Ivanov v North West Gambling Board and Others

• Jurisdiction: South Africa
• Judge: Cloete JA, Heher JA, Snyders JA, Mhlantla JA and Mclaren AJA
• Judgment Date: 31 May 2012
• Citation: 2012 (2) SACR 408 (SCA)
• Docket Number: 312/2011 [2012] ZASCA 92
• Hearing Date: 14 May 2012
• Counsel: JP de Bruin SC (with N Jagga) for the appellant. M Donen SC (with ZZ Matebese) for the respondents.
• Court: Supreme Court of Appeal

Mhlantla JA (Cloete JA, Heher JA and Snyders JA and McLaren AJA concurring):

Introduction

G [1] This appeal, with the leave of the court below, turns on the effect of the declaration of invalidity of a search-and-seizure warrant. It also involves the question whether the appellant was entitled to institute a spoliation application and, more particularly, whether the fact, that his possession of the goods was and remains illegal, is a bar to his being restored to possession thereof. The issues arising on appeal will best be H understood in the light of the background facts that follow.

Background

[2] The North West Gambling Board, the first respondent, is a juristic I person established in terms of s 3 of the North West Gambling Act 2 of 2001 (the Act). I shall hereafter refer to the first respondent as the board. The Act provides for the regulation of gambling activities in the North West Province. The board has, in terms of s 4, certain powers, including the powers to oversee gambling activities and investigate illegal gambling throughout the province, and to exercise such powers and perform such J functions and duties as may be assigned to it in terms of the Act and any

Mhlantla JA

other law. The board and the South African Police Service (SAPS) A agreed to co-operate with regard to the investigation of illegal gambling in the province.

[3] On 22 January 2010 Mr Wilfred Pitso, the third respondent, who is an inspector in the employ of the board, inspected the business premises B of Mr Svetlov Ivanov, the appellant. As it appeared to the third respondent that gambling activities were taking place in contravention of the Act, he requested members of SAPS to conduct further investigations and to apply for a search warrant. Pursuant thereto, members of the SAPS applied for a search warrant from the magistrate, the sixth respondent, who serves in the court which has jurisdiction over the appellant's business premises in Rustenburg. The sixth C respondent issued the search warrant in terms of ss 20, 21 and 25 of the Criminal Procedure Act 51 of 1977 (the Criminal Procedure Act) read with s 65(6) – (8) of the Act.

[4] On 29 January 2010, Inspector Freddy (the second respondent) and D other members of the SAPS, as well as the third respondent and some employees of the board, went to the premises of the appellant to execute the search warrant. They confirmed that the appellant was in possession of gambling machines and other gambling devices, despite the fact that he did not have the requisite licence and was not authorised by the board E to possess the machines — in effect contravening the provisions of s 9(1) of the National Gambling Act 7 of 2004. [1] Possession and use of machines without a valid licence are offences under s 82 of the Act. [2]

Mhlantla JA

A [5] As these events were unfolding, the appellant launched an ex parte application in the Rustenburg magistrates' court on an urgent basis. He sought an order, inter alia, 'cancelling' the search warrant and directing the members of SAPS to restore possession of his business premises to him. In his affidavit he averred that he was the owner of Max-a-Million B Casino and that the warrant was invalid. The magistrate granted an order for the restoration of his business premises, but — correctly — made no order that affected the validity of the warrant. The order was brought to the attention of the police officers who were still in the process of executing the search warrant, but they continued with the search and seizure operation. They locked the premises and informed the appellant C that they would continue the following day. The appellant was arrested and taken to the Rustenburg Police Station where he was given a written notice to appear in court on 1 February 2010 on a charge of illegal gambling.

[6] On 30 January 2010 the second and third respondents, as well as D other police officers and employees of the board, returned to the appellant's premises and seized the machines and equipment which appeared to be gambling machines. This caused the appellant to institute an ex parte application in the North West High Court, Mafikeng, against the first to fifth respondents, on an urgent basis. In his founding affidavit E the appellant attacked the validity of the search warrant. He averred, inter alia, that he was 'conducting a business' at the premises; that the magistrate had issued a spoliation order on 29 January; that the police officers had ignored the court order and had seized some of his goods; and that they had returned on that day and were in the process of loading F machines into the truck. He stated that he would be obliged to obtain permits from the board to transport the machines back to the premises — thereby tacitly admitting that the machines were gambling machines. [3] The appellant sought an order, inter alia, declaring the search warrant null and void and directing the respondents to restore the machines to him with immediate effect.

Mhlantla JA

[7] The matter came before Moloto AJ, who granted a rule nisi with A immediate effect pending the return day, declaring the search warrant null and void and ordering the first to fifth respondents to restore possession of the machines to the appellant. The respondents complied with the order and returned the machines to the appellant. These machines are still in his possession.

[8] The respondents opposed the confirmation of the rule nisi. The third B respondent deposed to an affidavit on behalf of the respondents, save for the sixth respondent. He objected to the manner in which the appellant had launched the application. He stated that the appellant had failed to comply with the provisions of s 35 of the General Law Amendment Act 62 of 1955, C [4] as no notice had been given to them. He conceded that the warrant might have been defective. However, he stated that the respondents were justified in their actions and had met the requirements of ss 20, 21 and 25 of the Criminal Procedure Act; that the appellant had contravened the provisions of D s 9(1) of the National Gambling Act; and that he was conducting an illegal casino contrary to the provisions of s 50(1) [5] of the Act. He averred that, by virtue of s 79 of the Act, the gambling machines and other articles that were used in the commission of the offence were liable to forfeiture upon the appellant's conviction. He therefore sought that the rule nisi be discharged and the appellant be ordered to return the machines to the board. E

[9] The application was postponed on various occasions. It was eventually heard by Leeuw JP. After considering the issues, the learned Judge President discharged the rule nisi in part. She declared the warrant invalid for being too general and vague and accordingly set it aside. Relying on the decision of Oudekraal Estates (Pty) Ltd v City of Cape Town F and Others, [6] she held that the search and seizure were not unlawful as the search warrant, albeit invalid, had not yet been set aside when the police executed it, and that it had empowered them to conduct the search and seizure.

Mhlantla JA

A [10] The Judge President further held that the appellant was not entitled to a spoliation order and that he had adopted the wrong procedure and relied on a wrong cause of action. She ordered the appellant to return the machines to the respondents with the qualification that he was only entitled to the return of the items which he might lawfully possess. B Having found that the appellant had not displayed the utmost good faith required of an applicant in an ex parte application, the Judge President ordered the appellant to pay costs on a punitive scale. She later granted leave to appeal to this court.

[11] Against that background the appeal raises two issues. They are:

(a)

C whether the declaration of invalidity of the search warrant could transform a bona fide search that was executed under a warrant into a spoliation; and

(b)

whether, as a result of the declaration of invalidity of the search warrant, the appellant is entitled to unqualified restoration of the D machines, the possession of which without a licence is prohibited by the Act.

Findings

[12] It is common cause that the search warrant is invalid and that the E appellant is not a holder of any licence issued under the Act. Counsel for the appellant conceded that most of the machines seized from the appellant are gambling machines. In my view the learned Judge President rightly came to the conclusion that the search warrant was invalid and accordingly cancelled it. She, however, erred when she held that the F order declaring the search warrant invalid did not affect the lawfulness of the search and seizure.

A. Reliance on Oudekraal

[13] As indicated earlier in my judgment, the Judge President found G support in Oudekraal when she...