CONSTITUTIONAL COURT OF SOUTH AFRICA
Case CCT 311/22
In the matter between:
MINISTER OF RURAL DEVELOPMENT
AND LAND REFORM Applicant
and
LAND AND AGRICULTURAL DEVELOPMENT BANK OF
SOUTH AFRICA Respondent
Neutral citation: Minister of Rural Development and Land Reform v Land and
Agricultural Development Bank of South Africa [2024] ZACC 14
Coram: Maya DCJ, Kollapen J, Mathopo J, Mhlantla J, Rogers J,
Schippers AJ, Theron J, Tshiqi J and Van Zyl AJ
Judgments: Maya DCJ (majority): [1] to [70]
Rogers J (dissenting): [71] to [100]
Heard on: 17 August 2023
Decided on: 12 July 2024
Summary: Prevention of Organised Crime Act 121 of 1998 — civil recovery
of property under Chapter 6 — competing claims for exclusion of
“interest” in property from operation of forfeiture order —
meaning of “interest”
ORDER
On appeal from the Supreme Court of Appeal (hearing an appeal from the High Court
of South Africa, Eastern Cape Division, Makhanda). The following order is made:
1. Leave to appeal is granted.
2. The appeal is partly upheld to the extent set out in paragraph 3 below.
3. The order of the Supreme Court of Appeal is amended as follows:
“1. The appeal is upheld with no order as to costs.
2. The order of the Full C ourt is set aside and replaced with the
following:
(a) The appeal is dismissed with costs.
(b) The cross-appeal is upheld with costs.
(c) Paragraphs 2, 3 and 5 of the order of Goosen J are set aside
and replaced with the following:
‘2. The interest of the first applicant, the Land and Agricultural
Development Bank of South Africa, consisting of the debt
secured by its mortgage bond over the property concerned
is excluded from the operation of the forfeiture order.
3. The interest of the first respondent, the Minister of Rural
Development and Land Reform, consisting of a grant
allocated for the purchase of the property concerned, is
excluded from the operation of the forfeiture order.’”
4. There shall be no order as to costs.
JUDGMENT
MAYA DCJ (Kollapen J, Mathopo J, Mhlantla J, Theron J and Tshiqi J concurring):
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Introduction
[1] This is an application for leave to appeal against a judgment of the
Supreme Court of Appeal delivered on 13 October 2022. The core issues to be
determined are (a) whether the applicant, the Minister of Rural Development and Land
Reform (Minister), has an interest in the immovable property concerned as defined in
the Prevention of Organised Crime Act1 (POCA), and if she does, (b) how her claim to
the property and that of the respondent, the Land and Agricultural Development Bank
of South Africa (Land Bank),2 which compete for the exclusion of interests from the
operation of a forfeiture order under the POCA, should be resolved.
Factual background
[2] The background facts are largely common cause. The Department of Rural
Development and Land Reform (Department), for which the Minister is responsible,
controls, inter alia, land tenure reform, land development and land redistribution in
terms of which it redistributes productive commercial land to previously disadvantaged
individuals. It does so in execution of the constitutionally mandated programme of land
redistribution and reform. To achieve the objects of this programme , the Department
provides funds and grants, 3 one of which is the Land Redistribution and Agricultural
Development Grant (LRAD grant),4 to beneficiaries5 for the acquisition of agricultural
land and shares in agricultural enterprises.
1 121 of 1998.
2 Established in terms of section 2 of the Land and Agricultural Development Bank Act 15 of 2002 in terms of
which it is a legal person in which the State is the sole shareholder.
3 In terms of the Land Reform: Provision of Land and Assistance Act 126 of 1993; the Land Reform (Labour
Tenants) Act 3 of 1996; the Restitution of Land Rights Act 22 of 1994; and the E xtension of Security of Tenure
Act 62 of 1997.
4 Provided in terms of the Grants and Services Policy of the Department of Land Affairs Version 7 approved by
the Minister on 16 July 2001.
5 A beneficiary must be a black South African citizen of 18 years or older who is willing to live on or near the
land, operate or work on it and is committed to using the grant to purchase land for agricultural activities.
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[3] On 2 August 2006, the Minister provided a sum of R2 617 100 under the
LRAD grant for the acquisition of the following immovable properties: Portion 1 and
the Remaining Extent of the farm Poplar Grove No. 303, as well as the farm Honeyville
No. 302 in the Kouga Municipality in the Eastern Cape (collectively the property). The
property would be registered in the name of a trust to be formed comprising
39 beneficiaries, who were previously disadvantaged individuals identified under the
land redistribution and reform programme to receive such transfer.
[4] Transfer of the property, supposedly in pursuance of the above scheme, was
registered on 13 April 2007. However, as a result of fraudulent misrepresentations, the
property was transferred to and registered in the name of a private company,
CPAD Farm Holdings (Pty) Limited (CPAD Farm), of which Mr Mongezi Alfred Mde
was a sole director, rather than a trust. Simultaneously with transfer, a mortgage bond
over the property was r egistered in favour of the Land Bank which provided security
for amounts ad vanced to CPAD Farm by the Land Bank, namely a capital sum of
R5 082 900, and an additional sum of R1 016 580 in respect of legal costs, interest and
other fees under the bond.
[5] CPAD Farm soon fell into arrears in respect of its loan repa yments to the
Land Bank. In 2008, the Land Bank instituted proceedings against CPAD Farm to
recover the outstanding amounts due, owing and payable to i t. The Land Bank also
sought an order declaring the property executable. On 8 September 2008, the
Land Bank obtained default judgment against CPAD Farm for the capital sum
advanced, accrued interest and costs , and the p roperty was declared executable . On
14 October 2009, following the issue and service of a warrant of execution in respect of
the property, the Sheriff attached the property in execution of the default judgment.
[6] In October 2014, charges of fraud, alternatively theft, relating to the property
were brought in the Specialised Commercial Crime Court, Port Elizabeth against
Mr Mde and Mr Mzoli Pakade, a former Senior Planner and Project Officer in the
Department. The National Director of Public Prosecutions (NDPP) also launched an
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ex parte application for the preservation of the property in terms of section 38 of the
POCA6 against them in the Eastern Cape Local Division of the High Court,
Port Elizabeth. On 28 October 2014, the High Court (Chetty J) granted a preservation
order. Mr Michael Timkoe of Timkoe Trustees CC was appointed as curator bonis in
terms of section 42 of the POCA to assume control of the property and do anything
necessary to preserve it whilst the order remained extant.
[7] A copy of the preservation order was duly served on the Land Bank whereupon
it instructed an attorney, Mr Gregory Parker, to represent its interest. In
November 2014, Mr Parker w rote to Mr Warren Myburgh, an attorney in the
State Attorney’s office attached to the Asset Forfeiture Unit who represented the NDPP
in the preservation proceedings. He indicated that the Land Bank held a first mortgage
bond over the property and that he had instructions to enter an appearance to e xclude
the Land Bank’s interest in the property from the forfeiture.
[8] Thereafter, Mr Parker held a meeting with Mr Myburgh and Ms Freda Hack, an
employee of the Asset Forfeiture Unit. Mr Myburgh and Ms Hack assured Mr Parker
that the Land Bank’s interest as mortgage holder would be excluded from the forfeiture
order to be obtained and t his was further confirmed in an email dated
19 November 2014. Mr Parker advised Mr Myburgh that service of the forfeiture
6 Section 38 makes provision for preservation of property orders and reads:
“(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 off icial, 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.”
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application papers could be effected on his office. On 21 November 2014, Mr Parker
dispatched an email to Mr Myburgh enclosing statements which reflected the amounts
owed by CP AD Farm to the Land Bank. On 11 December 2014, Mr Parker asked
Mr Myburgh when the forfeiture application might be expected. No reply was received
and no application for a forfeiture order was served on the Land Bank.
[9] On 13 January 2015, the High Court (Majiki J) granted an order by default for
the forfeiture of the property in terms of section 53(1)(a) of the POCA.7 The forfeiture
order said nothing about the interest of the Land Bank. It reads:
“1. An order be and is hereby granted in terms of section 53(1)(a) of the Prevention
of Organised Crime Act 121 of 1998 (POCA), declaring forfeit to the State the
Honeyville Farm measuring 1 218,9797 hectares in the district of Humansdorp
(the property).
2. In terms of section 50(6) of POCA paragraph 5 below shall take effect 45 days
after publication of a notice thereof in the Government Gazette unless an
appeal is instituted before this time in which case this order will take effect on
the finalisation of such appeal.
3. Michael Timkoe (Timkoe) who was appointed as curator in the
preservation order, be and is hereby directed to continue acting as such for the
purpose of this order.
4. Pending the taking effect of this order the property shall remain under the
control of Timkoe.
5. On the date on which this order takes effect, to wit 45 weekdays after
publication in the Government Gazette, Timkoe shall cause the property to be
handed back to the Department of Rural Development and Land Reform for
re-allocation in terms of all applicable procedures, and as such to s ign all
7 Section 53(1)(a) reads:
“If the National Director applies for a forfeiture order by default and the High Court is satisfied
that no person has appeared on the date upon which an application under section 48(1) is to be
heard and, on the grounds of sufficient proof or otherwis e, that all persons who entered
appearances in terms of section 39(3) have knowledge of notices given under section 48(2), the
Court may—
(a) make any order by default which the Court co uld have made under sections 50 (1)
and (2).”
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necessary documents in regard thereto. This will be regarded as payment to
the State.
6. The applicant [(the National Director of Public Prosecutions )] is directed to
cause notice of this order to be served on the respondent [(CPAD Farm
Holdings (Pty) Ltd)].
7. The applicant [(the National Director of Public Prosecutions )] is further
directed to publish a notice of this order in the Government Gazette as soon as
it is practicable.”
[10] On 20 January 2015, Mr Parker wrote to Mr Myburgh expressing concern at the
terms of the order. Mr Myburgh replied pro viding assurances that the Land Bank’s
claims would be protected. At a further meeting, on 3 February 2015, Mr Myburgh and
Ms Hack represented to the Land Bank that its secured debt would be paid from the
proceeds of the sale of the property. Following Mr Timkoe’s endeavours to sell th e
property, on 25 March 2015, one of its occupiers made an offer to purchase it for the
sum of R7,5 million. After obtaining a valuation of the property, the Land Bank advised
that it required a revised offer of R8 million to recoup its losses . On 25 May 2015,
Mr Timkoe entered into a deed of sale in terms of which the property was sold to
Mr Willem Jansen van Vuuren for R8 million.
[11] The execution of the deed of sale would entitle the Land Bank to the full payment
of the proceeds of the sale a s the outstanding secured debt owed to it stood at
R10 309 493.75 as at 12 November 2015. The Minister would receive nothing and she
rejected this prospect. Consequently, the parties entered into a series of negotiations to
resolve the impasse, but this proved unsuccessful.
Statutory framework
[12] The provisions of the POCA, in terms of which the preservation of property and
forfeiture orders sought by the NDPP were granted and which are relevant for the
determination of the issues in this matter , are set out in Chapter 6, comprising
sections 37 to 62 of the POCA. These provisions govern the civil recovery of property
which is defined in section 1 of the PO CA as meaning “money or any other movable,
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immovable, corporeal or incorporeal thing and includes any rights, privileges, claims
and securities and any interest therein and all proceeds thereof”. And as the heading of
the Chapter suggests, the High Court proceedings it prescribes are, in terms of
section 37, civil in nature and the rules of evidence applicable in civil proceedings apply
thereto.
[13] Sections 38 to 47 govern applications by the NDPP for the preservation of
property pending potential forfeiture. Section 48 governs the process for an application
for a forfeiture order once a preservation of property order is in force. The NDPP may,
in terms of section 48(1), “apply to a High Court for an order forfeiting to the State all
or any of the property that is subject to the preservati on of property order”.
Section 48(2) entitles a person who entered an appearance in terms of section 39(3)8 in
respect of the preservation application to be served with a notice of the application for
a forfeiture order by the NDPP. In terms of section 48(4)(b)(i), that person may appear
in the application “to apply for an order excluding his or her interest in that property
from the operation of the order”. “Interest” is tersely defined in section 1 and “includes
any right”.
[14] Section 49(3) allows the late entry of an appearance by a person who did not
enter an appearance in terms of section 39(3) upon application to the High Court within
the period deemed appropriate by the Court. Such a late entry may be granted by the
High Court if it is satisfied that good cause is shown by the person that he or she has ,
for sufficient reason , failed to enter an appearance and has an interest in the property
which is subject to the preservation of property order.
[15] Section 50 deals with the making of a forfeiture order and provides in relevant
part:
8 Section 39(3) provides that “[a]ny person who has an interest in the property which is subject to the preservation
of property order may enter an appearance giving notice of his or her intention to oppose the making of a forfeiture
order or to apply for an order excluding his or her interest in the property concerned from the operation thereof”.
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“(1) The High Court shall, subject to section 52, make an order applied for under
section 48(1) if the Court finds on a balance of probabilit ies 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.”
[16] Section 1 of the POCA defines the classes of property envisaged in subsection 1
above. “‘Instrumentality of an offence’ means 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”.
“‘Unlawful activity’ means any conduct which constitutes a crime or which contravenes
any law whether such conduct occurred before or after the commencement of this Act
and whether such conduct occurred in the Republic or elsewhere”.
[17] Section 52 provides in subsection (1) for the exclus ion of interests in property
from the operation of a forfeiture order by the High Court under section 48(3) or by a
person referred to in section 49(1). Section 52(2) empowers the High Cou rt to make
such an order—
“in relation to the forfeiture of the proceeds of unlawful activities, if it finds on a
balance of probabilities that the applicant for the order—
(a) had acquired the interest concerned legally and for a consideration, the value
of which is not significantly less than the value of that interest; and
(b) where the applicant had acquired the interest concerned after the
commencement of [the POCA], that he or she neither knew nor had reasonable
grounds to suspect that the property in which the interest is held is the proceeds
of unlawful activities.”
[18] Section 54 governs the exclusion of interests in forfeited property where a person
is affected by a forfeiture order and was entitled to receive notice of the application for
the order, but did not receive such a notice. Section 54(1) entitles any s uch person to
apply for an order excluding his or her interest in the property concerned from the
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operation of the order, or varying the operation of the order in respect of such property.
The rest of the section sets out the procedural requirements for t he application and the
manner in which it must be adjudicated by the High Court.
[19] In particular, section 54(2) requires the application to be accompanied by an
affidavit setting forth, inter alia, the nature and extent of the applicant’s right, title or
interest in the property concerned, the time and circumstances of the applicant’s
acquisition of such right, title or interest and any additional facts supporting the
application. In terms of section 54(8), the High Court may make a forfeiture order—
“in relation to the forfeiture of the proceeds of unlawful activities, if it finds on a
balance of probabilities that the applicant for the order—
(a) had acquired the interest concerned legally and for a consideration, the value
of which is not significantly less than the value of that interest; and
(b) where the applicant had acquired the interest after the commencement of [the
POCA], that he or she neither knew nor had reasonable grounds to suspect that
the property in which the interest is held is the proceeds of unlawful activities.”
Litigation history
High Court
[20] The Land Bank approached the High Court for an order amending the forfeiture
order to subject it to the full extent of its rights in terms of the mortgage bond on the
basis that the order failed to safeguard the interests and rights of bondholders over the
property.9 It sought the exclusion of its interests from forfeiture in terms of
section 53(1)(a) of the POCA by a variation of paragraph 1 of the forfeiture order to
include at the end of the paragraph the words “subject to interests of bondholders”. The
Land Bank also sought a declaratory order that entitled Mr Timkoe to proceed with the
sale of the property su bject to the rights of bondholders. To this end , it sought the
deletion and substitution of paragraph 5 of the forfeiture order.
9 Land and Agricultural Bank of South Africa v CPAD Farm Holdings [2020] ZALCPE 9 (High Court judgment).
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[21] It was not in dispute that the Land Bank had an “interest” in the property as
defined in the POCA. It was also common cause that it did not join the proceedings for
forfeiture to secure its interest as a bondholder, as it was required to do in terms of
section 39 of the POCA, as a result of the failure of the NDPP officials to serve it with
the application for the forfeiture order . The Minister accepted that the forfeiture order
had to be varied to protect the Land Bank’s interest as a bondholder. However, relying
on Levy,10 she argued that the Land Bank had no stronger right than the Department. In
her submission, both parties were victims of fraud and, as such, were entitled to benefit
from the proceeds of the forfeiture in proportion to the capital losses each had incurred.
[22] The Land Bank’s stance, on the other hand , was that the Department was not a
victim of th e unlawful activity. I t sought to distinguish Levy on the basi s that there,
unlike in the present case, the respondents held no security , either in a form of a
mortgage bond or as a judgment creditor. The proposed proportional sharing in the
proceeds thus did not apply, so it argued.
[23] The High Court (Goosen J) determined two issues . First was whether the
forfeiture order ought to have recognised the rights of the Land Bank as a mortgage
holder. Second was whether the sale of the property ought to proceed as envisaged by
the declarator sought. The High Court adopted the reasoning in Levy, which highlighted
the wide definition of the term “interest” in section 52 of the POCA . It held that th e
Act seeks to protect the interests of innocent third parties who have become the victims
of fraudulent activity. The High Court reasoned that there is no reason in principle why
an organ of state cannot rank or qualify as a victim of fraudulent activity and that it is
therefore not precluded from being a holder of a recognisable interest in the property
which is worthy of protection. It concluded that both parties had established defined
interests in the property and that such interests ought to be excluded from the forfeited
property.
10 National Director of Public Prosecution v Levy [2004] 4 All SA 103 (W).
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[24] The High Court, however, rejected the Minister’s submission that the parties
should share the sale proceeds according to their respective capital losses in the
property. In its view, that argument ignored the fact that the Land Bank holds security
in the form of a mortgage bond, which it perfected by obtaining a judgment in its favour
covering both the capital debt and the interest owed to it by CPAD Farm. It also held
that the order for the return of the property to t he Department by the curator bonis in
paragraph 5 , in lieu of payme nt to the State, was made in error because it was not
consonant with the forfeiture order in paragraph 1 . Thus, effect could not be given to
it.
[25] In conclusion, the High Court held that because the forfeiture order was granted
in ignorance of the default judgment and the order which declared the property
executable, both paragraphs 1 and 5 c ould not stand in their present form. The
High Court therefore varied paragraph 1 of the original order as prayed by the
Land Bank. It set aside and replaced paragraph 5 with an order which authorised (a) the
disposal of the property by the curator bonis, (b) payment to the Land Bank of an
amount equal to the value of its judgment debt as at the date of disposal of the property,
and (c) payment to the Minister of an amount equal to the value of the grant funds paid
to facilitate the acquisition of the property.
[26] In terms of a new paragraph 5A, it was provided that if the property was disposed
of for a price less than the aggregate of the s ums contemplated in (b) and (c), the
amounts payable to the Land Bank and the Minister should be in proportion to the said
sums. In other words, the proceeds were to be shared pro rata. But, contrary to the
Minister’s contention, the apportionment was to be done on the basis that the
Land Bank’s claim included interest in accordance with the default judgment it had
obtained. Included in the replacement order was a raft of directions to the curator bonis
relating to the implem entation of processes such as the manner of disposal of the
property and the deduction of fees, expenditure, incidental costs and charges relating to
the said disposal.
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Full Court
[27] The Minister appealed the decision of the High Court in the Full Court of the
Division.11 She still sought an apportionment of the proceeds of the sale of property
between the Department and the Land Bank according to the capital loss es they
respectively sustained. In addition, the Minister sought an order for the handing over
of the property to the Department for land redistribution to deserving beneficiaries. The
Land Bank, on the other hand, lodged a cross -appeal. It sought orders amending the
forfeiture order as it had asked the High Court for the proceeds of the sale of the property
to be fi rst apportioned to it and, in the event of any free residue after payment of its
judgment debt and interest, for such residue to be paid to the Minister.
[28] The issues before the Full Court (Rugunanan and Beshe JJ and Krüger AJ) were
framed as follows – whether (a) the Land Bank’s interest or loss should be confined to
the capital advanced by it or whether it should in clude interest on such capital; (b) the
High Court erred in deleting and substituting paragraph 5 of the forfeiture order; (c) the
High Court erred in awarding proportional apportionment between the Minister and the
Land Bank; (d) the High Court should have found that the Land Bank’s judgment ,
which predated the forfeiture order and remained extant, took precedence; and (e) the
finding of th e High Court constitute d an arbitrary deprivation of a portion of the
Land Bank’s constitutional right to property.
[29] The Full Court upheld the appeal and dismissed the cross-appeal, both with costs.
It found that the Land Bank’s asserted secured entitlement to the property, upon which
it relied for its contention that it enjoys a prior and stronger right than any rights which
may have accrued to the Minister, was offset by section 57(2) of the POCA.12 It further
endorsed the approach in Levy, as the High Court had done, and held that the decision
suggested that the respective interests in the property of the Minister and the Land Bank,
11 Minister of Rural Development and Land Reform v Land Agriculture Bank of South Africa [2021] ZAECGHC
61 (Full Court judgment).
12 In terms of section 57(2) “[a]ny right or interest in forfeited property not exercisable by or transferable to the
State, shall expire and shall not revert to the person who has possession, or was entitled to possession, of the
property immediately before the forfeiture order took effect”.
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as victims of unlawful activity, should be limited to the equivalent of their capital loss
without ranking in status or prior position. The parties would thus be entitled to share
in the proceeds of the disposal of the property in accordance with the ratio of their
respective capital losses – a 2:1 participat ion quota in favour of the Land Bank. The
Full Court declined to reinstate the original paragraph 5 of the order, which ordered the
handing over of the property to the Minister for the purpose of distributing it to
deserving beneficiaries. This was on the basis that the interests of those beneficiaries
would not be precluded by the administration of the property in the hands of the
curator bonis as section 57 of the POCA does not preclude its disposal to the Minister
by other means.
Supreme Court of Appeal
[30] The Land Bank successfully challenged the judgment of the Full Court on appeal
in the Supreme Court of Appeal.13 There, the issues were the same as those now raised,
namely, whether the Minister has an interest in the property as defined in the POCA
and, if so, how the competing claims of the parties for the exclusion of the ir interests
from the operation of the forfeiture order should be determined.
[31] The Supreme Court of Appe al, in a unanimous judgment penned by Van der
Merwe JA, held that the definition of the term “interest” in section 1 of the POCA, to
“include any right” , renders the word “includes” a term of exhaustive denotation. It
said that although it is generally a term of extension, in some cases the word “includes”
is used where the primary meaning of the term that is defined is well -known and
introduces a meaning or meanings that go beyond the primary meaning. It can ,
however, also signify that what follows constitutes a complete or exhaustive definition
of the relevant term. In the context of the POCA, the purpose of the words “includes
any right” is to define “interest”, which has wide and vague import and is used in
provisions dealing with the acquisition of r ights to property, more precisely. For this
13 Land and Agricultural Bank of South Africa v Minister of Rural Development and Land Reform [2022] ZASCA
133; 2023 (1) SACR 1 (SCA) (Supreme Court of Appeal judgment).
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view, the Supreme Court of Appeal relied on sections 52(2) and 54(8) of the POCA ,
which provide for the exclusion of interests in forfeited property and the protection of
an interest acquired legally . It also referenced the purpose of Chapter 6 of the POCA
which, it held, would be undermined if the forfeiture it contemplates was subjected to
“vague and flimsy ” interests, as opposed to legal rights. Therefore, “includes” is
equivalent to the word “means ” and “interest” means “any right ”, which is an
expression of wide import and may include a contingent right to property.
[32] The Supreme Court of Appeal rejected the Minister’s reliance on Levy, which, it
held, was wrongly decided. The purpose of Chapter 6 of the POCA, it said, is not to
protect the interests of victims of crime by compensation for their losses but rather to
forfeit the proceeds of unlawful activities, instrumentalities of offences and property
associated with terrorist and related activities to the State. The Supreme Court of
Appeal stated that it was open to the Minister to invoke section 300 of the
Criminal Procedure Act,14 which outlines the provisions for a court to award
compensation for damage or loss of property caused by a criminal offence with the
object of ensuring that victims can receive compensation directly through the criminal
process while limiting double recove ry through subsequent civil suits which provides
for c ompensation for losses . It also held that t he POCA is saved from
unconstitutionality by the “protection of the pre-existing interests of innocent citizens”
in property subject to forfeiture and that whether such a person was a victim of crime is
irrelevant.
[33] The Supreme Court of Appeal concluded by holding that Chapter 6 of the POCA
neither rendered common law principle s inapplicable nor varied them. Therefore,
whether an interest in property was legally acquired must be determined under existing
law, including the common law . The principle that real rights generally preva il over
personal rights and the maxim qui prior tempore potior est iure (he who is earlier in
14 51 of 1977.
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time is stronger in law) ,15 which applies to the ranking of rights that are equal in
hierarchy, apply in the matter. Accordingly, there was no legal basis for depriving the
Land Bank of the preference provided by its real right or its secured claims for interest
and costs. The Minister neither has a right to nor interest in the property on the facts of
this case. And even if she did, the exclusion of such an interest from the forfeiture order
would not constitute an efficacious remedy and the Land Bank’s interest would have to
be afforded precedence over hers. Thus, the appeal was upheld with the result that only
the Land Bank’s interest “consisting of the debt secured by its mortgage bond over the
property” was excluded from the operation of the forfeiture order. It is this deci sion
which the Minister seeks to challenge in this Court.
In this Court
Applicant’s submissions
[34] The Minister contends that the application raises an arguable point of law of
general public importance. She further contends that it is in the interests of justice to
grant leave to appeal because there are reasonable prospects of success as evidenced by
the fundamentally different conclusions of the three judgments in the High Court, the
Full Court and the Supreme Court of Appeal, respectively, with regard to the meaning
to be ascribed to the relevant statutory provisions.
[35] As in the courts a quo, the Minister accepts t hat the Land Bank has a legally
recognisable interest in the property which must be excluded from the operation of the
forfeiture order in terms of section 54 and argues only that she has also established an
interest in the property similarly worthy of protection. She supports the judgment of
the Full Court and submits that the Supreme Court of Appeal erred in its findings that
the Minister had no interest in the property or the proceeds of any sale thereof and that
even if she had an interest in the property, the interest of the Land Bank would prevail.
She argues that the Supreme Court of Appeal erred by contrasting the provisions of
15 Where there are two or more competing equitable interests, the first in time prevails over the others.
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Chapter 6 of the POCA with section 300 of the Criminal Procedure Act because these
provisions are compatible and can be read together.
[36] The Minister submits that the POCA neither recognises nor creates a hierarchy
of victims, as was found by the Full Court, and that the principles of common law relied
upon by the Supreme Court of Appeal should not trump the intention of the Legislature
to recognise and preserve the rights of all victims of crime. She contends that if the
parties are to be treated equally as innocent victims of crime, they should, in principle,
be entitled to share in the sale proceeds of the property in accordance with their
respective capital losses.
[37] The Minister also challenges the meaning ascribed to the words “interest in the
property” by the Supreme Court of Appeal and its rejection of Levy. She submits that
“interest includes any right”, “proceeds of unlawful activities” and “property” are other
relevant definitions in section 1 of the POCA. She argues that the Supreme Court of
Appeal confused the right to recover public funds with the right to property and
deprived her of the right to pursue unlawfully and fraudulently diverted public funds.
She challenges the finding that the Land Bank is entitled to recover its full capital,
interest and costs , which, she argues , will result in the entire proceeds of the sale
accruing to the Land Bank and leave the State with no return despite the declaration of
forfeiture of the property to it.
Respondent’s submissions
[38] The Land Bank denies that the matter engages the jurisdiction of this Court and
argues that although there are three differing judgments, the Minister must still establish
that there is a measure of plausibility or substance in the argument she advances.
[39] The Land Bank argues that the Supreme Court of Appeal’s judgment is sound.
It contends that the Minister’s stance that the parties should share in the proceeds
according to their respective capital losses ignores its secured real right under the bond
and the judgment in its favour, which predates the forfeiture order, and an attachment
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17
order which remains in force. It argues that this has an effect of arbitrarily depriving it
of its secured property rights in breach of section 25(1) of the Constitution.16 It contends
that there is no connection between the deprivation of the Minister’s property rights and
the means sought to be achieved by the POCA as it has not committed any crime and
owes no debt to the Minister. T he interpretation of the Supreme Court of Appeal is
consistent with section 39(2) of the Constitution,17 so it argues.
[40] The Land Bank further contends that Levy is distinguishable from this case. It
makes the points that unlike in its case, none of the victims in Levy had secured rights
or preferential clai ms over the property in issue which was purchased, without their
knowledge, with investments made by the respondents in a pyramid scheme in the form
of funds they paid into an attorney’s trust account. The Land Bank contends for a
narrow interpretation of “interest” which, it argues, accords with the well -settled
approach to interpretation set out in Endumeni18 and Fidelity Security Services.19
[41] The Land Bank argues further that Chapter 6 of the POCA should not be applied
without restraint as civil forfeitur e rests on the legal fiction similar to an action in rem
(an action against a thing) in admiralty law, that the property in issue and not the owner
has contravened the law. It contends that the effect is excessively harsh on the parties
and may infringe consti tutional rights such as section 25(1) of the Consti tution. It
submits that the Minister failed to meet the jurisdictional requirements of
section 52(2) of the POCA and that her claim is only a monetary one, against the person
who perpetuated the fraud. It argues that if the parties are ordered to share on an equal
footing, in terms of their respective capital losses only, it would suffer a greater loss
than the Minister.
16 Section 25(1) of the Constitution provides that “[n]o one may be deprived of property except in terms of law of
general application, and no law may permit arbitrary deprivation of property”.
17 In terms of which every court, tribunal or forum must promote the spirit, purport and objects of the Bill of
Rights when interpreting any legislation and when developing the common law or customary law.
18 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593 (SCA) at
para 18.
19 Minister of Police v Fidelity Security Services (Pty) Limited [2022] ZACC 16; 2022 (2) SACR 519 (CC); 2023
(3) BCLR 270 (CC) at para 34.
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Issues
[42] The issues for this Court’s determination are—
(a) whether it has the jurisdiction to adjudicate this application for leave to
appeal and whether it is in the interests of justice to grant leave to appeal;
(b) whether the Minister has an “interest” in the property as defined in
section 1 of the POCA , which is capable of exclusion in terms of
section 52(2) of the POCA; and, if so,
(c) how the c ompeting claims of the parties for the exclusion of their
“interests” from the operation of the forfeiture order under the POCA
should be determined.
Jurisdiction and leave to appeal
[43] This Court has jurisdiction to decide matters that raise constitutional issues if the
interests of justice so require20 and any other matter that raises an arguable point of law
of general public importance which ought to be considered by it under
section 167(3)(b)(ii) of the Constitution. However, “a holding that a matter rai ses an
arguable point of law of general public importance does not inexorably lead to a
conclusion that the matter must be entertained” and whether the matter warrants this
Court’s attention will depend on the interests of justice.21
[44] I agree with the Minister’s contention that this Court’s extended jurisdiction is
engaged in light of the conflicting judgments of the High Court, the Full Court and the
Supreme Court of Appeal regarding the interpretation to be ascribed to the applicable
provisions of the POCA. There is indeed dissension in these judgments which requires
this Court to make a definitive pronouncement on the relevant issues. This conflict has
a material bearing on the Minister’s prospects of success on appeal in this Court, which
20 In terms of section 167(3)(b)(i) read with section 167(6) of the Constitution. See also Kubyana v Standard
Bank of South Africa [2014] ZACC 1; 2014 (3) SA 56 (CC); 2014 (4) BCLR 400 (CC) at paras 16-7.
21 Paulsen v Slip Knot Investments 777 (Pty) Limited [2015] ZACC 5; 2015 (3) SA 479 (CC); 2015 (5) BCLR 509
(CC) (Paulsen) at para 18.
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19
is an impo rtant factor in determining whether it is in the interests of justice to grant
leave. In Booysen,22 this Court reiterated a principle it established in NEHAWU23 that
“when there are different judicial opinions that have been expressed in a lower court or
in lower courts in a matter in respect of which leave is sought, that means that there are,
prima facie, reasonable prospects of success”.
[45] The extent of the application of the legal principles set out in Levy and
Mazibuko,24 including the meaning to be accor ded to the words “interest in the
property” in Chapter 6 of the POCA, and whether the protection it affords extends to a
state organ where state funds allocated to discharge a constitutional obligation are
misappropriated through unlawful activities, are c learly matters of fundamental
importance which transcend the narrow interests of the present litigants and implicate
the interests of the general public. 25 I hold the view, therefore, that the re is substance
in th e Min ister’s contention that the matter rai ses arguable points of law of general
public importance and that it is in the interests of justice to grant leave to appeal.
Does the Minister have an interest in the property in terms of the POCA?
[46] The meaning of the word “interest” is pivotal in these proceedings. If the parties
have an interest in the property as contemplated in the POCA, then they are each entitled
to have their respective interests excluded in the forfeiture order. To that end, each
party must, in terms of section 54(1) and (2), establish the nature and extent of its right,
title or interest in the property and the time and circumstances of its acquisition. The
interest will then be excluded from the forfeiture order under section 54(8), if it is found
on a balance of probabilities that it was acquired legally and for a consideration and that
22 Booysen v Minister of Safety and Security [2018] ZACC 18; 2018 (9) BCLR 1029 (CC); 2018 (6) SA 1 (CC) at
para 93. See also National Education Health and Allied Workers Union v University of Cape Town [2002] ZACC
27; 2003 (3) SA 1 (CC); 2003 (2) BCLR 15 4 (CC) (NEHAWU) at para 26 and Areva NP Incorporated v Eskom
Holdings SOC Limited [2016] ZACC 51; 2017 (6) BCLR 675 (CC); 2017 (6) SA 621 (CC) at para 28.
23 NEHAWU above n 22 at para 26.
24 Mazibuko v National Director of Public Prosecutions [2009] ZASCA 52; 2009 (6) SA 479 (SCA) at para 57.
25 Paulsen above n 21 at para 26.
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its holder neither knew nor had reasonable grounds to suspect that the property in which
it is held is the proceeds of unlawful activities – the innocent owner defence.26
[47] In Fidelity Security Services,27 this Court laid down the following guidelines to
statutory interpretation:
“(a) Words in a statute must be given their ordinary grammatical meaning , unless
to do so would result in an absurdity.
(b) This general principle is subject to three int errelated riders: a statute must be
interpreted purposively; the relevant provision must be properly
contextualised; and the statute must be construed consistently with the
Constitution, meaning in such a way as to preserve its constitutional validity.
(c) Various propositions flow from this general principle and its riders. Among
others, in the case of ambiguity, a meaning that frustrates the apparent purpose
of the statute or leads to results which are not businesslike or sensible results
should not be preferred where an interpretation which avoids these unfortunate
consequences is reasonably possible. The qualification ‘reasonably possible’
is a reminder that Judges must guard against the temptation to substitute what
they regard as reasonable, sensible or businesslike for the words actually used.
(d) If reasonably possible, a statute should be interpreted so as to avoid a lacuna
(gap) in the legislative scheme.”
[48] So, with the aid of the above guidelines, what meaning is to be ascribed to the
words “interest includes any right”? The first step is to determine what the Legislature
intended “includes” to denote. This Court in New Clicks SA28 described it thus:
26 National Director of Public Prosecutions v Mohamed NO 2003 (1) SACR 561 (CC); 2003 (5) BCLR 476; 2003
(4) SA 1 (CC) (Mohamed II) at para 19.
27 Fidelity Security Services above n 19 at para 34. See also Shiva Uranium (Pty) Limited (In Business Rescue) v
Tayob [2021] ZACC 40; 2022 (3) SA 432 (CC); 2022 (2) BCLR 197 (CC) at para 38 ; Road Traffic Management
Corporation v Waymark Infotech (Pty) Limited [2019] ZACC 12; 2019 (5) SA 29 (CC); 2019 (6) BCLR 749 (CC)
at paras 30-2 and Cool Ideas 1186 CC v Hubbard [2014] ZACC 16; 2014 (4) SA 474 (CC); 2014 (8) BCLR 869
(CC) (Cool Ideas) at para 28.
28 Minister of Health v New Clicks SA (Pty) Limited [2005] ZACC 14; 2006 (2) SA 311 (CC); 2006 (1) BCLR 1
(CC) at paras 455-6.
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“As a general rule the terms ‘including’ or ‘includes’ are not terms of exhaustive
definition but terms of extension. However, they may, depending on the context, be
used as terms of exhaustive definition. As the court put it in Dilworth v Commissioner
of Stamps:
‘The word “include” is very generally used in interpretation clauses in
order to enlarge the meaning of words or phrases occurring in the body
of the statute; and when it is so used these words or phrases must be
used as comprehending, not only such things as they signify according
to their natural import, but also those things which the interpretation
clause declares that they shall include. But the word “include” is
susceptible of another construction, which may become imperative, if
the contex t of the Act is sufficient to sh ow that it was not merely
employed for the purpose of adding to the natural significance of the
words or expressions defined. It may be equivalent to “mean and
include”, and in that case it may afford an exhaustive explanat ion of
the meaning which, for the purposes of the Act, must invariably be
attached to these words or expressions’.
. . .
The sense in which the term ‘including’ is used must be ascertained from the context
in which it is used.”
[49] The Court, quoting from De Reuck,29 continued:
“The correct sense of ‘includes’ in a statute must be ascertained from the context in
which it is used. . . . If the primary meaning of the term is well known and not in need
of definition and the items in the list introduced by ‘inclu des’ go beyond that primary
meaning, the purpose of that list is then usually taken to be to add to the primary
meaning so that ‘includes’ is non -exhaustive. If . . . the primary meaning already
encompasses all the items in the list, then the purpose of the list is to make the definition
more precise. In such a case ‘includes’ is used exhaustively.”
[50] The Supreme Court of Appeal’s interpretive exercise in this regard resulted in a
conclusion that “although ambiguity may have been avoided by the employment of the
29 De Reuck v Director of Public Prosecutions, WLD [2003] ZACC 19; 2004 (1) SA 406 (CC); 2003 (12) BCLR
1333 (CC) (De Reuck) at para 18 and New Clicks above n 28 at para 456.
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word ‘means’”, “includes” in the context of this matter is equivalent to “means” and
that “interest” , therefore, means any right. This finding is, however, not without
difficulty. Section 1 of the POCA appears to distinguish between the words “mea ns”
and “includes” as it repeatedly uses both variably in its list of definitions. This raises
the question as to why the Legislature used the word “includes” instead of “means” to
define “interest”, as it did elsewhere, if that is what it intended.
[51] Additional to this challenge is the fact that the POCA seems to distinguish
between “rights” and “interests” as it employs the words distinctly in various provisions.
The definition of “property” , which is couched in the widest terms, lists any rights,
privileges, claims and securities and any interest in money or any movable, immovable,
corporeal or incorporeal thing, and all proceeds thereof. Section 57(2) also refers to
“[a]ny right or interest in forfeited property”. There is another example on which I
expand below.
[52] Unfortunately, the POCA is not exactly a model of clarity or precision in this
regard. A majority of the provisions in Chapter 6, including those which exclude
interests in property subject to preservation or forfeiture or ders – sections 39(3)
and (5)(b); 48(4)(b); 50(3); 52(1), (2), (2A), and (4); and 54(1) – refer only to “interest
in the property” and make no mention of “right in the property”. However , although
section 54(1) merely refers to an applicant’s “interest in the property”, section 54(2)(a)
and (b), which flows directly from it, is worded differently. These provisions set out
the requirements for the affidavit accompanying the application for the exclusion of
interests in property contemplated in subsection (1). Significantly, instead of using the
words “interest in the property” employed in section 54(1), subsections (2)(a) and (b)
refer to the applicant’s “right, title or interest in the property”, the nature and extent of
which must be explained in the relevant affidavit.
[53] “Interest” is defined in Merriam -Webster’s Law Dictionary as “a right, title,
claim or share in property”. The Oxford English Dictionary describes the term as “the
relation of being objectively concerned in something, by having a right or title to, a
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23
claim upon, or a share in; the fact or relation of being legally concerned; legal concern
in a thing; especially right or title to property, or to some of the uses or benefits
pertaining to property”. According to Black’s Law Dictionary, the word means “a right
to have the advantage accruing from anything; any right in the nature of property, but
less than title; a partial or undivided right; a title to a share”. The latter definition then
makes the point that “[t]he terms ‘interest’ and ‘title’ are not s ynonymous” which is,
indeed, correct.30
[54] A plain reading of subsections 54(1) and 54(2)(a) and (b) ineluctably leads to the
conclusion that the Legislature’s reference to the applicant’s “interest in the property”
in section 54(1) was intended to mean a right, title or interest in the property concerned,
that is, a right, a title or an interest would suffice in providing the jurisdictional fact for
the bringing of the application. Needless to say, this interpretation does not only
distinguish “title” but al so differentiates between the words “right” and “interest”,
which are used separately in the same sentence, as the POCA does elsewhere in the
manner indicated above.
[55] A reading of the judgment of the Supreme Court of Appeal shows that in its
interpretive exercise it dealt with the definition of “interest” only as found in the POCA
and did not under take any examination of section 54, in particular, the reference to
“right, title or interest” as being applicable to the facts at hand. Had it done so, it would
have realised the flaw in its interpretation that “interest means right”. On the application
of this interpretation to section 54(2), the words “right, title or interest” would have to
be read as referring to a “right, title or right” as “interest” and “ right” could be used
interchangeably. This would partially render the section meaningless. Such an
interpretation must, therefore, be wrong. The Legislature clearly distinguished between
a right and an interest.
30 The distinction is supported by the definition of the word “title” in the Oxford English Dictionary – “a legal
right to the possession of property (especially real property); the evidence of such rights; title deeds” – which has
been adopted by our courts. See, for examp le, Melcorp SA (Pty) L imited v Joint Municipal Pension Fund
(Transvaal) 1980 (2) SA 214 (W) at 218F; [1980] 1 All SA 49 (W) at 501-2.
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[56] It must also be pointed out that the Sup reme Court of Appeal’s reliance on
De Reuck was misguided. That matter involved the interpretation of the word s
“child pornography”. Section 1 of the Films and Publications Act31 defines these words
to include “any images” and then lists a rang e of images. This Court held that the use
of “includes” in the definition was consistent with an intention that the list should refine,
and thus be coloured by, the primary meaning of “child pornography”. 32 Unlike here,
the list in De Reuck and the descriptions which were given in the other cases referenced
by the Supreme Court of Appeal,33 where the context in which “includes” was
employed, clearly indicated that “what follow s thereafter constitute[d] a complete or
exhaustive definition of the relevant term” and actu ally gave meaning to the vague
expression.
[57] A question which arises in the circumstances is whether the words “interest in
the property” are to be read to mean “right, title and interest in the property” in the rest
of the provisions of the POCA which govern the exclusion of interests from a forfeiture
or preservation order. In our law, the Legislature is presumed to use language
consistently.34 Therefore, the same words or expressions in a statute are presumed to
bear the same meaning unless to do so would result in manifest absurdity or would
clearly frustrate the manifest intention of the lawgiver.35 To my mind, it would be quite
odd for the words “interest in the property” to have a certain meaning in
section 54(2)(a) and (b) and a different one in the other provisions dealing with the same
subject matter, namely, the exclusion of interests from forfeiture or preservation. I
cannot fathom any reason to deviate from the presumption in the present context.
31 65 of 1996 ( read with section 1 of the Criminal Law (Sexual Offences and Related Matters) Amendment Act
32 of 2007).
32 De Reuck above n 30 at para 19.
33 Union Government v Rosenberg Limited 1946 AD 120 at 127; R v Debele [1956] 4 All SA 251 (A) at 251-3;
1956 (4) SA 570 (A) at 572H -573A and 575A -576A and Stauffer Chemical Co v Sasfan Marketing and
Distribution Co (Pty) Limited 1987 (2) SA 331 (A) at 350H-351E.
34 Du Plessis “ Statute Law and Interpretation ” in LAWSA 2 ed (2011) v ol 25(1) at para 333 and Principal
Immigration Officer v Hawabu 1936 AD 26 at 33.
35 South African Transport Services v Olgar 1986 (2) SA 684 (A) at 688 and S v Dlamini; S v Dladla; S v Joubert;
S v Schietekat [1999] ZACC 8; 1999 (4) SA 623; 1999 (7) BCLR 771 (CC) at para 47.
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[58] All the indicia, in my view , point to the conclusion that the word “includes” in
the definition of “interest” was intended to be non -exhaustive and that the Legislature
meant to give the word “interest” a wide meaning. Interestingly, the Supreme Court of
Appeal readily adopted this view in R O Cook Properties (Pty) L imited,36 albeit in a
different context, where it sought to interpret the phrase “instrumentality of an offence”.
In their consideration of the forfeiture provisions, Mpati DP and Cameron JA, writing
for a unanimous court, stated that the POCA “defines ‘interest’ very widely as including
‘any right’”. Thus, the approach of the Supreme Court of Appeal in this matter and its
interpretation of the term is also contrary to its own precedent. “Interest” does not mean
“right” and Levy’s expansive approach to the interpretation of the expression “interest
in the property” and its endorsement by the High Court and the Full Court was
justified.37
[59] The Supreme Court of Appeal’s reliance on Mazibuko to justify its finding that
“interest” means “any right” was, therefore, misplaced. There, the Court considered
whether the interest of one spouse in a farm belonging to the joint estate of a couple
married in community of property, which was found to be an instrumentality of an
offence, was capable of being excluded from forfeiture as she was unaware and had no
reasonable grounds to suspect that the property was an instrumentality of an offence.
The Supreme Court of Appeal accepted that the couple’s interests in the property, in the
rights of ownership in it, were indivisible by reason of their marriage regime, but held
that a division of the proceeds was possible once the property was sold. Thus,
Ms Mazibuko not only had an interest in the property, wh ich was indivisible from that
of her husband, but she also had a divisible interest in the proceeds thereof, albeit that
the accrual of the latter interest was contingent on the property’s sale. And that
36 National Director of Public Prosecutions v R O Cook Properties (Pty) Limited [2004] ZASCA 38; [2004] 2 All
SA 491 (SCA); 2004 (2) SACR 208 (SCA) at paras 22-3.
37 This decision, which is distinguished from the present matter by its facts, concerned an application for a
forfeiture order under section 48 of the POCA. The respondents, who were induced by a fra udulent
misrepresentation to invest substantial funds in an investment pyramid scheme used to purchase the residential
property sought to be forfeited, successfully applied to have their interest excluded from the forfeiture order. The
court held that they were entitled to be compensated for their losses.
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26
contingent interest, held the Supreme Court of Appeal, fell within the wide definition
of the term in the POCA. Contrary to the Supreme Court of Appeal’s understanding,
the latter holding, in my view, merely bolsters the expansive approach that accords
“interest” a wide interpretation . It was by no means a statement by the
Supreme Court of Appeal that “interest” is equivalent to “right”.
[60] This approach does not conflict with the overarching purpose of the POCA,
which must be taken into account in the interpretive exercise. This purpose was
explained by this Court as follows in Mohamed I:38
“The Act’s overall purpose can be gathered from its long title and preamble and
summarised as follows: The rapid growth of organised crime, money laundering,
criminal gang activities and racketeering threatens the right s of all in the Republic,
presents a danger to public order, safety and stability, and threatens economic stability.
This is also a serious international problem and has been identified as an international
security threat. South African common and statut ory law fail to deal adequately with
this problem, because of its rapid escalation and because it is often impossible to bring
the leaders of organised crime to boo k, in view of the fact that they invariably ensure
that they are far removed from the overt criminal activity involved. The law has also
failed to keep pace with international measures aimed at dealing effectively with
organised crime, money laundering and criminal gang activities. Hence the need for
the measures embodied in the Act.
. . .
Various international instruments deal with the problem of international crime in this
regard and it is widely accepted in the international community that criminals should
stripped of the proceeds of their crimes, the purpose being to remove the incentive for
crime.” (Emphasis added.)
[61] Indeed, the central purpose of the POCA to combat organised crime, money
laundering and criminal gang activities , gives effect to South Africa’s international
obligation to ensure that criminals do not benefit from their crimes. But there is another
38 National Director of Public Prosecutions v Mohamed NO [2002] ZACC 9; 2002 (9) BCLR 970 (CC); 2002 (4)
SA 843 (CC) (Mohamed I) at paras 14-5.
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27
important purpose found in the forfeiture provisions in C hapter 6 – to protect the
interests of parties who legally, for consideration and innocently acquired a right or
interest in the property concerned.
[62] The question is whether the Minister’s claim amounts to such an interest, that is
one acquired innocently, legally and for consideration (a payment or reward) 39 in the
context of this matter, particularly the wide ambit of the word “interest”. And the
answer must be yes. The Minister’s claim is a persona l right in the form of the
LRAD grant allocated by her Department for the property’s acquisition, which paid part
of the purchase price. O rdinarily, such a personal right would merely be an amount
advanced by a loaner to a loanee, but this is not the case here. As mentioned above, the
LRAD grant is intrinsically linked to land reform. It is given to previously
disadvantaged individuals or groups, who must make a contribution either in cash or
labour, to acquire land for agricultural purposes as part of the Land Redistribution and
Agricultural Development Programme, to which the Minister’s personal right is also
linked. This programme is run in the execution of the State’s obligation under
section 25(5) of the Constitutio n to “foster conditions which enable citizens to gain
access to land on an equitable basis” and undo the legacy of apartheid of racialised land
inequity. Needless to say, this programme benefits poor citizens who, incidentally, bear
the brunt of corruptio n the most, 40 as is evidenced by the misfortune which befell the
would-be beneficiaries in this very case.
[63] An interest of the nature of the Minister’s claim is clearly not a “vague and flimsy
interest”, which diminishes rights, of the ilk adverted to by th e
Supreme Court of Appeal when it expressed a concern that the purpose of the POCA
would be undermined if the forfeiture is subjected to “such interests”, as opposed to
legal rights. It is an interest in the forfeited property which, while it may not be a real
right in the sense of the Land Bank’s mortgage bond over the property that can be used
39 As the words “for consideration” are defined in the Oxford English Dictionary.
40 National Director of Public Prosecution v Botha NO [2020] ZACC 6; 2020 (1) SACR 599 (CC); 2020 (6)
BCLR 693 (CC) at para 3.
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to assert a preferential right to the property, is nonetheless an interest acquired lawfully
and innocently by the Minister in the manner contemplated in section 54(8). While the
Supreme Court of Appeal may be correct in the view that the language of
sections 52(2) and 54(8) is that of the acquisition of property rights, it erred in not
considering the remainder of the provisions governing the exclusion of interest s in
property, the use of “interest” in defining “property”, and the constitutional implication
of its interpretation.
[64] I cannot conceive a reason why an organ of state in the Minister’s position, which
manages and disburses public resources in the exercis e of a constitutional mandate to
provide state grants for the purchase of the very property that is in contention in this
matter, would be precluded from having its interest in that property excluded from
forfeiture. W hile there may be an alternative reme dy available to the Minister in the
form of section 300 of the Criminal Procedure Act,41 which she can invoke against the
person or persons who misappropriated the grant funds, no reason has been advanced
why these provisions should preclude her interest in the property from the protection
offered by the POCA. In Mohamed I, this Court explained that the remedies provided
in the POCA exist because “conventional criminal penalties are inadequate as measures
of deterrence when organised crime leaders are able to retain the considerable gains
derived from organised crime, even on the occasions when they are brought to
justice”.42 Considering this, it is difficult to believe that the intention of the POCA is
to only protect parties who have a right to property, r equiring those with an “interest”
to pursue criminal proceedings.
41 In terms of this section she may be awarded compensation—
“[w]here a person is convicted by a superior court, a regional court or a magistrates’ court of an
offence which has caused damage to or loss of property (including money) belonging to some
other person, the court in question may, upon the application of the injured person or of the
prosecutor acting on the instructions of the injured person, forthwith award the injured person
compensation for such damage or loss.”
42 Mohamed I above n 39 at para 15.
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The competing claims
[65] Having established that the Minister has an interest in the property, the second
leg of the enquiry is how the competing claims of the parties for the exclusion of the
parties’ interests from the operation of a forfeiture order under the POCA should be
determined. Should they be ranked according to the common law principles set out in
the judgment of the Supreme Court of Appeal? Or should they be treated equally under
the POCA on the premise that both the Minister and the Land Bank are innocent victims
of fraud, whose protection is the purpose of the POCA, and should be compensated in
the amount of their respective capital losses, as the Minister contends?
[66] It was argued for the Minister that unlike in the case of the common law maxim
qui prior est tempore potior est iure (he who is earlier in time is stronger in law) applied
by the Supreme Court of Appeal, the POCA does not provide for a hierarchy of claims
and there is no basis to favour one victim over the other. It was further argued that the
common law principle that a real right generally prevails over a personal right does not
apply because legislation takes precedence and the parties should be treated equally as
victims under the POCA, which has no specific mechanism for compensation. The
Land Bank, on the other hand, contended for the application of the common law
principles.
[67] The presumption that legislation does not alter the common law unless expressly
stated is well-established,43 and the Minister properly conceded that the POCA gives no
indication of an intention to do so. The Land Bank’s real right in the property, as the
mortgagee, entitles it to the reservation of the proceeds of the mortgaged propert y for
the principal obligation owed to it to the exclusion of claims against the property at the
43 Mader v Mallin Diamond Mines Limited [1964] 2 All SA 92 (T).
MAYA DCJ
30
instance of other creditors.44 It has a preferential right to secure the sale of the property
under an order of court for the purpose of satisfying the debt owed to it.45
[68] Accordingly, the common law principles and a ranking of the claims must apply
in this matter. I n light of the Land Bank’s status as a secured creditor, its full claim,
i.e., the capital sum, interest and costs, enjoy priority and rank first in respect of the
apportionment of any sale p roceeds of the prop erty. The consequence of this
apportionment is that because the outstanding debt to the Land Bank exceeds the
amount of the sale proceeds, the Minister will receive nothing. However, at the hearing,
the Minister’s counsel expressed her reconciliation with that eventuality, in line with
her alternative prayer in her application papers for the reinstatement of the High Court
order. The Minister’s view was that such an order wou ld not be an empty one , as the
recognition of her interest would create an important binding legal precedent in the
State’s favour.
[69] The finding that the Minister has an interest in the property constitutes some
success in her favour and the appeal must be upheld to that extent. In view of that partial
success, I am not inclined to make an order of costs. The Land Bank was mulcted with
all the costs, both in the High Court and in the Full Court, and the Minister was ordered
to pay the costs of both the appeal and the cross-appeal in the Supreme Court of Appeal.
These costs orders were wrong, having regard to the decision I reach in these
proceedings, and should be set aside.
[70] In the result, the following order is made:
1. Leave to appeal is granted.
2. The appeal is partly upheld to the extent set out in paragraph 3 below
44 Dendy “Mortgage and Pledge” LAWSA 3 ed (2020) vol 29 at para 326. See also Lief v Dettman 1964 (2) SA
252 (A) at 259, where it was held that the purpose of registering a mortgage bond is to ensure that —
“the world should have knowledge of the fact that there is a charge against the mortgagor’ s
property; that the object is not to notify the world that the mortgagor owes the mortga gee a
specific sum of money . . . that the real rights under a bond are immovable but the debt is a
movable.”
45 Roodepoort United Main Reef GM Co Limited v Du Toit 1928 AD 66 at 71.
MAYA DCJ / ROGERS J
31
3. The order of the Supreme Court of Appeal is amended as follows:
“1. The appeal is upheld with no order as to costs.
2. The order of the Full Court is set aside and replaced with the
following:
(a) The appeal is dismissed with costs.
(b) The cross-appeal is upheld with costs.
(c) Paragraphs 2, 3 and 5 of the order of Goosen J are set aside
and replaced with the following:
“2. The interest of the first applicant, the Land and
Agricultural Development Bank of South Africa,
consisting of the debt secured by its mortgage bond
over the property concerned is excluded from the
operation of the forfeiture order.
3. The interest of the first respondent, the Minister of
Rural Development and Land Reform, consisting of
a grant allocated for the purchase of the property
concerned, is excluded from the operation of the
forfeiture order.”
4. There shall be no order as to costs.
ROGERS J (Schippers AJ and Van Zyl AJ concurring):
Introduction
[71] I have had the pleasure of reading the Deputy Chief Justice’s judgment (first
judgment). I shall adopt the abbreviations used in the first judgment. I agree that our
jurisdiction is engaged and that leave to appeal should be granted. I agree that if the
Department has an “interest” in the property for purposes of section 54 of the POCA,
the Land Bank’s mortgage bond enjoys priority. On the evidence, th is means that the
entire proceeds of the property will go to the Land Bank. I disagree, however, that the
ROGERS J
32
Department has an “interest” in the property. And so I disagree with the first judgment’s
proposed amendment to the order granted by the Supreme Co urt of Appeal. I would
dismiss the appeal with costs.
[72] In its definition section, the POCA states that “‘interest’ includes any right”. The
first judgment holds that “includes” here is not exhaustive, so that an “interest” in
property may be something ot her than a “right” in property. That is an important
question, but it may not be dispositive. Even if the definition is not exhaustive, there is
a further question, namely whether the Department’s claim, which is admittedly not a
“right” in the property, is nevertheless an “interest” in the property, having regard to
whatever residual meaning “interest” may have.
Is the definition of “interest” exhaustive?
[73] The first judgment attaches significance to the fact that in section 1 of the POCA
the lawmaker has distinguished between “means” and “includes”,46 the inference being
that the former is exhaustive while the latter is not. This would be a weighty factor if
section 1 displayed a careful distinction between the two words, but in my view it does
not. The definitions of “criminal gang” 47 and “pattern of criminal gang activity” 48 are
introduced by “includes”, yet both are clearly exhaustive. Without apparent distinction,
46 At [50].
47 This term is defined thus:
“‘criminal gang’ includes any formal or informal ongoing organisation, association, or group of
three or more persons, which has as one of its activities the commission of one or more criminal
offences, which has an identifiable name or identifying sign or symbol, and whose members
individually or collectively engage in or have engaged in a pattern of criminal gang activity;”
48 This term is defined thus:
“‘pattern of criminal gang activity’ includes the commission of two or more criminal offences
referred to in Schedule 1: Provided that at least one of those offences occurred after the date of
commencement of Chapter 4 and the last of those offences occurred within three y ears after a
prior offence and the offences were committed—
(a) on separate occasions; or
(b) on the same occasion, by two or more persons who are members of, or belong
to, the same criminal gang;”
ROGERS J
33
the definition of “pattern of criminal gang activity” uses “includes” while the definition
of “pattern of racketeering activity”49 uses “means”.
[74] The first judgment considers that it would make a nonsense of the expression
“right, title or interest” in section 54(2) to interpret “interest” as meaning only a “right”,
because if one plugged the definition into that expression, it would read “right, title or
right”.50 The first point to note is that section 54(2) is the only place where “right title
or interest” appears in the POCA. Elsewhere in the POCA, the lawmaker sensibly has
used just the defined word “interest”. Sections 52 and 54 perform similar functions.
Section 52 applies where a person seeks to have its interest excluded from forfeiture
before a forfeiture order is granted. Section 54 gives an opportunity for an exclusion to
be made after the forfeiture order has been granted. There is no discernible reason for
the lawmaker, in the isolated instance of section 54(2), to have used the expression
“right, title or interest” where “interest” sufficed in section 52 and throughout the re st
of the Act.
[75] The isolated expression “right, title or interest” in section 54(2) should thus not
be given undue prominence. It seems to have been used with insufficient thought. It is
an omnibus expression often encountered in commercial contracts to cover every legal
interest which a person may hold in property. There is self -evident superfluity within
the expression itself. “Title” is already embraced within “right”, title (ownership) being
the most complete right that a person can hold in property.
[76] On any reckoning, reformulating the omnibus expression by importing the
definition of “interest” into it gives rise to disjuncture. The first judgment’s
interpretation of the definition of “interest” is that it means “interests, including rights”.
49 This term is defined thus:
“‘pattern of racketeering activity’ means the planned, ongoing, continuous or repeated
participation or involvement in any offence referred to in Schedule 1 and includes at least two
offences referred to in Schedule 1, of which one of the offences occurred after the
commencement of this Act and the last offence occurred within 10 years (excluding any period
of imprisonment) after the commission of such prior offence referred to in Schedule 1;”
50 At [55].
ROGERS J
34
On that basis, “right, title or interest” becomes “right, title or interest including a right”.
Just as one may ask why, in this isolated omnibus expression, the lawmaker used the
word “interest” if an interest were confined to a “right”, so one may ask why the
lawmaker used the word “right” if an “interest” as defined already includes a “right”.
[77] In regard to “includes” in statutory definitions, the first judgment has quoted 51
the relevant part of this Court’s judgment in De Reuck,52 which in turn paraphrased
Debele.53 The definition of “interest” in the POCA falls most readily into the second or
third class mentioned in De Reuck, i.e. classes where an exhaustive definition is usually
meant. In relation to an interest held in property, the expression “any right” falls within
the natural meaning of “interest”. Indeed, “right” is the most obvious example of an
interest in property. That is the primary meaning of “interest”, for example, in the
definition of “land” contained in the Alienation of Land Act. 54 There was no need for
the lawmaker to say that an “interest” included “any right” if this was not intended to
be exhaustive.
[78] Nevertheless, the word “any” in the POCA definition serves the important
purpose of emphasising that there is no limitation on the “rights” in property that qualify
as an “interest” – “any” right in property qualifies. It is this very point that was
emphasised in R O Cook Properties (Pty) Ltd,55 to which reference is made in the first
judgment.56 The Supreme Court of Appeal in that case was not suggesting that an
“interest” could be something other than a “right” but rather that “any” (rather than only
51 At [49].
52 Above n 29.
53 Above n 33 at 575H-576C.
54 68 of 1981. In terms of paragraph (b) of the definition of “land” in that Act, “land” includes, in relation to
Chapters I and III, “any interest in land, other than a right or interest registered capable of being registered in
terms of the Mining Titles Registration Act, 1967 (Act No. 16 of 1967)”. The expression “any interest in land”
is not itself defined, but the relationships that have been held to be “interests in land” have all been rights in land:
see Christie The Law of Contract in South Africa 8 ed (LexisNexis, 2022) at 145. See also Brink v Stadler 1963
(2) SA 427 (C) at 429A-E; Cowley v Hahn 1987 (1) SA 440 (E) (Cowley) at 445I-446A. In other legislation, the
expression “limited interest in land” has been held to be confined to real rights that diminish ownership: Van der
Hoven v Cutting 1903 TS 299 at 306; Pretoria Town Council v Receiver of Inland Revenue 1931 AD 178 at 186.
55 Above n 36.
56 At [58].
ROGERS J
35
some) rights qualified for potential exclusion. I thus cannot agree with the first
judgment that the decision of the Supreme Court of App eal in the case now before us
was in any way inconsistent with its own precedent.
[79] The first class of case mentioned in De Reuck – the class where a non-inclusive
meaning is usually meant – is where “the primary meaning of the term is well known
and not in need of definition and the items in the list . . . go beyond that primary
meaning”. In the POCA, the definition of “interest” does not comprise a list and the
only thing mentioned – “any right” – is within the primary meaning of “interest”. If the
word “interest” were intended to go beyond “right”, it is that residual content of
“interest” that one would have expected to see in the definition, yet it is absent.
[80] For these reasons, the Supreme Court of Appeal was right to conclude that the
definition is exhaustive. That being so, the Department fails at the first hurdle. I should
make it clear that this conclusion does not mean that a right in property, for purposes of
the POCA, has to be a real right. It is unnecessary to decide whether personal rights in
respect of property, e.g. an ordinary lease or (if it is not a real right) a usufruct,57 qualify.
If they do, it is because the right, although personal, is still a right in respect of the use
or exploitation of the property in question.58
“Interest” falling short of a “right”
[81] However, even if the definition is not exhaustive, the Department’s claim does
not fall within the residual content of “interest”, i.e. an “interest” in property falling
short of a “right” in property. The Department was defrauded out of money. It made a
financial grant on the basis that the money would go towards purchasing farms in the
name of a trust of which the beneficiaries would be previously disadvantaged
individuals. Because it was defrauded, the Department has a person al monetary claim
57 In Cowley, above n 54, it was held that a usufruct is a personal right and that the provisions of the Alienation of
Land Act thus do not apply to it. The correctness of this view has been questioned: See Christie above n 54 at
145.
58 In the context of the Death Duties Act 29 of 1922, it was held in Hansen’s Estate v Commissioner for Inland
Revenue 1956(1) SA 398 (A) that “any interest” included a personal right to property: at 405 in fine.
ROGERS J
36
for delictual damages, or perhaps for unjustified enrichment, against the fraudsters.
Such a claim cannot be regarded as an “interest” in the farming properties for purposes
of the POCA.
[82] The POCA conceives of an “interest” as being an i nterest “in” property. The
word “in” connotes a direct relationship between the interest and the property. It is not
enough that a creditor with a monetary claim against the debtor would find it useful to
levy execution against the property. That would give all creditors with monetary claims
against a debtor an “interest” in all the property of the debtor, since it is always to their
advantage to levy execution against all the debtor’s property.
[83] An “interest” for purposes of the POCA is something that i s capable of being
“acquired”59 and is then “held”60 in property. When a person is defrauded out of money,
its personal monetary claim for recovery arises, i.e. is acquired, immediately. The very
nature of a personal claim so acquired is that it lies against a person and is not “held in”
any particular property.
[84] If the fraud related to a proposed acquisition of property, the defrauded party
would have an immediate claim on parting with its money, whether or not the fraudster
thereafter used the money to ac quire the envisaged (or any other) property. What the
fraudster does with the money does not affect the legal nature of the defrauded party’s
claim, which remains personal against the fraudster and has no legal link with the uses
to which the fraudster puts the money.
[85] Assuming that the fraudster does later use the money to acquire property, it
cannot be said that at that point the defrauded party’s claim, which until then has been
a personal monetary claim, becomes an “interest in property”. The acquisit ion of the
property by the fraudster brings about no change in the legal character of the defrauded
59 See, for example, sections 2(1)(a)(iii), 2(1)(c)(i), 2(1)(d), 52(2)(a), 54(8) and 54(8A).
60 See, for example, sections 15(1), 20(5), 22(1), 44(1)(a), 52(2)(b), 52(3)(a) and 54(8A)(a).
ROGERS J
37
party’s right, which is a personal right against the fraudster. In the present case, for
example, it appears that the Department parted with the grant fund ing in 2006.
According to the charge sheet, that is when it was defrauded or its money stolen.
Yet CPAD Farm only took transfer of the property in April 2007, simultaneously with
the registration of the Land Bank’s mortgage bond.
[86] An “interest” for purpo ses of the POCA is something capable of reducing the
value of full ownership. Where A holds property, but B “holds an interest” in the
property, section 15(1) 61 provides that the value of A’s property for purposes of the
POCA is the market value of A’s pro perty less “the amount required to discharge any
encumbrance on the property”. Where no other person “holds an interest in the
property”, the value of A’s property is simply its market value. A personal claim such
as that of the Department is not somethi ng that diminishes the value of full ownership
or that can be regarded as an encumbrance on the property.
[87] It is also necessary to reflect on the concept of excluding interests from forfeiture
in terms of the POCA. Take the Land Bank. It has a personal m onetary claim against
the mortgagor, CPAD Farm, secured by a mortgage bond, which is a real right. It is the
Land Bank’s mortgage bond, not its personal claim, that is its “interest in” the property.
If the mortgage bond is excluded from the forfeiture, the Land Bank continues to hold
the mortgage bond and the curator takes the forfeited property subject to the mortgage
bond, which then secures the full personal claim that the Land Bank has against CPAD
Farm.
61 Section 15 is headed “Value of property”. Subsection (1) reads:
“For the purposes of this Chapter, t he value of property, other than money, in relation to any
person holding the property, shall be—
(a) where any other person holds an interest in the property—
(i) the market value of the property; less
(ii) the amount required to discharge any encumbrance on the property;
and
(b) where no other person holds an interest in the property, the market value of
the property.”
ROGERS J
38
[88] If the mortgage bond were not excluded from the forfeiture, it would be lost and
subsumed into the full ownership of the curator. The Land Bank would continue to
enjoy a personal monetary claim against CPAD Farm. If CPAD Farm owned any
property that was not subject to forfeiture, the Land Bank coul d, with the judgment it
has on its personal claim, levy execution against the non -forfeited property. The
personal claim exists independently of the mortgage bond.
[89] On the first judgment’s interpretation, one would have to conclude, however,
that the Land Bank has two “interests” in the property, its mortgage bond (which is a
real right) and its monetary claim (which is a personal right). Excluding the mortgage
bond from the forfeiture would not be enough, because unless the Land Bank’s personal
claim were also excluded from forfeiture, the Land Bank would lose the personal claim
and there would then be no claim which the mortgage bond could secure.
[90] The Department’s interpretation thus gives rise to peculiar results. To treat
personal monetary claims as “interests in property” effectively means that those
personal claims are lost unless they are excluded from the forfeiture order. This turns
the POCA into an instrument for expropriating the personal claims not of criminals but
of third parties. That is not among the POCA’s purposes. There is no reason for a
creditor’s monetary claim to be in any way affected by a forfeiture order. Although the
forfeiture order means that the forfeited property no longer forms part of the assets
against which the creditor can levy execution, the creditor’s monetary claim should be
unaffected and the creditor should still be entitled to proceed against non -forfeited
assets.
[91] The Department is in the same position as the Land Bank, except that it has only
a personal claim and not also a mortgage bond or other interest in the property. There
is no need to exclude its personal monetary claim against CPAD Farm from the
forfeiture order because the forfeiture order has had no effect on its personal claim. If
the amendment to the order that the first judgment proposes were not made, the
Department would still have its personal claim and it could still obtain judgment against
ROGERS J
39
CPAD Farm and levy execution against any non-forfeited property of CPAD Farm. In
truth, the exclusion of the Department’s supposed “interest” in the property is an attempt
to elevate the Department’s personal claim into something it is not, namely a claim
conferring a special right to levy execution against the property.
[92] Revealingly, the forfeiture order i nitially granted by the High Court (per
Majiki J) did not treat the Department’s claim in respect of the grant funding as an
interest in the property that fell to be excluded in terms of section 52 of the POCA. No
reference was made to an interest held by the Department in the property. The whole
property was simply forfeited to the state. To this day, the Department has not applied
to have its supposed interest excluded. Perhaps as a result, there is a dearth of evidence
as to what the Department’s grant funding was actually spent on.62
[93] The first judgment63 endorses the wide view of “interest” taken by Van Oosten J
in Levy64 and holds that this wide view “does not conflict with the overarching purpose
of the POCA”.65 I respectfully disagree. The crucial reasoning in Levy is contained in
the following passage from that judgment:
“Section 52 of the Act permits a person with an ‘interest in the property’ to intervene
in the forfeiture proceedings and the Court may the n ‘exclude certain interests in
property which is the subject of the order from the operation thereof ’. It was clearly
the intention of the Legislature to protect the interests of innocent third parties who
have become the victims of a fraudulent activity . The measures provided for in the
Act, i.e. preservation and forfeiture, are in the nature of execution in an ordinary civil
action. Ordinarily a plaintiff in a civil action, having a claim sounding in money against
the defendant would only be entitled to payment of his or her claim once judgment has
been entered in his or her favour and following upon the execution process. In granting
62 CPAD Farm bought the immovable property for R5.5 million and movable assets for R2.2 million. The
Land Bank provided a capital sum of R5 082 900 and an additional sum of R1 016 580 and took security over the
immovable property by way of its mortgage bond . It may well be that most of the Department’s grant funding
went towards CPAD Farm’s purchase of the movables. The movables were not the subject of the forfeiture order.
63 At [58].
64 Above n 10.
65 At [60].
ROGERS J
40
the forfeiture order in terms of the Act, the court, in effect, pronounces judgment
declaring the property to be executable. It is then that the rights of interested parties
become relevant. In casu the monies of the second and third respondent were used to
pay the purchase price of the property. Their interest in the property accordingly is the
equivalent of those amounts.”66
[94] There are several misconceptions in this passage. The first is the proposition that
one of the purposes of the POCA is to protect the victims of crime – in that case, the
second and third respondents who had lost money in a pyramid scheme. While the
POCA has provisions that are concerned with the welfare of the victims of crime, the
provisions dealing with exclusions from forfeiture are not among them. The purpose
of the exclusion provisions is clear from the requirements that have to be met in o rder
to achieve an exclusion. It is irrelevant whether the person seeking the exclusion was a
victim of a crime. What is important is that such person acquired the interest in good
faith and for fair value. In the present case, for example, the Land Ban k, unlike the
Department, was not the victim of any crime.
[95] In short, the purpose of the exclusion provisions is to protect innocent parties
who have acquired an interest in forfeited property at fair value. Advancing the interests
of the victims of crime is thus not a reason to give “interest” an unnaturally wide
meaning. To the contrary, the purposes of the POCA instead militate against giving
“interest” too wide a meaning. In terms of section 57 of the POCA, and subject to any
order for the exclusion of interests in forfeited property, such property must be
deposited into or delivered to the Criminal Assets Recovery Account (Account).
Section 69A(1) identifies the purposes for which funds in the Account may be used. 67
66 Levy above n 10 at para 21.
67 Section 69A(1) provides:
“The property and money allocated to, or standing to the credit of, the Account may be utilised
by Cabinet, after considering the recommendations of the [Criminal Assets Recovery]
Committee, for—
(a) the allocation of property and amounts of money from the Account to specific
law enforcement agencies;
(b) the allocation of property and amounts of money from the Account to any
institution, organisation or fund contemplated in section 68(c); and
(c) the administration of the Account.”
ROGERS J
41
The wider the meaning of “interes t”, the more exclusions there will be in respect of
forfeited property. This will reduce the net funds received by the Account, in turn
reducing the amounts available to be spent on the beneficial purposes identified in
section 69A(1).
[96] Innocent persons who take the trouble to ensure that their outlay is matched by
legally recognised interests in property are quite rightly protected. The purposes of the
POCA are not advanced by affording a similar protection to creditors with purely
personal monetary claims.
[97] The second misconception in the passage I have quoted from Levy is its
description of forfeiture as being in the nature of execution in a civil action. By way of
forfeiture, the property is supposedly declared executable, thus bringing the rights of
persons such as the second and third respondents in that case to the fore. I have some
difficulty in understanding what the Judge meant by this. Forfeiture in terms of the
POCA is not a form of execution pursuant to a civil action. The National Director of
Public Prosecutions does not have a civil claim against the criminal. Forfeiture in terms
of the POCA is a punitive measure designed to strip criminals of their tools of illicit
trade and their ill -gotten gains. The proceeds of the forfeiture go to t he Account, and
must be used for the purposes identified in section 69A(1). Forfeiture in a particular
case does not create a fund against which the victims of that particular crime can claim.
[98] Extending protection to creditors with personal claims is lik ely to create
confusion in the operation of the POCA. Just by way of example:
a. The first judgment refers to the link between the Department’s outlay and
land reform. Does this mean that a personal claim will only amount to an
“interest” if the state was defrauded of money earmarked for land reform?
Section 68(c) provides that one of the objects of the Criminal Assets Recovery Committee is —
“to advise Cabinet in connection with the rendering of financial assistance to any other
institution, organisation or fund established with the object to render assistanc e in any manner
to victims of crime.”
ROGERS J
42
If not, what objectives other than land reform qualify? Does the creditor
have to be an organ of state?
b. How direct must the link be between the money lost by the creditor and
the forfeited asset? For example, what if, in this very case, the fraudsters
had used the money not to buy a farm but luxury cars? Would the
Department then have had an “interest” in the cars?
c. If the fraudsters had used only R500 000 towards buying the farm and
squandered the rest on an extravagant lifestyle, would the Department’s
“interest” in the property be R500 000 or the full amount of R2 617 100?
[99] Finally, the question may be asked what interests falling short of rights would,
on my approach, qualify as “interests” for purposes of the POCA. Of course, my
primary position is that the definition of “interest” is exhaustive so that it is not
necessary to look beyond legal rights in property. However, if the definition of
“interest” is not exhaustive, this might be because the lawmake r, out of an abundance
of caution, retained a residual category of “interests” to avoid technical arguments as to
whether certain recognised legal interests in land were or were not “rights in land”.
[100] I would thus dismiss the appeal with costs, including the costs of two counsel.
For the Applicant:
For the Respondent:
N J Mullins SC instructed by the Office
of the State Attorney, Gqeberha
A Beyleveld SC and T Rossi instructed
by Greyveinstein Attorneys