Director of Public Prosecutions: Cape of Good Hope v Bathgate

• Jurisdiction: South Africa
• Judge: Van Zyl J
• Judgment Date: 17 December 1999
• Counsel: W J Downer for the applicant. J C Heunis SC (with him W A King) for the respondent.
• Hearing Date: 08 June 1999
• Court: Cape Provincial Division

Van Zyl J:

Introduction

[1] This is the return day of a provisional order granted on 21 October 1998 and E thereafter amended and extended in terms of further orders dated 5 November 1998, 23 November 1998, 15 December 1998 and 20 April 1999.

[2] The order of 21 October 1998 relates, in general, to the prohibition from and restraint on alienating, encumbering or otherwise dealing with the realisable property of the F respondent, as set forth in an inventory of assets (annexure 'A' to the order). It is directed, in addition to the assets contained in the said inventory, to all property held in the name of the respondent or in which he has an interest. Pending the return day, the provisional order is to operate as a temporary interdict. G

[3] In terms of the said order one Susan Anne St Leger Seaton of Deloitte and Touche, Claremont, was appointed curator bonis, subject to her furnishing security to the satisfaction of the Master of the High Court. She was required to furnish a comprehensive report, to be filed with the Master and this Court, setting forth the details, nature and value of the assets of which she has taken control and has received in her H custody. She was also enjoined to indicate how she has dealt with such assets or intends dealing therewith. In the case of assets not under her control or in her custody, she was ordered to make appropriate recommendations.

[4] The amending order of 5 November 1998 required the curator bonis to furnish the respondent with funds for the appointment of legal representatives and an accountant, I and to return a certain motor vehicle to him forthwith. The respondent, in turn, was permitted to retain a number of items in his possession but was ordered to deliver specified items to the curator bonis and to provide her with a statement of assets and liabilities and a statement of income and expenditure. J

Van Zyl J

A [5] The further amending order of 15 December 1998 discharged the said Susan Anne St Leger Seaton as curator bonis and replaced her with one Steven Powell of Deloitte and Touche Forensic Services. The new curator bonis was required to file a comprehensive report to supplement those furnished by his predecessor on 3 B November 1998 and 14 December 1998 respectively. Powell's report was furnished on 30 March 1999. I shall return to these reports later (see para [15] below).

[6] The aforesaid orders were issued in terms of the Proceeds of Crime Act 76 of 1996 C (hereinafter referred to as the 'Proceeds Act'), that came into operation on 16 May 1997. The Proceeds Act has since been repealed and replaced by the Prevention of Organised Crime Act 121 of 1998 (hereinafter referred to as the 'Organised Crime Act'), which became operative on 21 January 1999. Section 80(2) of the Organised Crime Act, however, provides that proceedings instituted in terms of the Proceeds Act, before the commencement of the Organised Crime Act, shall be dealt with as if the latter Act had not been passed.

D [7] Chapter 3 of the Proceeds Act provides, inter alia, that, when an accused person has been prosecuted and there are reasonable ground for believing that a confiscation order may be made against him, a restraint order may be issued in respect of his realisable assets. Confiscation orders are dealt with in Chapter 2 and arise from an enquiry, at the request of the public prosecutor, into the benefits derived by a convicted E person from his offences or related criminal activities. If he has so benefited, he may be ordered to pay the State an amount of money not exceeding the 'proceeds of the crime' for which he was convicted, or arising from any related criminal activity. If he is unable to make such payment, an order may be made to attach his realisable assets.

F [8] The respondent seeks to have the provisional order discharged on the basis that it has been issued in terms of an Act that is partly unconstitutional. In this regard he has attacked the constitutional validity of the restraint provisions of the Proceeds Act, more particularly ss 16, 17, 18, 22 and 23 therof. I shall return to these provisions later on in G this judgment (see paras [52]-[57] below).

The merits

[9] It appears from the founding affidavit of one DJ Marais, a detective sergeant in the South African Police Services, stationed at the South African Narcotics Bureau, Cape H Town, that various charges are being investigated against the respondent. They include drug dealing and the possession of an unlicensed firearm and ammunition. Marais, who is the investigating officer in the criminal proceedings against the respondent, states that the respondent was arrested on 7 July 1998 at a house in Milnerton and released on bail on 23 July 1998.

I [10] The respondent is suspected of being involved in a large-scale cocaine dealing operation in the Western Cape. On the day of his arrest he was in fact found in possession of some 2,7 kg of cocaine, a variety of instruments used in the manufacture, weighing and packing of 'crack' cocaine, some R130 000 in cash and sundry documents relating to organised drug dealing. The instruments and cash J exhibited extensive traces of cocaine.

Van Zyl J

[11] According to Marais the respondent formed a close corporation, Bathgate A Investments CC, during 1995. He is the only member thereof. It appears, however, to have no bank account, business connections or income generating business activities. Nevertheless it is the registered owner of at least two properties, situated in Langebaan and Woodstock respectively. B

[12] The respondent himself is the registered owner of property in Woodstock and is also the owner of the Milnerton property aforesaid. In terms of an agreement dated 13 August 1997 between the respondent and one Gayle Williams, the latter property and a certain Mazda MX6 vehicle are described as being registered in the name of Williams. She has unhindered occupation thereof subject thereto, however, that they will, on C notice to her, revert to him. This accords with a schedule of assets and liabilities dated 24 April 1998, emanating from his accountant, in which the Milnerton property is indicated as being an asset of the respondent.

[13] The value of the respondent's assets in April 1998 was, according to the said schedule, R1 223 925. Travel documents indicate that he undertook two overseas visits D during 1998 and is enjoying an affluent lifestyle. To do so would require substantial capital resources. Yet, Marais points out, he appears to have had no legitimate source of income from which to fund his expensive modus vivendi. It must hence be inferred, according to Marais, that he was living off the proceeds of illegal drug dealing. This is confirmed by the fact that, on 19 September 1998, the police attached R50 000 in cash E at the Milneton property, where the respondent is still resident. Marais is of the view that the respondent is presently continuing with his illegal activities.

[14] With reference to ss 8 and 16 of the Proceeds Act, Marais opines that there are reasonable grounds to believe that a confiscation order may be granted against the F respondent and that a restraint order should be issued against his realisable property.

[15] It appears from the aforesaid reports of the curatores bonis (see para [5] above) that the respondent informed both Seaton and Powell that he was unemployed at the time of his arrest. He usually operated a flea-market stall but, due to lack of stock, he had been unable to trade for several months. His only income, he said, was R4 500 per G month in the form of rentals from properties. He had also allegedly acquired R200 000 as gambling income. It would appear that he purchased a number of properties by way of cash transactions and hence had no bond liabilities in respect thereof. His monthly expenses, excluding expenditure on overseas travel, amounted to R8 650. H

[16] In an affidavit dated 5 November 1998 the respondent reserved the right to respond to all the allegations contained in the founding affidavit of Marais as soon as he was able to appoint legal representatives and an accountant to assist him. Despite such appointments having been made, he chose, in his brief answering affidavit dated 14 December 1998, not to deal with any of the allegations made by Marais in respect of his I ostensible drug dealing activities. He simply made the bald allegation that he was innocent of the charges brought against him and would, in due course, be acquitted thereon. For the rest he failed to deal with the merits at all. J

Van Zyl J

A [17] In reply Marais, the deponent to the founding affidavit, pointed out that no person other than the respondent had come forward to exercise any rights to the properties attached by the curator bonis. He therefore reiterated his belief that the respondent had acquired the properties from the proceeds of illegal drug dealing and that he would be B convicted on a prima facie case to be presented by the State. This was confirmed by the curator bonis, Powell.

[18] A supporting replying affidavit has been deposed to by one Graham David Dawes, an inspector in the South African Police Service stationed at the Organised Crime Unit (Narcotics), Cape Town, and working, at the time of deposing to his affidavit, at the C Investigative Directorate for Organised Crime and Public Safety. His field of expertise is that of a financial investigator assisting with investigations relating to the proceeds of crime, more particularly the proceeds of drug trafficking. As a member of the Organised Crime Intelligence Unit, which became the Organised Crime Unit (Narcotics) in 1996, he D has been involved in investigating large-scale narcotics traffickers locally, nationally and internationally. With reference to the documentation attached at the respondent's Milnerton home, Dawes observes that the notes contained...