Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and Others; In re Hyundai Motor Distributors (Pty) Ltd and Others v Smit NO and Others

• Jurisdiction: South Africa
• Judge: Chaskalson P, Langa DP, Goldstone J, Kriegler J, Madala J, Mokgoro J, Ngcobo J, O'Regan J, Sachs J, Yacoob J, Cameron AJ
• Judgment Date: 25 August 2000
• Citation: 2000 (2) SACR 349 (CC)
• Hearing Date: 16 March 2000
• Counsel: G J Marcus SC for the applicants. D Soggot SC for the respondents.
• Court: Constitutional Court

Langa DP: E

Introduction

[1] The National Prosecuting Authority Act [1] (the Act) makes provision for the search and seizure of property by an Investigating Director in the office of the National Director of Public Prosecutions, to facilitate the investigation F of certain specified offences. The power to search and seize property may be exercised on the authority of a warrant issued by a judicial officer. This case is concerned with the constitutionality of the provisions that authorise the issuing of warrants of search and seizure for purposes of a 'preparatory investigation', one of two G investigatory procedures provided for in Chapter 5 of the Act.

The facts of the case

[2] On 17 November 1999, search warrants were authorised by the first respondent, a Judge of the Transvaal High Court (the High Court), pursuant to an application made to him in Chambers by the Investigating Directorate H for Serious Economic Offences and its Investigating Director, respectively the second and third respondents. The warrants empowered the second and third respondents to conduct a search and seizure operation, for purposes of a preparatory investigation, at the premises of the 'Wheels of Africa Group of Companies' and at the I home of the ninth applicant, Mr Muller Conrad Rautenbach. The search was carried out on 18 and 19 November 1999 and a large quantity of documents, records and data - three lorry-loads in fact - were seized.

[3] Applicants immediately approached the High Court challenging the legal and constitutional validity of the operation. The relief they

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sought was wide-ranging. In his judgment delivered on 23 December 1999, [2] Southwood J, before whom the A matter was argued, declared certain provisions of the Act to be unconstitutional. This application, brought under ss 167(5) [3] and 172(2)(a) [4] of the Constitution, is for the confirmation of that declaration of invalidity, which is contained in para [1] of the order of Southwood J and reads: B

'The provisions of ss 29(5), 28(13) and 28(14) of the National Prosecuting Authority Act 32 of 1998 are declared to be inconsistent with the Constitution and invalid, to the extent only that they permit the issue of a warrant to authorise the search and seizure of property and accordingly the invasion of privacy of persons where there are no reasonable grounds to suspect that a specified offence has been committed.' [5] C

The rest of the order is not relevant for purposes of this judgment. Confirmation of the order is opposed by the second, third, fourth, fifth and sixth respondents, who have also filed an appeal contending that the provisions in question are consistent with the Constitution. The dispute before us concerns the constitutionality of the relevant D provisions only insofar as they apply to a preparatory investigation. For the sake of convenience, the parties will be referred to in this judgment in the manner in which they were cited in the application before the High Court.

The scheme of the Act E

[4] The Act came into force on 16 October 1998. It provides for the establishment of a single national prosecuting authority in the Republic

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A pursuant to s 179 of the Constitution. [6] The national prosecuting authority consists of a national director, deputy national directors, directors, deputy directors and prosecutors. [7] In terms of the Act, the President may establish up to three Investigating Directorates within the office of the National Director of Public Prosecutions [8] B in respect of specific offences or specified categories of offences. Three Investigating Directorates have, as a consequence, been established; the first is for the investigation of organised crime and public safety offences, [9] the second for serious economic offences [10] and the last for the investigation of corruption. [11] The powers and duties of the Investigating Directorates are set out in Chapter 5 of the Act.

C [5] This matter is concerned with the activities of the Investigating Directorate for Serious Economic Offences. It is necessary to draw attention to s 26(1) of the Act which defines a 'specified offence' as -

'any offence which in the opinion of the Investigating Director falls within the category of offences set out in the proclamation referred to D in s 7(1) in respect of the Investigating Directorate concerned'.

The specified offences that the second respondent is required to investigate are set out in the Schedule to Proclamation R123 of 1998. They are:

'(a)

E Any offence of -

(i)

fraud;

(ii)

theft;

(iii)

forgery and uttering; or

(iv)

corruption in terms of the Corruption Act, 1992 (Act No 94 of 1992); or

(b)

F any other -

(i)

economic common-law offence; or

(ii)

economic offence in contravention of any statutory provision, which J

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involves patrimonial prejudice or potential patrimonial prejudice to the State, any body corporate, trust, institution or person, A

which is of a serious and complicated nature.'

[6] Central to Chapter 5 are the provisions of ss 28 and 29, which deal respectively with investigations and searches. Section 28 makes provision for two forms of investigatory procedure. The first is an 'inquiry' [12] which B may be held if the Investigating Director -

'has reason to suspect that a specified offence has been or is being committed or that an attempt has been or is being made to commit such an offence . . .'

The second procedure is a 'preparatory investigation' [13] which may be held if the Investigating Director considers C it necessary to hear evidence in order to enable him or her to determine if there are reasonable grounds to conduct an inquiry.

[7] Section 28 has 14 subsections. Subsections (1) to (12) are concerned with matters pertaining to the conduct of an inquiry. Subsections (13) and (14) deal specifically with a preparatory investigation. The latter two D provisions read as follows:

'(13) If the Investigating Director considers it necessary to hear evidence in order to enable him or her to determine if there are reasonable grounds to conduct an investigation in terms of ss (1)(a), the Investigating Director may hold a preparatory investigation. E

(14) he provisions of ss (2) to (10), inclusive, and of ss 27 and 29 shall, with the necessary changes, apply to a preparatory investigation referred to in ss (13).'

A preparatory investigation is thus held if the Investigating Director is uncertain whether there are reasonable F grounds to conduct an inquiry. At least two kinds of doubt may give rise to the decision to conduct a preparatory investigation rather than an inquiry: doubt whether there is reason to believe that an offence has been committed, on the one hand, and doubt whether an offence, suspected to have been committed, is in fact a specified offence. G

[8] The effect of the reference to s 29 in s 28(14) is to permit an Investigating Director to invoke the powers of search and seizure for purposes of a preparatory investigation. Section 29 provides for the issuing of search warrants for purposes of the inquiry referred to in s 28(1), and of the preparatory investigation held under s 28(13). It also provides for the manner in which the warrants may be executed. Armed with a warrant, an H Investigating Director has extensive powers. The warrant authorises the examination and seizure of any object, the copying of, or the taking of portions from any document or book located on or in the premises, that has or may have a bearing on the inquiry or preparatory investigation, as the case may be. [14] I

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A [9] It was common cause, and rightly so in my view, that when the officials of the State exercise the s 29 powers of search and seizure, the right to privacy which is guaranteed under s 14 of the Constitution is implicated. Section 14 of the Constitution provides that:

'Everyone has the right to privacy, which includes the right not to have -

(a)

B their person or home searched;

(b)

their property searched;

(c)

their possessions seized; or

(d)

the privacy of their communications infringed.'

C [10] The Act places certain constraints on the exercise of the powers of search and seizure. Section 29(4) requires that there be prior judicial authorisation before a search and seizure is conducted by an Investigating Directorate. The nature of the judicial officer's function in an application for a warrant is governed by the provisions of s 29(5). The two subsections read as follows:

D '(4) Subject to ss (10), the premises referred to in ss (1) may only be entered, and the acts referred to in ss (1) may only be performed, by virtue of a warrant issued in chambers by a magistrate, regional magistrate or Judge of the area of jurisdiction within which the premises is situated . . . .

(5) A warrant contemplated in ss (4) may only be issued if it appears to the magistrate, regional magistrate or Judge from information E on oath or affirmation, stating -

(a)

the nature of the inquiry in terms of s 28;

(b)

the suspicion which gave rise to the inquiry; and

(c)

the need, in regard to the inquiry, for a search and seizure in terms of this section,

F that there are reasonable grounds for believing that anything referred to in ss (1) is on or in such premises or suspected to be on or in such premises.'

The issues

[11] In this Court, the applicants argued in support of the High Court's finding that s 29(5), read with ss 28(13) and 28(14), was unconstitutional. Mr Marcus, who presented argument on their behalf, contended that the G impugned provisions, properly interpreted, do not require that there should be a reasonable suspicion that a specified offence has been committed before a judicial officer may authorise a search warrant for purposes of a preparatory...