National Director of Public Prosecutions v Starplex 47 CC and Others: In re Ex parte National Director of Public Prosecutions v Mamadou and Another

• Jurisdiction: South Africa
• Judgment Date: 20 March 2008
• Citation: 2009 (1) SACR 68 (C)

National Director of Public Prosecutions v Starplex 47 CC and Others: In re Ex parte National Director of Public Prosecutions v Mamadou and Another
2009 (1) SACR 68 (C)

2009 (1) SACR p68

Citation	2009 (1) SACR 68 (C)
Case No	12099/2007
Court	Cape Provincial Division
Judge	Bozalek J
Heard	January 30-31, 2008; February 13, 2008; February 14, 2008
Judgment	March 20, 2008
Counsel	T Smit (with Z Venter) for the applicant.; JC Tredoux for the respondents.

Flynote : Sleutelwoorde

Search and seizure — Preservation of property order — Application for — Chapter 6 of Prevention of Organised Crime Act 121 of 1998, s 38 — Standard of proof required — Section 38(2) explicitly requiring that applicant having I to do no more than establish existence of 'reasonable grounds to believe that the property concerned is an instrumentality of an offence or the proceeds of unlawful activities' — This clearly falling short of standard of proof on balance of probabilities, as also demonstrated by express mention in s 50(1), concerning forfeiture orders, of proof 'on a balance of probabilities' — Such level of proof clearly not intended by legislature where J s 38(2) concerned.

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Search and seizure — Preservation of property order — Application for — Chapter A 6 of Prevention of Organised Crime Act 121 of 1998, s 38 — application concerning sums of cash — Prosecution based on respondents' allegedly unlawful possession of cash withdrawn — Whether good reason existing for bringing application ex parte — Common cause that respondents' legal advisor having contacted police with view to recovering moneys — Since first respondent entitled to demand release of seized moneys at any time B after withdrawal of charges, applicant justified in adopting prudent attitude by bringing application without notice to respondents.

Search and seizure — Preservation of property order — Application for — Chapter 6 of Prevention of Organised Crime Act 121 of 1998, s 38 — applicant alleging respondents operating unlawful foreign exchange business — C Large cash sums seized — Respondents claiming that moneys proceeds of parking and clothing businesses — Respondents' versions highly improbable and lacking credibility — Possible that part of seized cash indeed proceeds of legitimate business — However, no dividing line could be drawn on sparse information provided by respondents — Under circumstances, and especially given that only preservation order being sought, D court not attempting to draw arbitrary line between funds possibly lawfully generated and other funds.

Search and seizure — Seizure by police in terms of ss 20 and 22 of Criminal Procedure Act 51 of 1977 — Police seizing cash suspected of being proceeds of unlawful foreign exchange operation — Section 22 of Act E authorising police to carry out search and seizure without warrant if having reasonable grounds to believe that warrant would be issued, but that delay in obtaining such warrant would defeat object of search — In casu, if authorities leaving premises in order to secure warrant, every chance that cash disappearing — Money capable of quick flight and difficult to trace — Search and seizure lawfully conducted. F

Headnote : Kopnota

Pursuant to an ex parte application in terms of the Prevention of Organised Crime Act 121 of 1998 (POCA), the applicant was granted a rule nisi for the preservation of significant cash sums in rands, euros, United States dollars and pounds sterling. At that stage only two respondents had been cited by the applicant, but after service of the rule nisi five intervening G respondents declared an interest in the property and indicated their intention to oppose any application for the confirmation of the preservation order. The cash had been seized during a raid conducted on premises occupied by the first and second respondents. The applicant alleged that the greater part of the cash consisted of the proceeds of an unlawful money exchange business operated by the first respondent, while the lesser part H was - according to the second respondent - the proceeds of her business of selling food. According to the first respondent, however, the South African currency seized was the proceeds of the first intervening respondent's parking business at Cape Town railway station, and of its wholesale selling of clothing and apparel. The bulk of the sums of foreign currency seized belonged variously to the second, third, fourth and fifth intervening I respondents, on whose behalf the first respondent had held the cash for safekeeping. The interest declared by the five intervening respondents corresponded approximately to the amounts seized from the first respondent; no such interest was declared in the balance of the amounts seized, which corresponded with the amounts found in the second respondent's possession. Apart from contesting whether the seized cash was either the J

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A instrumentality of an offence or the proceeds of unlawful activities, the respondents and intervening respondents also raised a question of onus and challenged the propriety of the applicant's having obtained the rule nisi on an ex parte basis, as well as the legality of the search and seizure operation.

Held, that s 38(2) of POCA explicitly required that an applicant for a preservation order need do no more than establish the existence of 'reasonable B grounds to believe that the property concerned is an instrumentality of an offence or the proceeds of unlawful activities'. This clearly fell short of the standard of proof on a balance of probabilities, the test contended for by the respondents. That this was so was also demonstrated by the express mention in s 50(1), concerning forfeiture orders, of proof 'on a balance of probabilities'. Such a level of proof had clearly not been intended by the C legislature where s 38(2) was concerned. (Paragraph [13] at 77d-e.)

Held, further, that it had been contended that the first and second respondents should have been given notice of the initial application for a preservation order and that there had been no good reason why the matter had been brought ex parte, inasmuch as the moneys had at all relevant times been held by the police pending the outcome of an exchange control prosecution D of the first respondent. It was common cause, however, that when this prosecution was withdrawn the first respondent's legal advisor had contacted the police with a view to recovering the moneys; and that he had been informed that the applicant intended applying for a preservation order. Certain correspondence ensued, which was later placed before the judge who granted the preservation order. There was thus no question of any E material fact having been withheld from the court. Furthermore, since the first respondent could have demanded the release of the seized moneys at any time after the withdrawal of charges, the applicant was justified in adopting a prudent attitude by bringing the application without notice to the respondents. (Paragraphs [15] - [17] at 77g-78g.)

Held, further, regarding the lawfulness of the seizure, that a warrant had been F obtained on the basis of information that a group of foreign nationals was suspected of issuing fraudulent documents and permits. During the search operation it had become apparent to the police that further offences, namely, contraventions of the exchange control regulations, were being committed. They had proceeded to act in terms of s 22 of the Criminal Procedure Act 51 of 1977, which authorised a police official to carry out a G search if he had reasonable grounds to believe that a warrant would be issued, but that the delay in obtaining such a warrant would defeat the object of the search. If the authorities had left the premises in order to secure a warrant, there was every chance that the moneys would have disappeared. This would not have been prevented simply by posting a guard at the premises, as the respondents contended. Money was capable of quick H flight and could be difficult to trace. In the result, the search and seizure had been lawfully conducted. (Paragraphs [18] and [19] at 78h-79b and 79c-d.)

Held, further, the first respondent had not explained how much cash the parking and clothing businesses generated on a daily, weekly or monthly basis. There was also no information provided concerning the cash salaries that were apparently paid or the cash purchases the businesses supposedly I made. Such lack of detail was perplexing. On the other hand, documentation seized by the police tended to bolster the applicant's case. Certain loose pages appeared to be handwritten notes of foreign currency transactions. The first respondent simply denied any knowledge of these documents and, while he suggested that they might have been seized from the premises of a neighbouring businessman, no affidavit from that person had been supplied J and neither was there any explanation as to why such an affidavit could not

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be filed. While it might be accepted that the first intervening respondent A sold clothing from time to time, no evidence had been presented of any systematic trading in clothing when such evidence should have been easily obtainable. Likewise, there were strong indications that the first intervening respondent did conduct a parking business, but, once again, details of its turnover, income and sales were notably lacking. If the first respondent had indeed engaged in the unlawful buying and selling of foreign currency it B would have been foolish of him not to have arranged 'cover' in the form of one or more legitimate businesses. In the result, the first respondent and the first intervening respondent had not satisfactorily explained the presence of the substantial sum of over R148 000 on the premises...