The National Director of Public Prosecutions v Fielies and Another (529/03) [2004] ZANCHC 99 (26 March 2004)

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[2004] ZANCHC 99
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The National Director of Public Prosecutions v Fielies and Another (529/03) [2004] ZANCHC 99 (26 March 2004)

Reportable: Yes /
No
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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division)
Case
no: 529/03 Date delivered: 26/ 03 /2004
In
the matter of:
THE
NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS APPLICANT
and
FIELIES,
YVONNE FIRST RESPONDENT
VISSER,
DAWID SECOND RESPONDENT
JUDGEMENT
TLALETSI
J:
INTRODUCTION
[1] This
is an application brought by the National Director of Public
Prosecutions (NDPP) for civil forfeiture of property under Section
48(1) of the Prevention of Organised Crime Act 121 of 1998 (POCA,
hereinafter called “the Act”). The applicant obtained a
provisional
preservation order in terms of Section 38(2) of the Act
on the 13
th
June 2003 and was confirmed by this court on the 11
th
July 2003.
[2]
The properties which are the subject matter of the application are:
(a)
Erf 1748, Hartswater, situate at 78 Felecia Street, Hartswater.
(b)
One Pool Table
(c)
One music system (“juke box”)
(d)
One box freezer, and
(e)
One refrigerator
[3]
The NDPP had to, in terms of Section 48 of the Act apply to the
High Court for an order for the forfeiture of all or any of
the
property concerned. In terms of Section 50(1) the High Court shall
grant the forfeiture order applied for by the NDPP if it
finds on a
balance of probabilities 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. The proceedings under
chapter 6 are deemed to be civil proceedings and are governed
by the
rules of evidence and procedure applicable to proceedings of that
kind. The purpose of this chapter is intended to target
the asset
bases of criminal enterprises, independent of criminal proceedings.
The focus is on the property that has been used to
commit an offence
or which constitutes the proceeds of crime and not the wrongdoer’s
per
se
.
See:
National
Director of public
Prosecutions
and Another v Mohamed NO and Others
2002(2) SACR 196 (CC) at 204 c-d and 204 f, and
National
Director of Public Prosecutions v Prophet
2003(2) SACR 287 (CPD) at 291 d-f.
THE
APPLICANT’S CASE
[4] The
applicant is seeking an order against the respondents for the
forfeiture of the property which the applicant contends that
it has
been used in the unlawful sale of liquor. Section 154(1)(a) of the
Liquor
Act 27 of 1989
makes it an offence for a person to sell liquor without a valid
licence. On conviction the offender may be liable to pay a fine
or
sentenced to imprisonment for a period of not more than five years.
[5] The
applicants’ application is based on the affidavit of JULIANA
GALETLANE RABAJI, the Special Director of Public Prosecutions
in the
Asset Forfeiture Unit, acting on the authority of the National
Director Of Public Prosecutions dated 3
rd
April 2001. She referred to the affidavits of JACOB VAN RHENEN
SAUNDERS (Saunders) a Superintendent in the South African Police
Services (SAPS) stationed at Hartswater Police Station. The factual
background of the application is set out in Saunders’ affidavit
together with annexures thereto, filed in support of the Application
for a preservation order.
[6] The
First Respondent is the registered owner of Erf 1748 Hartswater. Two
separate buildings have been erected on the premises.
The first is
the main house and the second building (the shebeen) is erected
towards the rear of the main house. It is alleged
that the business
of the shebeen is conducted mainly from this latter building although
liquor is also sold and stored in the main
house. Access to the
shebeen is controlled through a security gate and a door. The
shebeen is divided into various demarcated areas.
The first is the
sales area, in which liquor is stored in refrigerators and sold to
the public through a security window. The second
is a public area
consisting of a large room wherein a music system or a ‘juke box’
and a pool table have been installed. The
third area is the storage
room which is towards the rear of the shebeen. This area is usually
used for the storage of empty beer
crates.
[7] The
main house consists of three bedrooms, a lounge, bathroom, store room
and a kitchen. Saunders alleges that liquor is stored
in the store
room as well as the refrigerator in the kitchen. Sales of liquor
take place from the kitchen mainly over weekends.
The property is
within the area Jurisdiction of this Court.
[8] During
the year 2000 The Second Respondent lodged an application with the
Provincial Liquor Board for a licence to operate a tavern
on the
premises. His application was not granted by the Liquor Board. It
appears that a number of residents and interested parties
lodged
objections to the application with the liquor board.
[9] On
the 12
th
January 2001 Superintendent Saunders together with other members of
the SAPS conducted a trap in terms whereof the First Respondent
sold
liquor to a constable in the SAPS without a licence. There were many
people in the premises who appeared to be shebeen patrons.
When
police attempted to arrest the Respondents for illegal sale of liquor
the police were locked on the premises and assaulted
with stones.
SAPS motor vehicles used in the operation were damaged by these
people. Police reinforcements were called from Kimberley
for
assistance. Several people including the Respondents were arrested.
Large quantities of liquor and soft drinks were seized by
the police.
Other items seized were books containing names of various
individuals with amounts of money next to the names. Second
Respondent pleaded guilty to a charge of selling liquor without a
licence and was convicted and sentenced to a fine of R300-00 or
120
days imprisonment. At least one of the individuals arrested at the
premises pleaded guilty to unruly behaviour. In his plea
explanation
he disclosed that the shebeen business is operated in the premises.
[10] On
the 29
th
June 2001 The First Respondent’s daughter, who is a minor, was
arrested as a result of an alleged trap for selling liquor to a
member of the SAPS without a licence. Although the First Respondent
was not present, she was later joined as co-accused to her daughter’s
charges and trial. Some quantities of liquor as well as a cash box
were seized. The two were subsequently acquitted of the charges
against them. Of interest is the fact that the First Respondent’s
daughter’s defence at trial was a a denial of sale of liquor
to the
police officer used for the trap, and stated that she gave him liquor
free of charge thinking that he was one of the guests
who were to
attend First Respondent’s party that day.
[11]
On the 25
th
February 2003, Inspector Willem van Staden, a member of the SAPS
acting on a search warrant, conducted a search on the premises.
He
seized large amounts of liquor and empty crates. As the Second
Respondent Could not produce a licence to sell liquor he was
arrested
and charged for dealing in liquor without a licence. This case is
still pending before the Magistrate Court Hartswater.
[12] Superintendent
Saunders referred to various crimes reported allegedly having taken
place at or near the shebeen. These relate
to murder, attempted
murder, common assault and assault with intent to do grievous bodily
harm. He referred to a statement by the
Public Prosecutor who
alleges that several dockets have been opened pertaining to offences
which occurred at or near the shebeen.
In his view closure of the
shebeen will decrease crime in the area. Saunders concludes that the
sound system, pool table and the
refrigerators were probably
purchased with the proceeds of the respondents unlawful sale of
liquor and they constitute proceeds of
crime. That the refrigerators
are instrumentality of the offence as they are used to store and
refrigerate the liquor. He stated
that the respondents have
demonstrated that they do not have any intention of ceasing their
illegal operation from the premises,
and that criminal proceedings
have thus far and will not deter the Respondents from illegal
conduct.
RESPONDENTS
CASE
[13] The
Respondent’s version of the historical background of events does
not differ materially from that of the applicant. The
layout of the
premises by the applicant is admitted by the Respondents. They
dispute that they started to sell liquor since 1998
as they only
started building on the premises in 1999. They admit that liquor was
sold on the premises without a licence. They
however state that the
sale was ceased as from March 2003 after Inspector van Staden spoke
to the Second Respondent about the sale.
He admits that he was fined
R300-00 for unlawful sale of liquor and further that his application
for a liquor licence was tuned down.
[14]
In response to the incident of the 12
th
January 2001 Second Respondent admit the incident having taken place
and that charges were withdrawn against other people who were
arrested. It was then that Superintendent Saunders told him that he
will ‘
get
him
’
and this started a vendetta against him. Although he does not
dispute that various crimes were reported to the police, he stated
that they were not necessarily connected to their premises and that
there are other shebeens in the area patronised by people.
[15] The
Respondents deny that the property was obtained through the proceeds
of the unlawful sale of liquor. The First Respondent
already had the
immovable property as an inheritance from her late husband before
liquor was sold in the premises. As regards the
music system or juke
box, it is alleged that it was hired from one Ben and Claude since
the year 2001. The box freezer was purchased
in December 2002 at
Price and Pride stores, Hartswater and is fully paid up. The
refrigerator was purchased by the First Respondent
at Bears Furniture
Stores as a second hand item.
[16] The
Respondents therefore do not dispute the following averments and are
common cause:-
16.1
that there is a shebeen at the property,
16.2
that they are not in possession of a valid licence to sell liquor,
16.3
the layout of the buildings on the premises which was structured as
such for the purpose of an application for a liquor licence,
and sale
of liquor.
16.4
that the SAPS took some action against the shebeen and that
quantities of liquor have been confiscated,
16.5
that there was resistance to SAPS action on the property,
16.6
that the Second Respondent pleaded guilty to unlawful dealing in
liquor and paid a fine of R300-00
16.7
that the First Respondent and her daughter were arrested for
unlawful dealing in liquor and were subsequently acquitted,
16.8
that there could be crimes reported in the area although the
Respondents say that they may not necessarily be connected to
their
shebeen,
16.9
that there are various complaints from members of the community
about the existence of the shebeen.
THE
ISSUES
[17] Both
counsel are in agreement that the issues to be decided are firstly
whether the property is an instrumentality of an offence,
and or
whether the property or some of the property are the proceeds of
crime. In addition Mr Schreudder who appeared on behalf
of the
Respondents raised an argument that the Act is concerned with
organised crime and therefore contravention of Section 154 (1)
(a) of
the Liquor Act is not covered by the Act.
IS
THE ILLEGAL SALE OF LIQUOR AN OFFENCE
CONTEMPLATED
IN SCHEDULE 1 OF the ACT
[18] Illegal
sale of liquor is not specifically listed in schedule 1 of the Act.
Item 33 however makes provision for any offence,
the punishment
whereof may be a period of imprisonment exceeding one year without
the option of a fine. It was argued on behalf
of the Respondents
that this item should not be interpreted widely so as to include
illegal sale of liquor as there are specific
offences mentioned in
the schedule by name, and not by penal reference, and that the words
“
without
the option of a fine
”
is a type of an offence, where provision for a fine is not provided
for. This argument finds support in the decision of Fevrier
AJ in
Ex
Parte
National
Director of Public Prosecutions
,
case no.: 2380/2000 (WLD) decided
on
05/09/2000 (unreported
).
[19]
Foxcroft J in
National
Director of Public Prosecutions
vs
Patterson
and Another
case no
.:
12100/99 delivered
on
24/04/2001 (unreported)
where he was confronted with similar argument about the applicability
of item 33 to the illegal sale of liquor had the following
to say at
page 4 line 18 – page 5 line 9:
“I
agree with the finding in that judgement that the words “without
the option of a fine” in item 33 of Schedule 1 do mean
that
Parliament has prescribed that those words, as they appear in items
33, relate to the period of imprisonment exceeding one year.

Clearly, Parliament was dealing with what it regarded as a category
for reasonably serious offences (in addition to the ones already
listed). One way of providing a broad general category for such
offences would be to look at the maximum sentences provided for
such
offences. In my view, that is all that Parliament did. It was not
saying that in the case of any offence where a fine was
a possibility
then the
Prevention of Organised Crime Act could
never apply. I
regard it as illogical to force a reading which necessarily imports
the word “only” between “may” and “be”
in item 33 when to
treat other words as understood to be included makes more sense.
Those other words, in my view, would be something
like “apart from
other punishments which are permissible” before the words “maybe
a period of imprisonment exceeding one year
without the option of a
fine”.
I
am in agreement with the above reasoning. The Court held further
that:
gc
the
pattern to be deduced from items 1 – 32 of the Schedule is that the
legislature had not curtailed the sentence options to those
providing
for unsuspended imprisonment only. This also means, impliedly, that
the most severe offences or sentences are not limited
to (only)
unsuspended imprisonment without the option of a fine. Why then,
when interpreting item 33, should one hold that in that
item, only
Acts not allowing fines to be imposed should be capable of forming a
basis for forfeiture under POCA?”
[20] I
therefore with respect agree with the submission by Mr Volmink on
behalf of the Applicant, that the decision of Foxcroft J
is
preferable to the approach adopted by Fevrier AJ, and find that the
illegal sale of liquor is an offence contemplated in item
33 of
Schedule 1 of the Act.
INSTRUMENTALITY
OF AN OFFENCE
[21] The
meaning assigned to ‘instrumentality of an offence’ in chapter 1
of the Act is any property which is concerned in the
commission or
suspected commission of an offence at any time before or after the
commencement of this Act, whether committed within
the Republic or
elsewhere. The interpretation of the phrase has been considered by
our courts on a number of occasions. STEGMAN
J in Ex Parte: The
National
Director
of
Public Prosecutions re: Application for Forfeiture of Property in
terms of sections 48 and 53 of Act 121 of 1998, unreported case
no:
2000/12886 (WLD)
at
paragraph 12 held that:
g
The
mere fact that a particular offence was committed on a particular
property would not necessarily entail the consequence that the
property was ‘concerned in the commission’ of the offence. It
seems to me that evidence of some closer connection than mere
presence on the property would ordinarily be required in order to
establish that the property had been concerned in the commission
of
the
offence”
(See
also
National
Director of Public Prosecutions v Patterson
2001(2) SACR 665 (C) at 667 F-G).
[22] It
is accepted that a mere coincidental link between the property sought
to be forfeited and the commission of the offence would
not qualify
the property as an ‘instrumentality’. A clear nexus has to be
established between the property concerned and the
offence committed.
(See:
National
Director of Public
Prosecutions
v Carolus and Others
1999(2) SACR 27 (CPD) at 39 h per Blignaught J :-
g
It
seems to me, therefore, that property would only qualify as an
instrumentality where it has been used as means or instrument in
the
commission of the offence, or where it is otherwise involved in the
commission of the offence.”
Each
case must be determined on its own facts and circumstances.
[23] Considering
the facts of the present case it is common cause that a separate
structure was erected on the premises to accommodate
the business of
sale of liquor. The structure consists of a sales area where liquor
was stored and sold to the public, there is
a public area where the
public can drink, play pool and listen to the music from the music
system or juke box, and there is a storage
area where empty beer
crates where stored. It is also not disputed by the Respondents that
the main house on the premises is integrally
involved in the business
of illegal sale of liquor, and that liquor was also stored and sold
in the main house. Under these circumstances
one can justifiably
conclude that the use of the property was deliberate, and planned,
and that the property was important to the
success of the illegal
sale of liquor. The use of the property was not an isolated event.
[24] I
am of the view that it will be unreasonable to conclude that the main
house was erected for the purpose of carrying out the
illegal
activities. It has been used for residential purposes. However this
factor, alone is in my view not sufficient to exclude
the house from
the ambit of the phrase instrumentality. My attention was directed to
the decision of Patel J in
National
Director of Public Prosecutions v
K.
Mohunram and two Others
:
case no.: 3576/01 (NPD) delivered on 02/02/2004 (unreported) in which
the following remarks are made at page 8 :-
“When
the First Respondent acquired the shares in the Second Respondent it
was clear and is common cause that he did so with the
intention of
conducting a legitimate operation. It is also common cause that the
whole building was not used as a gambling house
since it was
partitioned to make space for glass building operations.
The
entire building cannot, accordingly be deemed to be an
instrumentality of the offence. Different considerations may prevail
had
the entire property been purchased for the purpose of running an
illegal operation and illegal operations were indeed conducted on
the
entire property
.
A restrictive interpretation of the definitions must mean that the
Legislature had intended a pat of an immovable property used
in the
commission of offences to be included within the meaning of the Act,
then it should have said so in clear language. This,
the legislature
has not done.” (My underlining)
[25] In
my view the approach of Patel J in Mohunram’s case may lead to
absurd results if strictly adhered to. It would mean that
a drug
dealer who illegally manufactures and sells drugs from his house may
avoid forfeiture if he raises a defence that he only
operate from one
room and not the entire house. Similarly the owner of a yacht on
which drugs are illegally stored may avoid forfeiture
if he is able
to show that the entire yacht was not involved in the storage of the
drugs, but only a portion. In my view such approach
would defeat the
object of the Act which is intended to ensure that property concerned
in the commission of crime is taken out of
circulation.
[26] The
approach adopted in
National
Director of Public
Prosecutions
v Seleoane
and
Others
2003 (3) All SA 201
(NC) is preferable. The immovable property and a
vehicle which was used to store, cultivate and convey dagga were
declared to be
instrumentalities.
[27] The
respondents in their defence allege that the applicant’s
application is part of a personal vendetta by the police against
them. Second Respondent in his affidavit filed in terms of Section
39(5) of the Act states that because certain items such as a
soccer
play or, loudspeakers, disco lights and cash of R 2 700-00 ,which
were not listed in the preservation order have been seized
by the
police, is an indication of the vendetta.
[28]
Superintendent Saunders’ response is that it is the
curator
and
not the police who ceased these items. The police were only present
for security reasons and they only removed the items upon
the request
of the
curator
.
He denies any vendetta against the respondents that he ever told the
Second Respondent that he will get him. He states further
that it is
not only the Respondent’s shebeen that has been raided, but others
as well. I find the vendetta argument to be spurious
and without
merit. They only raise this unsupported vendetta allegation to cover
their unlawful activity.
CONCLUSION
[29] I
am of the view that the applicant have succeeded to establish on a
balance of probabilities that the property is an instrumentality
of
the offence. I do not think it will be necessary therefore to
consider whether the property can be said to be the proceeds of
crime. This is a subject of a factual dispute raised by both
parties. A third party has laid claim to the pool table and has to
be excluded as request by Mr Volmink. Applicant is also entitled to
the costs of the application.
I
therefore make the following order:
1. An
order is granted in terms of
section 50(1)
of the
Prevention of
Organised Crime Act, Act
No. 121 of 1998 (“the Act”) declaring
forfeit to the State the property listed hereunder (hereinafter
referred to as “the property”).
1.1 Immoveable
Property described as Erf 1748, Hartswater, (Phokwane Municipality,
Division of Vryburg, Northern Cape), and situated
at 78 Felicia
Street, Hartswater, Vryburg, Northern Cape(Title Deed Number
T1029/2003)
1.2 One
Music System
1.3 One
Box Freezer
1.4 One
Refrigerator
2. The
pool table which is subject to the preservation order issued in this
matter is excluded from the operation of this forfeiture
order. The
curator
bonis
is
directed to return the said pool table to its lawful owner
3. All
the paragraphs of the Order shall operate with immediate effect,
except that the
curator
bonis
shall not exercise his powers and duties in terms of
section 57(1)(c)
as outlined in paragraph 4 below, which will take effect on the day
that a possible appeal is disposed of in terms of
section 55
, or on
the day that the application for the exclusion of the interests in
the forfeited property in terms of section 54 of the Act
is disposed
of, or after the expiry of the period in which an application may be
made in terms of section 54 of the Act.
4. In
terms of section 56(1) of the Act, DEREK ARTHUR FOSTER, a director of
PricewaterhouseCoopers Inc, shall remain the appointed
curator
bonis
to assume control over the property.
5. The
curator
bonis
shall have all such powers, duties and authority as provided for in
section 42(1) and 57 of the Act.
6.
The fees and expenditure of the
curator
bonis
shall be paid from the forfeited property, or failing which by the
State.
7. The
Registrar of this Court is directed in terms of section 50(5) of the
Act to publish a notice of this Order in the Government
Gazette as
soon as practicable after the Order is made.
8. Costs
of the application are against the Respondents jointly and severally,
the one paying, the other to be absolved.
_________________
L
P TLALETSI
JUDGE
ADVOCATE FOR
THE APPLICANT : ADV VOLMINK
ADVOCATE
FOR THE RESPONDENT : ADV SCHREIDER
ATTORNEY
FOR THE APPLICANT : Neville Cloete Attorneys
ATTORNEY
FOR THE RESPONDENT : Van de Wall and Associates