National Director of Public Prosecutions and Another v Mohamed NO and Others

• Jurisdiction: South Africa
• Judge: Chaskalson CJ, Langa DCJ, Ackermann J, Goldstone J, Madala J, Mokgoro J, Moseneke J, Ngcobo J, O'Regan J and Yacoob J
• Judgment Date: 03 April 2003
• Docket Number: CCT 44/02
• Hearing Date: 25 February 2003
• Counsel: W H Trengove SC for the appellants. D Marais for the respondents.
• Court: Constitutional Court

Ackermann J:

Introduction

[1] This case arises out of a declaration of constitutional invalidity made by the Johannesburg High Court (the High Court) in respect of s 38 (the section) of the Prevention of Organised Crime Act [1] (the Act). The section reads: E

'38 Preservation of property orders

(1) The National Director may by way of an ex parte application apply to a High Court for an order prohibiting any person, subject to such conditions and exceptions as may be specified in the order, from dealing in any manner with any property. F

(2) The High Court shall make an order referred to in ss (1) if there are reasonable grounds to believe that the property concerned -

(a)

is an instrumentality of an offence referred to in Schedule 1; or

(b)

is the proceeds of unlawful activities.

(3) A High Court making a preservation of property order shall at the same time make an order authorising the seizure of the property G concerned by a police official, and any other ancillary orders that the court considers appropriate for the proper, fair and effective execution of the order.

(4) Property seized under ss (3) shall be dealt with in accordance with the directions of the High Court which made the relevant preservation of property order.' H

In terms of s 1 of the Act a 'preservation of property order' means 'an order referred to in s 38'.

[2] First appellant is the National Director of Public Prosecutions (the National Director). Second appellant is the Minister of Justice and Constitutional Development (the Minister). [2] The first three respondents are trustees of the Zunaid Family Trust (the trust) and owners in this I capacity of certain fixed property (the trust property). First and fourth

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respondents also claim a personal interest in the trust property. The four respondents will be referred to jointly as 'the A respondents', bearing in mind that they were the applicants in a counter-application brought in the High Court, to which reference will presently be made. This is the second occasion on which this issue of the section's constitutional invalidity has served before this Court between the same parties. B

The litigation in the High Court and this Court

[3] The litigation commenced with the granting of a preservation of property order by the High Court on 4 October 2000 on the ex parte application of the National Director. The order was published in the Government Gazette of 13 October 2000 in terms of s 39(1) of the Act and served on, amongst others, the C first to third respondents.

[4] On 11 January 2001, the National Director launched an application in terms of s 48 of the Act for the forfeiture, under s 50, of the immovable property that had been the subject of the preservation order. A counter-application, joining the Minister, was then launched by the respondents seeking the following relief: D first, a declaration that the whole of chap 6 of the Act (comprising ss 37 - 62) was inconsistent with the Constitution and therefore invalid; secondly, the reconsideration of the preservation of property order in terms of Rule 6(12)(c) of the Uniform Rules of Court [3] and its dismissal; and thirdly, condonation of their failure to enter an appearance to oppose the E forfeiture proceedings.

[5] In the first hearing the High Court dealt first with the second and third heads of relief in the counter-application. [4] It came to the conclusion, for reasons that are not presently relevant, that '(t)he applicants' only chance of success lies in the constitutional challenge to the validity of chap 6 of the Act'. In the first hearing the High Court F dealt only with the unconstitutionality of s 38, however, and on 19 March 2002 made an order declaring the section to be constitutionally invalid

'to the extent that it requires the NDPP (the National Director of Public Prosecutions) to bring an application for a preservation of property order ex parte in every case and makes no provision G for a rule nisi calling upon interested parties to show cause why a preservation of property and seizure order should not be made'.

It referred such order for confirmation to this Court and postponed the proceedings pending our decision. H

[6] That order came before this Court for confirmation under ss 167(5) and 172(2) of the Constitution, [5] and in a judgment delivered on 12 June

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2002 (the 'Mohamed (1) judgment'), [6] we set aside the High Court's declaration of invalidity on two grounds. The first was that A the notional severance order was not a competent order to remedy constitutional invalidity caused by an omission. [7] The second was that the High Court had erred, by dealing solely with the constitutional attack against s 38, and by failing to deal with all the relief sought by the respondents against the appellants. [8] We accordingly referred the matter back to the High Court to be dealt with B in the light of our judgment.

[7] The High Court did so in a second hearing in which it had before it two applications. One was by the National Director for a forfeiture order under s 52 of the Act and related relief. The other was a counter-application (the counter-application) in which, although various sections in chap 6 were separately attacked for their C unconstitutionality (ss 38, 39, 48, 49, 50, 52), the respondents also sought to strike down the chapter in its entirety.

[8] In its judgment of 16 October 2002 [*] the High Court found - as it had in the first D hearing - that the section limited the fair hearing component of the s 34 right and that such limitation was not justifiable under s 36 of the Constitution. Section 34 of the Constitution provides, to the extent relevant for the present case, that

'(e)veryone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court . . .'. E

[9] It thereupon made an order declaring the section to be constitutionally invalid, remedying the perceived unconstitutionality by means of a severance and reading-in order. The order reads as follows:

'1.1

The provision in s 38 of Act 121 of 1998 that the National Director may "by way of an ex parte F application" apply to a High Court for a preservation of property order is declared to be inconsistent with the Constitution.

1.2

Section 38 of Act 121 of 1998 is to be read as if the words "by way of an ex parte application" did not appear therein.

2.1

The omission from s 38 of Act 121 of 1998 of a rule nisi procedure is declared to be inconsistent with the Constitution. G

2.2

Section 38 of Act 121 of 1998 is to be read as though it contained a ss (4) reading as follows:

"(4)(a) A Court to which an application is made in terms of ss (1) may instead of making a final order, make a provisional preservation of property and seizure order having immediate effect and simultaneously grant a rule nisi calling upon all interested parties (including the parties referred to in H s 39(1)(a)) upon a day mentioned in the rule to appear and show cause why the preservation of property and seizure order should not be made final.

(b) If a rule nisi is issued the Court may give such directions as it considers appropriate for the rule to be brought to the attention of parties who may have an interest in the property concerned. I

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(c) Upon the application of any interested party, the court may anticipate the return day for the purpose of discharging the A rule nisi if 24 hours' notice of such application has been given to the National Director."

3.

The orders referred to in paras 1 and 2 shall be with retrospective effect save that they shall not invalidate any forfeiture order already made, and those orders are referred to the Constitutional Court for confirmation.

4.

Save as set out in paras 1, 2 and 3 above, the counter-application is dismissed. B

5.

The applicants are ordered jointly and severally to pay the respondents' costs, including the costs of two counsel, occasioned by the application to amend and supplement the counter-application.

6.

The respondents are ordered jointly and severally to pay the applicants' costs of the counter-application.' C

The High Court, however, dismissed the attacks on the other sections as well as against chap 6 as a whole. Despite having found s 38 to be unconstitutional to the extent indicated in the order, the High Court granted the main application of the National Director. The order of constitutional invalidity is now before this Court for confirmation. D

[10] The appellants appeal as of right but the respondents have not appealed against the dismissal of their attacks in the counter-application against the individual sections of chap 6 or against chap 6 as a whole, nor against the forfeiture order granted on the main application of the National Director. E

The issues before this Court

[11] Accordingly there are only three issues now before us:

(i)

The correctness of the High Court's declaration of invalidity of s 38. F

(ii)

The correctness of the remedial order, in the event of the declaration of invalidity having been correctly made.

(iii)

The correctness of the costs orders.

These issues fall within a narrow compass. Here, as in De Beer's case, [9]

'(w)e are concerned with the scope of the fair-hearing component of G that (the s 34) right in a court of law. This may simply be referred to as "the s 34 fair-hearing right".'

[12] The question is whether s 38 unjustifiably limits such right. If it does, the only other question is whether the High Court order should be confirmed in the form issued or in some other form. H

[13] This issue relates solely to the constitutionality of the procedure established by s 38 and is not concerned with the constitutionality of the substantive...