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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION

CASE NO: 1466/07

IN THE EX PARTE MATTER OF

NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS

APPLICANT

In re:

RUBBER DUCK WITH REGISTRATION DTP988; BOAT TRAILER WITH REGISTRATION DNT 118 EC

JUDGMENT

Prevention of Organised Crime Act – section 50(2) – what constitutes ancillary order – whether order allocating use of forfeited property to law enforcement agency may be made – nature of power to allocate use of forfeited property in terms of section 69A of POCA.

Failure to cite curator bonis in application – fatal defect in application – application dismissed.

GOOSEN, A.J.

1. On 13 December 2007 an order was issued in terms of section 50(1) of the Prevention of Organised Crime Act, 121 of 1998 (hereinafter POCA) declaring certain assets forfeit to the state. These assets were seized in July 2007 pursuant to a law enforcement operation conducted by Marine and Coastal Management officials (hereinafter MCM) in the Port Elizabeth and Port Alfred areas. The operation was directed at combating illegal abalone harvesting activities. Included in the assets seized and subsequently declared forfeit is a 9 metre long rubber duck, described in the papers as a super duck and boat trailer. It is these items that are the subject of this application.

2. In this application the applicant, being the Asset Foreiture Unit under the auspices of the Director of Public Prosecutions, seeks an order in terms of section 50(2) of POCA authorising MCM to utilise the super duck and boat trailer in law enforcement activities pending the recommendations of the Criminal Asset Recovery Account Committee and final allocation of the items by the Cabinet in terms of section 69A of POCA.

3. Section 50(2) of POCA provides that the High Court may “…when it makes a forfeiture order or at any time thereafter, make any ancillary orders that it considers appropriate, including orders for and with respect to facilitating the transfer to the state of property forfeited to the state under such order.”

4. The type of orders that may be made are not circumscribed other than that they must be ancillary to the forfeiture order. The language used in the section suggests that the orders must be of such a nature as to facilitate the carrying into effect of the primary order, namely the order declaring certain property forfeit to the state. Mr Gysman, who appeared for the applicant, argued that the order sought is indeed ancillary to the forfeiture order insofar as it regulates the utilization of the forfeited property in accordance with the primary objectives and purposes of the Act, namely the utilization of forfeited property in law enforcement and the combating of organised crime.

5. The order sought will certainly, if granted, regulate the use of the forfeited property, but in my view cannot be said to have any bearing upon the carrying into effect to the forfeiture order. In that sense it cannot properly be said to be ancillary to the order of forfeiture.

6. The only sense in which it may constitute an ancillary order is to the extent that it regulates and controls the powers of a curator bonis appointed to give effect to a forfeiture order.

7. In this regard section 56 of POCA, which sets out the effect of a forfeiture order, provides:

(1)  Where a High Court has made a forfeiture order and a curator bonis has not been appointed in respect of any of the property concerned, the High Court may appoint a curator bonis to perform any of the functions referred to in section 57 in respect of such property.

(2)  On the date when a forfeiture order takes effect the property subject to the order is forfeited to the State and vests in the curator bonis on behalf of the State.

(3)  Upon a forfeiture order taking effect the curator bonis may take possession of that property on behalf of the State from any person in possession, or entitled to possession, of the property.

8. In this instance, at the time that the forfeiture order was made, a curator was indeed appointed and was charged with the authority to, inter alia:

… (C)ause the property to be disposed of by private sale or other means auctioned and the proceeds paid into the Criminal Asset Recovery Account established under Section 63 of the Act, held at the South African Reserve Bank;

Perform any ancillary acts which, in the opinion of Raymond Buys, but subject to any directions of the Criminal Assets Recovery Committee established under section 65, are necessary.

9. It is clear from the terms of the forfeiture order that the curator’s powers were circumscribed. To the extent that the order now sought in terms of section 50(2) would constitute an amendment of the terms of the original order it may well be construed as an ancillary order and therefore authorised in terms of section 50(2). I am prepared to accept that this is so.

10. That, of course, does not mean that the order sought by the applicant is competent in the circumstances of this matter. On the contrary, in my view it is not.

11. There are in fact a number of fundamental difficulties with the application, only two of which need be outlined here.

12. The order that is sought envisages the temporary allocation of the use of the super duck and trailer to MCM for much needed law enforcement operations to combat the scourge of abalone poaching in the Eastern Cape. Whilst this is undoubtedly a laudable objective, the applicant loses sight of the nature and range of measures provided for in POCA by which the allocation and utilization of forfeited property is regulated and controlled.

13. Chapter 7 of POCA deals with the establishment and management of the Criminal Assets Recovery Account. The account is established as a separate account in the National Revenue Fund¹ and consists of, inter alia, all monies derived from the fulfillment of confiscation and forfeiture orders contemplated in chapters 5 and 6 and all property derived from the fulfillment of forfeiture orders contemplated by section 57.² In terms of section 65 a Criminal Assets Recovery Committee is established consisting of the Ministers of Justice, Safety and Security and Finance as well as the National Director of Public Prosecutions.

14. The Committee’s function is to advise the Cabinet on all aspects relating to forfeiture of property in terms of POCA and to advise on all aspects relating to the rendering of financial assistance to law enforcement agencies.³

15. The Committee makes recommendations to the Cabinet with regard to a policy to be adopted concerning the forfeiture and realization of property and, very importantly, with regard to the allocation of property and moneys from the Account to specific law enforcement agencies.⁴

16. Section 69A sets out a detailed scheme for the utilization of forfeited property and provides for a framework of accountability for such utilization. It is appropriate to record here the full text of the section.

(1)  The property and money allocated to, or standing to the credit of, the Account may be utilised by Cabinet, after considering the recommendations of the Committee, for—

(a) the allocation of property and amounts of money from the Account to specific law enforcement agencies;

(b) the allocation of property and amounts of money from the Account to any institution, organisation or fund contemplated in section 68 (c); and

(c) the administration of the Account.

(2)  All amounts of money withdrawn, or property allocated, from the Account under subsection (1) shall be so withdrawn or allocated as a direct charge against the National Revenue Fund.

(3)  (a)  Whenever Cabinet allocates property or money under subsection (1) to a specific law enforcement agency or to an institution, organisation or fund contemplated in section 68 (c)—

(i) Cabinet shall indicate the specific purpose for which that property or money is to be utilised; and

(ii) the Minister shall forthwith cause all particulars of such allocation to be tabled in Parliament.

(b)  Property or money allocated under subsection (1) may not be utilised for any other purpose than that specified in terms of paragraph (a) (i).

(4)  No allocation of property or money shall be made under subsection (1) to an institution, organisation or fund contemplated in section 68 (c) unless an accounting officer for that institution, organisation or fund is appointed or designated for such institution, organisation or fund.

(5)  An accounting officer appointed or designated under subsection (4) shall be charged with the responsibility of accounting for all money allocated under subsection (1), the acquisition, receipt, custody and disposal of all property so allocated and all payments made by him or her in respect of the purpose for which the allocation had been made.

(6)  The Committee may, after consultation with the Treasury and the Auditor-General, in such manner as it deems necessary, issue guidelines to accounting officers appointed or designated under subsection (4) in connection with the systems of bookkeeping and accounting to be followed by them.

(7)  Accounting by a law enforcement agency or institution, organisation or fund for property and money allocated to it from the Account under subsection (1) shall be done separately from accounting for money and property received from any other source.

(8)  The Auditor-General shall audit the books of accounts, accounting statements, financial statements and financial management of each law enforcement agency or institution, organisation or fund to which property or money had been allocated under subsection (1) in respect of that allocation, and the provisions of section 6 of the Auditor-General Act, 1989 (Act 52 of 1989), shall apply in respect of any such audit.

(9)  The Auditor-General shall submit a copy of the report on an audit under subsection (8) to the Committee.

17. It will be immediately apparent that the allocation of property or funds out of the Criminal Assets Recovery Account is an executive function that is specifically regulated. In the first instance the authority to make such allocation is that of the Cabinet, acting upon the recommendations of a Committee comprising Cabinet ministers and in accordance with a policy adopted for that purpose. Furthermore, the allocation of property must be for a specific purpose and must, in accordance with subsections (5) and (7) be accounted for separately from other funds and resources allocated to the law enforcement agency. The allocation itself is made subject to reporting requirements to Parliament, thus establishing a measure of oversight and control.

18. I have grave doubts that a Court is entitled to venture into the terrain of resource allocation in matters of this nature. The utilization of forfeited property in accordance with the statutory scheme is a matter for the exercise of executive authority. Whilst it may be that a Court can, in appropriate circumstances, issue orders that have the effect of holding the executive to account in terms of the legislation, it will not seek to usurp the executive’s function.

19. In the present application, no basis is laid upon which this Court could properly allocate the use of the assets to MCM, even if it is assumed that such allocation can be made pending the final allocation by Cabinet. The applicant has not placed before me the policy in terms of which such allocation is made, nor has it set out any basis upon which it may reasonably be inferred that the assets will in due course be allocated to MCM. There is no indication when the Committee may deal with the matter, nor has the Committee been afforded an opportunity to address the issue. In my view this renders the application fatally defective.

20. There is of course a further aspect to be considered. As indicated above, the effect of a forfeiture order is that the forfeited assets vest in the appointed curator bonis. In terms of section 57 (1) of POCA the curator is required, subject to any order an excluding interest in forfeited property, to deposit moneys into the Account; deliver property to the Account or dispose of property subject to the directions of the Committee.

21. The order sought by the applicant has a clear and direct bearing upon the exercise of the curator’s powers in terms of POCA and in terms of the forfeiture order granted by this court.

22. The curator has not been cited in this application and has accordingly not had an opportunity to deal with the effect of the order sought. In these circumstances no order which affects the vested rights of the curator or impacts upon the proper and regulated exercise of the curator’s power can properly be made.

23. In my view the application cannot succeed. I accordingly make the following order:

The application is dismissed.

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G. G. GOOSEN

ACTING JUDGE OF THE HIGH COURT

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