National Director of Public Prosecutions v Kyriacou (308/2002) [2003] ZASCA 95; [2003] 4 All SA 153 (SCA) (26 September 2003)

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[2003] ZASCA 95
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National Director of Public Prosecutions v Kyriacou (308/2002) [2003] ZASCA 95; [2003] 4 All SA 153 (SCA); 2004 (1) SA 379 (SCA); 2003 (2) SACR 524 (SCA) (26 September 2003)

REPUBLIC OF SOUTH
AFRICA
IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case No: 308/2002
Reportable
In the matter between
THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS
Appellant
and
SAVVAS IOANNOU KYRIACOU
Respondent
BEFORE:
Howie P, Brand
JA, Nugent JA, Southwood AJA and Mlambo AJA
HEARD:
Mon 18 August 2003
DELIVERED: Fri 26 September 2003
SUMMARY
:
Restraint order in terms of Prevention of Organised
Crime act, 121 of 1998 – requirements for
JUDGMENT
MLAMBO AJA
[1] On 25 September 2001 the respondent was convicted by
Lombard J in the Orange Free State Provincial Division of the High
Court
on 102 counts of receiving stolen property knowing that it was
stolen and he was sentenced to fifteen years’ imprisonment. The

value of the property concerned was approximately R4,5 million.
After convicting the respondent the learned judge ordered (in
terms
of
s 34(1)(a)
of the
Criminal Procedure Act 51 of 1977
) that the
property be returned to the rightful owners. On the following day
the learned judge commenced an enquiry to determine
whether a
confiscation order should be made as contemplated by
s 18(1)
of the
Prevention of Organised Crime act 121 of 1998 (“the Act”). The
learned judge found that the respondent had benefited
from the
offence of which he was convicted, and postponed further conduct of
the enquiry to enable the parties to make submissions
relating to the
amount of the benefit the respondent had received.
[2] On 11 October 2001, before the enquiry was
concluded, the High Court, (Cillié J) made a provisional restraint
order as contemplated
by
Section 26
of the Act, upon the
ex
parte
application of the appellant. In terms
of that order a
curator bonis
was
appointed
,
and he was
authorised to take possession of the property of various close
corporations of which the respondent was the sole member,
the
property of various trusts controlled by the respondent, and certain
other specified property, including the respondent’s
residence and
its contents. On the return day that provisional order was set aside
by Cillié J.
With leave granted by the court
a
quo.
the appellant now appeals against the
setting aside of that order. The judgement of Cillié J setting
aside the provisional order
is reported: see
2002 (2) SACR 67
(0).
[3]
Sections 18
and
26
of the Act form part of an
elaborate legislative structure created by Chapter 5 which is
designed to enable the State to divest
convicted criminals of the
proceeds of their criminal activities. The central provision of
Chapter 5 is
s 18
, which authorises a court that has convicted a
person of an offence, to make what is referred to as a ‘confiscation
order’.
The subsection reads as follows:
“(1) Whenever a defendant is convicted of an offence the court
convicting the defendant may, on the application of the public

prosecutor, enquire into any benefit which the defendant may have
derived from -
(a) that offence;
(b) any other offence of which the defendant has been convicted at
the same trial; and
(c) any criminal activity which the court finds to be sufficiently
related to those offences,
and, if the court finds that the defendant has so benefited, the
court may, in addition to any punishment which it may impose in

respect of the offence, make an order against the defendant for the
payment to the State of any amount it considers appropriate
and the
court may make any further orders as it may deem fit to ensure the
effectiveness and fairness of that order”.
[4]
Section 12(3)
provides that for purposes of Chapter
5 a person has benefited from unlawful activities ‘if he or she has
at any time, whether
before or after the commencement of this Act,
received or retained any proceeds of unlawful activities.’
(5)
Section 25
and
26
(which fall within
Part 3
of
chapter 5) allow for a ‘restraint order’ to be made in
anticipation of the granting of a confiscation order. The purpose
of
a restraint order is to preserve property so that it may in due
course be realised in satisfaction of a confiscation order.
Section
26(1)
authorises the National Director of Public Prosecutions to
apply to a High Court,
ex parte
,
for an order ‘prohibiting any person from dealing in any manner
with any property to which the order relates’. The remaining

provisions of
Part 3
confer wide powers upon the Court as to the
terms of a restraint order. In particular, it may appoint a
curator
bonis
to take charge of the property that has
been placed under restraint, order any person to surrender the
property to the curator,
authorise the police to seize the property
and place restrictions upon encumbering or transferring immovable
property. It may
also make a provisional restraint order having
immediate effect and simultaneously grant a rule
nisi
calling upon the defendant to show cause why the order should not be
made final.
National Director of Public
Prosecutions v Rebuzzi
2002(2) SA 1 (SCA)
(6) The circumstances in which a restraint order may be
made are provided for in
s 25(1)
as follows:
“A High Court may exercise the powers conferred on it by
s 26(1)
[i e the powers to make a restraint order]-
(a) when –
(i) a prosecution for an offence has been
instituted against the
defendant concerned;
(ii) either a confiscation order has been made against that defendant
or it appears to the Court that there are reasonable grounds
for
believing that a confiscation order may be made against that
defendant; and
the proceedings against that defendant have not been concluded; or
(b) when-
(i) that court is satisfied that a person is to be charged with
an offence; and
it appears to the Court that there are reasonable grounds for
believing that
a confiscation order may be made against such
person.”
[7] In support of his application for a restraint order
in the present case the appellant relied upon an affidavit by Captain
Van
Wyk, the investigating officer in the case in which the
respondent was convicted. Van Wyk pointed out that the goods that
were
found in the possession of the respondent had been stolen, in
some cases by operators of so-called fly-by-night businesses who
obtained goods on credit and then disappeared. He said that he was
investigating another matter in which goods to the value of

approximately R300,000 had in similar fashion been obtained on credit
and had been found on the premises of a business that was
controlled
by the respondent.
[8] The learned judge in the court
a
quo
was of the view that no proper grounds
had been established for making a restraint order for two reasons.
In relation to the property
that had been the subject of the
conviction the learned judge pointed out that the benefit that the
respondent had received in
that regard had already been forfeited in
consequence of the order made by Lombard J for the return of the
property to the rightful
owners and thus, said the learned judge, it
was ‘highly unlikely that a confiscation order will be made’
[9] Furthermore, approaching Van Wyk’s disputed
evidence relating to the further alleged criminal activity of the
respondent in
accordance with the principles set out in
Stellenbosch
Farmers
Winery Ltd v
Stellenvale Winery
(Pty) Ltd
1957 (4) SA
234(C)
and
Plascon –Evans Paints v Van
Riebeek Paints
[1984] ZASCA 51
;
1984 (3) SA 623
(A), the
learned judge concluded that the order sought by the appellant could
not be granted ‘if the truth cannot be established
from the
papers’. He went on to say that the “discretion to grant a
restraint order is to be sparingly exercised and then
only in the
clearest of cases and where the considerations in favour
substantially outweigh the considerations against,”relying
in this
regard on what was said in
National
Director
of Public Prosecutions v Mcasa and Another
2000(1)
SACR 263 (TK) at 275 E-
F.
[10] In my view the learned judge’s approach to the
matter was incorrect as was the court’s approach in
Mcasa’s
case.
Section 25(1)(a)
confers a discretion upon a court to make a
restraint order if,
inter alia,
‘there
are reasonable grounds for believing that a confiscation order may be
made…’ While a mere assertion to that effect
by the appellant
will not suffice
(National Director of Public
Prosecutions v Basson
2002(1)
SA 419 (SCA) at 428 B-C) on the other hand the appellant is not
required to prove as a fact that a confiscation order will
be made,
and in those circumstances there is no room in determining the
existence of reasonable grounds for the application of
the principles
and onus that apply in ordinary motion proceedings. What is required
is no more than evidence that satisfies a
court that there are
reasonable grounds for believing that the court that convicts the
person concerned may make such an order.
[11] A court that convicts an offender is not restricted
to making a confiscation order in relation only to the offences of
which
the offender has been convicted.
Section 18(1)
of the Act
authorises a court to make a confiscation order once it has found
that the offender has benefited either from the offence
of which he
has been convicted, or from any other offence of which he has been
convicted at the same trial, or from any criminal
activity which the
court finds to be sufficiently related to those offences. A finding
that the offender has benefited in any
of those respects constitutes
the jurisdictional fact that is necessary for a court to exercise its
discretion to make a confiscation
order. Whether the court exercises
that discretion, and the extent to which it does so, will depend upon
the extent to which the
offender is found to have benefited from
either the crime concerned, or from other offences of which he was
convicted, or from
related criminal activity.
[12] In the present case there is no dispute that the
necessary jurisdictional fact already existed at the time the
provisional
restraint order was sought for Lombard J had already
commenced the enquiry contemplated by
s 18(1)
and had found that the
respondent had benefited within the meaning of the section. Indeed,
such a finding was inevitable, bearing
in mind that the respondent
was found to have been in possession of stolen property to the value
of approximately R4,5 million.
The fact that he was relieved of that
property by the order made by the trial court has no bearing on the
existence of the jurisdictional
fact that is necessary for the court
to exercise its discretion to make a confiscation order. Although
the respondent has already
been deprived of the benefit that he
received from the commission of the crimes of which he was convicted
(and in my view it would
be an improper exercise of the court’s
discretion to order the confiscation of further property in relation
to those crimes alone)
that is not the end of the enquiry. Having
found that respondent received a benefit from those crimes the court
has a discretion
to order the confiscation of benefits he received
not only from that criminal activity but also from related criminal
activity.
[13]
In the course of the enquiry
that is to follow as to the extent to which he has benefited from his
crimes or from related criminal
activity, the respondent is faced
with the presumptions created by
s22
, in particular
ss22(1)
and
22
(3) which provide as follows:
“22(1) For the purposes of determining whether a defendant has
derived a benefit in an enquiry under
section 18(1)
, if it is found
that the defendant did not at the fixed date, or since the beginning
of a period of seven years before the fixed
date, have legitimate
sources of income sufficient to justify the interests in any property
that the defendant holds, the court
shall accept this fact as
prima
facie,
evidence that such interests form part of such a benefit.
…
22(3) For the purposes of determining the value of a defendant’s
proceeds of unlawful activities in an enquiry under
section 18(1)
-
(a) if the court finds that he or she has benefited from an offence
and that-
(i) he or she held property at any time at, or since, his or her
conviction; or
(ii) property was transferred to him or her at any time since the
beginning of a period of seven years before the fixed date,
the court shall accept these facts as
prima facie
evidence
that the property was received by him or her at the earliest time at
which he or she held it, as an advantage, payment,
service or reward
in connection with the offences or related criminal activities
referred to in
section 18(1)
;
(b) if the court finds that he or she has benefited from the offence
and that expenditure had been incurred by him or her since
the
beginning of the period contemplated in paragraph (a), the court
shall accept these facts as
prima facie
evidence that any such
expenditure was met out of the advantages, payments, services or
rewards, including any property received
by him or her in connection
with the offences or related criminal activities referred to in
section 18(1)
committed by him or her.”
[14] Quite apart from the evidence of Van Wyk relating
to the additional goods that were found, the appellant expressly put
the
respondent on notice that he intended to rely upon these
presumptions when the following was said in his representative’s
founding
affidavit:
“I submit that in view of the fact that the purpose of the
restraint order is to preserve sufficient property to satisfy the

confiscation order against the Respondent, the Honourable Court
should not only have regard to the amount of R4,5 million for which

he had been convicted but also take into account the likelihood that
Respondent derived much of his income from criminal activities
rather
than from legitimate sources. In this regard I wish to bring the
Honourable Court’s attention that the Applicant intends
to rely on
the presumptions created by
section 22
of the act and in particular
section 22(3)
of the Act with regard to the amount of the
confiscation order.”
[15] The question in the present case is thus whether
there are reasonable grounds for believing that the trial court,
taking into
account these presumptions, may order the confiscation of
the property that was placed under restraint. In my view there are
indeed
reasonable grounds for believing that that might occur, for
the respondent has gone no way at all towards rebutting the
presumptions
that are created by
s 22.
(I should add that in his
answering affidavit the respondent alleged that these presumptions
offend the constitution but that
was not pursued in argument before
us.)
[16] The respondent said, rather cursorily, that over
the years he has earned profit from trading in shares and from
property transactions
but he provided little or no detail of the
source of the assets used in these transactions, or of the profits
that he made. In
relation to the trade in shares, he provides no
details of any profit or assets he acquired in this manner other that
this was
between 1967 and 1970. In relation to his property dealing,
his explanation covers assets valued at approximately R6 million but

leaves the sources of a substantial part of his estate unexplained.
I hasten to add that I do not suggest that the respondent
will not in
due course be able to rebut the presumptions. All we are called upon
to determine at this stage is whether there are
reasonable grounds
for believing that he may not do so, with the result that a
confiscation order may be made. In my view the
cursory and vague
response of the respondent to the challenge presented to him by
s22
does indeed provide grounds for such a belief. I can see no other
grounds upon which the discretion to grant a restraint order
ought to
be exercised against the appellant.
[17] Counsel for the respondent submitted that the
appellant should be non-suited for failing to disclose in the
ex
parte
application that the trial court had
granted a forfeiture order in terms of
s34(1)
of the
Criminal
Procedure Act and
the amount thereof. It was submitted that such
disclosure was called for as it is likely to have influenced the
court whether
to grant the provisional order or refuse it. It is
common cause that the
s 34
order was not referred to in the papers
[18] It is correct that utmost good faith must be
observed when initiating an
ex parte
application, and failure to disclose and present fully and fairly all
known material facts may constitute a ground to dismiss an

application. The duty to disclose extends to all facts which might
influence a court in coming to its decision. (
National
Director of Public Prosecutions v Basson
,
supra at
428(21) I-J.)
[19] The learned judge in the court a
quo
had a discretion, on being apprised of all the facts, to either set
aside the provisional order or confirm it. An important
consideration
in the court
a quo
was the question whether the court that granted the provisional order
might properly have been influenced by non-disclosure of
the
s34
order to refuse relief The learned judge in the court
a
quo
heard full argument on this issue but
elected to discharge the rule on another ground. He did not deem it
necessary to deal with
this one. I can see no reason to have
discharged the order by reason of the non-disclosure in question.
Had disclosure been made
the
s 34
order would not have been the
answer to a confiscation order. There was, in addition, as already
said, the matter of related criminal
activity and the force of the
presumptions.
[20] Accordingly the appeal is upheld with costs,
including the costs occasioned by the employment of two counsel. The
order made
by the court
a quo
is set aside and substituted for it is the following order:
“
The provisional restraint order is confirmed. The
respondent is ordered to pay the costs of the application.”
D MLAMBO
ACTING JUDGE OF APPEAL
CONCURRING:
HOWIE P
BRAND JA
NUGENT JA
BRAND JA
/
BRAND JA
:
[1] I have had the benefit of reading the judgments of
both Mlambo and Southwood AJJA. I concur in the judgment of Mlambo
AJA and
I share the views reflected therein. I find myself in
respectful disagreement with Southwood AJA.
[2] The difference in the diverging judgments seems to
pertain, not so much to the interpretation of the relevant provisions
of
the Act, but to the application of these provisions to the facts
of the case. Broadly stated, Southwood AJA is of the view that
the
jurisdictional requirements referred to in
s 25(1)(a)(ii)
have not
been met in that there appear to be no 'reasonable grounds for
believing that a confiscation order may be made against'
the
respondent. I cannot agree. I believe that reasonable grounds for
such belief do indeed exist. Since both the relevant facts
and the
opposing arguments already appear from the two preceding judgments, I
will state the reasons for the view I hold as succinctly
as possible.
[3] It is true that the appellant has been deprived of
the R4,5 million which appears to have constituted his entire benefit
from
the crimes of which he had been convicted. I agree with the view
expressed by both Mlambo and Southwood AJJA that, if this were
the
end of the matter, the trial court would be likely to exercise its
discretion in favour of the respondent. However, I believe
that there
is a real possibility of the trial court concluding that a
confiscation order is warranted on the basis that the respondent
had
derived substantial benefits from offences sufficiently related to
those of which he had been convicted. Southwood AJA seems
to be of
the view that a restraint order can only be based on benefits derived
from related criminal activities if the appellant
can establish the
respondent's involvement in such activities on a balance of
probabilities (see par [16] of his judgment). I do
not agree. All
s
25(1)(a)(ii)
requires are reasonable grounds for the belief that the
trial court may (not will) conclude that respondent benefited from
related
criminal activities.
[4] The respondent was convicted on 102 counts of the
common law crime of receiving stolen property which he knew to be
stolen.
The property concerned was found in his possession. It was
worth R4,5 million. It is clear that he committed the crime of
receiving
stolen property on a grand scale. It is most unlikely that
a 'fence' who had operated on such a scale would be so unlucky to be

caught in possession, on one single occasion, of all the stolen
property that he had ever received.
[5] Added to this, there is the fact that the respondent
currently owns immovable property to the value of R42 million gross
and
in excess of R18 million nett of the amounts owing on the bonds
registered over them. This is on his own case. In his answering

affidavit the respondent does not begin to explain how he acquired
this substantial estate. This is where
s 22
of the Act comes in. In
terms of this section it is presumed that these substantial assets
are derived from related criminal activities.
In this regard I do not
believe that the operation of
s 22
can be limited in the way
suggested by Southwood AJA in paras [21] and [22] of his judgment. Of
course, the respondent may be able
to rebut this
onus
at the enquiry. However, since he had failed to indicate virtually
any evidence upon which he proposes to rely in doing so, there
must
at least be reasonable grounds for believing that he may not succeed.
[6] Moreover, it goes without saying that the available
evidence should be approached holistically and not on a piecemeal
basis.
What must
inter alia
be
included in the complete picture, is the evidence of Captain van Wyk
regarding the allegedly stolen goods to the value of R300 000

that were subsequently discovered on the premises of a business
controlled by the respondent. Although, as is pointed out by
Southwood
AJA, the allegation that these goods had allegedly been
stolen is based on hearsay evidence, the respondent does not dispute
this
fact. Nevertheless I agree with Southwood AJA that the case made
out by Van Wyk against respondent with regard to these goods, seen
in
isolation, is not entirely convincing, yet it fits the pattern
established by his conviction. It is also true, as Southwood
AJA
points out, that these goods have, in any event, now been removed by
the SAPS. However, that, with respect, is not the point.
The goods
were received from the same so-called 'fly by night' sources and
stored in the same warehouse as those that formed the
basis of the
respondent's convictions. His defence with regard to these goods is a
repetition of the one raised in the criminal
prosecution. He again
denies 'any knowledge of how the goods were obtained' and contends
that he 'merely purchased them from sales
representatives whom [he]
had no reason to suspect of any crime'. In these circumstances there
is, in my view, at least a reasonable
prospect that the trial court
may discern the emergence of a pattern.
[7] For these reasons I agree with Mlambo AJA that there
are indeed reasonable grounds for believing that the trial court may
order
the confiscation of the property placed under restraint and
that the appeal should therefore be upheld with the accompanying
costs
order that he proposes to make.
………………
.
F D J BRAND
JUDGE OF APPEAL
Concur
:
Howie P
Nugent JA
Mlambo AJA
SOUTHWOOD
AJA
[1] I have had the benefit of reading the judgment of my
colleague Mlambo AJA and find myself unable to agree with the
reasoning
and the result. In my view the appeal should fail.
[2]
S 26(1)
of the Act provides for
the appellant to apply by way of an
ex
parte
application
to a competent 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 to which the
order relates. The purpose of such restraint order is the

preservation of the property so that any confiscation order made in
terms of
s 18(1)
of the Act will be effective. Compare
National
Director of Public Prosecutions v Phillips and Others
2002
(4) SA 60
(WLD) [7].
[3]
S 25
of the Act provides for the
jurisdictional requirements for an order in
terms of
s 26.
The jurisdictional requirement in issue in the present
case is contained in
s 25(1)(a)(ii):
‘when –
it appears to the court that there are reasonable
grounds for believing that a
confiscation
order may be made against that defendant.’
This jurisdictional requirement necessitates a
consideration of the circumstances
in which
a confiscation order will be made and whether the established facts
in the instant case would induce a reasonable person
to believe that
a confiscation order may be made against the respondent.
[4]
S 18
of the Act gives the court the power to make a confiscation
order. It
provides that:
27
‘
(1) Whenever a defendant is convicted of an offence
the court convicting the defendant may, on the application of the
public prosecutor,
enquire into any benefit which the defendant may
have derived from –
(a) that offence;
(b) any other offence of which the defendant has been
convicted at the same trial; and
(c) any criminal activity which the court finds to be
sufficiently related to those offences, and, if the court finds that
the defendant
has so benefited, the court may, in addition to any
punishment which it may impose in respect of the offence, make an
order against
the defendant for the payment to the State of any
amount it considers appropriate and the court may make any further
orders as
it may deem fit to ensure the effectiveness and fairness of
that order.
(2) The amount which a court may order the defendant to
pay to the State
under
subsection (1) –
(a) shall not exceed the value of the defendant’s
proceeds of the offences or related criminal activities referred to
in that
subsection, as determined by the court in accordance with the
provisions of this Chapter; or
(b) if the court is satisfied that the amount which
might be realised as contemplated in
section 20(1)
is less than the
value referred to in paragraph (a), shall not exceed an amount which
in the opinion of the court might be so realised.’
[5]
S 12(3)
of the Act provides that
for purposes of Chapter 5 a person has benefited from unlawful
activities if he or she has at any time,
whether before or 28 after
the commencement of the Act, received or retained any proceeds of
unlawful activities. ‘Proceeds of
unlawful activities’ is broadly
defined in
s 1
of the Act to mean ‘any property or any service,
advantage, benefit or reward which was derived, received or retained,
directly
or indirectly, in the Republic or elsewhere, at any time
before or after the commencement of the Act, in connection with or as
a result of any unlawful activity carried on by any person and
includes any property representing property so derived’.
[6]
S 19
of the Act provides for the
determination of the value of proceeds of
unlawful activities as follows:
‘
(1) Subject to the provisions of
subsection (2), the value of a defendant’s proceeds of unlawful
activities shall be the sum of
the values of the property, services,
advantages, benefits or rewards received, retained or derived by him
or her at any time,
whether before or after the commencement of this
Act, in connection with the unlawful activity carried on by him or
her or any
other person.
(2) In determining the value of a
defendant’s proceeds of unlawful activities
the court shall –
(a) where it has made a declaration
of forfeiture or where a declaration of
forfeiture has previously been made in respect of property which is
proved to the satisfaction of the court –
(i) to have been the property which
the defendant received in connection with
the criminal activity carried on by him or her or any other person;
or
(ii) to have been property which
directly or indirectly represented in the
defendant’s hands the property which he or she received in that
connection, 29 leave the property out of account;
(b) where a confiscation order has
previously been made against the
defendant leave out of account those proceeds of unlawful activities
which are proved to the satisfaction of the court to have
been taken
into account in determining the amount to be recovered under that
confiscation order.’
[7] The clear purpose of these
provisions is to ensure that the defendant does
not continue to enjoy the benefit of the proceeds of the unlawful
activities in which he is or was involved. Compare
National
Director of Public Prosecutions v Rebuzzi
2002
(2) SA 1
(SCA) [2]
National
Director of Public Prosecutions v Phillips and Others
supra
[42]-[43]. The provisions of
s 18
make it clear that these are
specific unlawful activities and not simply suspected unlawful
activities.
S 18(1)
provides for an enquiry into any benefit which
the defendant may have derived from offences of which the defendant
has been convicted
at the trial and any criminal activity which the
court finds to be sufficiently related to these offences. The court
can make this
finding only if it knows what other criminal activity
is involved.
S 18(2)
expressly limits the amount which the court may
order the defendant to pay to the State under subsection (1) to the
value of the
defendant’s proceeds of the offences or related
criminal activities ‘as determined by the court in accordance with
the provisions
of this chapter’ (i e in accordance with
s 12(3)
and
s 19
of the Act). Compare
National
Director of Public Prosecutions v Rebuzzi
supra
[2]-[3].
[8] To show that there are reasonable
grounds for believing that a
confiscation order may be made against the respondent, the appellant
relied on 30 the fact that the respondent had been found guilty
on
102 counts of receiving stolen property to the value of approximately
R4,5 million and the fact that on 28 July 2000 the SAPS
discovered
allegedly stolen goods to the value of approximately R300 000 at the
premises of a close corporation controlled by the
respondent. In the
appellant’s founding affidavits no mention was made of the fact
that the court convicting the respondent on
the 102 counts of
receiving stolen property had made an order in terms of
s 34(1)(b)
of
the
Criminal Procedure Act 57 of 1977
that the goods be returned to
the persons entitled to them. This omission will be considered later.
[9] No other specific criminal activity by the
respondent was alleged.
[10] In deciding whether it appears
to the court that there are reasonable grounds for believing that a
confiscation order may be
made against the respondent it must be
borne in mind that an application for a restraint order is a civil
proceeding and not a
criminal proceeding
(s 13(1):
National
Director of Public Prosecutions v Phillips and Others
supra
[39]-[45]), that the rules of evidence applicable in civil
proceedings apply
(s 13(2))
and that any question of fact must be
decided on a balance of probabilities
(s 13(5)).
Clearly what is
required is proper proof of the relevant facts by means of admissible
evidence.
[11] In
National
Director of Public Prosecutions v Basson
2002
(1) SA 419
(SCA) [19] Nugent AJA commented on
s 25(1)
of the Act as
follows:
‘
Section 25(1)
of the Act does not
permit a court to grant a restraint order upon
nothing more than a summary of the allegations made against the
defendant concerned, and an expression of opinion by members of
the
appellant’s staff that 31 a confiscation order will be granted
(which is all that was before the Court in the present case).
The
section requires that it should appear to the court itself, not
merely to the appellant or his staff, that there are ‘reasonable

grounds’ for such a belief, which requires at least that the nature
and tenor of the available evidence needs to be disclosed.
Precisely
what evidence is required, and the form that it should take, it is
not necessary, to decide in the present case …’
[12] In order to establish that the
respondent had benefited from criminal activities sufficiently
related to the offences of which
the respondent had been convicted
the appellant relied on the affidavit of Capt Casparus Johannes van
Wyk the investigating officer
in the case in which the respondent had
been convicted as well as another case in which the respondent had
yet to be brought to
trial. In his affidavit Capt van Wyk states that
on 28 July 2000 the SAPS discovered allegedly stolen goods to the
value of approximately
R300 000 at the premises of VIVA CASH AND
CARRY, a business controlled by the respondent, and attached and
removed these goods
from the premises. He then proceeds to explain
why these goods might be stolen and states that the matter is still
under investigation.
He also says that the respondent did not dispute
ownership of the goods and said that he, the respondent, was in
possession of
documents to support this claim but that no such
documentary proof had been forthcoming. Capt van Wyk concludes by
saying that
the respondent has in all probability benefited from
criminal activities other than those of which he has already been
convicted
and that these criminal activities are closely related to
the offences of which the 32 respondent has already been convicted.
Capt
van Wyk is clearly referring to the allegedly stolen goods
discovered, attached and removed on 28 July 2000.
[13] Capt van Wyk’s evidence as to
the question of the goods having been
stolen is clearly hearsay and inadmissible. He does not disclose the
nature and tenor of the evidence at his disposal to show that
the
goods were in fact stolen and that the respondent stole the goods or
received the goods knowing them to be stolen. He does
not even allege
that the respondent stole the goods or received the goods knowing
them to be stolen.
[14] The respondent admits that the
SAPS discovered and attached goods to
the value of approximately R300 000 at the premises of VIVA CASH AND
CARRY and that these goods were alleged to be stolen. The
respondent
also admits that he did not deny ownership of the goods but states
that he showed Capt van Wyk proof of ownership in
the form of
invoices – although he was not able to show him all the invoices
because some were in the possession of sales representatives.
The
effect of the respondent’s evidence is that he and the manager of
VIVA CASH AND CARRY purchased the goods in the ordinary
course of
business. Capt van Wyk did not file a replying affidavit to dispute
the correctness of the respondent’s allegations.
[15] Against the background of the
respondent’s convictions the respondent’s
explanation may be regarded with some scepticism. However in the
absence of positive averments by Capt van Wyk as to the crime
the
respondent committed and admissible evidence to support these
averments the respondent’s explanation is not so improbable
that it
should simply be rejected. The respondent also pointed 33 out that
despite the fact that some 17 months had elapsed since
the attachment
of the goods the case had not been brought to trial and that the
regional court hearing his bail application had
wanted to release him
on warning. These facts are not disputed by the appellant and there
is no explanation for the failure to
bring the case to trial. All
this indicates that the respondent’s involvement in other criminal
activities is far from clear
cut.
[16] The appellant therefore failed
to establish on a balance of probabilities that the respondent was
involved in any other criminal
activity related to the offences of
which he was convicted.
[17] Even if it is accepted (even
though it is not alleged) that the respondent
has again received stolen property to the value of approximately R300
000 it is common cause that the SAPS have attached and removed
and
(apparently) are still in possession of that property. This property
is the only benefit which the respondent could have derived
from the
unlawful activity and he has been deprived of that benefit. The
overwhelming probability is that if the respondent is
again convicted
of receiving stolen property the court will make an order in terms of
s 34(1)
of the
Criminal Procedure Act just
as was done in the case of
the 102 counts of receiving stolen property.
[18] While it is correct that the
respondent has benefited from unlawful
activities as contemplated in
s 12(3)
of the Act, which is an
essential prerequisite for an order in terms of
s 18(1)
, I cannot
agree that the fact that the respondent has been deprived of the
property by an order in terms of
s 34(1)
of the
Criminal Procedure
Act (and
will be deprived of the other property attached on 28 July
34 2000 by a similar order) has no bearing on whether the court may
make a confiscation order. In my view these facts have a direct
bearing on that question. I agree with my colleague Mlambo AJA that

it would be an improper exercise of the court’s discretion to make
an order in terms of
s 18(1)
of the Act when the benefit of the
crimes has already been removed by order of court. The same applies
where the overwhelming probability
is that the property which is the
subject of the other apparent criminal activity will also be removed
by order of court. At this
stage it has been removed by the police
and it will not be restored to the respondent unless he is acquitted.
[19] The position is that the
respondent has not continued to enjoy the
proceeds of the 102 offences of which he has been convicted or the
allegedly stolen property which was attached and removed by
the SAPS
on 28 July 2000. There is therefore no reasonable ground for
believing that a confiscation order will be made in terms
of
s 18(1)
of the Act.
[20] I do not agree with Mlambo AJA that the position is
altered by the
presumptions
contained in
ss 22(1)
and
22
(3) of the Act.
[21]
S 22(1)
applies when the court
does not know whether a
defendant has derived any benefit from the offences of which he has
been convicted or any other criminal activity which the court
finds
to be sufficiently related to those offences and only ‘if it is
found that the defendant did not at the fixed date, or
since the
beginning of a period of seven years before the fixed date, have
legitimate sources of income sufficient to justify the
interests in
any property that the defendant holds’.
In the present case the court knows
what benefit the respondent derived from the offences of which he was
convicted and the other
criminal activity. In the case of the former
it was goods to the value of approximately R4,5 million and in the
case of the latter
it is goods to the value of approximately R300
000. In the light of these facts the presumption cannot operate.
Another reason
why the presumption cannot operate is that it was not
part of the appellant’s case that the respondent did not have
legitimate
sources of income sufficient to justify the interests in
the property which he holds. The appellant did
not allege this or tender any
evidence on this issue. The respondent’s explanation for how he
acquired the property was tendered
by way of background information
and was not disputed by the appellant.
[22] Similarly, the presumption in
s
22(3)
only applies when the court is not able to determine the value
of the defendant’s proceeds of unlawful activities. In the instant

case the value of the defendant’s proceeds of unlawful activities
(determined in accordance with
ss 12(3)
and
19
of the Act) is known.
The respondent’s properties are therefore irrelevant. They are
clearly not the proceeds of the unlawful
activities relied upon by
the appellant. Compare
National
Director
of Public Prosecutions v Phillips
and Others
supra
[76].
[23] The vague allegation made by the
appellant in para (20) of the founding
affidavit which is referred to by Mlambo AJA in para [14] of his
judgment takes the matter no further. If it refers to criminal

activities other than those already referred to in this judgment it
falls far short of what is required to be established for the
purpose
of
s 25(1)(a)(ii).
It is simply a bald statement. There is no
indication of the
nature of the criminal activities
referred to and there is no indication of the nature and tenor of the
evidence available to establish
such criminal activities. Compare
National Director of Public Prosecutions v Basson supra [19]. The
weakness of the appellant’s
case is reflected in the appellants
failure to reply to the respondent’s denial of the allegations in
para (20) of the founding
affidavit; the respondent’s
pertinent allegation that the vast
majority of his income and assets as been built up over a period of
thirty years without resorting
to any illegitimate means; the
respondent’s allegation that the paragraph contain speculation in
the air and that no factual
basis has been laid for the statements in
the paragraph.
In the absence of evidence about
unlawful activities there will be no basis for the court to make a
finding that such criminal activity
is sufficiently related to the
offences of which the respondent has been convicted at the trial.
Such a finding is a necessary
prerequisite for the enquiry to be held
in terms of s (18). Unless other criminal activity is proved and such
a finding is made
and the necessary facts established there is no
basis for the presumptions to operate.
What the appellant seems to suggest
and what Mlambo AJA seems to accept is that because the respondent
has large property holdings
and the respondent has not explained in
detail how he acquired these properties (something which he was not
called upon to do)
these must have been derived from unlawful
activities. In my view there is no factual basis for this.
[24] The court
a
quo
could have set
aside the order on the grounds of a failure by the appellant to
disclose information which might affect the granting
of the order.
The most important omission was the failure to disclose that the
court which had convicted the respondent had made
an order in terms
of
s 34(1)
of the
Criminal Procedure Act. This
is clearly a relevant
fact which would have influenced the court in coming to a decision.
It is well established that the utmost
good faith
must be observed in
ex
parte
applications.
In
National Director
of Public Prosecutions v Basson
supra
par [21] this court emphasized that – ‘all material facts must be
disclosed which might influence a court in coming to
its decision,
and the withholding or suppression of material facts, by itself,
entitles a court to set aside an order, even if
the non-disclosure or
suppression was not wilful or
male
fide
(
Schlesinger
v Schlesinger
1979
(4) SA 342
(W) at 348E–349B).’
[25] This issue was argued fully
before the High Court which did not decide to
dismiss the application on this ground. Because of the view I take of
the merits it is not necessary to decide whether this decision
of the
High Court should be altered on appeal.
[26]
I would dismiss the appeal with costs.
________________
B R SOUTHWOOD
ACTING JUDGE OF APPEAL