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[2008] ZAFSHC 51
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National Director of Public Prosecutions v Mlambo (4999/2006) [2008] ZAFSHC 51 (29 May 2008)
IN
THE HIGH COURT OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case
No. :
4999/2006
In
the matter between:-
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
Applicant
and
PETER
MLAMBO
Respondent
______________________________________________________________
HEARD
ON:
6
DECEMBER 2007
_____________________________________________________
JUDGMENT
BY:
RAMPAI,
J
_____________________________________________________
DELIVERED
ON:
29
MAY 2008
_____________________________________________________
[1] These
proceedings are about an app
lication
in terms of
section 50
of The
Prevention of Organised Crime Act, No.
121 of 1998
. The property which is the object of this application is
owned by the respondent. The members of the national investigation
team
of the South African Police Service seized the property on 22
May 2006. The property is currently subject to the preservation of
property order granted in terms of
section 38
of POCA, No. 121 of
1998, which was granted on 29 June 2007. Now the director in this
current application seeks to have the preserved
property declared
forfeited to the State. That is the main relief sought. The
forfeiture of property order sought contains certain
ancillary
reliefs. The respondent opposes the application.
[2] In
this matter the applicant is the National Director of Public
Prosecutions, a public official appointed in terms of
section 10
read
with section 179(1)(a) of the 1996 Constitution of the Republic of
South Africa. The applicant’s principal place of
business is
located at 123 Westlake Avenue
,
Weavind, Silverton, Pretoria, Gauteng Province. I pause to remind
the applicant and the legal practitioners in general that it
is
incorrect to refer to the Supreme Constitution as Act 103 of 1996.
The Constitution is not on the same par as other national
legislations which are referred to as Acts of Parliament because it
is the supreme law of the country. It has in the past been
pointed
out that it must be referred to simply as the 1996 Constitution of
the Republic of South Africa. The words “Act
No. 103”
are therefore not appropriate to use.
[3] The
applicant’s deponent is advocate Richard James Chinner. He is
a deputy director of Public Prosecutions appointed
in terms of
section 15
of the
National Prosecuting Authority Act, No. 32 of 1998
.
He is a functionary in the office of the applicant. But more
importantly, he is the Regional Head of the Asset Forfeiture Unit
which is under the control of the applicant in Pretoria.
[4] The
respondent is Mr. Peter Mlambo an adult male and a businessman who
resides at 63 Ras van Niekerk Street, Kroonstad in the
Free State
Province. He is a person whose proprietary interests are adversely
affected by the relief sought.
[5] This
application concerns a certain property that was seized by the
members of the national investigating team of the applicant
in Welkom
on 22 May 2006. The property consists of money in the sum of R70
000,00 cash. The property is currently in Klerksdorp.
It is under
the control of Superintendent Madito, a member of the South African
Police stationed at Klerksdorp and attached to
the Precious Metals
and Diamond Unit. He is the commanding officer of the unit. The
applicant suspects the property to be the
proceeds of unlawful
activities which was why the property was seized.
[6] Although
the property is currently held outside the jurisdiction of this
court, this court has jurisdiction to entertain the
current
application. In the first place, the property was seized in Welkom,
which place is to be found within the Free State Province.
In the
second place, the preservation order in respect of the property was
granted in this court. In the third place, the forfeiture
order
sought in these proceedings flows from the preservation order granted
in the previous proceedings in this selfsame court.
Therefore, this
court is best placed to exercise effective jurisdiction in the
current matter and also represents the jurisdiction
most convenient
to deal with the dispute.
[7] It
seems to me convenient to make a few comments about the papers
relevant for the adjudication of this dispute. The case of
the
applicant is not limited to the founding affidavit made in support of
the current application for the order of the forfeiture
of property.
In addition to this, the applicant relies on the founding affidavit,
supporting affidavit and annexures thereto,
which were filed in
respect of the first preservation order that was heard by Cillié
J on 30 November 2006. In that case
the founding affidavit was made
and signed by Clive Pillay. The rest of the documents are specified
in an index filed by the applicant
on 25 June 2007.
[8] The
applicant also relies on the founding affidavit, supporting affidavit
and annexures thereto, which were filed in respect
of the first
forfeiture of property application of 16 March 2006. Since the first
preservation order expired on 15 March 2007,
90 days after it was
published in terms of
section 40
, the effort of the applicant to
obtain an order for the forfeiture of property by virtue of a belated
application of 16 March 2007,
were abortive. However, on 28 June
2007 Wright J granted a fresh preservation order of property on the
same papers as before.
It is the applicant’s request that all
its affidavits filed in support of the first preservation
application, the abortive
forfeiture application and the second
preservation application, be incorporated in the current forfeiture
application and that
the current founding affidavit be read as so
amplified.
[9] In
this current forfeiture application before me, the respondent has
filed a brief answering affidavit in which he made no attempt
to deal
with the issues. In stead, like the applicant, the respondent relies
on the affidavits and annexures he made in support
of his previous
opposition to the first preservation application, the abortive
forfeiture application and the second preservation
application. His
answering affidavit in support of his resistance to the current
forfeiture application must also be amplified
by incorporating his
previous affidavits. It will be readily appreciated, therefore, that
the allegations of facts on both sides
are scattered over a wide
range of affidavits and annexures. It is to this vast field that I
now turn.
[10] The
matter has to be considered against the following backdrop, which is
common cause or undisputed. The police suspected
that the respondent
was involved in gold smuggling. A day before he was arrested, they
embarked upon a prior surveillance of his
activities. They monitored
his movements. They targeted certain specific premises which the
respondent apparently frequented.
On 22 May 2006 they received a
surveillance report about the respondent’s whereabouts. They
then made their move on three
fronts. They carried out police raids
at 15256 Khabanyane Street, Oppenheimer Park, Welkom, at 3 Donalbain
Street, Bedelia, Welkom
and at 63 Ras van Niekerk Street, Kroonstad.
They were armed with search warrants.
[11] At
13h10 they raided Khabanyane Street. Here the National Investigation
Team was led by Captain Hendrik Frans Flynn. Mr.
George Hattingh
took down the notes. The police team searched the house and the
shack. Nothing of interest was found on the premises.
Next to this
house, but in the street the respondent’s motor vehicle, a
Mazda Etude sedan with registration number FLB 640
NW was parked.
They searched the motor vehicle and found a utility bill in the name
of B. Michalakis.
[12] At
13h10 they secured Donalbain Street. Captain Senzile Jacob Galane
led the second team of National Investigators to the
premises. The
premises were secured. Inspector Hendrik Stephanus van Dyk took down
the notes. The police team found a lady called
Alet Pitso and a
child on the premises. Captain Galane explained the purpose of the
police visit to her.
[13] At
14h40 Captain Flynn’s team of National Investigators arrived at
Donalbain Street. The team was accompanied by the
respondent. This
residential property had an electronic gate and its garage an
electronic door. The police team them searched
the main house and
found a total cash in the amount of R70 000,00. Besides the main
house, the police team also searched the cottage
and the backyard
outside. As to what was found or not found in the cottage and in the
backyard, is generally not a matter of common
cause. Besides the
money, a municipal utility bill in the name of the respondent was
found in the main house. While the police
were searching the
backyard, the respondent attempted to flee but he was recaptured.
[14] Ras
van Niekerk Street: At 15h30 the premises were secured by the third
National Investigation Team. Here the raid was led
by Captain Gideon
Petrus Greyling. During the third raid Captain Greyling took down
the notes. Among others, Captain Moletsane
Johannes Mokoena was with
him. The police team found a certain Ms Mxala on the premises. Here
the investigation team found and
seized a firearm, bank statements
and certain documents. There is one more item, a certain piece of
paper, about which there is
a dispute.
[15] According
to Sergeant A.D.O. van Blerk, the investigating officer, all the
exhibits seized during the police raids of the aforesaid
three
residential places, were handed to him and they are currently under
his control at the SAP 13 exhibit store of the Precious
Metals and
Diamond Unit at Klerksdorp in Northwest.
[16] On
the strength of what the police considered incriminating exhibits
seized during the raids, the respondent was arrested in
Welkom on the
same day, 22 May 2006. He was apparently charged with the smuggling
of gold or unlawful dealing in unwrought gold.
The relevant police
reference is Welkom CAS 475/05/2006. At the time the current
application was initiated on 8 October 2007,
the respondent’s
trial was due to commence in the Welkom Regional Court on 19 November
2007.
[17] The
version of the applicant is set out in the founding affidavit by the
deputy director, the supporting affidavit by the investigating
officer together with 18 annexures thereto, which include several
affidavits by the members of the three national investigating
teams.
The collective summary of all this is that besides the money found at
Donalbain Street, certain incriminating articles
were found, such as
pieces of unwrought gold, a certain E-11T scale, a blowtorch, gas
bottles, regulator pipes, borax and a number
of used crucibles. Some
of the equipment was connected and set up while others were buried in
the soil in the backyard. These
articles are ordinarily used during
the processing of unwrought gold. In addition to these articles, the
police investigators
also found a municipal utility bill issued in
the name of the respondent in respect of this residential property.
[18] Subsequent
to 22 May 2006, further investigation was carried out by the police.
Among others, the police obtained more information
about the
ownership of the Donalbain Street property, where the money was found
and seized. On the strength of all the information
gathered on 22
May 2006, prior thereto and subsequent thereto, the applicant’s
case is that the respondent was the owner
of the property where the
money and the incriminating articles were found and that there were
reasonable grounds to suspect that
the applicant was involved in gold
smuggling and that the property seized and preserved, constituted
proceeds of an unlawful criminal
activity.
[19] The
respondent disputes the applicant’s case in every respect where
it differs from his version. Although he admits
that, the property
seized and preserved, is his money he specifically denies that he is
the owner of Donalbain Street, the residential
property where the
money was found and seized. He also specifically denies that he was
involved in gold smuggling and that the
cash seized from the
aforesaid property formed proceeds of any criminal activity in which
he was involved. His contention is that
he derived the money from
and during the course of ordinary lawful business transactions; that
there was no real connection between
the money and any incriminating
article found at Donalbain Street and he averred the house belonged
to his late friend, Steven
Sithole, on whose behalf he purchased the
property.
[20]
Section
38
of POCA provides:
“
38 Preservation
of property orders
(1) The National Director may by way
of an ex parte application apply to a High Court for an order
prohibiting any person, subject
to such conditions and exceptions as
may be specified in the order, from dealing in any manner with any
property.
(2) The High Court shall make an order
referred to in subsection (1) if there are reasonable grounds to
believe that the property
concerned-
(a) is an instrumentality of an
offence referred to in Schedule 1;
(b) is
the proceeds of unlawful activities; or
(c) is property associated with
terrorist and related activities.
(3) A High Court making a preservation
of property order shall at the same time make an order authorising
the seizure of the property
concerned by a police official, and any
other ancillary orders that the court considers appropriate for the
proper, fair and effective
execution of the order.
(4) Property seized
under subsection (3) shall be dealt with in accordance with the
directions of the High Court which made the
relevant preservation of
property order.”
[
21] The
preservation of property order granted by Wright J on 29 June 2007,
reads as follows:
“
IT
IS ORDERED THAT:
1
. Leave
is granted in terms of
Rule 6(6)
of the Rules of Court for applicant
to renew the application for a preservation order in terms of the
prevention of Organised Crime
Act 121 of 1998 on the same papers as
previously filed in this application.
2. A preservation
order is granted in the same terms as previously granted (and which
has since expired on the 30
th
November 2006) with the exception of paragraph 9 thereof.
3. The applicant must pay the
respondent’s wasted costs of today’s proceedings.”
[2
2] The
original preservation order which was granted on 30 November 2006 by
Cillié J and referred to in paragraph 2 of the
preservation
order by Wright J reads as follows:
“
IT
IS ORDERED THAT:
The
Property
1. This order related to R70 000-00
(seventy thousand rand) in cash (“the property”).
Prohibition against dealing in any
manner with the property
2. In terms of section 38(2) of the
Prevention of Organised Crime Act No 121 of 1998 (“the Act”)
all persons with knowledge
of this order, are, other than as required
and permitted by this order, prohibited from:
2.1 removing, taking possession of or
control over, dissipating, interfering with, diminishing the value
of, pledging or otherwise
hypothecating, attaching or dealing in any
other manner with any of the movable property to which this order
relates.
3. The property shall remain under the
effective control of Superintendent Madito of the South African
Police Service’s Precious
Metals and Diamond Unit, Klerksdorp.
Living and legal expenses
4. If any respondent or any other
person holding an interest in the property satisfies the Court that:
4.1 he or she is unable to meet his or
her reasonable living expenses or those of his or her family or
household,
4.2 he or she is unable to meet his or
her reasonable legal expenses in connection with any proceedings
instituted against him or
her in terms of the Act or any other
related criminal proceedings,
4.3 he or she cannot meet the expenses
concerned out of his or her property that is not subject to this
order.
The Court may,
after the granting of this order, make appropriate provision for the
payment of such expenses as in the Court’s
determination are
reasonable, out of the property subject to this order, provided
further that no such provision for the payment
of expenses may be
made unless the person concerned has disclosed under oath all his or
her interest in the property and has provided
to the Court a full and
sworn written statement of his or her assets and liabilities.
Service and publication
The applicant shall in terms of
section 39 of the Act:
5.1 cause notice of
this order, in the form set out in annexure B hereto, together with
documents supporting the application, to
be served by the sheriff on:
5.1.1 Peter Mlambo of 3 Donalbain
Street, Bedelia, Welkom.
5.2 cause notice of this order, in the
form set out in annexure B hereto, to be published in the Government
Gazette as soon as practicable
after the order is granted.
Entry
of appearance to oppose forfeiture order
Any person who has an interest in the
property and who intends:
6.1 opposing the application for an
order forfeiting the property to the State,
6.2 applying for an order excluding
his or her interest from a forfeiture order in respect of the
property.
must enter an appearance giving notice
of such intention in terms of section 39(3) of the Act.
Such notice shall be delivered to the
applicant:
7.1 in the case of any person
specifically identified for service in terms of this order, within 14
calendar days after such service,
7.2 in the case of any other person,
14 calendar days after the date upon which a notice of the order was
published in the Government
Gazette.
A notice in terms of section 39 must
contain full particulars of the chosen address for the delivery of
documents concerning further
proceedings in this matter and must be
accompanied by an affidavit setting out:
8.1 full particulars of the identity
of the person giving the notice,
8.2 the nature and extent of his or
her interest in the property concerned,
8.3 whether he or she intends opposing
the making of the forfeiture order, or whether he or she intends
applying for an order excluding
his or her interest in that property
from the operation of the order,
8.4 whether he or she admits or denies
that the property concerned is an instrumentality of an offence
referred to in schedule 1
of the Act, or is the proceeds of unlawful
activities and the basis for such defence,
8.5 if he or she intends applying for
the exclusion of his or her interest from the operation of the
forfeiture order, the basis
for such application.
Any person who is affected by the
order may on good cause shown, apply for reconsideration thereof.
Such application shall be
made upon 72 hours notice (or such shorter
period as the Court may determine on good cause shown) to the
applicant and all other
persons identified in this order as being
persons who may have an interest in the property, and must be made
not later than 8
days after the person applying for reconsideration
becomes aware of the existence of the order, or within such further
period
as the Court may consider reasonable, bearing in mind the
underlying objectives of Chapter 6 of the Act.”
[2
3] The
new preservation order by Wright J was served on the respondent’s
attorneys. It was also published in the Government
Gazette on 7
September 2007 as would more fully appear from annexure “RJC2”
attached to the founding affidavit by R.J.
Chinner. It was duly
published in accordance with the preservation order.
[24
] In
terms of section 40 of POCA a preservation order expires 90 days
after the date on which it was published in the Government
Gazette.
This means that the requisite forfeiture application based on a
preservation order has to be filed within a period of
90 days. The
90 day period in the instant case was due to expire on 7 December
2007. However, the forfeiture application was
filed on 8 October
2007. Therefore section 40 was duly complied with. When the
forfeiture order was served on the respondent’s
attorney, does
not appear. However, the answering affidavit was signed in Welkom on
13 November 2007 by the respondent. It follows,
therefore, that
service upon the respondent’s attorney must have been effected
before the 13
th
November 2007. As I have already said the applicant relied on the
same papers that had previously been filed. The ground of the
application is that the property in question constituted proceeds of
an unlawful activity and thus capable of seizure, preservation
and
forfeiture.
[25] The
respondent indicated, in terms of section 39, that he intends
opposing the forfeiture application and he relied on his
affidavit,
as previously filed. The respondent’s resistance was grounded
on the denial that the property in question constituted
proceeds of
unlawful activities, as the applicant claimed.
[26] The
character of the procedure created in Chapter 6 of POCA has some
peculiar features:
“
POCA
provides for a unique procedure in terms of which a person who wishes
to oppose a forfeiture application has to e
nter
an appearance to defend before forfeiture application had been
launched, namely: within 14 days after the preservation order
came to
the person’s knowledge. It also requires such an appearance to
be set out under oath,
inter
alia
,
stating the basis of the defence.”
The
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS
v
CHARLTON THUSO MATJEKE
2004 TPD 17051
at par. 8 per Motata JA. This is the unreported
decision delivered on 20 June 2007.
[27] After
a suspected property has been seized, an application in terms of
Chapter 6 of POCA follows two stages: the preservation
of property in
terms of section 38 is the first stage of the process. The
forfeiture of property in terms of section 50 is the
second stage of
the process. Both the preservation stage and the forfeiture stage
are civil in nature. The rules of evidence
applicable to civil
proceedings apply to both the preservation process and the forfeiture
process as set out in this chapter.
Though separate both processes
are intertwined and interconnected.
MOHAMED
NO v NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS,
[2002] ZACC 9
;
2002 (4) SA 843
(CC). In that case Ackerman J observed that section
38 forms part of a complex two stage procedure whereby property,
which is
the instrumentality of a criminal offence, is forfeited to
the State or the proceeds of the crime are so forfeited. These
complex
provisions are tightly interconnected both as a matter of
process and substance as Ackerman J correctly remarked.
[28] The
forfeiture proceedings as outlined in section 50 are civil and not
criminal in nature. The process is governed by the
rules of evidence
applicable in civil proceedings. The rules of evidence or
constructions applicable only in criminal proceedings,
do not apply
in forfeiture proceedings (section 37).
[29] Forfeiture
applications, such as the one before me, may be launched even if
there is no prosecution against anyone. It follows
therefore that
the outcome of criminal proceedings against any individual is
irrelevant in such cases (section 50(4)). They are
recognised
defences that can be raised by a party likely to be adversely
affected by the forfeiture order sought in forfeiture
application.
The most obvious defence may be that the property was acquired
legally, in other words, that it was not derived from
any unlawful
activity. An interested party may, also, oppose the grant of the
forfeiture order sought, on the ground that he neither
knew nor had
reasonable grounds to suspect that the property formed the proceeds
of an unlawful activity or that the property was
an instrumentality
of an offence (section 52).
[30] The
court has no discretion when it
comes to making a forfeiture
order. If
the court finds on a balance of probabilities that the property in
question was an instrumentality of an offence or
the proceeds of
unlawful activities, the court must grant the forfeiture order. I
hasten to mention that the only discretion the
court has, is to
exclude the interest of parties that have shown that they acquired
interests in the property concerned legally.
But even in such a case
the court has no absolute discretion, since the court must consider
proportionality which provides it
with a discretion. This, however,
is much less of an issue in proceeds cases.
[31] The
issue to be determined is, therefore, whether on a balance of
probabilities the court can find that the property seized
and
preserved, constituted proceeds of unlawful activities or
instrumentalities of an offence.
[32] It
has been held that the instrumentality test entails three enquiries.
The first dimension is the nexus between the offence
and the property
and the extent of the property’s role in the offence. The
second dimension is the role and culpability
of the property owner.
The third dimension is the possibility of separating offending
properties that can be readily be separated
from the remainder. See
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS v R O 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
2004 (2) SACR 208
(SCA).
[33
] In
measuring the strength and extent of the nexus between the properties
sought to be forfeited and the offence, the following
factors were
identified as useful. The first factor is whether the use of the
property in the offence was deliberate and planned
or merely
incidental and fortuitous. The second factor is whether the property
was important to the success of the illegal activity.
The third
factor is the duration in which the property was legally used and the
special extent of its use. The fourth factor
is whether its illegal
use was an isolated event or had been repeated and the fifth factor
is whether the purpose of acquiring,
maintaining or using the
property was to carry out the offence. See
UNITED
STATES v CHANDLER
[1994] USCA4 2075
;
36 F 3d 358
(1998) which was quoted with approval in
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS v R O COOK PROPERTIES (PTY) LTD;
and
two other cases,
supra
,
and in
PROPHET
v NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
2006 (1) SA 38
(SCA). It was further pointed out that none of the
factors was individually decisive and that the court must be able to
conclude
after considering the totality of the circumstances that the
property was a substantial and meaningful instrumentality in the
commission
of the offence.
[34] The
purpose of an application for the forfeiture of property was
described as follows in
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS v R O COOK PROPERTIES (PTY) LTD;
and
two other cases,
supra
,
firstly, the removing of the incentives of crime; secondly, the
deterring of persons from using or allowing their property to
be used
in crime; thirdly, the eliminating or incapacitating of some of the
means by which crime may be committed and fourthly,
the advancing of
the ends of justice by depriving those involved in crime of the
property concerned.
[35] The
court made the point that although certain of the purposes of
forfeiture under Chapter 6 had penal elements, the objectives
of the
Chapter were not underpinned by penal considerations. In the case of
MOHAMED
,
supra
,
the Constitutional Court held that the primary objective of
provisions of this sort, is to remove the incentive of crime not to
punish criminals. In other words, any proportionality analysis would
have to weigh the impact of the forfeiture on the respondent,
not
only against the severity of his crime but also against the backdrop
of public interest in the prevention of crime, because
both are
legitimate objectives that forfeiture is designed to serve.
[36] Section
1 of POCA provides that
“
....
proceeds of unlawful activities means any property .......... which
was derived, received or retained .......... in connection
with or as
a result of any unlawful activity carried on by any person and
includes any property representing property so derived.”
This
definition was considered in the
NATIONAL
DIRECTOR OF PUBLIC PROSECUTIONS v R O COOK PROPERTIES (PTY) LTD;
and
two other cases,
supra
,
[2004] 8 BCLR (SCA) 844 at par. 67 – 72. The court examined
all the factors bearing on its interpretation and concluded
that for
a property to constitute proceeds of unlawful activity, the
connection the definition envisages, requires some form of
consequential relation between the property and the unlawful
activity. In other words the proceeds must, in some way or other,
be
the consequences of the unlawful activity.
[37] I
now turn to examine the factual allegations in support of the two
conflicting versions in the instant case. The cash, in
other words,
the preserved property was found at 3 Donalbain Street, Bedelia in
Welkom. On the one hand, it is the applicant’s
contention that
the place where the money was found is the respondent’s house.
On the other hand, it is the respondent’s
contention that the
place where the money was found is a friend’s house and not
his. On behalf of the applicant it was submitted
that the cash
constituted proceeds of unlawful activities in the form of illegal
dealings in unwrought gold. On behalf of the
respondent it was
submitted that there were no reasonable grounds to sustain the
applicant’s suspicion.
[38] The
respondent alleged that the house in question was purchased and owned
by his late friend, a certain Steve Sithole, a Zimbabwean
national,
who at one stage worked at No. 5 shaft of President Brand Gold Mine
in Welkom. He stated in his opposing answering affidavit
that after
his death, Sithole was buried in Zimbabwe. It is his case that the
deceased Sithole’s heir or heiress is now
the legitimate owner
of the residential property in question. The explanation is riddled
with vagueness. The respondent does
not say where and when Sithole
died or why Sithole could not purchase the property in his name.
Moreover, and this is very important,
it appears that he does not
even know Sithole’s next of kin in Zimbabwe or their address.
He apparently made no efforts
through Sithole’s last employer
to trace Sithole’s relatives in Zimbabwe and to inform them
about a major asset in
the deceased estate of the late Steve Sithole.
[39] At
the time the cash was seized, a certain lady, Ms Alet Pitso, was
found in occupation of the residential property concerned.
She was
placed in occupation of the property by the respondent and not his
late friend. According to the respondent the lady
was his
girlfriend. According to the investigator the lady was the
respondent’s wife. Whether the lady was the respondent’s
girlfriend, as he alleges, or his wife, as the applicant alleges, is
immaterial. What is important is that she was in one way
or the
other related to the respondent and not to the alleged friend.
[40] The
respondent’s version as relates to the ownership of 3 Donalbain
Street, fails to impress me. As at 16 October 2006
the property was
still registered in the name of a certain Barbara Michalakis.
Subsequent to the seizure of the property on 22
May 2006 further
investigation revealed that Barbara Michalakis married a certain
gentleman by the surname Giannakopoulos approximately
nine years
before the police raided this particular property. The
Giannakopoulos couple sold the property to the respondent.
The sale
transaction took place about a decade ago, in May 1997 to be precise.
(Van Blerk’s affidavit paragraphs 20, 21
and 31 and the
annexure thereto) According to Mr. Giannakopoulos the property was
sold to the respondent and, in his affidavit,
no mention is made to
the effect that the respondent purchased the property for and on
behalf of someone else.
[41] To
this day the respondent still pays the municipal utility bill in
respect of 3 Donalbain Street. (Van Blerk’s affidavit
paragraph 22) The municipal water and electricity account is held in
the name of P. Mlambo of 3 Donalbain Street, Bedelia, Welkom.
The
document was obtained from the First National Bank during further
investigation that followed the raid of 22 May 2006. The
averment is
admitted by the respondent. See Mlambo’s answering affidavit
par. 50.6.
[42] Besides
the sedan, a Mazda Etude with registration number FLB 640 NW which
the respondent was driving on his arrival at Khabanyane
Street in 22
May 2006, another motor vehicle belonging to the respondent was found
in the garage at 3 Donalbain Street. (Flynn’s
affidavit
paragraphs 19 and 20) The property situated at 3 Donalbain Street
had an electronic gate and an electronic garage door.
The
interesting thing about this is that the respondent denies the
allegation that the gate and the garage doors were opened by
means of
remote controls that were found in his Mazda Etude. According to him
the gate was already open on Flynn’s arrival
on the scene. But
he does not deny that he possessed remote controls for the electronic
gate and the electronic garage doors.
See Blerk’s affidavit
paragraph 10 and the annexures thereto which include Flynn’s
affidavit.
[43] Perhaps
the most telling documentary evidence against the respondent is that
he furnished Matjhabeng Local Municipality with
building plans for
the approval of certain extensions which he and nobody else wanted to
effect to 3 Donalbain Street. Now, if
this residential property was
an asset in the deceased estate of his late friend on whose behalf he
had purchased it from the Giannakopoulos
couple, on what basis did
the respondent decide to effect certain alterations to the fixed
property without the consent of the
heir or the heiress or the
executor of the deceased estate of his late friend. (Flynn’s
affidavit paragraph 22)
[44] In
the light of the aforegoing factors I have come to the conclusion
that on a balance of probabilities the version of the
applicant is
far more probable than the version of the respondent as to the
ownership of 3 Donalbain Street. The version of the
respondent that
he purchased the property for and on behalf of his late friend is
riddled with improbabilities. His conduct leaves
much to be desired.
The way he had dealt with 3 Donalbain Street for an inordinately
long period of about ten years at the time
the property was raided by
the police, strongly militates against his own version. It is my
finding, therefore, that 3 Donalbain
Street was at all times,
material to this matter, owned by the respondent and no-one else,
notwithstanding the fact that he never
officially and legally took
transfer thereof from the Giannakopoulos. It seems to me that his
decision not to take transfer of
the property was not occasioned by
any ignorance. I shall revert to this point later.
[45] It
is the respondent’s contention that he resided at Kroonstad and
not in Welkom. But the fact remains that he had an
intimate
relationship with Ms Alet Pitso. According to the investigators the
lady admitted that she resided on the property at
3 Donalbain Street.
The respondent confirmed that the lady indeed resided there,
although he disputed that he was also resident
on the same property.
According to the investigators who raided the 6 Ras van Niekerk
property, they found a certain Ms Mxala.
How she related to the
respondent does not appear on the papers. But that is not all.
Exactly who the respondent’s wife
is, also does not appear on
the answering affidavit. If Ms Mxala was his wife the respondent
would probably have said so.
[46] The
impression I got upon my reading of the papers was that Ms Mxala was
probably a housekeeper. She did not claim the respondent
to be her
husband. Now, consideration of all these factors, gives credence to
the investigators’ allegation that Ms Alet
Pitso claimed the
respondent to be her husband. That claim is more probable than not.
If that is so then the applicant’s
contention that the
respondent also resided at 3 Donalbain Street, among others, appears
persuasive.
[47] I
now turn to the raid of 3 Donalbain Street on 22 may 2006. The raid
took place against the backdrop of observations done
by the police
regarding the respondent’s suspicious activities. As a result
of such observations the police came to suspect
that the respondent
was involved in gold smuggling activities. It was precisely this
suspicion which led to the raids of 22 May
2006. At 3 Donalbain
Street they found the following incriminating articles in a cupboard
in the outside cottage: two pieces of
unwrought gold. In the
backyard on the premises and buried in the soil used they found
crucibles with traces of unwrought gold.
Again in the backyard but
this time on the ground under a tree they found one piece of
unwrought gold. See Van Blerk’s
supporting affidavit
paragraphs 14, 15, 16 and 19 and annexures referred to.
[48] Besides
gold itself, the following articles were also found: Inside the house
an E-11T scale; in the outside cottage gold processing
equipment
consisting of two gas bottles, regulators, pipes and a blowtorch.
All this pieces of equipment had been connected and
set up. In the
backyard, buried in the soil, borax, a chemical used in the
processing of unwrought gold was found. Van Blerk’s
supporting
affidavit paragraphs 13 and 15 together with the annexures thereto.
[49] When
the police investigating team was busy searching the backyard the
respondent made an abortive attempt to flee from the
scene. He
jumped over the fence and ran down the street. However, he was very
swiftly apprehended. His explanation for this
behaviour is that he
wanted to run to a place where he could call his lawyer. I am of the
view that this explanation is patently
false. In the first place, on
his own version, he did not know who the intruders were. He believed
that the invaders or the raiders
were robbers. How on earth would a
lawyer have assisted or rescued his client from the robbers?
[50] If
he honestly believed the raiders were robbers, he would have thought
of contacting the police first and foremost. It seems
to me more
probable than not that the respondent knew that the raiders were
members of the police. That knowledge, notwithstanding,
he never
asked the police to let him call his lawyer. His explanation is
farfetched and false. The reasons why the respondent
ran away, is
simple. The guilty are afraid.
[51
] As
I see it, the cumulative effect of all the aforegoing incriminating
articles, incriminating conduct of the respondent, his
hopeless
attempt to distance himself from the ownership of 3 Donalbain Street,
the numerous false aspect of his explanation, has
driven me to come
to the conclusion that the respondent was indeed using 3 Donalbain
Street as a smelthouse for the purpose of
processing unwrought gold
illegally. This explains why for almost a decade he purchased an
immovable property but took no serious
steps to have the transfer
registered in his name. During the search unwrought gold found on
the property in 3 Donalbain Street
had the mass of 46,1732 grams with
a value of R6 389,00 according to the assessment report by the
forensic science laboratory.
[52] During
the search of 3 Donalbain Street members of the police investigating
team did not find evidence that the premises were
inhabited by any
other occupants. On the contrary documents belonging to the
respondents were found in almost all the rooms of
the house during
the search. (Flynn’s affidavit paragraph 18) I reject the
respondent’s claim that besides his aforesaid
girlfriend there
were tenants living on the premises. What is striking about his
explanation is that the respondent himself made
no mention of one of
the various tenants who inhibited the property at various times, at
he alleged. There is no grain of truth
in this explanation. Taking
everything into consideration leads me to the conclusion that the
respondent was not a mere frequent
visitor to 3 Donalbain Street or a
mere innocent resident, he was much more. He was a smuggler of
unwrought gold with a relatively
clean place of residence at
Kroonstad and an unlawful smelthouse or workplace in Welkom. It is
in the smelthouse where the cash
was found.
[53] I
turn now to the critical issue of the money. The R70 000,00 cash was
found on the scene at 3 Donalbain Street where it was
seized. On the
strength of the ownership of the residential property as well as a
number of incriminating articles that were found
on the premises
where the money was also found, the applicant contended that the cash
constituted proceeds of an unlawful activity
and therefore was
capable of been subject to the forfeiture order in terms of the
legislation we are here dealing with. On the
strength of his denial
of ownership pertaining to the residential property in question, his
ignorance of the incriminating objects
which were found on the
premises where his money was also found and the absence of forensic
test results which positively indicated
that his money was
contaminated with any traces of gold, the respondent contended that
the cash or the preserved property did not
constitute the proceeds of
unlawful activity and therefore was incapable of been subject to a
forfeiture order as sought by the
applicant.
[54] Ms
Marais, counsel for the applicant, submitted that the respondent’s
financial statements and the supporting information
thereof which he
supplied to the South African Revenue Services showed that the
respondent was not earning sufficient legitimate
income to justify
his possession of the R70 000,00 cash. (See Van Blerk’s
affidavit paragraphs 25 – 28.)
[55] Mr.
Heymans, counsel for the respondent, disagreed. He submitted that
the respondent was earning sufficient legitimate income
to justify
his possession of a modest amount of R70 000,00. He submitted that
the money originated from the respondent’s
lawful business
activities.
[56] The
respondent is a proprietor of a business enterprise called Gain
Discounters CC. As at 22 May 2006 he was trading at Maokeng
in
Kroonstad. He was previously trading in the central business
district of Kroonstad. The business had been in existence for
about
ten years at the time the cash was seized.
[57] Five
annual financial statements were annexed to his answering affidavit.
These indicated that as at 28 February 2002 the
turnover was R833
018,00 and the net profit R45 591,00; as at 28 February 2003 turnover
R504 847,00 net profit R39 949,00; as at
28 February 2004 turnover
R393 617,00 net profit R47225,00; as at 28 February 2005 turnover
R340 430,00 net profit R49 109,00;
as at 28 February 2006 turnover
R264 367,00 net profit R48 929,00.
[58] It
was argued on behalf of the respondent that for a business man with
that sort of a turnover an amount of R70 000,00 was
not
extraordinarily a large sum of money. The respondent stated that he
always kept a certain amount of cash to cover unexpected
business or
private needs. The cash seized from him was partly his working
capital and partly his savings. From time to time
he used the funds
to make loans to friends. The cash was money he earned through
honourable business endeavours over a decade.
Besides the Kroonstad
business he started another business at Kutloanong in Odendaalsrus.
[59] In
the light of the aforegoing I am not persuaded by the applicant’s
contention that the respondent did not earn sufficient
legitimate
income to justify his possession of the cash we are here concerned
with. It is not inconceivable for such a business
man to have such
an amount in his possession. But that is not all. The difficulty I
have is that the cash was found in seven
packs of R10 000,00 each.
Each pack consisted of R100 notes only. If the money was earned
during the course of ordinary business
dealings one would have
expected to find all sorts of banknotes including coins in the
respondent’s possession. This was
not the case. This raises
the suspicion that the money did not emanate from the respondent’s
honourable business endeavours.
[60] It
is common cause that the cash was found concealed in the roof at 3
Donalbain Street. This in itself created a great suspicion
that
there was something untoward about the cash. This is how the
respondent explains the suspicious circumstances:
“
I decided not to keep the money
at my own place (6 Ras van Niekerk Street, Kroonstad) because as a
business man I am exposed to
robbery and my house is always a
target.”
(
Bracketed
words are mine.)
[61] The
difficulty I have is that according to the respondent’s
version, he permanently lived at Kroonstad, but frequented
3
Donalbain Street, Bedelia in Welkom where his girlfriend lived. The
business which generated his livelihood was at Kroonstad
and not in
Welkom. Yet, he kept the money which he used for emergency purposes
for business as well as private not at Kroonstad
where the business
was but at Welkom far away from the business. His explanation that
he did so because his house at Kroonstad
was vulnerable to robberies,
fails to impress. Obviously carrying money up and down to Welkom and
back to Kroonstad was equally
risky. Besides, according to his own
version, at 3 Donalbain Street his girlfriend was not staying alone.
There were other faceless
and dubious characters who occupied the
same property and who were possibly involved in the smuggling of
gold. Now if his permanent
residence at Kroonstad was vulnerable, it
seems to me that his girlfriend’s residence in Welkom was
equally vulnerable.
The value added forms from the South African
Revenue Services which the respondent attached to his answering
affidavit, do not
in my view take this case any further. They merely
show that contrary to what the applicant had claimed, the respondent
was officially
registered as a vendor for the purposes of value-added
tax.
[62] It
is undisputed that the respondent bought the premises where the money
was seized; that he was present at 3 Donalbain Street
when the
premises were raided; that cash was found hidden in the roof of the
house; and that physical objects such as gas bottles,
pipes,
regulator, blowtorch, crucibles and borax were found on the premises.
Although the respondent denies ownership of the residential
property
and knowledge of these various physical objects which were found on
the premises, his girlfriend occupies the premises
permanently and
the respondent frequently visits the place and stays with his
girlfriend during such visits.
[63] It
is crystally clear to me that the respondent attempts to distance
himself from the residential property at 3 Donalbain Street,
since
unwrought gold and gold processing equipment, which articles were
highly incriminating, were found there. I have already
found that
the residential property in question belonged to the respondent; that
the unwrought gold belonged to him and that all
the gold processing
equipment also belonged to him.
[64] Among
the incriminating tools used in the gold processing were crucibles.
These crucibles had already been used. They were
found buried in the
soil in the backyard. The story they tell was that gold processing
incidents had previously taken place on
the premises. This evidence
suggests that the cash was derived from an unlawful activity. The
crucibles were hidden in the soil.
The cash was hidden in the roof.
The respondent was responsible for hiding the cash. He probably was
also responsible for concealing
the crucibles.
[65] Besides
the crucibles and the borax that were buried in the soil and the
unwrought gold found on the premises, a number of
tools used in the
gold processing were also found on the premises. These tools were
not loosely lying around. They were deliberately
connected and set
up and ready to be used, like the crucibles, the rest of these tools
are ordinarily used in the industrial processing
of gold. This
evidence strongly suggests that whoever buried the crucibles in the
soil in the backyard, was also responsible for
the connecting and
setting up the equipment found in the outside room. The state of
readiness of the equipment, strongly suggests
that cash found in the
roof was to be utilised to continue with the unlawful activities in
the future.
[66] I
have no doubt that the cash was important to the success of the
illegal activity of gold smuggling. In this sense one may
say that
the cash found in the smelthouse, if not the proceeds of unlawful
activities, then it was an instrumentality of further
unlawful gold
smuggling activities. It appears to me that the owner of the cash,
as the owner of the unlawful smelthouse, was
keeping the money as
operating capital in order to pay the small runners, the poor
desperate souls, who often project themselves
as
bona
fide
mineworkers, enter the shafts, and spend days in the dark tunnels of
the mines stealing gold dust. As a judge I read about these
trespassers time and time again in the criminal reviews that I do
from the district courts. I have also seen a TV documentary
about
these small fries who sometimes even die underground.
[67] On
the facts I am persuaded that the use of the cash in the offence of
gold smuggling was deliberate and planned and not merely
incidental
and fortuitous; that the use of the cash was important to the
continued success of the illegal activity; that the cash
was always
kept as a revolving credit derived from gold smuggling and
occasionally used and kept to pay suppliers in the future;
that the
illegal use of the cash was not an isolated event but rather kept to
facilitate a prospective repeat(s) of an unlawful
activity that had
been done before as clearly evidenced by the ready to be used
connected equipment and the already used crucibles
and that the
purpose of acquiring and maintaining cash readily available or using
the cash was to carry out the offence further.
[68] In
the light of the aforegoing I find that there was a positive nexus
between the smuggling of gold on the one hand and the
property
together with its role in the offence on the other hand. The
suspicious role and the culpability of the owner was clearly
demonstrated through his acts of concealing and that separating the
offending cash from the remaining untainted properties, was
justified
in the circumstances of this case since the primary aim was to take
away the incentive of crime.
[69] For
the reasons enumerated above I have come to the conclusion that the
cash that was found hidden in the roof of the respondent’s
house, situated on the premises where a number of incriminating
objects were also found, constituted the proceeds of the respondent’s
unlawful activities in the form of gold smuggling. I would,
therefore, uphold the contention of the applicant and reject that
of
the respondent to the contrary.
[70] Although
certain aspects of the applicant’s version were disputed by the
respondent, nothing significant tends on that
dispute. To argue that
such a dispute amounts to a serious factual dispute, is an argument
which failed to impress me. In my
view, there is no real, genuine
and
bona
fide
dispute that cannot be resolved on the papers. Therefore there is no
need to have the matter referred to oral evidence. The version
of
the respondent was so patently farfetched that I do not hesitate to
reject it outright as false.
[71] There
is one more issue which I need to address. The respondent raised a
point
in
limine
that the affidavit of Clive Pillay in the preservation application,
was not dated and that the town at which it was made was not
stipulated.
[72] It
is so that the attestation certificate was defective in those
respects. However, the attestation certificate clearly shows
that
the affidavit was made and the oath taken at Braamfontein. Moreover,
the affidavit was properly signed by the deponent.
The relevant
notice of motion in respect of the original preservation application
was dated 23 November 2006. It was signed in
Bloemfontein by Ms M.M.
Naidoo, the State Attorney. In the notice of motion reference was
made to Clive Pillay’s affidavit.
It stands to reason,
therefore, that by 23 November 2006 Clive Pillay had already signed
the affidavit in dispute.
[73] Counsel
for the applicant submitted that the provisions relating to the
attestation of affidavits were directory and not peremptory.
She
argued that the affidavit substantially complies with the
requirements for the attestation in all other respects. I am
persuaded
by her submission. It has been held that the provisions of
Regulation 4(1) were directory. Failure to comply with them was
condoned
in a number of cases.
EX
PARTE DU TOIT
1962 (1) SA 45
(E);
SWART
v SWART
1950 (1) SA 263
(O) at 265 – 267;
S
v MUNN
1973 (3) SA 734
(NCD). In my view the point
in
limine
was not well taken. Therefore, it cannot succeed.
[74] In
conclusion, I hold the view that a proper case has been made out for
the forfeiture order sought. Factually the suspicion
was justified.
Legally the requirements of section 50 have been duly complied with.
I would, therefore, grant an order for the
forfeiture of the property
concerned.
[75] Accordingly
I make the following order:
75
.1 An
order is granted in terms of the provisions of
section 50
of the
Prevention of Organised Crime Act, No. 121 of 1998
declaring forfeit
to the State certain property namely: R70 000,00 in cash which
property is presently subject to a preservation
of property order
granted by this Honourable Court under the above case number on the
30
th
of November 2006;
The
appointment of a
curator
bonis
is hereby dispensed with. The property shall vest in the State,
and Superintendent Madito, of the Precious Metals and Diamond
Unit
Klerksdorp, of the South African Police Service or an officer of an
equal or higher rank, is directed to deal with the
property as
follows:
Assume control of the
property and take it into his custody;
To deposit the cash
into the Criminal Asset Recovery Account established under section
63 of the Act, account number 80303056
held at the South African
Reserve Bank, Pretoria.
The Registrar of this
Honourable Court must publish a notice of this Order in the
Government Gazette as soon as practical after
the Order is made.
Any person affected by
the forfeiture order, and who was entitled to receive of the
application under section 48(2) but who
did not receive such
notice, may within 45 days after the publication of the notice of
the forfeiture order in the Gazette,
apply for an order under
section 54 of the Act, excluding his or her interest in die
property, or varying the operation of
the order in respect of the
property.
All the paragraphs of
the order operate with immediate effect, except paragraphs 4, 5 and
6, which will only take effect on
the day that a possible appeal is
disposed of in terms of section 55, or on the day that an
application for the exclusion of
interests in forfeited property in
terms of section 54 of the Act is disposed of, or after expiry of
the period in which an
appeal may be lodged or application be made
in terms of section 54 of the Act.
The costs of this
application are awarded to the applicant.
______________
M.H. RAMPAI, J
On
behalf of the applicant:
Adv.
Amanda Marais
Instructed
by:
The
State Attorney
BLOEMFONTEIN
On
behalf
of
the respondent: Adv. P.J. Heymans
Instructed
by:
E
G Cooper Attorneys
BLOEMFONTEIN
and
Muller
& Partners
WELKOM
/sp
2008/05/26
02:38 PM
2008/05/27
10:08 AM
2008/05/29
09:12 AM