National Director of Public Prosecutions v Bacela and Another (FB09/2020) [2022] ZANWHC 52 (28 October 2022)

IN THE HIGH COURT OF SOUTH AFRICA

NORTH WEST DIVISION – MAHIKENG

APPEAL CASE NUMBER: FB 09/2020

CASE NO: M280/2017

Reportable: NO

Circulate to Judges: NO

Circulate to Magistrates: NO

Circulate to Regional Magistrates: NO

In the matter between:

THE NATIONAL DIRECTOR OF PUBLIC

PROSECUTIONS

APPELLANT

AND

SHIRLEY DALI BACELA

1ST RESPONDENT

MAFISA TEG TRANSPORT (PTY) LTD

2ND RESPONDENT

CIVIL APPEAL

CORUM: HENDRCKS JP; DJAJE ADJP & MTEMBU AJ

Heard: 22 JULY 2022

Delivered: This judgment is handed down electronically by circulation to the parties through their legal representatives’ email addresses. The date for the hand-down is deemed to be on 28 OCTOBER 2022

ORDER

The following order is made:

1. The appeal is dismissed.

2. The appellant is ordered to pay the costs.

JUDGMENT

DJAJE ADJP

[1] This appeal turns on the provisions of section 48 of the Prevention of Organised Crime Act 121 of 1998 (“POCA”). The appellant had brought an application in terms of section 48 of POCA which was dismissed on the basis that the forfeiture notice was not served on the respondents by the Sheriff.

[2] The facts that led to the application for a preservation order were briefly as follows: The first respondent was alleged to have been convicted of various contraventions of the Drugs and Drug Trafficking Act 140 of 1992 in the Rustenburg area. Further that she was identified as a kingpin of an illegal drug trafficking syndicate together with five males who were runners. The appellant alleged that she registered the second respondent for the sole purpose of facilitating criminal activities which included money laundering. It was for that reason that the appellant brought an application to have the assets of the first and second respondent forfeited to the state as instrumentalities of criminal activities.

[3] The appellant brought an application for a preservation order which was granted on 22 June 2017 as provided for in section 38 of POCA. The order was served on the respondents on 6 July 2017. A notice of intention to oppose the granting of a forfeiture order was filed by the respondents. The notice directed all correspondence

to be served on the attorneys of the respondents. The preservation order was published in the Government Gazette on 11 August 2017. On 26 September 2017 the appellant brought an application for a forfeiture order in terms of section 48 of POCA to have the assets of the respondents be declared forfeited to the State. The application was opposed by the respondents.

[4] At the hearing of the application, the respondents raised a point in limine that the appellant had failed to comply with section 48(3) of POCA in that the forfeiture notice was not served by Sheriff on the respondents, but by the State Attorney on the attorneys of the respondents. The point in limine was upheld and the application in terms of section 48 of POCA was dismissed. The merits of the matter were not dealt with and hence this appeal will also not deal with the merits of the application.

[5] The issue to be determined in this appeal is whether the forfeiture application was invalid as it was not served on the respondents by the Sheriff within the 90 day period as prescribed in section 40 of POCA.

[6] The appellant argued that there was substantial compliance with the provisions of POCA when the forfeiture notice was served on the respondents. Firstly, that the forfeiture notice was served within the 90 days and the preservation order had not lapsed. Secondly, by entering a notice to oppose, the respondents had the intention to oppose the forfeiture application and had appointed the offices of their attorneys to receive all correspondence in the matter as provided for in sections 39(3) and 39(5) of POCA. The appellant argued that service of the forfeiture notice was in accordance with Rule 4(1) (aA) and 4 (6) (b) of the Uniform Rules of Court and as such can be condoned by a court for non-compliance with section 48(3) of POCA.

[7] During argument both parties referred to different case law in support of their argument. The appellant relied on the unreported case of National Director of Public Prosecutions v Hilda van der Burg and Another (5597/06) CPD (22 December 2008) where the court at paragraph 26 held that: “ In as much as section 39(5) specifically envisages the appointment of a service address for the delivery of documents concerning further proceedings under “ this chapter” (that is, Chapter 6 of POCA, which also contains the provisions governing applications for a forfeiture order), there seems to be no merit in the respondents’ in limine point that service of the forfeiture application at the service address appointed by them in their section 39(3) notice was insufficient. It is common cause that the forfeiture application was served at the appointed service address within the ninety-day period specified in section 40 of POCA. Furthermore, section 40 of POCA merely requires that an application for a forfeiture order must be “pending within ninety days after the date on which notice of a preservation order is published in the Government Gazette. That does not presuppose the service of the application but merely the issuing thereof. I accordingly find that there has been proper compliance with the provisions of section 48(1), as read with section 40 of POCA.”

[8] In support of the argument that a court should condone the non-compliance with section 48(3), if any, the appellant referred to the case of National Director of Public Prosecutions v Seleoane & Others [2003] JOL 11137 (NC). In that case the court condoned the non-compliance to have the notice of forfeiture served on the respondents by Sheriff.

[9] In contention, the respondents argued that the provisions of section 48(3) of POCA are pre-emptory in that the notice of forfeiture ‘shall’ be served on the respondents by Sheriff. It was submitted that Rule 4(1)(aA) of the Uniform Rules is applicable to interlocutory applications. Further, that a forfeiture notice is not an interlocutory application but a self-standing application. It was the respondents’ argument that the only manner in which an application could be pending before court within the 90 day period was if there was service of the forfeiture application by the Sheriff on the respondents.

[10] The respondents referred to the case of National Director of Public Prosecutions v Moolla 2010 (2) SACR 429 (GSJ) as far as the interpretation of the peremptory provisions of POCA are concerned. The court held that: “the stringent and peremptory provisions of POCA ought not to be liberally interpreted, especially in instances of non-compliance therewith. Although forfeiture orders were extremely useful weapons in the fight against organised crime, a balance had to be struck between the individual’s constitutional rights and the obligation to eliminate crime. A statute that made serious inroads into the rights of an individual was to be construed in a manner that limited such inroads as far as possible…..”

[11] It is important to deal with this matter by making reference to the relevant sections of POCA. Section 38 of POCA provides that:

“38 Preservation of property orders

(1) The National Director may by way of an ex parte application apply to a High Court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property.

(2) The High Court shall make an order referred to in subsection (1) if there are reasonable grounds to believe that the property concerned-

(a) is an instrumentality of an offence referred to in Schedule 1;

(b) is the proceeds of unlawful activities; or

(c) is property associated with terrorist and related activities.

[Sub-s. (2) substituted by s. 27 (1) of Act 33 of 2004.1

(3) A High Court making a preservation of property order shall at the same time make an order authorising the seizure of the property concerned by a police official, and any other ancillary orders that the court considers appropriate for the proper, fair and effective execution of the order.

[Sub-s. (3) substituted by s. 6 of Act 38 of 1999.]

(4) Property seized under subsection (3) shall be dealt with in accordance with the directions of the High Court which made the relevant preservation of property order.”

[12] Section 39 deals with the notice of the preservation of property as follows:

“39 Notice of preservation of property orders

(1) If a High Court makes a preservation of property order, the National Director shall, as soon as practicable after the making of the order-

(a) give notice of the order to all persons known to the National Director to have an interest in property which is subject to the order; and

(b) publish a notice of the order in the Gazette

(2) A notice under subsection (1) (a) shall be served in the manner in which a summons whereby civil proceedings in the High Court are commenced, is served.

(3) Any person who has an interest in the property which is subject to the preservation of property order may enter an appearance giving notice of his or her intention to oppose the making of a forfeiture order or to apply for an order excluding his or her interest in the property concerned from the operation thereof.

(4) An appearance under subsection (3) shall be delivered to the National Director within, in the case of-

(a) a person upon whom a notice has been served under subsection (1) (a) ,14 days after such service; or

(b) any other person, 14 days after the date upon which a notice under subsection (1) (b) was published in the Gazette

(5) An appearance under subsection (3) shall contain full particulars of the chosen address for the delivery of documents concerning further proceedings under this Chapter and shall be accompanied by an affidavit stating-

(a) full particulars of the identity of the person entering the appearance;

(b) the nature and extent of his or her interest in the property concerned; and

(c) the basis of the defence upon which he or she intends to rely in opposing a forfeiture order or applying for the exclusion of his or her interests from the operation thereof.”

[13] In section 40 it is the duration of the preservation order that:

“40 Duration of preservation of property orders

A preservation of property order shall expire 90 days after the date on which notice of the making of the order is published in the Gazette unless-

(a) there is an application for a forfeiture order pending before the High Court in respect of the property, subject to the preservation of property order;

(b) there is an unsatisfied forfeiture order in force in relation to the property subject to the preservation of property order; or

(c) the order is rescinded before the expiry of that period.”

[14] The Act in section 48 deals with the forfeiture of property and provides that:

“48 Application for forfeiture order

(1) If a preservation of property order is in force the National Director, may apply to a High Court for an order forfeiting to the State all or any of the property that is subject to the preservation of property order.

(2) The National Director shall give 14 days notice of an application under subsection (1) to every person who entered an appearance in terms of section 39 (3). [Sub-s. (2) substituted by s. 26 of Act 24 of 1999.]

(3) A notice under subsection (2) shall be served in the manner in which a summons whereby civil proceedings in the High Court are commenced, is served.

(4) Any person who entered an appearance in terms of section 39 (3) may appear at the application under subsection (1)-

(a) to oppose the making of the order; or

(b) to apply for an order-

(i) excluding his or her interest in that property from the operation of the order; or

(ii) varying the operation of the order in respect of that property, and may adduce evidence at the hearing of the application.”

[15] The issue in this matter turns on the implication of the provisions of section 48(3) of POCA as far as the service of the forfeiture application is concerned. The section says the ‘notice shall be served in the manner in which a summons whereby civil proceedings in the High Court are commenced, is served’. The appeal court in Nkisimane and Others v Santam Insurance Co Ltd 1978 (2) SA 430 (A) cautioned that care must be exercised “not to infer merely from the use of such labels [peremptory or directory] what degree of compliance is necessary and what the consequences are of non or defective compliance. These must ultimately depend upon the proper construction of the statutory provision in question, or, in other words, upon the intention of the lawgiver as ascertained from the language, scope and purpose of the enactment as a whole and the statutory requirement in particular.”

[16] The Constitutional Court in Mohunram v National Director of Public Prosecutions (Law Review Project as Amicus Curiae) [2007] ZACC 4 noted that forfeiture orders are ‘draconian’ in nature and stated as follows:

“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 and elsewhere have generally been astute to the fact that forfeiture of the instrumentality of crime can produce arbitrary and unjust consequences”.

[17] What is important is to determine the intention of the legislature in the provisions of section 48 (3) of POCA. The question is whether non-compliance with the section renders the forfeiture application a nullity or whether such non-compliance can be condoned. As stated in the matter of Mohunram above, the forfeiture orders are very drastic as they involve the confiscation of property and are draconian in nature. The intention of the legislature from inserting the word ‘shall’ can be attributed to the very serious consequences of forfeiture orders. It is thus important for the notice of the forfeiture application to come to the attention of the respondent. Section 48 (3) is clearly peremptory as non-compliance thereto, although not having a penalty, have dire consequences.

[18] The appellant argued that a court can in the case of non-compliance with the provisions of section 48(3), exercise its inherent discretion and condone such non-compliance. As already stated above, the section is peremptory. In deciding the issue of condonation we should be mindful of the warning in Sefatsa and Others v Attorney-General, Transvaal and Another 1989 (1) SA 821 (A) where it was said that the court cannot have an inherent power which would entitle the court to act contrary to an express provision of an Act of Parliament.

[19] The courts’ function is to interpret statutes and in instances of ambiguity in a statute, the court can exercise its discretion to fill in the gaps so as to bring the provisions of the statute in line with the meaning and purpose thereof. The provisions of section 48(3) of POCA are clear and unambiguous and there can be no difficulty with its interpretation. It is therefore not necessary for this Court to interpret section 48(3) or condone any non-compliance.

Costs

[20] It is trite that costs follow the result and I see no reason why the appellant should not pay the costs.

Order

[21] Consequently, the following order is made.

J T DJAJE

ACTING PEDUTY JUDGE PRESIDENT

OF THE HIGH COURT, NORTH WEST DIVISION,

MAHIKENG

I agree

R D HENDRICKS

JUDGE PRESIDENT OF THE HIGH COURT,

NORTH WEST DIVISION, MAHIKENG

DISSENTING JUDGMENT

MTEMBU AJ

[22] I have had the pleasure of reading the judgment penned by my colleague Djadje ADJP (first judgment). The facts of the matter and the parties’ contentions have been accurately and meticulously set out in the first judgment. Therefore, there is no need to repeat the same. Unfortunately, I cannot agree with the conclusion reached in the first judgment. I differ from the majority’s conclusion. In my view, the appeal should be upheld for the reasons that I will address in this judgment.

[23] While I accept that section 48(3) of POCA is pre-emptory in providing that a forfeiture application shall be served in the manner in which a summons commencing civil proceedings is served, but this is not the end of the inquiry. The next step is how a summons commencing civil proceedings is served. Obviously, the answer is located within rules 17 and 4 of the Uniform Rules. Rule 17 provides that:

“Every person making a claim against any other person may, through the office of the registrar, sue out a summons or a combined summons

addressed to the sheriff directing him to inform the defendant inter alia that, if he disputes the claim, and wishes to defend..”

[24] Rule 4 outlines a procedure for the process of effecting service by the Sheriff. A document initiating application proceedings in the High Court is effected by the Sheriff in terms of Rule 4(1)(a) of the Uniform Rules. However, there is an exception to this rule. Rule 4(1)(aA) provides that:

“Where the person to be served with any document initiating application proceedings is already represented by an attorney of record, such document may be served upon such attorney by the party initiating such proceedings”.

[25] It is glaring that where the party is already represented by an attorney of record and had indicated that further documents with regard to the matter may be served at that attorney's address, then service can be effected in terms of Rule 4(1)(aA) and such service is valid and effective.

[26] It is trite that this subrule is applicable to ancillary and interlocutory applications. I will therefore demonstrate the applicability of this subrule in this matter. The court a quo correctly crystallized the issue, namely, whether a forfeiture application is an interlocutory application pending proceedings, as

opposed to an application commencing proceedings.

[27] It is common cause that the appellant applied for the preservation of property order in terms of section 38(1) of POCA, which was duly granted. It is also common cause that the respondents, as persons who had an interest in the property which is subject to the preservation of property order, entered an intention to oppose the making of a forfeiture order in terms of section 39(3) of POCA. Section 39(5) requires a person who is entering an appearance to oppose in terms of section 39(3) to state in such notice ‘full particulars of the chosen address for the delivery of documents concerning further proceedings under this Chapter and shall be accompanied by an affidavit.’ In my view, a reference to “delivery of documents concerning further proceedings under this Chapter” also includes a forfeiture application.

[28] It is conspicuous that legal proceedings for the preservation of property orders are linked to the forfeiture order proceedings, and vice versa. There cannot be a valid forfeiture order application in the absence of a preservation of property order. These two are intimately linked. A contention which seeks to suggest that the forfeiture application is self-standing and has no relationship with the preservation of property application is without merit. While I accept that a forfeiture application is the main but it does not enjoy absolute independence. It originates from the proceedings of the preservation order. Therefore, those proceedings, so to speak, pendente lite or incidental to the forfeiture proceedings which were to be initiated not later than 90 days from the date of the preservation order.

[29] Property forfeiture is a two-stage process. The first stage is to obtain a preservation order, which may be granted if the court has reasonable grounds to believe that the property in question is either an instrumentality of an offence listed in Schedule 1 of the Act, or the proceeds of unlawful activities. The second stage is that a forfeiture order can only be granted in relation to property that is already the subject of a preservation order under section 39.

[30] Section 39 of POCA, when read in conjunction with sections 48(2) to (4), establishes a mechanism through which persons with legitimate interests in the property may oppose the application for forfeiture of the property. In terms of the forfeiture procedure, Chapter 6 of the Act, creates a two-stage asset forfeiture mechanism. As already stated, the first stage of the proceedings is the preservation order, with the second stage involving an application to the court for the forfeiture of the preserved property. See National Director of Public Prosecutions v Parker 2006(1) All SA 317 (SCA) par [13].[1]

[31] I now revert to the interpretation of rule 4(1)(a). Munnik A JP in Reuben v Yorhshire Insurance Co. Ltd 1967 (3) SA 166 (ECD) at 167A-B stated that, “The wording of rule 4(1)(a), as amended, indicates that the lawgiver had in mind the commencement of proceedings either by way of action or by way of application.” It is glaring that the word “document” was intended to cover both action and application. In Yorhsire, it was further said that, “The wording of Rule 4(1)(a) must be read with subject to the qualification where such service by the Sheriff should be required.”[2]

[32] Rule 4 (6) (b) reads that service shall be proved where service has not been effected by the sheriff, nor in terms of subrule (3) or (4), by an affidavit of the person who effected service, or in the case of service on an attorney or a member of such attorney’s staff. The wording of this subrule presupposes that the Sheriff will not serve in certain cases, and where specifically service is to be effected on an attorney. The wording of this subrule clearly indicates that the Sheriff would not be required to serve service on an attorney or a member of his staff in certain cases.[3]

[33] The SCA in Finishing Tough v BHP Billiton Energy Coal SA 2013 (2) SA 204 (SCA) dealt with the interpretation of Rule 4(1)(a). In BHP Billiton, it was common cause that the review application was not served by the sheriff on any of the State respondents. It was only served by hand on the State Attorney representing them. In this regard, BHP relied on the provisions of rule 4(1) (aA). It was contended that the application for interdict which had been filed before was not linked to the review proceedings and that there was no basis for the attorneys of BHP Billiton to serve the documents on the State Attorney as they were not attorneys of record for purposes of service in respect of the review application. It was contended that the service by hand did not constitute proper service in terms of rule 4 and consequently the interdict had lapsed. The SCA dismissed this contention and stated that the proceedings relating to the application for an interdict and review were closely linked. They related to the same prospecting rights in issue and the same parties.

[34] In my view, this is the same contention raised by the respondents in this matter that the forfeiture application is self-standing and not linked to the preservation order proceedings hence, in respondents’ view, there was no basis to serve the notice on their attorney. This, according to the respondents, did not constitute proper service in terms of rule 4 which requires service by Sheriff.

[35] I agree with the sentiments as enunciated in NDPP v Hilda van der Burg and Another (5597/06) unreported judgment CPD (22 December 2008) at para 26, that: “In as much as section 39(5) specifically envisages the appointment of a service address for the delivery of documents concerning further proceedings under “ this chapter” (that is, Chapter 6 of POCA, which also contains the provisions governing applications for a forfeiture order), there seems to be no merit in the respondents’ in limine point that service of the forfeiture application at the service address appointed by them in their section 39(3) notice was insufficient”. [My Emphasis]

[36] In casu, it is common cause that the appellant sought to forfeit the respondents’ properties after having obtained a preservation order. Meaning, both the preservation order and forfeiture order proceedings relate to the same issues and the same parties, as it was observed in BHP Billiton. Most importantly, in this matter, the case number is the same which signifies that the forfeiture application is a continuous application. Even if it was not the same, the allocation of different case numbers would be of no consequence. In BHP Billiton, it was held that the fact that each application had been allocated a different case number is irrelevant. It was held, the litigation was continuous. This is exactly my point in this matter, on the proper construction of sections 39 and 48 of POCA, it is evident that the litigation is continuous.

[37] Therefore, in my view, section 48(3) of POCA cannot be read in isolation from the rules regarding service of documents initiating proceedings in the High Court. While documents initiating proceedings in the High Court are to be effected by the Sheriff in terms of Rule 4(1)(a), but this subrule is relaxed, once the person to be served with a document initiating application proceedings is already represented by an attorney of record. In my view, the service of the forfeiture application on the respondents’ attorneys of record was in accordance with the statutory requirements set out in sections 39(2), 39(3), and 48(3) of POCA. As already stated above, a forfeiture application is a two-stage process and not self-standing.

[38] For the reasons stated above, the court a quo erred in finding that the service by the appellant was not in compliance with section 48(3) of POCA. Having found that the appellant duly complied with sections 39(2), and 48(3) of POCA, it is unnecessary for me to deal with the issue of condonation. Therefore, I would have upheld the appeal with costs and substituted an order of upholding the respondents’ point in limine made by the court a quo with an order of dismissing the point in limine.

[39] Consequently, the following order is made:

1. The appeal is upheld with costs.

A M MTEMBU

ACTING JUDGE OF THE HIGH COURT,

APPEARANCES

DATE OF HEARING : 22 JULY 2022

JUDGMENT RESERVED

: 22 JULY 2022

DATE OF JUDGMENT : 28 OCTOBER 2022

COUNSEL FOR THE PLAINTIFF :

ADV T RAIKANE

(with her S J MAISELA)

COUNSEL FOR THE DEFENDANT : ADV B ROUX SC

[1] See also National Director of Public Prosecutions v Mohamed No [2002] ZACC 9; 2002 (4) SA 843 (CC) at 851B – D & 852A-B; See also Bobroff and Another v National Director of Public Prosecutions [2021] 3 All SA 1 (SCA); 2021 (2) SACR 53 (SCA) at para 15.

[2] 1967 (3) SA 166 at 167 C

[3] Ibid at 167E - F