National Director of Public Prosecutions v Ramlutchman

• Jurisdiction: South Africa

National Director of Public Prosecutions v Ramlutchman
2016 (1) SACR 362 (KZP)

2016 (1) SACR p362

Citation	2016 (1) SACR 362 (KZP)
Case No	AR 161/14
Court	KwaZulu-Natal Division, Pietermaritzburg
Judge	D Pillay J and Bezuidenhout AJ
Heard	March 23, 2015
Judgment	April 20, 2015
Counsel	M Govindasamy SC (with R Naidoo) for the appellant.; VJ Gajoo SC (with JE Howse) for the respondent.

Flynote : Sleutelwoorde

Prevention of crime — Confiscation order in terms of Prevention of Organised Crime Act 121 of 1998 — Benefits of crime — Restricted to profit or C gain and not entire proceeds of crime.

Headnote : Kopnota

The appellant appealed against the dismissal by a magistrate of an application for a confiscation order in terms of s 18 of the Prevention of Organised Crime Act 121 of 1998 (POCA) against the respondent. It was contended that the 'benefit' that derived from the proceeds of unlawful activities was the total D amount of the proceeds of a contract for the building of schools.

The respondent had been found guilty of 21 counts of fraud and one count of corruption under the Prevention and Combating of Corrupt Activities Act 12 of 2004. The facts were that he had created and submitted false documents to the Construction Industry Development Board to support an application for a grading to which he was not entitled. He had thus E misrepresented his status and been awarded tenders that he would otherwise not have obtained. The appellant conceded in the magistrates' court that it had not shown the exact profit the respondent had derived from the corrupt scheme, despite having had access to the complete audited financial records. The magistrate consequently found that the appellant had failed to discharge the onus that rested upon it.

F Held, that on a purely factual and common-sense approach, the entire amount received as the proceeds of unlawful activities could not be a benefit if it were not exclusively a gain or profit. In the present matter the cost of the construction component of the proceeds received could not rationally be equal to a gain or benefit. To treat it as such, and order its confiscation, would result in the state unjustly enriching itself at the expense of the respondent. G It would be disproportionate and create an imbalance between effectiveness and fairness as required. Appeal dismissed. (Paragraph [33] at 376f–377a.)

Cases cited

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): referred to H

First National Bank of SA Ltd t/a Wesbank v Commissioner, South African Revenue Service and Another; First National Bank of SA Ltd t/a Wesbank v Minister of Finance I 2002 (4) SA 768 (CC) (2002 (7) BCLR 702; [2002] ZACC 5): dictum in para [65] applied

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 2000 (2) SACR 349 (CC) (2001 (1) SA 545; 2000 (10) BCLR 1079; [2000] ZACC 12): dictum in para [43] applied J

2016 (1) SACR p363

Jooste v Score Supermarket Trading (Pty) Ltd (Minister of Labour Intervening) A 1999 (2) SA 1 (CC) (1999 (2) BCLR 139; [1998] ZACC 18): referred to

Kockjeu v National Director of Public Prosecutions 2013 (1) SACR 170 (ECG): referred to

Laugh it Off Promotions CC v SAB International (Finance) BV t/a Sabmark International (Freedom of Expression Institute as Amicus Curiae) B 2006 (1) SA 144 (CC) (2005 (8) BCLR 743; [2005] ZACC 7): referred to

Law Society of South Africa and Others v Minister for Transport and Another 2011 (1) SA 400 (CC) (2011 (2) BCLR 150; [2010] ZACC 25): dictum in para [37] applied

Mohunram and Another v National Director of Public Prosecutions and Another (Law Review Project as Amicus Curiae) 2007 (2) SACR 145 (CC) C (2007 (4) SA 222; 2007 (6) BCLR 575; [2007] ZACC 4): considered

National Coalition for Gay and Lesbian Equality and Another v Minister of Justice and Others 1998 (2) SACR 556 (CC) (1999 (1) SA 6; 1998 (12) BCLR 1517; [1998] ZACC 15): referred to

National Director of Public Prosecutions v Gardener and Another 2011 (1) SACR 612 (SCA) (2011 (4) SA 102): D dictum in paras [17] – [18] applied

National Director of Public Prosecutions v Mtungwa 2006 (1) SACR 122 (N): doubted

National Director of Public Prosecutions v 37 Gillespie Street Durban (Pty) Ltd and Another; National Director of Public Prosecutions v RO Cook Properties (Pty) Ltd; National Director of Public Prosecutions v Seevnarayan 2004 (2) SACR 208 (SCA) (2004 (8) BCLR 844; [2004] 2 All SA 491; [2004] ZASCA 37): dictum in para [65] applied E

National Director of Public Prosecutions v Rautenbach and Others 2005 (1) SACR 530 (SCA) (2005 (4) SA 603 (SCA); [2005] 1 All SA 412): dictum in para [66] applied

National Director of Public Prosecutions v Rebuzzi 2002 (1) SACR 128 (SCA) (2002 (2) SA 1): applied F

Prinsloo v Van der Linde and Another 1997 (3) SA 1012 (CC) (1997 (6) BCLR 759; [1997] ZACC 5): referred to

Prophet v National Director of Public Prosecutions 2005 (2) SACR 670 (SCA) (2006 (1) SA 38; [2006] 1 All SA 212; [2005] ZASCA 94): dictum in para [33] applied G

Prophet v National Director of Public Prosecutions 2006 (2) SACR 525 (CC) (2007 (6) SA 169; 2007 (2) BCLR 140; [2006] ZACC 17): dictum in para [46] applied

S v Makwanyane and Another 1995 (2) SACR 1 (CC) (1995 (3) SA 391; 1995 (6) BCLR 665; [1995] ZACC 3): dictum in paras [104] – [105] applied H

S v Mhlungu and Others 1995 (2) SACR 277 (CC) (1995 (3) SA 867; 1995 (7) BCLR 793; [1995] ZACC 4): dictum in para [36] applied

S v Shaik and Others [2007] 2 All SA 150 (SCA): referred to

S v Shaik and Others 2008 (2) SACR 165 (CC) (2008 (5) SA 354; 2008 (8) BCLR 834): applied

S v Zuma 1995 (1) SACR 568 (CC) (1995 (2) SA 642; I 1995 (4) BCLR 401; [1995] ZACC 1): referred to

South African Police Service v Solidarity obo Barnard (Popcru as Amicus Curiae) 2014 (6) SA 123 (CC) (2014 (10) BCLR 1195; [2014] ZACC 23): dictum in para [165] applied

Van der Walt v Metcash Trading Ltd 2002 (4) SA 317 (CC) (2002 (5) BCLR 454; [2002] ZACC 4): referred to. J

2016 (1) SACR p364

Legislation cited

Statutes A

The Prevention of Organised Crime Act 121 of 1998, s 18: see Juta's Statutes of South Africa 2014/15 vol 1 at 2-593.

Case Information

M Govindasamy SC (with R Naidoo) for the appellant.

VJ Gajoo SC (with JE Howse) for the respondent. B

An appeal against the dismissal by a magistrate of an application for a confiscation order in terms of the Promotion of Organised Crime Act 121 of 1998.

Order C

The appeal is dismissed with costs, including the costs of two counsel.

Judgment

D Pillay J (Bezuidenhout AJ concurring):

D [1] 'Benefit' is the word in s 18(1) of the Prevention of Organised Crime Act 121 of 1998 (POCA) that holds the attention of the court in this appeal, as it did in S v Shaik and Others 2008 (2) SACR 165 (CC) (2008 (5) SA 354; 2008 (8) BCLR 834). As the first ever decision of the Constitutional Court on ch 5 of the POCA, [1] Shaik outlined the scheme of criminal confiscation contemplated in ch 5 of the POCA, obviating the E need for this court to do so. [2] Rejecting a narrow interpretation of the word 'benefit' in s 18(1), the Constitutional Court pronounced unanimously as follows:

'[Section] 12(3) provides that a person will have benefited from unlawful activities if he or she has received or retained any proceeds of F unlawful activities. What constitutes a benefit, therefore, is defined by reference to what constitutes proceeds of unlawful activities. It is not possible in the light of this definition to give a narrower meaning to the concept of benefit in s 18, for that concept is based on the definition of the proceeds of unlawful activities. . . . Proceeds is broadly defined to include any property, advantage or reward derived, received G or retained directly or indirectly in connection with or as a result of any unlawful activity. . . . [Section 18(2)] expressly contemplates that a confiscation order may be made in respect of any property that falls within the broader definition, and is not limited to a net amount. The narrow interpretation of benefit proposed by the appellants cannot thus fit with the clear language of s 18 and the definition of H "proceeds of unlawful activities.' [3]

[2] Counsel for the appellant submitted that the 'benefit' in this case is the equivalent of the 'proceeds of unlawful activities', which in this case equalled the amount of the proceeds of the contract for building schools. I In defending the conclusion of the learned magistrate that the appellant

2016 (1) SACR p365

D Pillay J (Bezuidenhout AJ concurring)

had proved that the respondent had benefited from fraudulent A misrepresentations and corruption but not the amount of the benefit, counsel for the respondent persisted that the benefit could not be the proceeds of the contract. At most, it would be the profit after deducting the costs of construction from the contract price. As the appellant failed to discharge the onus of proving the amount of the benefit, the magistrate correctly B dismissed the confiscation application. On a question primarily of law the crux of the controversy is this: does 'proceeds of unlawful activities' equal everything 'received'; is everything received equal to 'benefit'; and does benefit equal 'proceeds' or 'gains'?

[3] The evidence and submissions invite this court to take its cue from C appellate decisions but to interpret and apply 'benefit' to circumstances different from Shaik; National Director of Public Prosecutions v Rebuzzi 2002 (1) SACR 128 (SCA) (2002 (2) SA 1); National Director of Public Prosecutions v Gardener and Another 2011 (1) SACR 612 (SCA) (2011 (4) SA 102); and Kockjeu above n2, but similar to National Director of...