Forfeiting proceeds: Civil forfeiture, the right to property and the Constitution

• DOI: https://doi.org/10.47348/SALJ/v138/i2a4
• Published date: 19 May 2021
• Pages: 323-366
• Date: 19 May 2021
• Citation: (2021) 138 SALJ 323
• Author: Rhimes, M.

323

FORFEITING PROCEEDS: CIVIL FORFEITUR E,

THE RIGHT TO PROPERTY AND THE

CONSTIT UTION

MICHAEL RHIMES†

Pupil Barr ister, England and Wales

Civil forfeit ure powers are a use ful tool in the ght agai nst crime — part icularly the

organised kind. T hey deter such c rime by removin g the proceeds from w rongdoers,

thereby diminish ing the incentive s for oending. Howeve r, as the courts in S outh

Africa have l ong recognised, the for feiture powe rs must be calibrated t o ensure a fair

balance betw een the public interest in crim e deterrence and privat e interests such as the

right to proper ty. Achieving this bal ance when for feiting proceeds i s a vexed question

which this art icle seeks to expl ore. It argues that whil e the forfeiture o f proceeds

will usually be justi ed by the legitimat e aim of crime dete rrence, for feiture should

neverthel ess be subject to a prop ortionality che ck. This check i s arguably required by

the property c lause in s 25(1) of the Constitution of the Re public of South Afr ica,

1996, and is justied by the nee d to constrain the breadth o f the powers unde r the

Prevention of O rganised Crim e Act. It then explor es what situation s might justify

refusing for feiture of proceeds, a nd how the propor tionality check sho uld be applied.

Prevention of Org anised Crime Ac t – proportionalit y – right to propert y –

proceeds of cr ime – civil forfeiture – consc ation

I IN TRO DUC TIO N

Faced with the question ‘What is property?’, Proudhon famously replied

‘It is theft!’1 Whether he was right is a matter for another day. But the idea

that propert y involved in crime can — and should — be forfeited to the

state has gained much inter national support.2 South A frica ha s followed

the trend by enact ing the Prevention of Organised Crime Act 121

of 1998 (‘POCA’). That legislation aims to deter crime by removing the

property used to commit it (which I shall call instrumentalities), as well as

the property derived from it (which I shall call proceeds).

† LLB ( Hons) (Queen Mar y) BCL (Oxon). The author ser ved as a foreign

law clerk to Just ice Froneman in the Constit utional Cou rt from Aug ust 2019 to

Januar y 2020. I thank Dan iel Sive, Raylene Keightley, Dr Helen Taylor, Rebecca

Gore, Pri ncess Ncube and t he anonymous reviewers for di scussion and i nput.

Any error s and infelicitie s of expression rema in my own. I have attempted to s tate

the law as before S eptember 202 0.

1 P J Proudhon W hat is Prope rty? An Inquiry into t he Principl e of Right and

Government (1840) First mémoir, ch I.

2 See National Director of P ublic Prosecutio ns v Mohamed NO 2003 (4) SA 1 (CC)

(‘Mohamed II’) para 16 (Ackerma nn J), referrin g to an ‘internat ional obligation’ to

prevent criminal s beneting from their crimes.

https://doi.org/10.47348/SALJ/v138/i2a4

(2021) 138 SALJ 323

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324 (2021) 138 THE SOU TH AFRICAN L AW JOURNA L

https://doi.org/10.47348/SALJ/v138/i2a4

Unlike post-conviction conscation, which deprives guilt y parties

of proceeds after they have been convicted of a criminal oence, civ il

forfeiture does not require a prior conviction. The state simply needs

to show that, on the balance of probabil ities, the proper ty in quest ion

constitutes the proceeds of, or is a n instrumental ity of, an oence.

The individu al may never be charged with an oence. They may even

previously have been acquitted. For th is reason, civil forfeit ure is a

considerable power — even, in Van der Walt’s words, an ‘extraordina ry’

one.3 The experience of forfeiture i n other jurisdictions, pa rticularly the

United States of A merica, shows that forfeited proper ty can be far in

excess of any ‘gain’ from oending, or h ave only tenuous connect ions to

such oending.4 In such circumst ances, the draconian eects of forfeitu re

may pose const itutional diculties.

Alive to th is risk, t he Constitut ional Court in Prophet5 and Mo hunram 6

fashioned what I shall ca ll a ‘proportionality check’. That ‘check’ requires

a court to deter mine whether for feiture would propor tionately further

the legislative aims of crime deter rence in POCA. A for feiture order

which fails to do so wil l be an ‘arbitrary depr ivation of propert y’, which

is contrar y to s 25(1) of the Constitution of the Republ ic of South Afr ica,

1996 (‘the Constitution’): ‘No one may be deprived of property except

in terms of l aw of general application, and no law may permit arbitrary

deprivation of proper ty.’

Both Prophet and Mo hunram dealt with the application of the

proportiona lity check to the for feiture of in strumentalities. In Botha,

however, the Constitutional Court — by a majority of ve to th ree —

held that the proport ionalit y check did not apply when forfeit ing the

proceeds of corr uption.7 This leaves an open question as to whether

the proportiona lity check is required before for feiting the proceeds of

other type s of oences, and provides a welcome opportun ity to reconsider

the law in this area.8

The dierence bet ween forfeiting instr umental ities and forfeiting

proceeds can be i llustrated with an ex ample. Suppose X operates an

unlicensed shebeen at his lawfu lly purcha sed house.9 Forfeiture could be

3 A J van der Walt ‘Civil for feiture of in strumentalit ies and proceeds of cri me

and the const itutiona l property clause’ (200 0) 16 SAJHR 1 at 6.

4 See part II.

5 Prophet v Nation al Director of Public P rosecutions 2007 (6) S A 169 (CC) (‘Prophet’ ).

6 Mohunram v Nationa l Director of Public Prosec utions (Law Rev iew Project as Amicus

Curiae) 2007 (4) SA 222 (CC) (‘Mohunram’).

7 National Direc tor of Public Prose cutions v Botha NO 2 020 (1) SACR 599 (CC)

(‘Botha’).

8 The scope of Botha ibid is discussed below at notes 74 and 75.

9 I base this example on Van der Burg v Na tional Direct or of Public Prosec utions

(Centre for Child L aw as Amicus Cur iae) 2012 (2) SACR 331 (CC) (‘Van der Burg’).

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CIVIL FOR FEITURE A ND THE RIGHT TO PROPE RTY 325

https://doi.org/10.47348/SALJ/v138/i2a4

ordered of the instrumentality of unlicensed l iquor sales (the property used

to commit the oence; i e the house itself ) or the proc eeds (the property

derived from the oence; i e the unlicensed alcohol sales).

If the instrumentality (the house itself ) is forfeited, t he proportiona lity

check would identify a number of factor s indicating that forfeiture may

be disproportionate, namely the value of the house is l ikely far in excess

of any ‘gain’ from unlicensed a lcohol sales; other innocent occupiers

(such as X’s spouse or children) may be left without alternative accom mo-

dation; and there may be only a remote con nection between the house

itself and its use as a shebeen. These factors may justify refusing forfeiture.

Now, suppose the proceeds (the alcohol sales) were to be forfeited

instead. One would have to reckon with the fact that these proceeds are

more fundamentally tainted than the inst rumenta lity. The house was

lawfully acquired but put to a wrongf ul use; the prots, however, are

unlawful gains which ought never to have been in X’s pocket to begin

with. In add ition, the factors considered in the proportionality check

above do not seem to apply as read ily here. The value of what is forfeited

is proportionate to the oence (by de nition, the more a lcohol sold

unlawfully, the more that is forfeited); no third parties are implicated; and

there is a direct connection bet ween the gains and the oence. Forfeiting

X’s proceeds simply removes what was unlaw fully acquired: how could

that ever be disproportionate?

This simple example speak s to three deeper concerns in extending the

proportiona lity check to the for feiture of proceeds, and which form the

structure of this article.

1. The  rst is whether the justication for the prop ortionality check i n

the context of the forfeiture of instrumentalities — wh ich Prophet

and M ohunram sourced in s 25(1) of the Constitution — extends

to the forfeiture of proceeds. Simply put, do proceeds fa ll within

the scope of that sect ion at all? (Part III).

2. The second is why the proceeds of crime should be protected.

They are, on one view, unlawful assets which the w rongdoer

should not be allowed to keep. Why should it then be necessary

to protect proceeds from forfeiture? (Part IV).

3. T he third is how the propor tionality check m ight apply to proceeds,

as opposed to in strumentalit ies. What sort of circu mstances might

justify a departure from the usual position that removing ill-

gotten gains is a proportionate response to wrongdoing? (Part V).

It is these thorny questions as to ‘whether’, ‘why’ and ‘how’ which this

article seek s to address By way of summary, I argue that a proportionality

check is constitut ionally requ ired before orderi ng the forfeiture of pr oceeds,

regardless of the type of wrongdoing at issue. It cannot be assumed that

forfeiting proceeds will always be justied. The proportional ity check

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