S v Shaik and Others (Civil Appeal) (248/06) [2006] ZASCA 106; [2006] SCA 134(2) (RSA) ; [2007] 2 All SA 150 (SCA) (6 November 2006)

S v Shaik and Others (Civil Appeal) (248/06) [2006] ZASCA 106; [2006] SCA 134(2) (RSA) ; [2007] 2 All SA 150 (SCA) (6 November 2006)

The Supreme Court of Appeal held that POCA's confiscation regime encompasses both direct and indirect benefits, including those derived through shareholding in a company enriched by criminal activity. The Act's purpose is to deprive criminals of all economic advantages gained from crime, and its definitions are broad enough to include indirect enrichment. Multiple confiscation orders for the same proceeds passing through different hands are permissible, provided the total recovery is capped to prevent unjust enrichment of the State. The court confirmed that both the value of shares and dividends used to acquire those shares are subject to confiscation, as both constitute proceeds of...

Citation
[2006] ZASCA 106
Parties
Appellant: Schabir Shaik; Appellant: Nkobi Holdings (Pty) Ltd; Appellant: Nkobi Investments (Pty) Ltd; Appellant: Kobifin (Pty) Ltd; Appellant: Kobitec (Pty) Ltd; Respondent: The State
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
6 November 2006
Case Number
248/06
Procedural Posture
Civil Appeal / Appeal Against Confiscation Orders Under POCA Following Criminal Conviction
Outcome
Appeal against paragraphs 1 and 2 of the confiscation order dismissed; appeal against paragraph 3 upheld; costs orders varied.
Judges
C T Howie, L Mpati, P E Streicher, M S Navsa, J A Heher
Legal Topics
Prevention of Organised Crime Act, Confiscation Order, Proceeds of Unlawful Activities, Joint and Several Liability, Costs Order
Criminal Law Civil Procedure Prevention of Organised Crime Act Confiscation Order Proceeds of Unlawful Activities Joint and Several Liability Costs Order

Case Brief

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Parties

Schabir Shaik

Appellant

Nkobi Holdings (Pty) Ltd

Appellant

Nkobi Investments (Pty) Ltd

Appellant

Kobifin (Pty) Ltd

Appellant

Kobitec (Pty) Ltd

Appellant

The State

Respondent

Procedural Posture

Civil Appeal / Appeal Against Confiscation Orders Under POCA Following Criminal Conviction

Legal Issues

  1. 1 Whether indirect benefit through shareholding constitutes proceeds of unlawful activities under POCA.
  2. 2 Whether multiple confiscation orders for the same proceeds passing through different hands are permissible.
  3. 3 Whether both the value of shares and dividends used to acquire shares may be confiscated without duplication or disproportionality.

Ratio Decidendi

The Supreme Court of Appeal held that POCA's confiscation regime encompasses both direct and indirect benefits, including those derived through shareholding in a company enriched by criminal activity. The Act's purpose is to deprive criminals of all economic advantages gained from crime, and its definitions are broad enough to include indirect enrichment. Multiple confiscation orders for the same proceeds passing through different hands are permissible, provided the total recovery is capped to prevent unjust enrichment of the State. The court confirmed that both the value of shares and dividends used to acquire those shares are subject to confiscation, as both constitute proceeds of...

Court Disposition

Appeal against paragraphs 1 and 2 of the confiscation order dismissed; appeal against paragraph 3 upheld; costs orders varied.

Orders

  • The appeal by the first, second and third appellants against paragraphs 1 and 2 of the order of the court a quo is dismissed.
  • The appeal by the first, second and third appellants against paragraph 3 of the order is upheld. That paragraph is set aside and replaced with: 'The application for a confiscation order in respect of the third benefit is refused.'