(5) violates:
the
right of a person who is arrested, to remain silent (section
35(1)(a));
the
right of an accused person who has been arraigned, to remain silent
and not to testify during the criminal proceedings (section
35(3)(h)); and
the
right of an accused person not to be compelled to give
self-incriminating evidence (section 35(3)(j))
by providing as follows:
39(5) ‘An appearance under
sub-section (3) shall contain full particulars of the chosen address
for the delivery of documents
concerning further proceedings under
this Chapter and shall be accompanied by an affidavit stating –
full
particulars of the identity of the person entering the appearance;
the
nature and extent of his or her interest in the property concerned;
and
the
basis of the defence
upon which he or she intends to rely
in opposing a forfeiture order or applying for the exclusion of his
or her interests from
the operation thereof.’
”
“
129.
There can be no doubt that
considerable pressure and undue duress are being exerted upon the
applicants (the accused) to give their
versions in respect of the
allegations of criminality under oath in an affidavit. Should the
applicants do so, this at the very
least provides material for
cross-examination and an advance disclosure of the applicants’
case in the criminal proceedings
where up to now, they have exercised
their right to silence. If the applicants do not give their version,
this will be a potential
aspect for cross-examination, criminal
sanction and a forfeiture order by default.”
Respondent’s
contentions
[12]
In response to Mr Ploos van Amstel’s submissions Mr Budlender
contends that the applicants’ argument is based on
a number of
false premises. It cannot be said that the NDPP is not entitled to
bring proceedings under Chapter 6 because he can
obtain the same
relief under Chapter 5. The remedies which are available through a
forfeiture order under Chapter 6 are fundamentally
different from the
remedies available under Chapter 5. Mr Budlender points out that the
applicants’ contention that the court
considering an
application for a preservation or forfeiture order has no discretion
to grant or refuse the order if the statutory
requirements are met,
is incorrect, and in support he refers to
PROPHET
v NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
2007
(6) SA 169
(CC) par [58].
[13] Chapter 6 of POCA is
not reasonably capable of the interpretation that it excludes the
power of the NDPP to make a Chapter
6 application if the respondent
is the accused in a pending criminal case. It can therefore not be
“read down” to achieve
that result. He concludes that it
follows that if Chapter 6 does bring about a breach of the right of
silence. According to him,
applicants’ remedy is an order
declaring Chapter 6 inconsistent with the Constitution and invalid to
that extent, and “reading
in” words so as to make Chapter
6 not applicable to cases where the respondent is the accused in a
pending criminal trial.
No such relief is sought in this case.
[14] On a plain reading
of Chapters 5 and 6 the application of Chapter 6 is not excluded
where the respondent is the accused in
a pending criminal trial. The
power to grant a preservation and forfeiture order under sections 38
and 48 is not qualified so as
to exclude their operation when there
are criminal proceedings pending. Further, Chapters 5 and 6 establish
different prerequisites
and different remedies.
[15]
By bringing the proceedings for a preservation order where criminal
proceedings are pending, there is no breach of the Bill
of Rights. As
to the right to remain silent, civil proceedings may create pressure
to testify, but there is no compulsion. The
potential of divulging
harmful information in civil proceedings is not in conflict with the
accused’s right to remain silent
(
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS v PROPHET
2003
(6) SA 154
(C) para [9] and [10]).
[16] Regarding the right
to property, the courts in a preservation or forfeiture order
application will consider proportionality.
In answer to the
Applicants’ contention that their right to equality is breached
by the fact that the preponderance of probabilities
is used as test
in Chapter 6, whereas in the criminal trial the test is proof beyond
a reasonable doubt, Mr Budlender says that
the Constitution does not
require any particular incidence or form of the onus in civil
proceedings.
[17] If the use of
Chapter 6 proceedings for a preservation order constitutes a breach
of the Bill of Rights the following steps
should be taken in the
argument:
(i) Construe the
legislation so as to be consistent with the constitution (e.g.
“reading down”) and if that is not possible:
Find
the statute unconstitutional and if possible read words in or leave
some words out, so as to achieve consistency with the
constitution.
[18] A
court has no power to afford to any law a meaning that it cannot
reasonably bear (
WARY
HOLDINGS (PTY) LTD v STALWO (PTY) LTD AND ANOTHER
[2008]
ZACC 12
;
2009
(1) SA 337
(CC) par [106]).
[19] As to the contention
that the NDPP must use the “least invasive” procedure, Mr
Budlender points out that there
is no legal principle which requires
the NDPP to use one constitutionally compliant procedure rather than
another.
C.
CONCLUSION
[20] I agree with Mr
Budlender that in the application for a forfeiture order, the
applicants can ask that the Chapter 6 proceedings
be stayed until the
court has decided their guilt or otherwise. An application for the
stay of the civil proceedings (at the stage
when a preservation order
was in place and the court was considering the granting of a
forfeiture order) was made in
NATIONAL DIRECTOR OF PUBLIC
PROSECUTORS v PROPHER
(
supra
) para [7] – [11],
and refused.
[21] On a plain reading
of POCA Chapter 6 proceedings are not excluded where criminal
proceedings are pending. In some cases criminal
proceedings will
follow where there have been Chapter 6 proceedings, and where the
court has already considered the granting of
a forfeiture order at
the start of the criminal proceedings, and the version of the accused
on instrumentality and proceeds will
be a matter of record. There has
been no suggestion that a trial following upon the consideration of a
Chapter 6 application for
forfeiture would be constitutionally
unfair.
[22] In the application
for the forfeiture order, the applicant’s can either set out
facts why the property is not an instrumentality
of the offence or
the proceeds of unlawful activities or remain silent.
[23] If the applicants
remain silent, the forfeiture order will probably be granted. If the
applicants wish to respond, they can
say, as first applicant has
already done, that the flats were bought many years ago, before the
alleged offences were committed,
and could not have been any
instrumentality of any offence with which he is charged, and were
also not bought with the proceeds
of unlawful activities. As to the
two motor vehicles, the applicants can deny that they were
instruments or proceeds.
[24] The applicants might
have been precipitous to launch the present application to set aside
the preservation order. The preservation
order is an interim order;
it is to be followed by a request for a forfeiture order, which will
be final in effect, finally forfeiting
the property to the state
(section 56(2) of POCA).
[25] The court
considering the forfeiture application will consider whether the
constitutional rights of the applicants have been
breached, and
decide the forfeiture application accordingly, or possibly order that
the forfeiture application be stayed until
the criminal proceedings
have been terminated. Similarly the court dealing with the criminal
trial will consider whether the use
of any evidence there –
e.g. the applicants’ affidavits in the preservation or
forfeiture proceedings – would
make the trial unfair as
contemplated in section 35 of the Constitution, and will consider
excluding the content of such affidavits
under section 35(5).
[26] With regard to
applicants’ prayer that paragraph 20.4 of the preservation
order be struck out, the applicants are not
compelled to disclose any
evidence in their notice of intention to oppose under section 39(5)
of POCA. Paragraph 20.4 of the notice
of the order served on the
applicants does not create a duty which the applicants cannot ignore.
D.
COSTS
[27] The conduct of the
NDPP falls short of what a court is entitled to expect of a litigant.
First, as to the
ex parte
nature of the proceedings, the NDPP
should have systems in place so that the present applicants could
have been notified. The facts
are that the vehicles and the money
were in police custody when the application was brought. A
caveat
could have been entered in the Deeds Office by consent in respect of
the flats. It is difficult to see what prejudice the NDPP
would have
suffered had there been notice.
[28] The fact that the
NDPP applied for a forfeiture order by default because the applicants
were one day late in noting their defence
causes one to raise the
eyebrows. A plaintiff is not entitled to default judgment where the
notice of intent to defend is out of
time. In terms of the rules of
court the plaintiff is entitled to apply to have the late notice set
aside as an irregular proceeding,
but normally the late filing will
be condoned especially if it is only a day out of the time as here,
and the matter will take
its normal course.
[29] In the circumstances
the NDPP, although successful in its defence of this application,
should be deprived of its costs.
E.
ORDER
[30] The application is
dismissed. No order as to costs is made.
____________
A. KRUGER, J
On behalf of the
applicants: Adv. C. Ploos van Amstel SC
Instructed by:
Honey Attorneys
BLOEMFONTEIN
On behalf of the
respondent: Adv. G. M. Budlender SC
Instructed by:
State Attorney
BLOEMFONTEIN