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[2007] ZACC 4
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Mohunram and Another v National Director of Public Prosecutions and Another (Law Review Project as Amicus Curiae) (CCT19/06) [2007] ZACC 4; 2007 (4) SA 222 (CC); 2007 (6) BCLR 575 (CC); 2007 (2) SACR 145 (CC) (26 March 2007)

Links to summary

IN
THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case
CCT 19/06
[2007]
ZACC 4
KUMARNATH MOHUNRAM
First Applicant
SHELGATE INVESTMENTS CC
Second Applicant
versus
THE NATIONAL DIRECTOR OF PUBLIC
PROSECUTIONS First Respondent
BOE BANK LIMITED Second Respondent
THE LAW REVIEW PROJECT Amicus Curiae
Heard on : 16 November 2006
Decided on : 26 March 2007
JUDGMENT
VAN HEERDEN AJ:
Introduction
This is an application for leave to appeal against a judgment of
the Supreme Court of Appeal,
1
upholding an appeal from a judgment of the Pietermaritzburg High
Court and replacing the order of that court with an order declaring
an immovable property forfeit to
the
state in terms of the
Prevention of Organised Crime Act 121
of 1998 (“POCA”). The property in question is registered in the
name of the second applicant,
Shelgate Investments CC (“Shelgate”).
The first applicant, Mr Kumarnath Mohunram, holds a 100 percent
member’s interest
in Shelgate. The forfeiture order was granted
on the basis that such property was an “instrumentality” of an
offence under
the KwaZulu Natal Gambling Act 10 of 1996 (“the KZN
Gambling Act”).
On 19 October
2001, the Pietermaritzburg High Court granted a preservation order
in terms of section 38(2) of POCA. The order
related to a
sectional title unit in a scheme known as the Malapin Centre
together with an undivided share in the common property
(“the
property”). The National Director of Public Prosecutions
(“NDPP”), the first respondent before this Court, in due
course
applied to the High Court under section 48 of POCA for a
forfeiture order in terms of section 50. A mortgage
bond is
registered over the property in favour of NBS, one of the operating
divisions of BOE Bank Limited (“BOE”), nominally
the second
respondent before this Court but which does not oppose any of the
relief sought by the applicants. BOE filed a notice
in terms of
section 39(3) of POCA as a party with an interest in the
property. It did not oppose the application for a forfeiture
order,
but merely sought to retain its interest in the property through
the mortgage bond registered in favour of NBS, more particularly
its rights as a secured creditor in terms of section 43(3)(a)
of POCA.
The High Court
dismissed the NDPP’s application for a forfeiture order,
concluding that the property had not been shown to be
an
instrumentality of an offence. The NDPP appealed to the Supreme
Court of Appeal, which upheld the appeal and granted the forfeiture
order. It is that judgment against which the applicants now seek
leave to appeal to this Court. They also apply for condonation
for
the late filing of the record. As the explanation given by them for
the delay is satisfactory and the NDPP consented to the
late filing
of the record, the condonation application should be granted.
This Court has
allowed the Law Review Project (“LRP”) to intervene in this
matter as amicus curiae. Written as well as oral
argument was
addressed to the Court
on behalf of
the
LRP.
Factual
background
In 1998, Mr
Mohunram purchased the 100 percent member’s interest in Shelgate.
He took occupation of the premises, partitioned
the building and
commenced trading as Vryheid Glass and Aluminium. However, along
with the legitimate glass and aluminium business,
Mr Mohunram also
operated up to 57 gaming machines on the premises. This was done in
contravention of section 44 of the
KZN Gambling Act, which
provides that no person may operate a casino
2
unless validly licensed.
3
In terms of section 3(3)(a) of the same Act, the owner of a
building may not allow any other person to conduct any gambling
activity therein or thereon unless that person has been duly
licensed.
4
Shelgate as owner acted in contravention of this section,
“allowing” its sole member, Mr Mohunram, to conduct the illegal
casino. Mr Mohunram also contravened section 95(2), read
together with section 55, of the Act by being in possession
of
unregistered gaming machines without a permit for the storage of
these machines. Finally, by employing people to work in his
unlicensed casino, Mr Mohunram contravened section 3(4)(b) of
the Act, which prohibits such employment.
5
In April 2001,
Mr Mohunram was arrested in connection with his illegal casino
operation. He was subsequently charged with 57 counts
of
contravening section 95(2) of the KZN Gambling Act (being in
possession of 57 unregistered gaming machines without the
requisite
permits), as well as with three counts of contravening
section 3(4)(b)
6
(employing three people in his unlicensed casino). He paid
admission of guilt fines of R1 500 each in respect of counts one to
57 (R85 500 in total) and of R1 000 each in respect of counts 58 to
60 (R3 000 in total). In addition, under the provisions of
the KZN
Gambling Act, he forfeited about R2 100, being monies that were
found and seized on the premises during a police raid.
His 57
gaming machines (which he valued at approximately R285 000 in
total) were also seized and destroyed in terms of the same
legislation.
7
Shelgate was not charged.
Subsequently,
the NDPP launched the proceedings that ultimately led to the
forfeiture order in respect of the property and culminated
in the
present application.
Application for
leave to appeal
Before leave
to appeal to this Court can be granted, it is incumbent on the
applicants to satisfy two requirements: (a) the application
must
raise a constitutional matter or issues connected with decisions on
constitutional matters;
8
and (b) it must be in the interests of justice that leave be
granted.
9
In the light
of the recent judgment of this Court in
Prophet v National
Director of Public Prosecutions
,
10
it must be accepted that the application for leave to appeal does
indeed raise a constitutional issue. In
Prophet
, Nkabinde J,
writing for a unanimous Court, held as follows:
“
Asset forfeiture orders as
envisaged under Chapter 6 of the POCA are inherently intrusive in
that they may carry dire consequences
for the owners or possessors
of properties particularly residential properties. Courts are
therefore enjoined by section 39(2)
of the Constitution to interpret
legislation such as the POCA in a manner that ‘promote[s] the
spirit, purport and objects of
the Bill of Rights’, to ensure that
its provisions are constitutionally justifiable, particularly in the
light of the property
clause enshrined in terms of section 25 of the
Constitution.”
11
(Footnotes omitted.)
The applicants
contended that it is also in the interests of justice to grant
leave to appeal. According to them, the facts of
this case are
fundamentally distinguishable from those of previously decided
cases where forfeiture orders in terms of POCA have
been granted.
The applicants submitted that this appeal highlights the questions
whether, in the particular circumstances of
this case, the property
in question was indeed an “instrumentality of an offence” for
the purposes of POCA and, if so, whether
the forfeiture was
“proportional”. It was further argued that the mischief
admitted to by Mr Mohunram is not the mischief
envisaged in the
long title of, or the preamble to, POCA. The Supreme Court of
Appeal thus erred in failing to consider whether
the legislature
intended that a person who engaged in what the applicants called “a
universally condemned offence, such as
drug dealing” ought to be
treated in precisely the same way, as regards the forfeiture
provisions, as a person who “at all
times pursued legitimate
business interests” on the property in question and “committed
an offence simply by not having a
licence for that particular
activity”.
As indicated
above, BOE did not oppose the application for leave to appeal and
abides the decision of this Court. The NDPP conceded
that the
application for leave to appeal does raise a constitutional matter.
It submitted, however, that it is not in the interests
of justice
to grant leave to appeal because the applicants do not have
reasonable prospects of success.
12
This Court should thus dismiss the application for leave to appeal
or, alternatively, dismiss the appeal itself.
The amicus
curiae, the LRP, made it clear that it raised no challenge to the
constitutionality of POCA. It submitted, however,
that this case
raises a constitutional issue because the Supreme Court of Appeal
interpreted the relevant provisions of the KZN
Gambling Act and of
POCA in the light of the text and the overall structure of the
latter statute without proper regard to the
Constitution, with the
consequence that the forfeiture which it upheld in this case
constituted: (i) an unlawful and arbitrary
deprivation of property
and thus an infringement of section 25 of the Constitution;
13
and/or (ii) a penal deprivation of property that is grossly
disproportionate, arbitrary and irrational and so infringed the

“cruel and unusual punishment clause” in the Constitution.
14
The grounds relied on by the LRP for these conclusions will be
considered in greater detail below.
In my view, it
is in the interests of justice that the applicants be granted leave
to appeal on the issues raised by them. As
stated in
Prophet
:
“
This issue [the forfeiture
of the applicant’s property] entails both what constitutes an
instrumentality of an offence, and the
proportionality of the
forfeiture under Chapter 6. Both these questions raise important
constitutional issues of substance and
need to be determined to
resolve the key complaint of the applicant: the question whether the
order declaring his property forfeit
should be set aside.”
15
The applicants
contended that the facts in this present matter are fundamentally
distinguishable from those of any of the decided
cases in which
civil forfeiture under POCA has been granted and requires a fresh
examination of both the issues of instrumentality
of an offence and
of proportionality of a forfeiture order. This being so, it is in
the interests of justice that the applicants
be granted leave to
appeal on the issues raised by them.
Issues
As Harms JA
pointed out in the Supreme Court of Appeal judgment in this case:
“
There are usually three main
issues in a case such as this to decide and they are (a) whether the
property concerned was an instrumentality;
(b) whether any interests
should be excluded from the forfeiture order; and (c) whether the
forfeiture sought would be disproportionate.”
16
In the present
application, as before the Supreme Court of Appeal, the second issue
does not arise, but the other issues both remain
in dispute. Before
dealing with these issues, however, it is necessary to consider
several of the points raised (the first in considerable
detail) by
the LRP.
The meaning of
“offence” in the context of Chapter 6 of POCA
The LRP
submitted that POCA was construed by the Supreme Court of Appeal in
a manner that improperly brought gambling per se within
the compass
of the Act and that, in consequence, the forfeiture provisions of
POCA were incorrectly brought to bear on Shelgate’s
property.
According to the LRP, the offences for which forfeiture is
potentially competent are limited to those “created”
by POCA,
that is, racketeering under Chapter 2, money laundering under
Chapter 3 and criminal gang activities under Chapter 4.
The LRP
collectively terms these offences “organised crime offences”.
Since unlicensed gambling, without more, is not an
organised crime
offence, no order of forfeiture can, it was contended, competently
be made under POCA on the basis of the provisions
authorising the
forfeiture of the instrumentalities of this offence.
The LRP argued
that, in proceedings before the courts which have considered the
relevant provisions of POCA, an “assumption”
has been made
that, provided an offence falls within the ambit of Schedule 1 to
POCA, forfeiture is competent. Underlying this
assumption is an
acceptance of the proposition that the “offence” contemplated
in the phrase “instrumentality of an offence
referred to in
Schedule 1”, as it appears in sections 38 and 50(1),
includes every offence listed in the Schedule, whatever
its nature.
According to the LRP, this assumption is unfounded, as POCA makes a
clear distinction between “offences”, on
the one hand, and
“crimes” and “unlawful activities”, on the other. The
“proceeds of unlawful activities”, which
by virtue of its
definition includes crimes, can be declared forfeit whatever the
nature of the unlawful activity or crime, giving
expression to the
ancient doctrine that no one should be permitted to profit from his
or her wrongdoing. By contrast, so contended
the LRP, before the
instrumentalities of wrongdoing can be declared forfeit, the act or
omission must be “an organised crime
offence” as contemplated
in POCA and,
in addition
, the “offence” must be one
referred to in Schedule 1. Thus, the reference to Schedule 1 simply
limits the ambit of the offences
under POCA that can provide the
basis for the grant of the forfeiture order. Were it otherwise, the
legislature could have been
expected to incorporate the reference
to Schedule 1 in the definition of “instrumentality of an
offence” in section 1.
The effect of
this approach, the LRP submitted, is that wrongdoing that fails to
satisfy
both
these requirements cannot provide a basis for
the grant of a forfeiture order under POCA. The LRP accepted that
gambling without
a licence falls within the compass of Schedule 1
and that gambling can, in circumstances where it is
also
an
organised crime offence, constitute an offence within the
contemplation of POCA. Gambling may therefore be the basis or
infrastructure
of an offence contemplated by POCA, but it must in
addition be shown that the statutory requirements of systematic
racketeering,
criminal gang activity or money laundering are
present. Thus, according to the LRP, if only one of the two
requirements is satisfied,
no forfeiture is competent, as in this
case where there was no proof of the second requirement.
The LRP found
support for this construction of POCA in what it regarded as the
purpose and object of POCA, as reflected in the
short and long
titles and the preamble – namely to prevent organised crime. It
also relied for its submissions in this regard
on the actual text
of POCA, contending that throughout POCA, the word “offence”,
when used without qualification, refers
exclusively to “organised
crime offences”. The LRP sought to illustrate this contention by
referring in particular to section 18.
This section provides
for the making of a confiscation order in respect of the “proceeds
of offences or related criminal activities”
when a defendant is
convicted of an “offence” and empowers the trial court to
enquire into any benefit that the defendant
may have derived from
“that offence” and from “any other offence of which the
defendant has been convicted at the same
trial”.
17
The import of this distinction between two kinds of offences, so
submitted the LRP, is to differentiate between offences under
POCA
(“organised crime offences”) and all other crimes (“ordinary
crimes”).
The LRP argued
further that, under the scheme of POCA, section 19(2) makes it
clear that property forfeited on the basis
that it constitutes the
proceeds of crime must be brought into account by a criminal court
in determining the quantum of a confiscation
order it proposes to
make.
18
No equivalent provision is made for the court to take into account
property that has been declared forfeit on the grounds that
it is
an instrumentality of the crime in question. According to the LRP,
the legislature might conceivably have thought that
it would be
just and fitting to ignore relevant forfeiture orders in this way
on the basis that the crime in question constituted
an “organised
crime offence”. It could, however, never have contemplated that
every declaration of forfeiture of property
arising out of
any
crime listed in Schedule 1 would be left out of account by a
criminal court making a confiscation order simply because the
property
forfeited constituted an instrumentality of the relevant
crime.
According to
the LRP, the courts have consistently recognised that the
forfeiture of the instrumentalities of any crime embraced
by
Schedule 1 can produce arbitrary and unjust consequences. In an
effort to moderate the problem, they have been forced to

reconstruct the statute by interpreting the word “shall” in
section 50(1) as “may”.
19
Only in this way have the courts been able to create a discretion,
which they have said is to be exercised by reference to the
principles of proportionality. The LRP acknowledged that this
reconstruction of the statute may be conceptually justified in
order to give due weight to the provisions of the Bill of Rights.
It nevertheless contended that there is no denying that the
legislature intended the forfeiture to be obligatory once the
requirements of section 50 were satisfied. Parliament could
never have harboured such an intention, the LRP submitted, unless
it envisaged that the only offences for which an order of

forfeiture based on instrumentality would be competent would be
those offences created by POCA itself. The legislature might have
been willing to countenance obligatory forfeiture in respect of
offences as harmful to society as organised crime offences, but
it
could hardly have had the same intention in respect of all the
offences referred to in Schedule 1.
These
submissions are not convincing. First, it is important to note
that, subsequent to the judgment of the Cape High Court in
National
Director of Public Prosecutions v Carolus and Others
,
20
in which Blignault J held that Chapter 6 of POCA
21
(as it was then) was not retrospective in effect,
22
the Act was amended by the
Prevention of Organised Crime Second
Amendment Act 38 of 1999
,
23
(“Act 38 of 1999”) “so as to make it clear that the
provisions of Chapters 3, 5 and 6 are applicable in respect of
instrumentalities
of offences and proceeds of unlawful activities
where such offences or unlawful activities occurred before the
commencement of
the Act”,
24
that is, that these provisions do operate retrospectively.
The definition
of “instrumentality of an offence” in
section 1(1)
of POCA
was substituted so as to mean:
“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”. (Emphasis
added.)
The definition of
“proceeds of unlawful activity” was also substituted 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 this 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.”
25
(Emphasis added.)
The point of
the amending legislation was driven home most pertinently by the
insertion of a new section 1(5) into POCA in
the following
terms:
“
Nothing in this Act or in
any other law, shall be construed so as to exclude the application
of any provision of Chapter 5 or 6
on account of the fact that –
(a) any offence or unlawful
activity concerned occurred; or
(b) any proceeds of unlawful
activities were derived, received or retained,
before the
commencement of this Act
.” (Emphasis added.)
This being so,
the contention of the LRP to the effect that the offences for which
forfeiture under Chapter 6 of POCA is potentially
competent are
limited to the offences “created” by Chapters 2, 3 and 4 of
POCA (what the LRP calls “organised crime offences”)
cannot be
correct. A reading of POCA, as amended, makes it clear that it
applies to offences committed before and after the commencement
of
the Act and accordingly has a wider ambit than that of offences
that were “created” by POCA, and which thus only existed
from
its date of commencement in January 1999.
It is
certainly true that POCA, even as amended, is not a model of
legislative clarity and coherence. The short title refers only
to
the prevention of “organised crime”, while the first two
phrases of the long title state that the Act is “to introduce
measures to combat organised crime, money laundering and criminal
gang activities” and “to prohibit certain activities relating
to racketeering activities”. As pointed out by Griesel J in
National Director of Public Prosecutions v Seevnarayan
, the
organised crime
leitmotif
forms “a recurrent theme
throughout the Act”.
26
Notwithstanding this recurrent theme, the wording of POCA as a
whole makes it clear that its ambit is
not
in fact limited
to so-called “organised crime offences”, so that the initial
impression created by the short and long titles,
as well as by most
of the paragraphs of the preamble, is incorrect. This is misleading
and more than a little unfortunate. However,
as pointed out by the
NDPP, arguments along the lines of that advanced by the LRP in this
regard have been considered and rejected
by the Supreme Court of
Appeal on two prior occasions. In
Cook Properties
, the court
held that such an interpretation of POCA:
“
. . . radically truncates
the scope of the Act. It leaves out portions of the long title, as
well as the ninth paragraph of the
preamble. These show that the
statute is designed to reach far beyond ‘organised crime, money
laundering and criminal gang activities’.
The Act clearly applies
to cases of individual wrong-doing.”
27
In the recent
case of
National Director of Public Prosecutions v Van Staden
and Others
,
28
the Supreme Court of Appeal reiterated that the provisions of POCA
“are designed to reach far beyond organised crime and apply
also
to cases of individual wrongdoing”.
29
It is not correct (as the LRP would have it) that these judgments
have simply made an “assumption” that, provided an offence
falls within the ambit of Schedule 1, forfeiture is competent. On
the contrary, the interpretation of the relevant provisions
of POCA
by the Supreme Court of Appeal in these cases was based on the
wording of the Act and formed part of the ratio decidendi
of the
judgments.
So too in
Prophet
, although the offence in question was
drug-manufacturing, there would appear to have been no evidence
before the court to link
the “backyard laboratory” conducted by
Mr Prophet with racketeering, money laundering or criminal gang
activities. On the
contrary, as was expressly acknowledged by Mpati
DP in the Supreme Court of Appeal judgment in that case:
“[w]hether the appellant was manufacturing drugs for sale or for
personal use is unknown. But drug trafficking and drug abuse
are a
scourge in any society and are viewed in a very serious light. The
penalties provided for drug offences in the Drugs Act
are testimony
to this.”
30
The LRP also
contended that the structure of POCA “suggests that the regime
for the forfeiture of the instrumentalities of an
offence was added
almost as an afterthought” and that this regime was “plainly
designed to be ancillary and to play a mere
supportive role”.
However, as pointed out by the NDPP, t
his Court
stated in
National Director of Public
Prosecutions and Another v Mohamed NO and Others
31
that POCA (and particularly Chapters 5 and 6
thereof),
“
. . . represents the
culmination of a protracted process of law reform which has sought
to give effect to South Africa’s international
obligation and
domestic interest to ensure that criminals do not benefit from their
crimes”.
32
Paragraph 9 of
the preamble to POCA in its original form read as follows:
“
AND WHEREAS persons should
not benefit from the fruits of organised crime and money laundering,
legislation is necessary for the
preservation and forfeiture of
property which is concerned in the commission or suspected
commission of an offence”.
This paragraph was
substituted in terms of section 13 of Act 38 of 1999 with the
following paragraphs:
“
AND WHEREAS no person
convicted of an offence should benefit from the fruits of that or
any related offence, whether such offence
took place before or after
the commencement of this Act, legislation is necessary to provide
for a civil remedy for the restraint
and seizure, and confiscation
of property which forms the benefits derived from such offence;
AND WHEREAS no person should
benefit from the fruits of unlawful activities, nor is any person
entitled to use property for the
commission of any offence, whether
such activities or offence took place before or after the
commencement of this Act, legislation
is necessary to provide for a
civil remedy for the preservation and seizure, and forfeiture of
property which is derived from unlawful
activities or is concerned
in the commission or suspected commission of an offence”.
The change of
wording, read together with the other provisions of Act 38 of 1999
discussed above, illustrates the intention of
the legislature to
make it quite clear that the civil forfeiture provisions of POCA
reach beyond the categories of organised
crime created by the Act.
The applicants did not attack the constitutionality of the
provisions of POCA dealing with civil forfeiture
of the
instrumentalities of offences on the basis that, if these
provisions are interpreted so as to apply to offences other
than
“organised crime offences”,
33
then they are unconstitutional and invalid. Neither did they
challenge the constitutionality of the amendments to POCA by Act
38
of 1999. Not surprisingly, as an amicus curiae, the LRP did not
seek to raise any challenge to the constitutionality of POCA
itself, but confined its arguments to the matters as pleaded by the
parties, in the manner set out above. Like the applicants,
it too
made no attempt to show that the judgments of the Supreme Court of
Appeal in either
Cook Properties
34
or
Van Staden
,
35
as regards the ambit of POCA, were wrong.
Had there been
a proper constitutional challenge by one of the parties, then in
terms of Rule 5 of the Constitutional Court Rules,
36
the Minister of Justice would have had to be joined as a party to
the proceedings. Furthermore, the NDPP and the Minister would
then
have had the opportunity to place before the Court information and
arguments relating to justification in terms of section
36
37
of the Constitution.
38
If the NDPP were to be required in an application for a
preservation order or for a forfeiture order under POCA, to show
that
the offence in question, in addition to being one of the
Schedule 1 offences, also constitutes (or at the least is
rationally
connected to) racketeering, money laundering or criminal
gang activities, this might unduly hamper the achievement of the
objects
of POCA. This possibility might have to be considered by
this Court in an appropriate future matter. I refrain from
expressing
a view one way or the other in this regard. The fact of
the matter is that, because of the manner in which the papers in
this
case were framed and the proceedings conducted, neither the
NDPP nor the Minister had any opportunity to place information of

this kind before the Court.
In
Prince v
President, Cape Law Society, and Others
, this Court stated the
following:
“
Parties who challenge the
constitutionality of a provision in a statute must raise the
constitutionality of the provisions sought
to be challenged at the
time they institute legal proceedings. In addition, a party must
place before the Court information relevant
to the determination of
the constitutionality of the impugned provisions. Similarly, a party
seeking to justify a limitation of
a constitutional right must place
before the Court information relevant to the issue of justification.
I would emphasise that all
this information must be placed before
the Court of first instance. The placing of the relevant information
is necessary to warn
the other party of the case it will have to
meet, so as to allow it the opportunity to present factual material
and legal argument
to meet that case. It is not sufficient for a
party to raise the constitutionality of a statute only in the heads
of argument,
without laying a proper foundation for such a challenge
in the papers or the pleadings. The other party must be left in no
doubt
as to the nature of the case it has to meet and the relief
that is sought. Nor can parties hope to supplement and make their
case
on appeal.”
39
(Footnote omitted.)
In the absence
of any constitutional challenge to either the relevant provisions
of Act 38 of 1999 or to the interpretation of
the provisions of
POCA relating to civil forfeiture of the instrumentality of an
offence as extending beyond “organised crime
offences” to cover
cases of individual wrongdoing, it would, in my view, be wrong for
this Court to enquire into and pronounce
upon these issues in the
present case. Any such enquiry would have to await a proper
constitutional challenge if such a challenge
were to be brought at
some stage in the future.
In conclusion
on this point, I remain unconvinced by the LRP’s contention that
Chapter 6 of POCA can reasonably be interpreted
so as to apply only
to so-called “organised crime offences”.
No adequate
proof that the casino was operating on Shelgate’s property
The LRP
contended that there was no adequate proof on the papers that the
illegal casino was in fact operated on Shelgate’s
property. It
annexed a schedule by means of which it purported to demonstrate
that there was no clarity as to the true physical
address of the
casino and no certainty on whether the casino was operated on the
property registered in Shelgate’s name.
These
contentions do not withstand scrutiny. Section 37 of POCA makes it
clear that proceedings under Chapter 6 are civil proceedings
in
every sense.
40
The NDPP applied for, and was granted, a preservation order in
respect of section 2 in the scheme known as Malapin Centre (as
shown and more fully described on sectional plan number SS 577/96)
and an undivided share in the common property in the scheme.
The
NDPP applied for a forfeiture order in respect of the same property
and the order granted by the SCA on appeal related to
this
property. In the High Court proceedings, the applicants filed two
answering affidavits in which they admitted that the property
was
used to conduct an unlawful casino. Moreover, in their application
for leave to appeal to this Court, the applicants did
not suggest
that there was any dispute regarding the fact that the property had
been used to conduct a casino.
The operation
of the casino on Shelgate’s property is common cause on the
papers and it follows that there is no merit in the
LRP’s
contention that it has not been shown that Shelgate’s property
was used by Mr Mohunram to conduct the illegal casino.
Forfeiture
provisions of the KZN Gambling Act
The LRP
submitted that, in framing the provisions of the KZN Gambling Act,
the legislature made specific provision for forfeiture
in
section 94(4) and, in so doing, signified an intention that
the forfeiture regime so created would suffice to meet the
mischief
sought to be cured by the enactment. Gambling equipment and
machines fall within the compass of section 94(4),
but the
premises on which a casino is operated do not. Thus, it was
contended, POCA cannot have been intended to apply to gambling
offences covered by the Act.
I do not agree
with this submission. First, the relevant section of the KZN
Gambling Act creates a further criminal sanction for
the offence,
whereas Chapter 6 of POCA deals specifically with civil forfeiture.
Second, the KZN Gambling Act provides for the
forfeiture of the
immediate means of the offence, such as gaming machines and money,
whereas in appropriate circumstances POCA
has a much broader
application, as “instrumentality” can extend to include
property (such as a house or a factory) which
is shown to have been
involved in the commission of the offence.
By way of
comparison, section 25(1) of the Drugs and Drug Trafficking
Act 140 of 1992 (“the Drugs Act”) provides as follows:
“
Whenever any person is
convicted of an offence under this Act, the court convicting him
shall, in addition to any punishment which
that court may impose in
respect of the offence, declare –
(a) any scheduled substance,
drug or property –
(i) by means of which the
offence was committed;
(ii) which was used in the
commission of the offence; or
(iii) which was found in the
possession of the convicted person;
(b) any animal, vehicle,
vessel, aircraft, container or other article which was used –
(i) for the purpose of or in
connection with the commission of the offence; or
(ii) for the storage,
conveyance, removal or concealment of any scheduled substance, drug
or property by means of which the offence
was committed or which was
used in the commission of the offence;
(c) in the case of an offence
referred to in section 13(e) or (f),
41
any immovable property which was used for the purpose of or in
connection with the commission of that offence,
and which was seized under
section 11(1)(g) or is in the possession or custody or under the
control of the convicted person, to
be forfeited to the State.”
(Footnote inserted.)
A criminal
prosecution, followed by a conviction, sentence and even a criminal
forfeiture, is no bar to the invocation of the
civil forfeiture
provisions of Chapter 6 of POCA and conversely, as is evident from
the
Prophet
case,
42
the invocation of these provisions is not contingent upon a
conviction.
43
A declaration of
criminal
forfeiture under section 25 of the
Drugs Act does not eliminate the possibility of civil forfeiture,
in terms of Chapter 6 of
POCA, of the instrumentalities of offences
referred to in section 13 of the Drugs Act
44
in appropriate circumstances. The same reasoning applies to the
relationship between a
criminal
forfeiture of property in
terms of section 94(1) of the KZN Gambling Act in respect of
an offence under that Act and a possible
civil forfeiture under
POCA of property constituting the instrumentality of the same
offence.
45
POCA is
national legislation and the KZN Gambling Act is a provincial Act.
As casinos are an area of concurrent national and provincial
competence in terms of Schedule 4 of the Constitution, the statutes
must operate concurrently. However, as will be discussed
further
below, civil forfeiture under POCA, although it does have remedial
objectives, also has palpably punitive or penal effects.
46
For this reason, in assessing the proportionality of a forfeiture
order, criminal penalties (including forfeitures) already incurred
must be taken into consideration.
Instrumentality
of an offence
I turn now to
the first of the two issues identified above.
47
The correct interpretation and application of the concept
“instrumentality of an offence” in the context of POCA were
recently,
and fully, considered by this Court in
Prophet
.
48
It is accordingly not necessary for purposes of this judgment to
repeat the analysis that was performed in that case.
In considering
the meaning of the phrase “an instrumentality of an offence
referred to in Schedule 1”,
49
this Court adopted the interpretation accepted by the Supreme Court
of Appeal in a trilogy of cases.
50
In the first of those cases,
Cook Properties
, Mpati DP and
Cameron JA
51
said that “[i]t is clear that in adopting this definition the
Legislature sought to give the phrase a very wide meaning.”
52
They held, however, that in order to ensure that application of the
forfeiture provision does not constitute arbitrary deprivation
of
property in violation of section 25(1) of the Constitution:
“
. . . the words ‘concerned
in the commission of an offence’ must . . . be interpreted so that
the link between the crime committed
and the property is reasonably
direct, and that the employment of the property must be functional
to the commission of the crime.
By this we mean that the property
must play a reasonably direct role in the commission of the offence.
In a real or substantial
sense the property must facilitate or make
possible the commission of the offence. As the term
‘instrumentality’ itself suggests
. . . the property must be
instrumental in, and not merely incidental to, the commission of the
offence. For otherwise there is
no rational connection between the
deprivation of property and the objective of the Act: the
deprivation will constitute merely
an additional penalty in relation
to the crime, but without the constitutional safeguards that are a
prerequisite for the imposition
of criminal penalties.”
53
In other words, the
determining question is:
“
. . . whether there is a
sufficiently close link between the property and its criminal use,
and whether the property has a close
enough relationship to the
actual commission of the offence to render it an instrumentality.”
54
The applicants
in this Court did not challenge this interpretation. Instead, they
sought to distinguish the present case on the
facts from
Prophet
,
55
arguing that there was not sufficient involvement of the property
in the offences to justify its forfeiture; thus, that it did
not
constitute an instrumentality for the purposes of POCA. According
to the applicants, the essence of their offences was in
fact the
conduct of gaming activity without a valid licence and the property
was not integral to the commission of the offences.
The fact that
the unlawful activity took place on the property was, in itself,
not sufficient to invoke the invasive provisions
of Chapter 6 of
POCA. As held by Stegmann J in
National Director of Public
Prosecutions: In re Application for Forfeiture of Property in terms
of sections 48 and 53 of the Prevention
of Organised Crime Act,
1998 (Act No 121 of 1998)
:
“
The mere fact that a
particular offence was committed on a particular property would not
necessarily entail the consequence that
the property was ‘concerned
in the commission’ of the offence, or that the property had become
an ‘instrumentality of an
offence’. It seems to me that evidence
of some closer connection than mere presence on the property would
ordinarily be required
in order to establish that the property had
been ‘concerned in the commission’ of the offence.”
56
The applicants
also submitted that there was no direct causal connection between
the property sought to be forfeited and the offences
upon which the
forfeiture application was founded. They based this submission on,
inter alia, the following allegations: the
criminal use of the
property was not deliberate or planned, but rather fortuitous and
incidental to the purpose of the property;
it was acquired to
pursue legitimate business interests and was used for this purpose
during and after the illegal activity;
the property was wholly
irrelevant to the success of the illegal activity; the illegal
activity commenced in 1998, during a period
when it was legal and
it was only later, in February 2000, that the KZN Gambling Act was
amended
57
to criminalise this activity; neither the time duration nor the
spatial extent of the illegal activity was reliably established,
but it could be safely accepted that the illegal activity occupied
a smaller section of the building, which primarily was used
as a
glass and aluminium factory.
These
contentions do not bear scrutiny. The present application concerns
an unlawful casino.
58
It is common cause that Mr Mohunram used the property – and that
Shelgate “allowed” him to do so – for the purposes of
operating a casino while neither he nor Shelgate had the requisite
licence in terms of the KZN Gambling Act. In operating this
casino,
59
Shelgate and Mr Mohunram, respectively, contravened
sections 3(3)(a) and 44 of the KZN Gambling Act. Both offences
are
listed in Schedule 1 of POCA.
60
Section 3(3)(a)
prohibits the owner of premises from using or allowing another
person to use
any premises
for gambling activities without a
licence. Section 44, read with the definition of “casino”
in section 1, also prohibits
the use of
any premises
for
operating a casino without a licence.
61
In short, the essence of both section 3(3)(a) and section 44
is directed at the manner in which premises are used.
As pointed
out by the NDPP, the legislature has chosen to prohibit the use of
premises for gambling purposes rather than the
activity of gambling
itself, which is regulated by other statutory provisions.
It follows
that the use, or allowing the use, of the property was a necessary
part of the offences the applicants committed. It
was not possible
to commit the offences without using the property. In the language
of
Cook Properties
, the property was “employed . . . to
make possible or facilitate the commission of the offence”.
62
Thus, the causal connection between the property and the offences
was certainly a direct one. The offences themselves pivoted
on the
use of the property for gambling purposes. It is common cause that
neither applicant had the requisite licence. That was,
however, not
the essence of their crimes. The essence was that the applicants
used the property or allowed it to be used as an
illegal casino.
The property was thus integral to the commission of the relevant
offences.
Even if an
exclusive
emphasis on the wording of the statutory
provisions creating the offences in question is regarded as unduly
formalistic, it can
easily still be said that the property in this
case was the instrumentality of the offences committed. The
property was specifically
adapted in various ways to operate as a
casino. Mr Mohunram had partitioned the property for this use. The
windows of the building
housing the casino had been tinted in order
to make it difficult to see into the building from the outside. It
contained 57 gambling
machines, arranged in rows, and a cashier’s
booth had been constructed on the property to facilitate gambling
activities. To
use the words of Nkabinde J in the
Prophet
case,
the property had been “appointed, arranged, organised, furnished
and adapted or equipped to enable or facilitate the applicant’s
illegal activities.”
63
The property
was also used to commit a series of offences over an extended
period of time. This is another indicator of instrumentality.
As
was stated by the Cape High Court in
National Director of Public
Prosecutions v Engels
:
“
In order to prove this point
[that the property is an instrumentality of an offence], the NDPP
cannot be confined to an isolated
incident of criminal conduct; on
the contrary, the more such incidents that can be established, the
more easily the inference may
be drawn that the property in question
is indeed an instrumentality of an offence.”
64
In
National
Director of Public Prosecutions v Parker
,
65
the Supreme Court of Appeal held that repeated use of immovable
property for criminal purposes may serve to render that property
an
“instrumentality of an offence” even if it has not been adapted
specifically for criminal purposes. In the present case,
as in
Parker
, there is “a pattern of sustained activity that
reveals the use to which the premises were put and their
instrumental character
in the crimes committed there.”
66
On the applicants’ own version, the property was used as an
illegal casino over an extended period of time. There is
accordingly
no merit in the applicants’ contention that the
criminal use of the property was fortuitous and incidental to the
purpose of
the property. On the contrary, it was deliberate and
planned.
On the
specific meaning of “instrumentality of an offence” for the
purposes of POCA, the LRP submitted that property can come
within
this concept only if it is “criminal property” within the
contemplation of the preamble to the Act. Thus, property
could only
be the instrumentality of an offence if it is inherently tainted
with the quality of crime and cannot be used for
any lawful
purpose. According to the LRP, Shelgate’s property does not have
this quality.
If this
argument were accepted, almost no property would qualify for
forfeiture (which could hardly have been the intention of
the
legislature). Many things that are used for unlawful purposes can
and very often do have a lawful use. The interpretation
contended
for by the LRP would mean that any item of property that might
notionally
be used for lawful purposes would not be
susceptible to forfeiture, even though it had
in fact
been
used for unlawful purposes. Not only would this interpretation give
rise to glaring absurdities, it would also totally undermine
the
purpose of the Act. The fact that the property can be, and perhaps
is, used for a lawful purpose does of course weigh in
the
proportionality enquiry.
To conclude on
this issue, in the light of the circumstances discussed in detail
above, I am satisfied that the Supreme Court
of Appeal was quite
correct in its finding that Shelgate’s property was indeed an
instrumentality of the offences committed
by it and by Mr Mohunram.
Proportionality
Turning now to
the question of proportionality, the purpose of the proportionality
enquiry is to determine whether the grant of
a forfeiture order
would amount to an arbitrary deprivation of property in
contravention of section 25(1) of the Constitution.
The
interpretation of POCA (and more particularly of “instrumentality
of an offence”) as reaching beyond the ambit of “organised
crime” and applying to cases of individual wrongdoing
67
could result in situations of clearly disproportionate (and hence
constitutionally unacceptable) forfeiture, and courts must
always
be sensitive to and on their guard against this.
68
The proper
application of a proportionality analysis weighs the forfeiture
and, in particular, its effect on the owner concerned,
on the one
hand, against the purposes the forfeiture serves, on the other. The
broader societal purposes served by civil forfeiture
under Chapter
6 of POCA have been held to include:
removing
incentives for crime;
69
deterring
persons from using or allowing their properties to be used in
crime;
eliminating or
incapacitating some of the means by which crime may be committed;
and
advancing the
ends of justice by depriving those involved in crime of the
property concerned.
70
As was stated
by the Supreme Court of Appeal in
Cook Properties
:
“
We agree that property
owners cannot be supine. In particular, we endorse the notion that
the State is constitutionally permitted
to use forfeiture, in
addition to the criminal law, to induce members of the public to act
vigilantly in relation to goods they
own or possess so as to inhibit
crime. In a constitutional State law-abiding property-owners and
possessors must, where reasonably
possible, take steps to discourage
criminal conduct and to refrain from implicating themselves or their
possessions in its ambit.
And the State is entitled to use criminal
sanctions and civil forfeitures to encourage this. Here
constitutional principle recognises
individual moral agency and
encourages citizens to embrace the responsibilities that flow from
it.
We therefore agree that the Act
requires property owners to exercise responsibility for their
property and to account for their
stewardship of it in relation to
its possible criminal utilisation. But the pursuit of those
statutory objectives cannot exceed
what is constitutionally
permissible. Forfeitures that do not rationally advance the
interrelated purposes of Chapter 6 are unconstitutional.”
71
(Footnote omitted.)
There are of
course limits as to how far the “deterrence element” of civil
forfeiture may go. But it is important to remember
that behind this
deterrence element is a message that is clearly justifiable from a
constitutional, moral and social point of
view. Section 25, the
“property clause” in the Constitution, must be interpreted and
applied in a manner which:
“
seeks to establish a balance
between the need to protect private property, on the one hand, and
to ensure that property serves the
public interest, on the other.
. . . .
In approaching the property
clause we must therefore recognise the constitutional value of
property, and the importance of protecting
it, while recognising
that it is not absolute.”
72
One’s right
to property carries with it important duties to use, manage or look
after it in a responsible manner. The recognition
of these duties
is one of the ways in which the common law notion of property is
rendered compatible with the values underpinning
a Constitution
that promotes the rule of law and other values of social
significance. In the words of Professor AJ van der Walt:
“
[T]o say that section 25
protects property does not mean that the protection of private
property is the main or the only purpose
of the property clause, or
that it entrenches existing property rights in the sense of
insulating them from any state interference,
or in the sense of
‘freezing’ the status quo as far as existing property holdings
are concerned, or that it enables the courts
to frustrate legitimate
state limitation of property through unjustified substantive
second-guessing of government policy. The
spirit and values of the
Bill of Rights indicate that this cannot be the case and that the
aim of section 25 is to establish a
just and equitable balance
between the protection of private property and the promotion of the
public interest. In other words,
it is argued here that section 25
can be seen as a property guarantee without necessarily falling foul
of the typically libertarian
view that the main function of the Bill
of Rights is to insulate private property from state interferences
and transformation programs,
and also without making the error of
opening the door on unjustified and purely obstructive judicial
activism. The assumption in
this book is that section 25 does
protect and indeed guarantee property, but then in a way that is
characteristic of the new constitutional
order in general and of the
Bill of Rights in particular.”
73
This Court has
held in
Prophet
that the proportionality enquiry requires a
general approach of:
“
. . . weighing the severity
of the interference with individual rights to property against the
extent to which the property was
used for the purposes of the
commission of the offence, bearing in mind the nature of the
offence.”
74
In
Prophet,
reference was made to the judgment of Ackermann J, writing for
a unanimous Court, in
First National Bank of SA Ltd t/a Wesbank
v Commissioner
,
South African Revenue Service and Another
;
First National Bank of SA Ltd t/a Wesbank v Minister of
Finance
.
75
In that case, Ackermann J held that a deprivation of property is
“arbitrary” within the meaning of section 25(1) when
the
“law of general application” referred to in that section does
not provide sufficient reason for the particular deprivation
in
question or is procedurally unfair.
76
For the validity of a deprivation, the Court held that:
“
. . . there must be an
appropriate relationship between means and ends, between the
sacrifice the individual is asked to make and
the public purpose
this is intended to serve. It is one that is not limited to an
enquiry into mere rationality, but is less strict
than a full and
exacting proportionality examination.”
77
Ackermann J
listed a number of factors which are relevant to establishing
“sufficient reason” for the deprivation in question.
78
Importantly for purposes of the present case, he held that:
“
Generally speaking, where
the property in question is ownership of land or a corporeal
movable, a more compelling purpose will have
to be established in
order for the depriving law to constitute sufficient reason for the
deprivation than in the case when the
property is something
different . . .”
79
The proportionality
enquiry in respect of the forfeiture of immovable property will
often pose particular challenges, not only because
of the value of
such property and of its often indivisible nature, but because of
the fact that it may be “home” to a number
of people.
80
In the
Prophet
case, whilst acknowledging that the standard for establishing
arbitrariness is different to the standard of proportionality,
Nkabinde J nonetheless adopted the following factors as some of
those which would be relevant to the proportionality enquiry:
whether the
property is integral to the commission of the crime;
whether the
forfeiture would prevent the further commission of the offence and
its social consequences;
whether the
“innocent owner” defence would be available to the respondent;
the nature and
use of the property;
81
and
the effect on
the respondent of the forfeiture of the property.
82
As indicated
above, the nature and extent of any other penalties, including
criminal penalties, which have already been meted
out to the
respondent should also be taken into consideration. Moreover, the
fact that the legislature has made provision for
a range of
penalties for a specific offence, while clearly not dispositive, is
certainly a significant factor to be taken into
consideration in
the proportionality exercise.
Turning to the
facts of the matter at hand, the applicants did not raise
proportionality as an issue in their affidavits, at the
hearing in
the High Court or in their heads of argument in the Supreme Court
of Appeal “as was their duty”.
83
The matter was, however, properly argued before the Supreme Court
of Appeal which dealt with this issue, concluding that “there
does not appear to be any merit in the argument that forfeiture
would have been disproportionate to the crimes involved.”
84
Counsel for the NDPP pointed out that the applicants, in their
heads of argument before this Court, have now for the first time
pertinently raised the issue of proportionality. The NDPP objected
to this course of conduct, contending that as a result of
the
applicants’ failure to plead their complaint about
proportionality when they should have done so, the NDPP has not had
an opportunity to adduce evidence on the issue. To allow the
applicants to raise their complaint at this late stage, argued the
NDPP, will deprive it of its fundamental right to be afforded a
fair opportunity to present its side of the case. In view of
the
conclusion to which I have come with regard to the issue of
proportionality, it is not necessary to deal with this objection
any further.
Significant
disproportionality?
Before
considering the proportionality of the forfeiture on the facts of
this case, I consider it desirable to attempt to clarify
some
confusion that has emerged in recent judgments on the “standard
of proportionality” applicable to the assessment of
the
relationship between the nature and value of the property subject
to forfeiture, the nature and gravity of the crime involved
and the
role the property played in the commission of the crime.
In the
majority judgment of the Supreme Court of Appeal in
Prophet
,
Mpati DP held that:
“
A mere sense of
disproportionality should not lead to a refusal of the [forfeiture]
order sought. To ensure that the purpose of
the law is not
undermined, a standard of ‘significant disproportionality’ ought
to be applied for a court to hold that a deprivation
of property is
‘arbitrary’ and thus unconstitutional, and consequently refuse
to grant a forfeiture order. And it is for the
owner to place the
necessary material for a proportionality analysis before the
court.”
85
According to the
majority, this approach was needed to “guard against the danger of
frustrating the lawmaker’s purpose for introducing
the forfeiture
procedure in the Act”, namely:
“
. . . the realisation by
the Legislature that there was rapid growth, both nationally and
internationally, of organised criminal
activity and the desire to
combat these criminal activities by,
inter
alia
, depriving
those who use property for the commission of an offence of such
property.”
86
In a minority
judgment, Ponnan JA rejected the benchmark of “significant
disproportionality” as being “too strict an evaluative
norm”,
87
and held that “[t]he draconian effect of the Act would be
exacerbated . . . were the elevated benchmark ‘significantly

disproportionate’ to be applied.”
88
As the learned judge pointed out:
“
It is for a court, in the
exercise of its discretion, against the backdrop of the full factual
matrix of the case, to determine
whether there is an appropriate
relationship between means and end. The imposition of a higher
minimum threshold tips the scales
in favour of the former, unduly
fetters the discretion of the court that has to undertake the
enquiry and disturbs the equilibrium
sought to be achieved by the
exercise. Courts should be vigilant to ensure that the statutory
provisions in question are not used
in
terrorem
and that
that there has been no overreaching and abuse.”
89
On appeal in
Prophet
,
90
this Court found it unnecessary to decide whether there is a
material difference between the test formulated by the majority
in
the Supreme Court of Appeal and that formulated by Ponnan JA. The
question of the incidence of the onus as regards the
proportionality
issue was also left open by this Court in
Prophet
.
91
The approach
of the majority of the Supreme Court of Appeal in
Prophet
92
may lead to unnecessary complexity. In the subsequent judgment of
that court in
Van Staden,
where the offence under discussion
was drunken driving, Nugent JA
93
referred to the majority view in
Prophet
and stated the
following:
“
Incursions upon conventional
liberties that are justified by the particular difficulties
encountered in the detection and successful
prosecution of organised
crime are not similarly justified in cases of ordinary crime that do
not present those difficulties. I
do not think that it is
permissible to look to one threat that the Act aims at combating
(the threat posed by organised crime)
in order to justify its
application in relation to a quite different threat (the threat that
is posed, for example, by drunken
driving) that does not present the
same challenges. It must be borne in mind that drunken driving,
which does not ordinarily result
from organised illicit activity,
and presents no special difficulties to detect and prosecute, can
attract substantial penalties,
and the ordinary criminal law ought
to be the first port of call to combat the evil. For the Act exists
to supplement criminal
remedies in appropriate cases and not merely
as a more convenient substitute.”
94
I agree that
it would be wrong for POCA to be utilised in a manner which blurs
the distinction between the purposes and the methods
of criminal
law enforcement, on the one hand, and those of civil law, on the
other. There is no justification for resorting to
the remedy of
civil forfeiture under POCA as a
substitute
for the
effective and resolute enforcement of “ordinary” criminal
remedies. In addition to the factors listed by this Court
in
Prophet
95
– the nature and gravity of the offence in question, the extent
to which ordinary criminal law measures (when properly enforced)
are effective in dealing with it, its public impact and potential
for widespread social harm and disruption – are all factors
that
should also weigh in the enquiry as to whether a forfeiture order
would be unconstitutionally disproportionate.
However, the
learned judge in
Van Staden
goes on to state that:
“
. . . I do not think that in
cases of drunken driving there is justification for imposing the
higher standard of ‘significant’
disproportionality referred to
in
Prophet
.
To avoid an order for forfeiture in such cases being arbitrary, and
thus unconstitutional, a court must be satisfied that the
deprivation is not disproportionate to the ends that the deprivation
seeks to achieve. In making that determination the extent
to which
the deprivation is likely to afford a remedy for the ill sought to
be countered, rather than merely being penal, will
necessarily come
to the fore, bearing in mind that the ordinary criminal sanctions
are capable of serving the latter function.”
96
As pointed out
above, it may be very difficult to draw a clear distinction in many
cases between “organised crimes”, on the
one hand, and
“ordinary crimes”, on the other. This being so, it is
potentially problematic to link a yardstick of “significant
disproportionality” with the former type of crime and that of
“disproportionality simpliciter” with the latter type. To
my
mind, there should be only one evaluative standard applicable to
all the offences that fall within the ambit of the forfeiture
provisions of POCA. That standard simply involves asking the
question whether the forfeiture of the property concerned is, in
all the circumstances of the case (including the nature and
seriousness of the offence), disproportionate in the sense
discussed
above. Adding labels and qualifiers to the degree of
“disproportionality” required can only give rise to unnecessary
confusion.
The organised crime element, while significant in
assessing whether a forfeiture order should be made in a particular
case, is
not necessarily decisive. The criminal activities of an
efficient and energetic individual miscreant may well have a more
extensive
reach and a greater negative social impact. So, for
example, an individual drug dealer selling “tik” (the drug
being manufactured
in
Prophet
97
)
through city schools may well have a larger client base and more
outlets than a drug syndicate.
It is the task
of the court to ensure that the deprivation of property that will
result from a forfeiture order is not arbitrary.
The
proportionality assessment is a
legal
one, based on an
evaluation of all the relevant factors in the full factual matrix
of the particular case. The onus of establishing
that all the
requirements for a forfeiture order in terms of section 50 of
POCA – including that of proportionality –
have been met, rests
on the NDPP throughout. However, as some of the factual material
relevant to the proportionality analysis
will often be peculiarly
within the knowledge of the owner of the property concerned, the
owner who is faced with a prima facie
case established by the NDPP
would in the usual course be well-advised to place this material
before the court.
98
This does
not
, however, shift the onus of proof to the owner
in question; it merely places on the owner an evidentiary burden
or, as it is
sometimes called, a burden of adducing evidence in
rebuttal.
99
Was the
forfeiture of Shelgate’s property disproportionate?
The main
argument advanced by the applicants in respect of proportionality
is that the forfeiture order made is disproportionate
and hence not
constitutionally justifiable considering the following
circumstances: the nature and gravity of the offences in
question;
100
the fine paid by Mr Mohunram and the forfeiture by him of monies
found on the premises and of the gaming machines; the absence
of
any direct causal connection between the property and the offences
on which the forfeiture application was based; and the
fact that
the illicit activity only occupied a portion of the premises in
question.
The strict
regulation of gambling activities is, in part, a legislative
recognition of the fact that gambling can have a major
negative
public and social impact. Illegal gambling is a serious offence.
This is made clear by the sanctions envisaged in section 94
of
the KZN Gambling Act. As first-time offenders, Mr Mohunram was
liable to a maximum period of ten years’ imprisonment without
the
option of a fine,
101
or to a fine not exceeding R2 million or a period not exceeding ten
years’ imprisonment,
102
while Shelgate risked a fine of R2 million.
103
The penalties provided for may be imposed in addition to “any
competent forfeiture contemplated in” section 94(4).
104
The
potentially harmful social and economic consequences of gambling
and the necessity of regulation to protect the public was
acknowledged by this Court in
Magajane v Chairperson, North West
Gambling Board and Others
, where Van der Westhuizen J, writing
for a unanimous Court, stated the following:
“
The Preamble of the Act [the
North West Gambling Act] makes clear that the Act aims to protect
the public confidence and trust and
the health, safety, general
welfare and good order of the inhabitants of the province through
the strict regulation of institutions
and individuals involved in
the gambling industry. The importance of this general purpose is
beyond question . . . . gambling is
an activity that could pose a
threat to individuals’ psychological, financial and even physical
health, as well as those of their
families and communities.
Regulation is essential to protect participants in the gambling
industry and the general public. The
gambling industry is a
pervasively regulated industry. Schedule 4 Part A of the
Constitution of the Republic of South Africa, 1996
lists gambling as
a functional area of concurrent national and provincial legislative
competence, and the provisions of the
National Gambling Act 7 of
2004
and the North West Gambling Act show that both national and
provincial legislation regulate the industry. The preambles of both
statutes proclaim the necessity of regulation to safeguard the
public.”
105
(Footnotes omitted.)
According to
the preamble to the
National Gambling Act 7 of 2004
:
“
It is desirable to establish
certain uniform norms and standards, which will safeguard people
participating in gambling and their
communities against the adverse
effect of gambling, applying generally throughout the Republic with
regard to casinos, racing,
gambling and wagering, so that –
gambling activities are
effectively regulated, licenced, controlled and policed;
members of the public who
participate in any licenced gambling activity are protected;
society and the economy are
protected against over-stimulation of the latent demand for
gambling; and
the licensing of gambling
activities is transparent, fair and equitable.”
A perusal of
this Act and of the KZN Gambling Act makes it clear that there are
very stringent requirements for the issue of a
casino license and
equally stringent controls once a license is issued. This is not
surprising. Prior to the promulgation of
the
National Gambling Act,
a
Lotteries and Gambling Board was created in terms of the
Lotteries and Gambling Board Act 210 of 1993 and mandated to
investigate
the gambling industry in South Africa and, in
particular, the manner in which gambling activities should be
regulated. As stated
by Selikowitz J in
Soundprop 1239 CC t/a
777 Casino v Minister of Safety and Security and Others
:
“
[I]t is significant to note
that the Board, after an extensive examination both here and abroad,
concluded that in an open and democratic
society there was room for
gambling provided that such gambling be strictly controlled. The
controls are needed for the protection
of the gamblers, for the
protection of society and in order to properly regulate the
industry. In the report of what is known –
after its chairperson –
as the Wiehahn Committee, there is a detailed examination of the
types of controls that are needed and
recommendations for the
implementation of such controls.”
106
These
recommendations
107
gave rise to the promulgation of the
National Gambling Act which
came into operation on 1 November 2004.
It is
significant that, among the reasons for the necessity of
controlling the gambling industry given, in
Soundprop
, by
the Minister responsible for the control of gambling were:
“
. . . that one must be aware
of the fact that the cash flow generated by gambling lends itself to
money laundering and to targeting
by crime syndicates . . .”
108
This is in
accordance with international experience. So, for example, various
royal commissions and enquiries in Australia “have
revealed that
there are strong connections between organised crime and illegal
gambling in Australia” and have also “documented
connections
between illegal casinos and money laundering”.
109
Similarly, close links between illegal gambling operations and
organised crime have been documented in the United States of
America.
110
Looking at the
circumstances of this case as a whole, the crimes committed on the
property involved the conducting of an illegal
casino for profit.
As discussed above, these are serious offences which can have very
negative social, economic and other impacts.
Thus, measures which
serve effectively to deter people from using or allowing their
property to be used for the commission of
these offences certainly
promote the interests of justice. It has already been pointed out
that the property was integral to
the commission of the offences
under the KZN Gambling Act; it is not a case where the property
could be said to be “incidental”
to the criminal endeavour. The
use of the property in the commission of the offences was not a
once-off thing; on the contrary,
it was a continuous sustained use
for more than a year subsequent to the casino operation becoming
illegal.
In addition,
as pointed out by the Supreme Court of Appeal in its judgment,
111
the subject of the forfeiture application is property belonging to
Shelgate, not to Mr Mohunram. Mr Mohunram has paid admission
of
guilt fines totalling R88 500 and has suffered forfeiture or loss
of monies and equipment amounting to approximately R287
000, but
Shelgate has to date lost nothing due to its illegal activities.
While Mr Mohunram is admittedly the sole member of
Shelgate, that
does not alter the fact that Shelgate has a separate corporate
personality. Mr Mohunram and Shelgate have enjoyed
the advantages
of their separate legal personalities and must also bear the
consequences thereof.
The admission
of guilt fines paid by Mr Mohunram related to his contravention of
section 95(2) and of section 3(4)(b)
of the KZN Gambling
Act.
112
He does not appear to have been charged with a contravention of
section 44, although it was common cause on the papers before
us that he had indeed contravened that section by operating his
casino without the requisite licence. This offence would seem
to
fall under section 94(2) of the KZN Gambling Act so that, had
Mr Mohunram been charged with and convicted of this offence,
he
would have been liable to imprisonment for a maximum period of 10
years without the option of a fine.
113
We do not know why he was
not
charged with a contravention
of section 44, nor do we know why Shelgate was
not
charged with a contravention of section 3(3)(a).
114
One possible
reason why we do not have this information on record is that, as
already pointed out, the proportionality point was
not raised by
the applicants in any of their affidavits, in the hearing before
the High Court or in their heads of argument in
the Supreme Court
of Appeal. So we are faced with a situation where
neither
Mr
Mohunram has been penalised for his contravention of section 44
of the KZN Gambling Act,
nor
has Shelgate been penalised for
its contravention of section 3(3)(a). Because of the manner in
which the proceedings were conducted,
it cannot be said with any
degree of confidence that the effect of the forfeiture order in the
present matter would indeed be
to give the NDPP “a second bite at
the cherry”, to use the words of Sachs J in his judgment in this
case, or that the forfeiture
of the property would amount to a
“duplication of punishment” for the same offence(s).
As pointed out
by Van der Walt:
“
[T]he property rights of
those who were actually involved in crime may be lost through
forfeiture, but by and large this is not
necessarily unjust or
unreasonable, as such loss would mostly be justifiable in the normal
way by describing the forfeiture as
an exercise of the police power
that merely has to satisfy the requirements in section 25(1) in
establishing a proper balance between
the public purpose of the
deprivation and the interests of the affected person.”
115
It appears
from the evidence that Mr Mohunram’s profit from the casino
amounted to approximately R30 000 per month. From February
2000 at
the latest to April 2001, the casino operated illegally, thus
producing an illicit income for Mr Mohunram totalling about
R420
000. Thus, even if one were notionally to disregard Shelgate’s
separate legal personality and take into consideration
the fact
that Mr Mohunram has incurred criminal penalties amounting to about
R365 000, the applicants are still left with “net
illicit
profits” of approximately R55 000. This must obviously also be
borne in mind when determining the question of proportionality
in
this case.
As for the
effect of forfeiture on the applicants, the property is owned by
Shelgate and is its only asset. Mr Mohunram has a
100 percent
member’s interest in Shelgate. Since the property is not used for
residential purposes, its forfeiture will have
no effect on the
living arrangements of the applicants. It will merely deprive them
of an asset that has some financial value
to them. According to the
NDPP’s calculations, which were not really gainsaid by the
applicants, the loss which they will suffer
is as follows. The
property was bonded in favour of NBS Bank in an amount of R600 000.
The balance outstanding on the bond was
approximately R477 000 at
the time of the preservation order proceedings. In other words, the
applicants have paid off approximately
R123 000 of the capital
amount of the bond. If a forfeiture order were to be granted, the
proceeds of the sale of the property
would be used in the first
instance to settle the indebtedness under the bond. What the
applicants will “lose”, therefore,
is the amount (if any) by
which the value of the property exceeds the value of the bond.
The applicants
did not adduce any evidence regarding the value of the property,
save to state that “it is unlikely that the
value of the
outstanding bond will be realised should the state elect to sell
the property”. The figures are in dispute, the
respondent
believing that there is value for the state in a forfeiture order
while the applicants disagree. According to Mr Mohunram,
the
property market in Vryheid at the relevant time was “severely
depressed” and he thought that it was unlikely that the
outstanding bond would be realised should the property be sold.
What this means is that, on the applicants’ own version, the
value of the property is less than R477 000. It follows that, if
forfeiture were to be ordered, the applicants would not “lose”
anything in the form of a notional amount by which the value of the
property exceeds the value of the bond. They would simply
lose the
R123 000 that they have already paid off on the capital amount of
the bond. It should be noted that Mr Mohunram’s
affidavits
dealing with this point were deposed to in 2001 and the position
with regard to the value of the property may well
have changed
since then.
As indicated
above, the evidence shows that the profits from the casino amounted
to some R30 000 per month. The illicit income
from the gambling
operation would accordingly have totalled about R420 000 during the
14 months (February 2000 to April 2001)
when Mr Mohunram continued
to run the operation after an amendment to the KZN Gambling Act
that made it clearly illegal. Therefore,
according to the NDPP, the
applicants have earned more from the illegal casino than they stand
to lose if the property is forfeited.
In the circumstances of this
case, the NDPP submits, there is no disproportionality (far less
“significant disproportionality”).
If the
financial effect of the criminal penalties incurred by Mr Mohunram
is also taken into consideration as part of the proportionality
enquiry,
116
then the overall effect on the applicants of a forfeiture of the
property is an immediate financial loss of about R68 000, viz
less
than the admission of guilt fines paid by Mr Mohunram. In addition
to this financial loss, however, other premises will
have to be
found for the legitimate glass and aluminium business being
conducted on the property and this will obviously have
considerable
financial implications. It must also be borne in mind that Mr
Mohunram stood surety vis-à-vis NBS Bank for Shelgate’s
liability under the bond so that, if a sale of property does not
realise the outstanding bond amount, then Mr Mohunram as surety
could possibly be held liable by NBS Bank for the shortfall.
A note of
caution must be sounded. It is certainly not
necessary
for a
court, in considering whether or not a forfeiture order applied for
will be disproportionate, to undertake the kind of
“financial
exercise” set out in the four preceding paragraphs. However, as
the figures were available in this case and were
referred to by the
applicants and the NDPP, it is useful to take them into
consideration in the present matter.
The applicants
further contended that forfeiture of the property would be
disproportionate since the illegal casino
only
occupied a
portion of the building in question. They point out that a portion
of the property was used for conducting a glass
and aluminium
business.
It is clearly
not a requirement for the grant of a forfeiture order that the
whole of the property must have been used as the
instrumentality of
an offence. As the Supreme Court of Appeal pointed out in its
judgment in this case,
117
“property” is defined in section 1 of POCA:
“
to include any ‘immovable’
thing and immovable property is identified with reference to its
cadastral description, ie it is
the property described in the deeds
office. It is highly unlikely that the whole of an immovable
property can ever be used in the
commission of a crime and the
restriction would make the provision meaningless.” (Footnote
omitted.)
The relevant
question for purposes of the proportionality enquiry is therefore
not whether the
whole
of the property was used in
furtherance of the crime. It is whether forfeiture of the whole
property would be disproportionate
to the seriousness of the crimes
committed and the benefits derived from those crimes. In this
regard, it has to be borne in
mind that the total area of the
sectional title property is 542 square metres. Although Mr Mohunram
did conduct a legitimate
business on part of the property, there is
no evidence before us as to the respective sizes of the two areas.
However, as pointed
out by the Supreme Court of Appeal, bearing in
mind that the illegal casino had 57 gaming machines and a cashier’s
booth, the
area occupied by the casino operation could not have
been insignificant. This is borne out by the fact that, after the
casino
was closed down, Mr Mohunram subdivided the casino area and
let out the two separate portions.
The NDPP
pointed out that, in any event, it would not be feasible to order
forfeiture of part of the property. In
National Director of
Public Prosecutions v Cole and Others
,
118
Willis J held that it is not possible to order forfeiture of part
of immovable property unless there is evidence that subdivision
is
feasible:
“
The intractable difficulty
is that immovable property, unlike various other kinds of assets of
which money is perhaps the best example,
is usually indivisible.
Subdivision of this immovable property would, in any event, require
the approval of the local municipality
which is not a party to these
proceedings. Besides, nothing was put before me to suggest that this
solution would be desirable,
and, if so, possible.”
A simi
l
ar
difficulty exists in the present circumstances, where the forfeiture
involves a sectional title unit.
119
The applicants have not adduced any evidence to establish that it
would be possible to order forfeiture of part of the sectional
title
unit.
In their
written submissions, the applicants state that “[n]either the
time duration nor the spatial extent [of the illegal
activities]
was reliably established”. In my view, however, there was enough
evidence to show that a substantial portion of
the property was
used as an illegal casino for an extended period of time. The
applicants’ contentions to the contrary are
not convincing.
The applicants
alleged that Mr Mohunram was given an assurance that upon payment
of substantial fines and destruction of the relevant
gambling
machines, he would face no further penalty. They contended that the
forfeiture application was launched in contravention
of the
agreement with the first applicant. In support of this contention,
the applicants refer to certain passages in their affidavits,
but
these passages fall well short of proving an assurance that Mr
Mohunram would pay no further penalty. The only entity who
could
have given such an assurance (or who could have entered into such
an agreement) was the office of the NDPP, and the applicants
do not
suggest that it did so. There is thus no factual basis for the
applicants’ complaint that the forfeiture application
was
launched in violation of an assurance or undertaking that the
matter had been brought to finality when the admission of guilt
fine was paid. The contentions of the applicants in this regard are
without merit.
On the
question of proportionality, the LRP submitted that the forfeiture
provisions of POCA are intended to be preventive, not
punitive.
According to the LRP, the forfeiture of the instrumentalities of an
offence can tenably have a place in civil law only
in order to
prevent the repetition of the offence by the use of that property.
In consequence, property can only be declared
forfeit if the NDPP
shows that it will probably be used to repeat the crime which will
follow only if it is property that, like
“tik”, can never have
a lawful use, or that can have no lawful use in the hands of the
lawbreaker (like, for example, gaming
machines in the hands of a
person who has no licence to use them). The forfeiture of the
Shelgate premises does not satisfy this
test.
As illustrated
above, the LRP’s interpretation is inconsistent with the
jurisprudence of this Court and of the Supreme Court
of Appeal. It
would require the NDPP to “show” that the property will be used
to repeat the crime. To impose such an onus
of proof on the NDPP
would undermine the purpose of POCA and might render it an
unworkable instrument in the fight against crime.
In conclusion,
it should be emphasised that, while the forfeiture of the property
in this case will undeniably have a punitive
effect on the
applicants, it will also serve the very important purpose of
deterring both the applicants and other people from
using or
allowing their property to be used for illegal gambling, with all
its potentially harmful consequences.
In view of the
above, I conclude that there is no merit in the applicants’
contention that the forfeiture order is disproportionate.
The
appeal must therefore be dismissed.
Costs
As regards
costs, it must be borne in mind that, until
Prophet
was
decided in September 2006, the issues of constitutional principle
raised by the applicants had, by and large, not been addressed
by
this Court. It would have made little sense for the applicants not
to proceed with their application after this Court’s
decision in
Prophet
. Thus, although the NDPP has asked for costs on
appeal, I am of the view that it would not be appropriate to accede
to this request.
The NDPP also
submitted that, as the LRP had in several respects made common
cause with the applicants in these proceedings, the
LRP should be
ordered to pay the NDPP’s costs occasioned by its intervention as
amicus curiae.
Rule 10(10) of
the Constitutional Court Rules provides that “an order of Court
dealing with costs may make provision for the
payment of costs
incurred by or as a result of the intervention of an
amicus
curiae
.” As has been pointed out by this Court in previous
cases, however, the intervention by an amicus curiae does not
ordinarily
result in an order for costs either for or against the
amicus.
120
In the words of Ngcobo J, writing for a unanimous court, in
Hoffmann v South African Airways
:
“
An
amicus
joins proceedings, as its name suggests, as a friend of the Court.
It is unlike a party to litigation who is forced into the litigation
and thus compelled to incur costs. It joins in the proceedings to
assist the Court because of its expertise on or interest in the
matter before the Court. It chooses the side it wishes to join
unless requested by the Court to urge a particular position. An
amicus
,
regardless of the side it joins, is neither a loser nor a winner and
is generally not entitled to be awarded costs.”
121
It is true
that the LRP did make common cause with the applicants to a
considerable extent. However, the arguments it advanced
were also
of a more general application and I am not persuaded that there is
sufficient reason for departing from the general
rule that no costs
order be made either in favour of or against an amicus.
Order
In the
circumstances, I would have granted the application for leave to
appeal, but dismissed the appeal with no order as to costs.
Langa CJ, Madala J, Van der Westhuizen
J and Yacoob J concur in the judgment of van Heerden AJ.
MOSENEKE DCJ:
I have had the
benefit of reading the compelling judgment prepared by my colleague
van Heerden AJ. She concludes that the application
for leave to
appeal should be granted but that the appeal be dismissed with no
order as to costs. Regrettably, I am unable to
support this
outcome. In my view, and also as Sachs J concludes, the appeal
should succeed with costs.
I do not
propose to rehash the facts and the history of litigation because
these are admirably captured in the judgment of van
Heerden AJ. I
may also add that I agree with the manner in which she has
characterised the issues that fall to be decided and
these are: (a)
whether the property concerned was an instrumentality of an
offence; (b) what is the meaning of “offence”
in the context of
civil forfeiture authorised by Chapter 6 of the
Prevention of
Organised Crime Act
122
(“POCA
”) and (c) whether the forfeiture sought in this case is
disproportionate.
I am
constrained to take a view different from that of van Heerden AJ in
relation to issues (b) and (c).
Instrumentality
of an offence
I dispose of
the issue of instrumentality of an offence first. Both the
applicants and the Law Review Project (“the LRP”),
the amicus
curiae, sought to persuade us that the fixed property that is the
target of the civil forfeiture was not shown to
be an
instrumentality of an offence of operating a casino without a valid
licence in contravention of section 44
123
of the KwaZulu-Natal Gambling Act
124
(KZN Gambling Act) and a contravention of section 3(3)(a)
125
of the same Act, namely being the owner of a building that allows
any other person to conduct gambling activities therein or
thereon
without a licence. For the reasons that van Heerden AJ advances, I
respectfully agree that the fixed property owned by
Shelgate, the
second applicant, was indeed an instrumentality of the offences
committed by it and Mr Mohunram.
The meaning of
offence in the context of Chapter 6 of POCA
The LRP and
both applicants have made it clear that they do not, in these
proceedings, contest the constitutional validity of
the civil
forfeiture provisions found in Chapter 6 of POCA. However, the
kernel of their submission is that gambling per se is
not an
“offence” for which forfeiture under POCA is competent. They
elaborate that POCA has been construed by the Supreme
Court of
Appeal in a manner that has improperly brought gambling within the
compass of the Act and that, as a result, the forfeiture
provisions
of POCA have unwarrantedly been brought to bear on the property
that has been declared forfeit.
The offences
for which forfeiture is potentially competent, the LRP submits, are
limited to those created by POCA. These are racketeering
under
Chapter 2, money laundering under Chapter 3 and criminal gang
activities under Chapter 4. They may collectively be termed
“organised crime offences” and the rest may conveniently be
called “ordinary crimes.” The LRP further argues that since
unlicensed gambling, without more, is not an organised crime
offence, no order of forfeiture can competently be made under POCA
on the basis of the provisions providing for the forfeiture of the
instrumentalities of such an offence. They urged us to interpret
the phrase “instrumentality of an offence referred to in Schedule
1” in section 50(1)
126
of POCA as requiring that the offence should not only be a Schedule
1 offence but also an organised crime offence created by
Chapters
2, 3 and 4 of POCA. On this reasoning, although gambling offences
appear in Schedule 1, they will attract civil forfeiture
only if
they are also organised crime offences.
Van Heerden AJ
rejects these submissions as unconvincing. In essence, she holds
that because POCA has been amended to make it
clear that it applies
to offences committed before and after its commencement, it has a
wider ambit than offences that were created
by the POCA. She also
finds fortification in two prior decisions of the Supreme Court of
Appeal which in effect hold that the
provisions of POCA “are
designed to reach far beyond organised crime and apply also to
cases of individual wrongdoing.”
127
I am unable to
hold without more that the construction of section 50(1) of
POCA advanced by the LRP is without merit.
128
Happily, I do not have to resolve, in this case, the intractable
interpretive challenges on the proper reach of Chapter 6 of
POCA
and section 50(1) in particular. This is so for several
reasons. First, the conclusion I reach on proportionality does
not
compel a decision on the argument advanced by the LRP but not by
the applicants themselves. Second, in this case the proper
scope of
civil forfeiture in Chapter 6 and particularly the proper scope of
section 50(1) and the attitude of the Supreme
Court of Appeal
on these matters were not debated before the High Court or the
Supreme Court of Appeal. They were raised for
the first time in
this Court. Third, although the LRP takes the stance that its
argument is at an interpretative level and is
not meant to be an
attack on the validity of Chapter 6 of POCA, in my view, at the
very least, it constitutes an indirect or
collateral constitutional
challenge.
129
In
Democratic Party
Yacoob J warned that:
“
. . . considerable
difficulties stand in the way of the adoption of a procedure which
allows a party to obtain relief which is in
effect consequent upon
the invalidity of a provision of an Act of Parliament without any
formal declaration of the invalidity of
that provision.”
130
One will do
well to remember that the LRP contends that if the meaning given to
‘offence’ runs wide and well beyond organised
crime in a way
that includes all the acts of individual wrongdoing listed in
Schedule 1,
131
it would be inconsistent, not only with the purpose and text of the
statute, but more importantly with the prohibition against
unlawful
and arbitrary deprivation of property set by section 25(1)
132
of the Constitution. It would also constitute disproportionate and
irrational punishment not permitted by section 12(1)(e)
133
of the Bill of Rights.
It must be
said that neither this Court
134
nor the Supreme Court of Appeal,
135
has had occasion to decide the constitutional validity of the
relevant civil forfeiture provisions of POCA.
I am left with
no choice but to decline the invitation to decide a matter so grave
on the basis of a belated showing of the LRP.
What is more, if the
interpretive complaint of the LRP were to lead to a conclusion that
the relevant provision is inconsistent
with the Constitution, an
additional obstacle will confront this Court, being that the
Minister of State who administers this
legislation has not been
joined as a party to these proceedings. I specifically leave open
the decision whether the scope of
the Act is designed to reach
beyond racketeering, money laundering and criminal gang activities
and apply to cases of individual
wrongdoing.
Proportionality
Statutory
civil forfeiture of assets is meant to pursue worthy and noble
objectives aimed at curbing serious crime. And yet there
is no
gainsaying that, in effect, it is draconian. It is premised on the
notion that it is a civil remedy and that the prosecution
or the
state has to show only on a balance of probabilities that the
property may be seized and forfeited to the state. The criminal
standard of proof does not come into it. When the state seeks civil
forfeiture of assets that were used in the commission of
a crime,
it is not required to show that the owner has been convicted of the
offence or that the owner performed an unlawful
act with a criminal
intent. The initial and central enquiry in asset forfeiture is
whether the property is an instrumentality
of an offence. If it is,
the property is liable to be declared forfeit to the state.
136
Warning of the
inherent dilemma of civil forfeiture in the US context, an academic
writer, PJ Loughlin, observes that:
“
[W]hile the Department of
Justice and federal prosecutors were busy striking devastating
financial blows against organised crime,
money launderers and drug
traffickers, too many innocent owners of property were caught up in
a net cast too wide.”
137
Civil asset
forfeiture constitutes a serious incursion into well-entrenched
civil protections particularly those against arbitrary
and
excessive punishment and against arbitrary confiscation of
property. Courts in this country
138
and elsewhere
139
have generally been astute to the fact that forfeiture of the
instrumentalities of crime can produce arbitrary and unjust
consequences.
In the words of the minority judgment of Ponnan JA in
Prophet v National Director of Public Prosecutions
:
“courts should be vigilant to ensure that the statutory provisions
in question are not used
in
terrorem
and that
there has been no overreaching and abuse.”
140
This vigilance
is no less appropriate in relation to civil asset forfeiture of the
instrumentalities of crime embraced by section 50(1),
read
together with Schedule 1 of POCA. It is indeed so that
section 50(1) is couched in peremptory terms. It provides that
a court “shall” make a forfeiture order if it finds on the
civil standard of balance of probabilities that the property sought
to be forfeited is an instrumentality of an offence. Textually,
once the instrumentality threshold has been met, courts must
authorise forfeiture. However, courts have consistently interpreted
“shall” to mean “may”. They have correctly held all
requests by state prosecutors for civil forfeiture to the standard
of proportionality which amounts to no more than that the
forfeiture should not constitute arbitrary deprivation of property
or the kind of punishment not permitted by section 12(1)(e)
of the
Constitution.
141
In
Prophet
this Court was at pains to find and strike the appropriate balance
between the laudable societal quest to combat organised crime,
on
the one hand, and unwarranted interference with individual rights
to property as against arbitrary punishment. Nkabinde J,
writing
for a unanimous Court, warned that:
“
While the purpose and object
of Chapter 6 must be considered when a forfeiture order is sought,
one should be mindful of the fact
that unrestrained application of
Chapter 6 may violate constitutional rights”.
142
Nkabinde J
re-emphasised the proportionality standard laid down by this Court
in
FNB v Commissioner, SARS
143
that the forfeiture must be weighed against the purpose it serves.
And in order to arrive at an appropriate answer one has to
determine whether the property is closely associated with the
commission of the crime; whether the forfeiture will prevent

further wrongdoing; the nature and use of the property and the
effect of the forfeiture on the owner of the property.
It seems to me
that if the forfeiture sought occurs within the context of POCA,
additional and countervailing considerations come
into the
proportionality analysis. The nature of the crime must be probed
keeping in mind the predominant purpose of POCA. This
is a
self-evident proposition. The forfeiture must advance the purpose
that POCA proclaims. Otherwise, the forfeiture, being
the means,
will be misaligned with the predominant ends pursued by POCA.
The objects of
POCA are carefully considered in a unanimous judgment of this Court
in
Mohamed.
I can do no better than cite generously from it:
“
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 rights 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 statutory 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 book, 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.
It is common cause that
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 those
occasions when they are brought to justice. The
above problems make
a severe impact on the young South African democracy, where
resources are strained to meet urgent and extensive
human needs.
Various international instruments deal with the problem of
international crime in this regard and it is now widely
accepted in
the international community that criminals should be stripped of the
proceeds of their crimes, the purpose being to
remove the incentive
for crime, not to punish them. This approach has similarly been
adopted by our legislature.”
144
(Footnote omitted.)
In my view, it
must follow that, in deciding whether or not forfeiture of property
would be proportionate, the question whether
the instrumentality of
the offence is sufficiently connected to the main purpose of POCA
must be considered. I join Sachs J in
emphasising that the more
remote the offence in issue is to the primary purpose of POCA, the
more likely it is that forfeiture
of the instrumentality of the
crime is disproportionate. In other words, when ordinary crime is
in issue, the sharp question
should be asked whether it is a crime
that renders conventional criminal penalties inadequate. Is it a
crime that requires extraordinary
measures for its detection,
prosecution and prevention? Is it a crime that warrants the
extraordinary measures akin to those
appropriate to organised crime
as envisaged in POCA? Is it a crime that has some rational link,
however tenuous, with racketeering,
money laundering and criminal
gang activities? If the answers to these questions were in the
negative, this would be an important
indication that forfeiture may
be disproportionate.
An additional
consideration that enters the equation in the proportionality
analysis must be whether the crime in relation to
which the
“criminal property” was used is subject to asset forfeiture
provisions. If it is, it is a relevant and important
factor whether
the forfeiture provisions are exhaustive so as to render forfeiture
under POCA redundant or doubly punitive. This
is particularly so if
the offence in question has resulted in a criminal conviction and
the operative law provides for confiscation.
In the present case,
the LRP argued with considerable force that, in framing the
provisions of the KZN Gambling Act, the legislature:
(a) made
specific provision for forfeiture in section 94(4) thereof;
and (b) in so doing signified an intention that the
forfeiture
regime so created would suffice to meet the mischief sought to be
cured by the enactment.
Ordinarily, it
may be accepted that, when the legislature designates a set of
remedies to combat a specified crime, the remedies
are intended to
be effective and exhaustive. This is particularly so in the present
case. The KZN Gambling Act was passed well
ahead of POCA.
Therefore, it cannot be inferred that the KZN legislature intended
that the provisions of POCA would supplement
those of the KZN
Gambling Act. The legislature created adequate remedies, which do
not encompass the forfeiture of immovable
property on which an
unlawful casino is situated.
I have read
the persuasive analysis of van Heerden AJ on proportionality. On
balance, however, I take the view that the forfeiture
of the
property of the second applicant is not proportional to the purpose
it is meant to achieve. Additional to the factors
which are set out
in the judgment of Sachs J, I am satisfied that no link, however
remote, has been shown to exist between the
offence that the
instrumentality served and the purpose POCA has set for itself. Of
course, unlawful gambling is a serious offence
and may have adverse
social and economic consequences. However, the seriousness of the
offence of conducting an unlicensed casino
cannot be measured as a
generic social malady within a vacuum. For purposes of civil
forfeiture, the seriousness must be set
against the broad
objectives of POCA. I can find no suggestion, still less any proof,
that Mr Mohunram, being the sole member
of the close corporation
Shelgate, pursued any wrongdoing connected directly or indirectly
to organised crime as envisaged in
POCA. His motive seems to have
been profit. He appears to have been moved by financial greed and
for that he incurred significant
criminal sanctions and the
not-so-inconsiderable stigma of criminal conviction. His conduct
does not warrant the forfeiture of
the immovable property on which
the unlawful casino was conducted.
Much has been
made by the National Director of Public Prosecutions (“NDPP”)
of the fact that the applicants did not raise
proportionality as a
defence before the High Court or the Supreme Court of Appeal. The
NDPP seeks to suggest that, had the applicants
pleaded
proportionality, his office would have adduced evidence on the
issue. I do not think there is merit in this submission.
I have
intimated earlier that proportionality is not a statutory
requirement but an equitable requirement that has been developed
by
the courts to curb excesses of civil forfeiture. Put otherwise, the
requirement of proportionality is a constitutional imperative.
It
is imposed not by the relevant statute but by constitutional
disdain for arbitrary dispossession of property and unwarranted
or
excessive punishment. It would be entirely inappropriate to lumber
a person facing forfeiture proceedings under section 48
of POCA
with the burden to plead the defence of proportionality. In my
view, the NDPP itself, when initiating proceedings under
section 48, should place before the court adequate facts that
will allow the court to adjudicate properly on an application
for
forfeiture under section 50(1), and in particular, on whether
the forfeiture sought is constitutionally proportionate.
Therefore, I
am unable to accept that the NDPP has been deprived of a fair
opportunity to present its side of the case. As I have
said before,
the office of the NDPP, as applicant for forfeiture, bears the
initial duty to disclose all relevant facts within
its knowledge to
the court hearing the asset forfeiture application if arbitrary
forfeitures are to be avoided. I may add that,
in terms of
section 48(1) read together with section  0(1) of POCA,
the NDPP bears the onus to establish on a balance
of probabilities
that the forfeiture sought is justified. Naturally, the respondent
in forfeiture proceedings will have to adduce
evidence if she or he
hopes to disturb or rebut the facts that the NDPP relies upon in
the founding depositions.
However, it is
an entirely different matter to hold that it could ever be
justified to non-suit any person facing forfeiture proceedings
on
the basis that he or she has not raised proportionality.
Proportionality assessment is a matter of law and it is based on
a
careful weighing of all the facts of a particular case. Therefore,
the NDPP must always anticipate that the court will enquire
into
proportionality and must always place sufficient facts before the
court to enable it to make the requisite proportionality
assessment.
I return to
facts which point to the disproportionate nature of the forfeiture
order in this case. In regard to the financial
impact of the
forfeiture, the NDPP argued that the forfeiture will deter people
from using or allowing their property to be used
for the commission
of the offence and would, in that way, promote the interests of
justice. In
Mohamed
this Court, with reference to various
international instruments, made the point that it is now widely
accepted in the international
community that the purpose of civil
forfeiture is to remove the incentive for crime, not to punish the
offender.
145
Ackermann J further makes the point that this is the approach that
has been adopted by our legislature in enacting POCA.
146
It thus seems
to me that the proper approach to be adopted in reviewing the
relevant criminal sanction already imposed is not
whether it
constitutes adequate punishment, but whether the civil asset
forfeiture is properly related to the purpose of removing
the
incentives for crime and whether the forfeiture will serve as
adequate deterrence to the offender and to the broader community.
On the facts of this case, besides the stigma of a criminal
conviction, Mr Mohunram paid a fine of R88 500 and suffered
forfeiture
of monies and equipment to the value of R287 000. He
appears to have made illicit income of R420 000 over several months
with
a resultant “profit” of R55 000 before accounting for his
operating expenses, about which little is known.
On the other
hand, the immovable property is bonded in favour of NBS Bank Ltd,
the second respondent, for R600 000. The balance
of the bond stood
at approximately R470 000 at the time of the preservation order. On
the applicants’ showing, it appears as
if the property had a
value less than the balance owing on the bond. I recognise that,
given the passage of time, these property
values may have increased
significantly. Alluding to this arithmetical calculation, the NDPP
argued that Mr Mohunram would lose
virtually nothing but for R123
000 that Shelgate had paid in reduction of the capital amount of
the mortgage. If it is in fact
so, what legitimate purpose other
than additional punishment will the forfeiture serve? I hasten to
add, however, that the additional
punishment may be more severe
than we now understand. There are no facts on the impact the
forfeiture would have on the glass
and aluminium business of Mr
Mohunram and on all those that the business employs.
Another
compelling consideration is the fact that not the whole property
was used to advance the crime. It is common cause that
part of the
property was utilised by Mr Mohunram to conduct a legitimate
business. The NDPP argued that the forfeiture order
must
nonetheless encompass the entire property because the portion that
was used to conduct the illicit casino is indivisible
from the
portion which served as a legitimate business. In my view, the very
fact that the property is immovable and incapable
of subdivision,
except through intricate bureaucratic approvals, in itself,
suggests that the forfeiture order extends beyond
a legitimate
reach. Ordinarily, this should also be a weighty consideration in
deciding whether a forfeiture is proportional.
Conclusion
I hold that
the forfeiture order made under section 50(1) of POCA against
the first and second respondents is disproportionate
and, in the
result, the appeal must be upheld. I can find no reason in this
case why costs should not follow the event.
Order
In the
circumstances I would make the following order:
1. The application for condonation and for late filing of the record
is granted.
2. The application for leave to appeal is granted.
3. The appeal is
upheld with costs, including the costs of two counsel.
4. The order of the Supreme Court of Appeal is set aside and
replaced with the following order:
“The
application for an order in terms of
section 50(1)
of the
Prevention of Organised Crime Act 121 of 1998
, declaring forfeit to
the State the property described as
section 2
on sectional plan no
SS 577/96
in the scheme known as the Malapin Centre, in respect of
the land and building situate at 244 Utrecht Street, Vryheid, and
the
undivided share in the common property in the scheme apportioned
to the said section, is dismissed with costs.”
The National Director of Public
Prosecutions is ordered to pay the costs of the application in the
High Court which costs shall
include the costs of two counsel.
Mokgoro
J and Nkabinde J concur in the judgment of Moseneke DCJ.
SACHS J:
If the only
issue in this matter were whether the property in this case could
be considered an instrumentality of the crime, then
I would feel no
need to write separately. I agree with most of the reasoning
contained in the comprehensive, forceful and clearly
articulated
judgment by van Heerden AJ. The property concerned was manifestly
an instrument central to the commission of the
crime. It not only
housed the gambling machines but provided a fixed place where users
could drop in to use the slot machines
as they pleased. Though the
precise area was not established, it is clear that a substantial
portion of the building was occupied
by these machines.
Furthermore,
as van Heerden AJ observes, the issue of whether the processes of
forfeiture provided for by Chapter 6 of the
Prevention of Organised
Crime Act
147
(“POCA
”) meet with constitutional standards, is not before us.
No challenge was made to its constitutionality and we are obliged
to
apply the provisions on the assumption that they are
constitutional. I agree that no bright lines can be drawn between
organised
crime and private criminal activities. For the purposes
of this judgment I will assume that there is no obligatory
jurisdictional
requirement that the instrument of an offence be
shown to have a connection with organised crime, and once a
criminal offence
is literally covered by the schedule, and the
property concerned is proved to be an instrument in its commission,
a forfeiture
order in terms of Chapter 6 becomes permissible.
To say that
forfeiture in a particular matter will be constitutional, however,
is not to imply that it is constitutionally permissible.
If the
forfeiture would amount to arbitrary deprivation of property it
would, in terms of section 25 of the Constitution, be
unconstitutional. Accordingly the factors raised without success by
Mr Mohunram in an attempt to exempt the property from forfeiture
under Chapter 6 of POCA, are highly relevant in relation to whether
or not the deprivation of his property was arbitrary. It
is in this
setting that the principle of proportionality becomes all
important. And it is in respect of the application of the
proportionality principle, rather than with regard to any question
of interpretation of POCA, that I find myself parting ways
with the
judgment of van Heerden AJ.
Although the
concept of proportionality is not expressly mentioned in POCA, this
Court
148
and the SCA
have accepted that proportionality is a
governing principle imposing limits on how the powers granted under
POCA may be exercised.
In general terms, what proportionality loses
in categorical determinacy it makes up for in jurisprudential
flexibility and constitutional
aptness. By its nature, it requires
decisions that are highly contextualised and strongly congruent
with the constitutional and
other public interests at stake.
In approaching
the question of proportionality in relation to the forfeiture of an
instrumentality of an offence, it is necessary
to weigh the purpose
of the legislation against the effect of the forfeiture on the
affected person. The purpose of the legislation
is primarily
deterrent. In relation to the instrumentalities of an offence, it
seeks to prevent people from using their property
or allowing it to
be used for the commission of offences.
149
The closer one gets to the prevention of organised crime, which is
the primary rationale underlying POCA, the greater the importance
of the purpose becomes.
The adoption
of POCA was a legislative response to the conjunction of two
phenomena. In the first place, the rapid growth of organised
crime,
money laundering, criminal gang activities and racketeering had
become a serious international problem and security threat
from
which South Africa had not been immune. It was often impossible to
bring the leaders of organised crime to book because
they were able
to ensure that they were far removed from the overt criminal
activity involved.
150
Secondly, both South Africa’s common and statute law had failed
to keep pace with international measures aimed at dealing

effectively with these problems.
151
As Ackermann J stated in
Mohamed
(1)
:
“
It is common cause that
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 those
occasions when they are brought to justice. The
above problems make
a severe impact on the young South African democracy, where
resources are strained to meet urgent and extensive
human needs.
Various international instruments deal with the problem of
international crime in this regard and it is now widely
accepted in
the international community that criminals should be stripped of the
proceeds of their crimes, the purpose being to
remove the incentive
for crime, not to punish them. This approach has similarly been
adopted by our legislature.”
152
(Footnote omitted.)
One may say in
principle, then, that the closer the criminal activities are to the
primary objectives of POCA, the more readily
should a court grant a
forfeiture order. Conversely, the more remote the activities are
from these objectives, the more compelling
must the circumstances
be to make such an order appropriate. Furthermore, any
determination of proportionality should take into
account the
extent to which the common law and statutes prove (or threaten to
be) inadequate in the circumstances.
The primary
purpose of POCA in relation to the instrumentality of an offence is
to deter people from using property for crime.
However, that
purpose cannot legitimate the forfeiture of every instrumentality
of an offence. Deterrence as a law enforcement
objective is
constrained by the principle that individuals may not be used in an
instrumental manner as examples to others if
the deterrence is set
at levels beyond what is fair and just to those individuals. To do
otherwise would be to breach the constitutional
principle of
dignity. In each case, therefore, care needs to be taken to ensure
that the purpose of deterrence that the legislation
serves does not
produce a disproportionate impact on the owner of the forfeited
property. It is for this reason that the deterrent
purpose of the
legislation must be weighed against the effect on the individual
owner, in light of the relevant offence. In this
respect, the
extent to which the forfeiture manifestly is directed towards
preventing organised crime will be highly relevant.
The disjuncture
between the basic purposes of POCA and the effect on the individual
concerned should never be too great.
These
considerations animated the decision of this Court in
Prophet.
153
In that matter, this Court held that the forfeiture of a house used
for the manufacturing of tik was not disproportionate and
therefore
not arbitrary. The facts in that case demonstrated that there was
an adaptation in almost every single room in the
house to
facilitate the manufacturing of drugs. The house was not incidental
to the offence. It was so closely connected to the
equipment used
in the manufacturing of drugs that the two could not be separated.
Nkabinde J pointed out that:
“
The social problem caused by
drug manufacturing, dealing and usage, particularly in the Western
Cape, should not be overlooked.
There is an alarming rise in illicit
production of, demand for and trade in undesirable
dependence-producing substances. The illicit
production and use of
these substances undermine the legitimate economy and threaten the
national stability and security of the
country. In addition, they
pose a serious threat to the health, welfare and safety of human
beings, particularly young people and
children, and adversely affect
the social and economic foundations of our society. The rapid
expansion of drug markets in small
residential laboratories creates
immeasurable social problems. The sexual abuse of young children,
domestic problems, violence
inside and outside of the home, health
and instability in the Western Cape are attributable in part to the
use of ‘tik’ and
the prevalence of mini-laboratories in
residential areas.”
154
Thus, a
particularly noxious substance was involved. The distribution of
tik requires a network of dealers. It is a notorious
fact that
gangs in the Cape Town area are heavily involved in controlling the
drug trade. Furthermore, on the facts of that particular
case, the
manufacturer had escaped any form of criminal liability because of
the trial court’s findings that the search warrants
employed had
been invalid.
The central
facts in the present case are quite different. The use of gambling
machines on the premises was not initially prohibited.
The
operation only became criminal when at a certain stage it became
necessary for their use to be subjected to a regime of regulation.
Unlike tik, the use of which was in itself unlawful and medically
and socially devastating, the use of gambling machines was
not
regarded by the law as inherently harmful. The
legislatively-perceived harm flowed from the lack of regulation,
not from
the nature of the activity itself. Furthermore, Mr
Mohunram was in fact successfully prosecuted. His machines were
confiscated
and, weighing up all the relevant factors, the fine of
R88 500 was deemed appropriate. The effect of the forfeiture order
in
the present matter, then, is to give the National Director of
Public Prosecutions a second bite of the cherry, which would seem
to be constitutionally problematic.
I have
difficulty in accepting that, in the circumstances of this case,
imposing a forfeiture order on top of the penalties imposed
was not
disproportionate.
155
Though one can accept that historically speaking gambling has come
to be linked in the public mind with gangsterism and money
laundering, there does not appear to be any evidence on the record
that Mr Mohunram was subterraneously linked to any gangs,
and his
down-market casino would hardly have served as a meaningful agency
for laundering money.
At the same
time, the Act under which he was prosecuted provides for very
severe penalties.
156
It was a relatively recent piece of legislation passed in terms of
the concurrent competence to regulate gambling given to the
provincial legislature in our new constitutional dispensation. If
the prosecution felt that Mr Mohunram should not end up with
a
profit from his illicit activities it could have motivated for a
fine of up to R2 million, the payment of which would have
necessitated selling the property. If in the circumstances the
prosecution sought a severely deterrent remedy, it could have
framed charges carrying a prison sentence of up to ten years. If
the trial proceeded and the prosecuting authorities came to
the
conclusion that any penalty imposed was shockingly inadequate, it
could then have asked for a stiffer sentence on appeal.
In my view,
POCA was not adopted with a view to providing either a substitute
for, or a top-up of, ordinary forms of law enforcement.
It has its
own rationale and its own objectives, which should be jealously
guarded. The point is that the prosecution, aware
of all the
relevant facts, opted for the proceedings actually adopted, and
decided that the penalties imposed were proportional
to the
offences. Whether or not there were formal or informal bargains
over the plea need not be determined here. The prosecution
was in a
position to determine the nature of the charges and the penalties
to be sought. Had it followed a more aggressive course,
Mr Mohunram
might well have offered a more vigorous defence.
This
point was forcefully, and I believe appropriately, highlighted by
Nugent JA in
Van
Staden.
157
In that
matter the central issue was whether a motor car that had been
driven by someone under the influence of liquor could be
considered
the instrumentality of the offence of drunken driving. Having held
that it could be so considered, and as such be
liable for
forfeiture, Nugent JA went on to leave open the question of whether
it would in fact be appropriate for the Asset
Forfeiture Unit
(“AFU”) to succeed in obtaining a forfeiture order. After
pointing to the potential of the provisions concerned
to intrude on
the constitutional guarantee against arbitrary deprivation of
property, he stated:
“
Incursions upon conventional
liberties that are justified by the particular difficulties
encountered in the detection and successful
prosecution of organised
crime are not similarly justified in cases of ordinary crime that do
not present those difficulties. I
do not think it is permissible to
look to one threat that the Act aims at combating (the threat posed
by organised crime) in order
to justify its application in relation
to a quite different threat (the threat that is posed, for example,
by drunken driving)
that does not present the same challenges. It
must be borne in mind that drunken driving, which does not
ordinarily result from
organised illicit activity, and presents no
special difficulties to detect and prosecute, can attract
substantial penalties, and
the ordinary criminal law ought to be the
first port of call to combat the evil. For the Act exists to
supplement criminal remedies
in appropriate cases and not merely as
a more convenient substitute.”
158
These words
are apt in the present matter. The offence appears to be relatively
far from the heartland of organised crime, while
the ordinary
criminal penalties seem to have been quite appropriate to deal with
it. Though this may well be a borderline case,
I believe on balance
that the forfeiture is disproportionate. On this limited basis, I
would uphold the appeal and support the
order made by Moseneke DCJ.
I should add
that nothing stated above should be taken as suggesting a view
favouring an interpretation that would reduce the
capacity of the
AFU to fulfil the mandate given to it by POCA. On the contrary, if
it is to accomplish the important functions
attributed to it, it
should not unduly disperse the resources it has at its command. Its
manifest function as defined by statute
is to serve as a
strongly-empowered law enforcement agency going after powerful
crooks and their multitude of covert or overt
subalterns. The
danger exists that if the AFU spreads its net too widely so as to
catch the small fry, it will make it easier
for the big fish and
their surrounding shoal of predators to elude the law. This would
frustrate rather than further the objectives
of POCA.
Kondile AJ and
O’Regan J concur with the judgment of Sachs J.
For
the Applicant: Advocate YN Moodley SC and Advocate GJ Leppan
instructed by Roy Ramdaw Inc.
For the First Respondent: Advocate W
Trengove SC and Advocate A Cockrell instructed by The State
Attorney, KwaZulu-Natal.
For the Amicus Curiae: Advocate MSM
Brassey SC, Advocate P McNally and Advocate MJ Engelbrecht
instructed by Webber Wentzel Bowens.
1
National
Director of Public Prosecutions v Mohunram and Others
[2006] ZASCA 12
;
2006
(1) SACR 554
(SCA).
2
The
word “” is defined in section 1 of the KZN Gambling Act as
“premises upon which . . . gaming machines may be played under
the
authority of a casino licence issued by the [KwaZulu-Natal Gambling]
Board in terms of this Act”.
3
Section 44
provides that: “No person may operate or attempt to operate a
casino unless he or she is in possession of a valid
licence issued
by the Board in terms of this Act”.
4
Section 3(3)(a)
reads as follows:
“
The owner of any building, dwelling, structure or
premises of any other nature whatsoever shall not use such building,
dwelling,
structure or premises of any other nature whatsoever for
gambling purposes or allow any other person to conduct any gambling
activity
therein or thereon unless he or she or the person
conducting the gambling activity in or on such building, dwelling,
structure
or premises, is in possession of a licence issued in terms
of this Act”.
5
In
terms of section 3(4)(b): “No person shall employ or offer
employment to any person in any gambling activity, unless he
or she
is the holder of a valid licence issued in terms of this Act”.
6
The
relevant annexures to the charge sheets refer to “. . .
Section 4(b) read with Sections 1 and 94 of the KZN
Gambling
Act”, but it is clear from the description of the
offences in each charge sheet (“the accused did unlawfully employ
or offer
employment to any person, to wit [name of person] in any
gambling activity of which he is not a valid licence holder issued
in
terms of the Kwa-Zulu Natal Gambling Act No. 10 of 1996”) that
this is an error and that the reference should actually be to

section 3(4)(b).
7
Section 94(4)
of the Act provides that:
“
In addition to any penalty contemplated in this
section—
(a) all monies, coins, notes, chips, cheques, any
documents acknowledging debt or other articles used for securing the
payment of
money . . . found in or at the place where such
contravention occurred shall be forfeited to the Provincial
Administration of the
Province for disposal, including destruction,
at the discretion of the Minister; and
(b) any gaming equipment or gaming machines found in or
at the place where such contravention occurred shall be destroyed
forthwith.”
8
Section 167(3)(b)
of the Constitution of the Republic of South Africa, 1996.
9
Id
at section 167(6).
10
[2006] ZACC 17
;
2007
(2) BCLR 140
(CC);
2006 (2) SACR 525
(CC) at para 46.
11
Id.
12
In
this regard, it should be noted that, while the prospects of success
are an important consideration in deciding whether or not
to grant
leave to appeal to this Court, it is not the only matter to be
considered. See
Prophet
above
n 10 at para 48; see also
Minister
of Safety and Security v Luiters
[2006] ZACC 21
;
2007
(2) SA 106
(CC);
2007 (3) BCLR 287
(CC) at paras 24 and 32.
13
The
relevant part of section 25(1) provides: “No one may be
deprived of property except in terms of law of general application,
and no law may permit arbitrary deprivation of property.”
14
Namely
section 12(1)(e), in terms of which: “Everyone has the right
to freedom and security of the person, which includes
the right not
to be treated or punished in a cruel, inhuman or degrading way.”
15
Above
n 10 at para 54.
16
Above
n at para 2.
17
Section
18(1) of POCA reads as follows:
“
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.”
18
In
terms of section 19(2) of POCA:
“
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, 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.”
19
See
for example
National
Director of Public Prosecutions v Cole and Others
2005
(2) SACR 553
(W);
[2004] 3 All SA 745
(W) at paras 12-15, discussing
National
Director of Public Prosecutions v (1) RO Cook Properties (Pty) Ltd;
(2) 37 Gillespie Street Durban (Pty) Ltd and Another
(3) Seevnarayan
2004
(8) BCLR 844
(SCA);
2004 (2) SACR 208
(SCA);
[2004]
2 All SA 491
(SCA).
20
1999
(2) SACR 27
(C);
[1999] 2 All SA 607
(C).
21
Chapter
6 deals with the civil recovery of property and includes the
provisions governing preservation of property orders and forfeiture
orders.
22
And
thus could not be invoked on the basis of unlawful activities
committed before the coming into operation of POCA on 21 January
1999.
Carolus
above
n at 36f-38f. The Cape High Court judgment was upheld on appeal to
the Supreme Court of Appeal in
National
Director of Public Prosecutions v Carolus and Others
2000
(1) SA 1127
(SCA);
[2000] 1 All SA 302
(SCA).
23
Which
came into operation on 7 September 1999.
24
See
the preamble to Act 38 of 1999.
25
Section
1(b) of Act 38 of 1999. At the same time, the following definition
of “unlawful activity” was inserted into section
1(1):
“
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”.
(Emphasis added.)
26
2003
(2) SA 178
(C);
[2003] 1 All SA 240
(C) at para 60.
27
Cook
Properties
above
n at para 65, rejecting the restrictive interpretation given to POCA
by Griesel J in
Seevnarayan
above
n at paras 58-63. See also the Supreme Court of Appeal judgment in
Prophet
v National Director of Public Prosecutions
2006
(1) SA 38
(SCA);
2005 (2) SACR 670
(SCA) at para 33, where this
passage from
Cook
Properties
was
cited, apparently with approval.
28
2007
(1) SACR 338
(SCA).
29
Id
at paras 1 and 10
.
30
Above
n at para 38. Counsel for Mr Prophet argued before the Supreme Court
of Appeal that he did –
“
not
fall into the category [of offences] envisaged by the Act, in that
he has never been convicted of a drug-related offence; that
there
was no supporting evidence from anyone else that he dealt in drugs;
no prohibited substances were found on the property;
he is not a
member of a gang and has no links with gangs . . .” Id at para 31
While Mpati DP expressed the view (at para 34) that
“counsel minimises the appellant’s culpability in this matter
and the extent
of his operations”, the allegation in respect of
the absence of evidence of links between Mr Prophet and any
gang-related activities
does not appear to have been challenged. See
also
Prophet
above n at para 46.
31
[2003] ZACC 4
;
2003
(4) SA 1
(CC);
2003
(5) BCLR 476
(CC) at para 16. See also
National
Director of Public Prosecutions and Another v Mohamed NO and Others
[2002] ZACC 9
;
2002
(4) SA 843
(CC);
2002 (9) BCLR 970
(CC) at paras 15-16.
32
See
further in this regard
Carolus
above
n at paras 9-30 and generally, South African Law Reform Commission
Report
on International Co-operation in Criminal Prosecutions
(Project
98) December 1995, Chapter 4.
33
This
was the interpretation followed by the Supreme Court of Appeal in
Cook
Properties
above
n at paras 53-58 and 65 and in the
Van
Staden
case
above n at paras 1 and 7.
34
Above
n 19.
35
Above
n .
36
Rule
5 provides:
“
(1)In any matter, including any appeal, where there
is . . . any inquiry into the constitutionality of any law,
including an Act
of Parliament . . . and the authority responsible
for the executive or administrative act or conduct or . . . for the
administration
of any such law is not cited as a party to the case,
the party challenging the constitutionality . . . shall, within five
days
of lodging with the Registrar a document in which such
contention is raised for the first time in the proceedings before
the Court,
take steps to join the authority concerned as a party to
the proceedings.
(2)No order declaring such . . . law to be
unconstitutional shall be made by the Court in such matter unless
the provisions of this
rule have been complied with.”
37
Section 36
provides:
“
The
rights in the Bill of Rights may be limited only in terms of law of
general application to the extent that the limitationis
reasonable
and justifiable in an open and democratic society based on human
dignity, equality and freedom, taking into account
all relevant
factors including –
the nature of the
right;
the importance of
the purpose of the limitation;
the nature and
extent of the limitation
the relation
between the limitation and its purpose; and
less restrictive
means to achieve the purpose.
38
As
pointed out by this Court in
Beinash
and Another v Ernst & Young and Others
1999
(2) SA 116
(CC);
1999 (2) BCLR 125
(CC) at para 27, the executive
authority responsible for the legislation in question has a direct
interest in whether or not the
legislation is found to be
constitutional and must be given the opportunity to defend the
legislation should it wish to do so:
“
Often the relevant organ of state is best positioned
to provide the necessary arguments of justification should the issue
of the
provision’s constitutionality come down to the question of
the right’s limitation. It is often the only party that can
provide
this Court with the evidence it will need to enable it to
tailor its order in terms of the options available under s 172(1)(b)
of the Constitution.”
39
[2000] ZACC 28
;
2001
(2) SA 388
(CC);
2001 (2) BCLR 133
(CC) at para 22.
40
In
terms of section 37:
“
(1)
For the purposes of this Chapter all proceedings under this Chapter
are civil proceedings, and are not criminal proceedings.
(2) The rules of evidence applicable in civil
proceedings apply to proceedings under this Chapter.
(3) No rule of evidence applicable only in criminal
proceedings shall apply to proceedings under this Chapter.
(4) No rule of construction applicable only in criminal
proceedings shall apply to proceedings under this Chapter.”
41
Sections
5(a) and (b) prohibit any person from dealing in any
dependence-producing substance, or in any dangerous or undesirable
dependence-producing substance, respectively, unless he or she
qualifies in terms of section 5(b)(i)-(iv).
42
Above
n at para 66, referring to section 50(4) of POCA.
43
By
contrast, a conviction is indeed a precondition to the making of a
confiscation order in respect of the proceeds of unlawful
activities
under Chapter 5 of POCA. See in particular section 18(1) of
POCA.
44
Among
the offences referred to in Schedule 1 to POCA is “any offence
referred to in
section 13
of the
Drugs and Drug Trafficking Act,
1992
”.
45
The
same applies to a declaration of forfeiture of property under the
broad provisions of section
35(1)
of the
Criminal Procedure Act 51 of 1977
, which reads as follows:
“
A court which convicts an accused of
any
offence
[including any of the offences
referred to in Schedule 1 of POCA] may, without notice to any
person, declare –
(a) any weapon, instrument or other article by means
whereof the offence in question was committed or which was used in
the commission
of such offence; or
(b) if the conviction is in respect of an offence
referred to in
Part 1
of Schedule 2, any vehicle, container or other
article which was used for the purpose of or in connection with the
commission of
the offence in question or for the conveyance or
removal of the stolen property, and which was seized under the
provisions of this
Act, forfeited to the State.” (Emphasis added.)
The broad wording of section 35(1) makes it clear
that it applies to both cases of individual wrongdoing and to
“organised crime”.
46
See
Cook
Properties
above
n at paras 17-18.
47
See
para above.
48
Above
n at paras 55-57.
49
Section
1 of POCA defines “instrumentality of an offence” as “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”
also sections 38(2)(a) and 50(1)(a) of POCA.
50
Cook
Properties
above
n at para 6-32;
Prophet
above
n at paras 10-17;
National
Director of Public Prosecutions v Parker
2006
(3) SA 198
(SCA);
[2006] 1 All SA 317
(SCA).
51
Scott,
Nugent and Lewis JJA concurring.
52
Above
n at para 12.
53
Id
at para 31.
54
Id
at para 32.
55
Above
n .
56
(WLD)
Case No 2000/12886, 7 July 2000, unreported at para 12. Stegmann J
at fn 10 went on to point out that:
“
In particular, an ‘instrumentality of an offence’
is only liable to forfeiture in terms of section 50(1)(a) of the
Prevention
Act, 1998 when the offence is one referred to in Schedule
1 . . . Every [scheduled] offence must be committed on some piece of

property. But it would be absurd to infer that the Legislature had
intended every property on which such an offence had been committed
to be liable to forfeiture to the State. A closer connection must be
shown than mere presence. It must be established that the
property
was ‘concerned’ in the commission of the offence, and not merely
that the offence was committed on the property.”
See
also
National Director of Public Prosecutions v Patterson
2001
(2) SACR 665
(C) at 667d-h;
[2001] 4 All SA 525
(C) at 527-528;
Cook
Properties
above n at paras 33-34 and 50.
57
Presumably
by the KwaZulu-Natal Gambling Amendment Act 2 of 2000, which came
into operation on 11 February 2000.
58
As
indicated above n ,
a
“casino” is defined in section 1 of the KZN Gambling Act as
“any premises upon which casino games, bingo and gaming
machines
may be played under the authority of a casino licence issued by the
Board in terms of this Act”.
59
The
trading name of which was “AJ’s Entertainment Centre”.
60
Item
10 of Schedule 1 refers to “any offence under any legislation
dealing with gambling, gaming or lotteries”.
61
For
the wording of section 3(3)(a), section 44 and the
definition of “casino” in section 1(1), see above n ,
n and
n , respectively.
62
Above
n at para 34.
63
Above
n at para 57. This language was “borrowed” from the judgment of
the Supreme Court of Appeal in
Cook
Properties
above
n 19 at paras 34 and 49.
64
2005
(3) SA 109
(C);
2005 (1) SACR 99
(C);
[2004] 4 All SA 250
(C) at
para 13.
65
Above
n .
66
Id
at para 42 (Cameron JA concurring).
67
See
above at paras -.
68
“
Courts
should be vigilant to ensure that the statutory provisions in
question are not used
in
terrorem
and
that there has been no overreaching and abuse.” (per Ponnan JA in
Prophet
above
n at para 45).
69
This
purpose will be particularly relevant where one is dealing with the
forfeiture of the proceeds of unlawful activities and may
rarely be
applicable in the context of the forfeiture of the instrumentalities
of offences.
70
Cook
Properties
above
n at para 18.
71
Id
at paras 28-29.
72
Mkontwana
v Nelson Mandela Metropolitan Municipality and Another; Bissett and
Others v Buffalo City Municipality and Others; Transfer
Rights
Action Campaign and Others v MEC for Local Government & Housing
in the Province of Gauteng and Others (KwaZulu-Natal
Law Society and
Msunduzi Municipality as
Amici
Curiae)
[2004] ZACC 9
;
2005 (1) SA 530
(CC);
2005 (2) BCLR 150
(CC) at paras 81-82.
73
Van
der Walt
Constitutional
Property Law
(Juta,
Cape Town 2005) at 31. See also para below.
74
Above
n at para 58.
75
[2002] ZACC 5
;
2002
(4) SA 768
(CC);
2002 (7) BCLR 702
(CC).
76
Id
at para 100.
77
Id
at para 98.
78
Id
at para 100.
79
Id.
80
See
Parker
above
n at paras 35-38.
81
Particularly
in the case of immovable property, the question whether, in addition
to being “an instrumentality of an offence”,
the property is
also used as a residence.
82
Above
n at para 63.
83
See
the judgment of the Supreme Court of Appeal above n at para 5.
84
Id
at para 8.
85
Id
at para 37. Streicher, Mthiyane and Cloete JJA concurring.
86
Id.
87
Id
at para 42.
88
Id
at para 47.
89
Id
at para 45. See also the remarks of Nkabinde J in
Prophet
above
n at para 61.
90
Above
n at para 69.
91
Id
at para 70.
92
Above
n .
93
Cameron
JA, Malan, Theron and Cachalia AJJA concurring.
94
Above
n at para 7.
95
See
para above.
96
Above
n at para 8.
97
Above
n 10.
98
As
Innes J said in
Union
Government (Minister of Railways) v Sykes
1913
AD 156
at 173-174:
“
The important point is that less evidence will
suffice to establish a
prima facie
case where the matter is peculiarly within the knowledge of the
opposite party than would under other circumstances be required.”
99
In
South
Cape Corporation (Pty) Ltd v Engineering Management Services (Pty)
Ltd
1977
(3) SA 534
(A) at 548, Corbett JA described the difference between
the onus of proof and the evidential burden as follows:
“
As was pointed out by Davis A.J.A. in
Pillay
v Krishna and Another
1946 A.D. 946
at
952-3, the word
onus
has often been used to denote,
inter alia
,
two distinct concepts: (i) the duty which is cast on the particular
litigant, in order to be successful, of finally satisfying
the court
that he is entitled to succeed on his claim or defence, as the case
may be; and (ii) the duty cast upon a litigant to
adduce evidence in
order to combat a
prima facie
case
made by his opponent. Only the first of these concepts represents
onus
in its true and
original sense. In
Brand v Minister of
Justice and Another
1959 (4) SA 712
(AD) at
p.715, OGILVIE THOMPSON, J.A., called it ‘the overall
onus
’.
In this sense the onus can never shift from the party upon whom it
originally rested. The second concept may be termed, in
order to
avoid confusion, the burden of adducing evidence in rebuttal
(‘weerleggingslas’). This may shift or be transferred
in the
course of the case, depending upon the measure of proof furnished by
the one party or the other.”
See further on the distinction between the onus of
proof and the evidentiary burden in both civil and criminal cases,
Zeffertt,
Paizes & Skeen
The South
African Law of Evidence
(
formerly
Hoffmann and Zeffertt
)
5
ed (LexisNexis Butterworths, Durban 2003) at 121-124; Schmidt &
Rademeyer
Bewysreg
4
ed (Butterworths, Durban 2000) at 24ff; Schwikkard & Van der
Merwe
Principles of Evidence
2
ed (Juta, Cape Town 2002) at Chapters 31 and 32.
100
See
para above.
101
If
convicted of “performing any licensable act appertaining to
gambling without a valid licence” see section 94(2)(a) of
the
KZN Gambling Act.
102
If
convicted of “any other offence”, see section 94(3) of the KZN
Gambling Act.
103
Id.
104
Above
n .
105
[2006] ZACC 8
;
2006
(10) BCLR 1133
(CC);
2006 (5) SA 250
(CC);
2006 (2) SACR 447
(CC) at
paras 81-82.
106
1996
(4) SA 1086
(C) at 1093C-E.
107
Id
at 1093E-G. See also
Gaming
Association of South Africa (KwaZulu-Natal) and Others v Premier,
KwaZulu-Natal, and Others (No 1)
1997
(4) SA 494
(N) at 499F-501A. In the latter case, Levinsohn J pointed
out (at 504A-B) that “[e]ven though gambling is now no longer
labeled
as
per
se
immoral
or illegal it is nonetheless an activity which, if not properly
controlled, can spawn a great deal of social evil.”
108
Above
n 106 at 1093H-1094B.
109
Pinto
and Wilson
Gambling
in Australia trends and issues in crime and criminal justice
(Australian
Institute of Criminology No 24), (July 1990) at 3-4,
http://www.aic.gov.au/publications/tandi/ti24.pdf
,
accessed on 23 March 2007.
110
See
for example
United
States v Sacco
[1974] USCA9 47
;
491
F 2d 995
, 999-1001 (9
th
Cir
1974) and
United
States v Wall
[1996] USCA6 1214
;
92
F 3d 1444
, 1450-1451 (6
th
Cir
1996).
111
Above
n at para 7.
112
See
para above.
113
See
above n and accompanying text.
114
See
above n . This offence would seem to fall under section 94(3) of the
KZN Gambling Act and, had Shelgate been charged with and
convicted
of this offence, it would have been liable to a maximum fine of R2
million (see above n - and accompanying text).
115
Above
n at 195.
116
See
paras and above.
117
Above
n at para 4.
118
Above
n 19 at para 20.
119
Subdivision
of a section is regulated by
sections 21
and
22
of the
Sectional Titles Act 95 of 1986
. Subdivision of a section can only
occur where a certificate is issued by the local authority. See
section 21(2)(a)
read with
section 7(2)
of the
Sectional
Titles Act.
>
120
See
for example
Minister
of Justice v Ntuli
[1997] ZACC 7
;
1997
(3) SA 772
(CC);
1997 (6) BCLR 677
(CC) at para 43.
121
2001
(1) SA 1
(CC);
2000 (11) BCLR 1211
(CC) at para 63.
122
Act
121 of 1998.
123
Section 44
states:
“
No
person may operate or attempt to operate a casino unless he or she
is in possession of a valid casino license issued by the Board
in
terms of this Act.”
124
Act
10 of 1996.
125
Section 3(3)(a)
states:
“
The
owner of any building, dwelling, structure or premises of any other
nature whatsoever shall not use such building, dwelling,
structure
or premises of any other nature whatsoever for gambling purposes or
allow any other person to conduct any gambling activity
therein or
thereon unless he or she or the person conducting the gambling
activity in or on such building, dwelling, structure
or premises, is
in possession of a licence issued in terms of this Act or the
Regulation of Racing and Betting Ordinance, 1957
(Ordinance No. 28
of 1957).”
126
Section
50(1) of POCA states:
“
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 probabilities
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.”
127
National
Director of Public Prosecutions v Van Staden and Others
2007
(1) SACR 338
(SCA) at para 1;
National
Director of Public Prosecutions v (1) RO Cook Properties (Pty) Ltd;
(2) 37 Gillespie Street Durban (Pty) Ltd and Another;
(3)
Seevnarayan
2004
(8)
BCLR 844
(SCA);
2004 (2) SACR 208
(SCA) at para 65. See also
National
Director of Public Prosecutions v Mohunram and Others
[2006] ZASCA 12
;
2006
(1) SACR 554
(SCA) and
Prophet
v National Director of Public Prosecutions
[2006] ZACC 17
;
2006
(1) SA 38
(SCA);
[2006] 1 All SA 212
(SCA).
128
There
are ample lessons to learn on the latent risk of unfairness and
breach of fundamental freedoms lurking in any civil asset
forfeiture
system. In the USA, the federal system of civil forfeiture of assets
has been roundly condemned and criticised by the
judiciary, academic
commentators and the media as requiring a “modicum of sanity.”
See for example
Degen
v United States
517
US 820
(1996) cited in Loughlin PJ,
Does
the Civil Asset Forfeiture Reform Act of 2000 bring a modicum of
sanity to the federal civil forfeiture system
?
(no date available),
http://www.malet.com/does_the_civil_asset_forfeiture_.htm
,
accessed on 15 March 2007; Bell RE,
Civil
Forfeiture of Criminal Assets
(1999),
http://www.iap.nl.com/forfeit.html
accessed
on 15 March 2007.
129
On
the attitude of this Court to a collateral challenge to the
constitutional validity of a statute, see
Ingledew
v Financial Services Board and Others: In re Financial Services
Board v Van der Merwe and Another
[2003] ZACC 8
;
2003
(4) SA 584
(CC);
2003 (8) BCLR 825
(CC) at para 22;
MEC
for Development Planning and Local Government, Gauteng v Democratic
Party
and
Others
[1998] ZACC 9
;
1998
(4) SA 1157
(CC);
1998 (7) BCLR 855
(CC) at para 13.
130
Democratic
Party
above
n at para 61.
131
The
offences in Schedule 1 contain a vast collection of common law and
statutory crimes ranging from murder, public violence and
terrorism
on the one end to any offence in terms of which the punishment may
be a period of imprisonment exceeding one year without
the option of
a fine.
132
Section
25(1) states:
“
No
one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation of
property.”
133
Section
12(1)(e) states:
“
Everyone
has the right to freedom and security of the person, which includes
the right not to be treated or punished in a cruel,
inhuman or
degrading way.”
134
In
National
Director of Public Prosecutions and Another v Mohamed
NO
and Others
[2002] ZACC 9
;
2002
(4) SA 843
(CC);
2002
(9) BCLR 970
(CC);
2002 (2) SACR 196
(CC), this Court remitted
confirmation proceedings to the High Court for a decision on the
constitutional validity of Chapter 6
of POCA. In
National
Director of Public Prosecutions and Another v Mohamed NO and Others
[2003] ZACC 4
;
2003
(4) SA 1
(CC);
2003 (5) BCLR 476
(CC), this Court was not invited to
deal with the constitutional validity of Chapter 6 of POCA, save for
the procedural provisions
of section 38(1) of POCA. In
Prophet
v National Director of Public Prosecutions
[2006] ZACC 17
;
2007
(2) BCLR 140
(CC);
2006 (2) SACR 525
(CC) the constitutional
validity of certain provisions of Chapter 6 were raised but not
pressed on.
135
In
Cook
Properties, Mohunram, Prophet
and
Van
Staden
above
n , the constitutional validity of the civil forfeiture provisions
was indeed not called into question.
136
This
fixation with “instrumentality of an offence” may be traceable
to jurisdictions that recognise
in
rem
forfeitures.
Unlike
in
personam
jurisdiction
that seeks to hold the defendant personally accountable,
in
rem
jurisdiction
is based on the legal fiction that the thing or inanimate object or
property is treated as the guilty party.
137
Loughlin
above n at 2.
138
Van
Staden above n at paras 7-8;
Prophet
above
n at paras 46 and 61;
Mohamed
(2002)
above n at para 22;
Mohamed
NO and Others v National Director of Public Prosecutions and Another
2002
(2) SACR 93
(W) at para 21.
139
Normand
Martineau v Minister of National Revenue and Attorney General of
Ontario and Attorney General of Quebec
[2004]
3 R.C.S;
United
States v Hosep Krikor Bajakajian
[1998] USSC 75
;
524
US
321
(1998);
Calero-Toledo
v Pearson Yacht Leasing Co.
[1974] USSC 126
;
416
US 663
(1974). For a discussion on civil forfeiture generally, see
Liberty (The National Council for Civil Liberties),
Proceeds
of Crime: Consultation on Draft Legislation
(May
2001),
http://www.liberty-human-rights.org.uk/pdfs/policy01/jun-proceeds-crime-draft.pdf
,
accessed
on 19 March 2007.
140
Above
n 6 at para 45.
141
See
Cook
Properties, Van Staden
and
Prophet
above
n 6.
142
Above
n at para 61.
143
First
National Bank of SA Ltd t/a Wesbank v Commissioner, South African
Revenue Service and Another
;
First
National Bank of SA Ltd t/a Wesbank v Minister of Finance
[2002] ZACC 5
;
2002
(4) SA 768
;
2002 (7) BCLR 702
(CC) at para 98.
144
Mohamed
(2002)
above n at paras 14-15.
145
See
Mohamed
(2002)
above n at fn 6 for international conventions which support civil
forfeiture.
146
Id
at para 15.
147
Act
121 of 1998.
148
Prophet
v National Director of Public Prosecutions
[2006] ZACC 17
;
2007
(2) BCLR 140
(CC);
2006 (2) SACR 525
(CC) at para 58.
149
Id.
150
National
Director of Public Prosecutions and Another v Mohamed NO and Others
(1)
[2002] ZACC 9
;
2002
(4) SA 843
(CC);
2002 (9) BCLR 970
(CC);
2002 (2) SACR 196
(CC) at
para 14.
151
Id.
152
Id
at para 15.
153
Prophet
above
n .
154
Id
at para 68.
155
I
should add that I agree with Moseneke DCJ at para [135] that the
fact that the glass factory on the premises would be closed,
with
consequent effect on the livelihood of Mr Mohunram and the
employees, could be a further weighty factor against forfeiture.
156
Section
94 provides—
“
(1) Any person who contravenes any provision of this
Act or any rules of the Board shall, if such contravention is not
elsewhere
in this Act declared to be an offence, be guilty of an
offence.
(2) Any person convicted of performing any licensable
act appertaining to gambling without a valid licence issued in terms
of this
Act or the Regulation of Racing and Betting Ordinance,
1957 (Ordinance No. 28 of 1957) shall, on conviction and in
addition
to any competent forfeiture contemplated in subsection (4),
be liable to—
(a) in the case of a first conviction, imprisonment for
a period not exceeding ten years without the option of a fine; and
(b) in the case of a second or subsequent conviction,
imprisonment for a period not exceeding twenty years without the
option of
a fine:
Provided that a juristic person shall be liable, by
virtue of the provisions of section 332(2)(c) of the Criminal
Procedure Act,
1977 (Act No. 51 of 1977), to a fine
commensurate with the period of imprisonment contemplated herein and
provided for in
the Adjustment of Fines Act, 1991, (Act No. 101 of
1991).
(3) Any person convicted of any other offence in terms
of this Act shall, on conviction and in addition to any competent
forfeiture
contemplated in subsection (4), be liable to—
(a) in the case of a first conviction, a fine not
exceeding two million rands or imprisonment for a period not
exceeding ten years;
and
(b) in the case of a second or subsequent conviction, a
fine not exceeding four million rands or imprisonment for a period
not exceeding
twenty years or to such imprisonment without the
option of a fine.
(4) In addition to any penalty contemplated in this
section—
(a) all monies, coins, notes, chips, cheques, any
documents acknowledging debt or other articles used for securing the
payment of
money, any other documents, books and records relating to
the gambling activity in question found in or at the place where
such
contravention occurred shall be forfeited to the Provincial
Administration of the Province for disposal, including destruction,
at the discretion of the Minister; and
(b) any gaming equipment or gaming machines found in or
at the place where such contravention occurred shall be destroyed
forthwith.
(5) In addition to any other penalty contemplated in
this section, a person convicted of performing an act contemplated
in subsection
(1) or who is convicted of contravening or failing to
comply with sections 3(1), 4, 74, 75, 76 and 77 shall pay for the
benefit
of the Provincial Revenue Fund, such amount as the Secretary
for Finance determines is equal to the tax payable in terms of this
Act: Provided that such amount does not exceed five hundred thousand
rands.”
157
National
Director of Public Prosecutions v Van Staden and Others
2007
(1) SACR 338
(SCA).
158
Id
at
para 7.