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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 2015/10851

Not reportable

Not of interest to other judges

Revised.

4/4/2018

In the matter between:-

THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS                                   Applicant

and

STARPLEX 513 (PTY) LTD                                                                                           Respondent

and

STARFIN COMMODITY SOLUTIONS (PTY) LIMITED                                  Interested Party

JUDGMENT

 

CRUTCHFIELD AJ:

[1] This application in terms of Rule 30(1) of the Uniform Rules of Court (‘Rule 30(1)’), arose pursuant to the respondent’s alleged failure to comply with section 49(3) of the Prevention of Organised Crime Act, 121 of 1998 (‘POCA’).

[2] I refer to the background to the Rule 30(1) application below. 

[3] The applicant obtained an ex parte preservation order (‘the preservation order’) in respect of five (5) bars of unwrought gold of 30.295 kilograms (‘the property’).   The value of the property at the time of its seizure by the South African Police Service (‘SAPS’)), was approximately R9 million.

[4] The respondent served a notice of intention to oppose the granting of the forfeiture order, dated 6 February 2017 (the ‘notice to oppose’).

[5] Section 39 of POCA prescribes specific procedures in respect of a notice of opposition to the granting of a forfeiture order over property subject to a preservation order, or, in respect of an application for an order excluding an interest in the property concerned from the operation of the forfeiture order, if granted, in terms of s 52 of POCA.

[6] It was common cause that the notice to oppose was served outside of the permitted time-period, and, did not comply with the provisions of POCA’s s 39(5)(b) and (c), which require inter alia that the notice to oppose be accompanied by an affidavit stating:

‘... (b)   the nature and extent of (the respondent’s) interest in the property concerned; and

(c) the basis of the defence upon which (the respondent) intends to rely in opposing a forfeiture order or applying for the exclusion of his or her interests from the operation thereof.’

[7] On 6 March 2017, the applicant corresponded with the respondent’s attorneys of record advising that it considered the notice to oppose as pro non scripto.

[8] The applicant did not dispute that its correspondence did not afford the respondent the ten day period required by Rule 30(2)(b) to remove the cause of complaint.

[9] Thereafter, on 7 March 2017, the respondent served an application in terms of s 49(3) of POCA (the ‘s 49(3) application’), essentially an application for condonation of the late filing of the notice to oppose and for the deficits in that notice.

[10] For reasons referred to below, the applicant considered the s 49(3) application  as non-compliant, and served a notice in terms of Rule 30(2)(b), on 14 March 2017, permitting the respondent ten days to withdraw the s 49(3) application. 

[11] On 3 April 2017, the respondent amended its s 49(3) application by the inclusion of an application for intervention and reiterated its request for condonation of its late opposition to the forfeiture application.

[12] Notwithstanding, the applicant was steadfast that the s 49(3) application together with the amended notice of motion did not meet the requirements of POCA’s s 49 and constituted an irregular step that required withdrawal, failing which the applicant would apply for the setting aside of the s 49(3) application.

[13] POCA’s s 49 permits an order granting leave to enter an appearance within a specified time-period in terms of, and, in the manner set out in s 39 including s 39(5) of POCA.

[14] Section 49 prescribes a specific procedure involving a High Court application for leave to enter a late appearance. Pursuant thereto, the respondent was obliged to establish two factors in its s 49(3) application:

14.1 Firstly; ‘sufficient reason’ for its failure to enter an appearance timeously in terms of POCA’s s 39(3) of; and

14.2 Secondly; an ‘interest’ in the property subject to the preservation order. ‘Interest’ refers to a ‘lawful interest’ in and to the property.

[15] The respondent refused to withdraw its s 49(3) application.

[16] Thus, the application before me was in terms of Rule 30(1) for the setting aside of the s 49(3) application as an irregular step. 

[17] My task was to determine whether the s 49(3) application constituted a proper application in terms of POCA’s s 49, and, whether, given the requirements of POCA’s s 49, the respondent’s s 49(3) application constituted an irregular step liable to be set aside in terms of Rule 30(1).

[18] Starfin, the interested party, did not file a notice to oppose or an affidavit in answer to the Rule 30 application.

[19] The respondent opposed the Rule 30(1) application on two grounds. Firstly, that it had filed a comprehensive affidavit setting out the grounds of its opposition to the forfeiture application and requesting condonation for the late filing of the notice to oppose, and, secondly, that the applicant had failed to show prejudice, a prerequisite for relief in terms of Rule 30(1).[1]  Furthermore, that there was, in fact, no prejudice to the applicant pursuant to the s 49(3) application.

[20] The crux of the applicant’s argument was not that the respondent failed to deal adequately with the two requirements of POCA’s section 49(3), but that the respondent canvassed matter in addition thereto, outside of those two requirements and served, in effect, to set out the basis of the respondent’s opposition to the pending forfeiture order application. In addition, the respondent had applied for relief not envisaged in terms of s 49(3).

[21] The aforementioned was notwithstanding that the applicant was not yet obliged in terms of POCA’s s 48(2), to serve the forfeiture order application on the respondent, and in circumstances where the applicant had not yet done so. 

[22] I accept that the s 49(3) application dealt with matter extraneous to the strict requirements of POCA’s s 49(3), as did various of the orders claimed by the respondent in the s 49(3) application. Indeed, I did not understand the respondent to contend otherwise.

[23] The applicant referred to the differences between the requirements of POCA’s s 39(1) of and s 49(3)(b).

[24] The applicant argued that the s 49(3) application was inconsistent with the provisions of POCA’s s 49 read together with s 48(2) and s 62(2). Hence, the s 49(3) application ought to be set aside. Furthermore, the relief sought by the respondent was not provided for in terms of POCA’s s 49 and s 39.

[25] The respondent contended that the applicant’s stance was an attempt to deny the respondent a right to be heard in the forfeiture application given that the respondent’s defence in that application carried, allegedly, prospects of success. I do not venture any comment as to the respondent’s alleged prospects of success or otherwise. That is not my task.

[26] A court seized with an application in terms of Rule 30 is vested with a discretion.  Prejudice pursuant to the alleged irregular step is a requirement for success in terms of Rule 30.[2]  

[27] Cogent reasons exist for the requirements of POCA’s s 39(5)(b) and (c). The purpose and rationale thereof include affording the applicant an opportunity to consider and if necessary, investigate the defence to be raised in the forfeiture application. In the event that the defence is found to be valid, further steps are thus avoided.

[28] In the event of further steps proving necessary, the procedure requires the applicant to serve subsequently, a copy of the forfeiture application on the party giving notice after which opposing papers may be filed. 

[29] Notably, a court granting leave in terms of POCA’s 49(3)(b) may make order/s to regulate the further participation of the person granted leave in the forfeiture application proceedings.   

[30] As to the requirements of POCA’s s 39(5)(b) and (c), that the respondent demonstrates sufficient reason for the lateness, and its interest in the property:

30.1 The respondent, whose evidence was corroborated by an expert on behalf of the interested party, alleged that the gold seized by the State, (which the applicant contended belonged to the State), did not in fact so belong and was incorrectly seized.  Pursuant thereto, the respondent averred that the gold could not be forfeited. 

30.2 The respondent argued further that the five gold bars seized by the State bore no relevance to the gold bars referred to in the preservation application or the forfeiture application.  None of the gold bars seized by the State contained the elements of lithium or molybdenum that were melted into the gold belonging to the State.

[31] Hence, the respondent alleged facts sufficient to demonstrate a lawful interest of a nature that gave rise to locus standi, in the property.

[32] In respect of the reasons for the respondent’s delay in serving the notice to oppose, the respondent’s director was imprisoned and subsequently released upon the withdrawal of the charges brought against him.  He explained the confusion caused to him by the terminology ‘confiscation order’ and ‘preservation order’, and that he, not un reasonably, expected that steps would only be required upon the termination of the criminal proceedings instituted against him.

[33] Furthermore, the respondent had commenced taking legal advice when its director was arrested.

[34] The essence of the respondent’s director’s explanation was firstly, that he was unable to take the necessary steps in the light of his incarceration, and secondly, that he misunderstood the procedural requirements thereof.  That confusion was not unreasonable and should not serve to prevent an apparently reasonable claim to an interest in the property from being advanced in the forfeiture application.

[35] To my mind, the respondent set out facts sufficient to demonstrate that it held an interest in the property and an associated right to enter an appearance in terms of POCA’s s 39(3) and (5). Furthermore, the respondent set out enough to establish good cause for the late delivery of the notice to oppose.[3]

[36] I accept that the particularity furnished by the respondent in its s 49(3) application exceeded the minimum requirements of POCA’s s 49(3). That, however, far from prejudicing the applicant, served to assist the applicant in investigating the proposed defence to the forfeiture application, and, arming the applicant with greater insight into the respondent’s defence than would otherwise be the case. 

[37] Information additional to the minimum requirements of POCA’s s 49(3), (in circumstances where the respondent met the minimum requirements of POCA’s s 49(3)), cannot reasonably found a basis for finding that the respondent’s s 49(3) application does not constitute a proper application in terms of Section 49 of POCA. Nor did the applicant furnish any authority for such a proposition.

[38] The fact that the relief claimed by the respondent in its s 49(3) application did not conform to the strict requirements of POCA’s section 49, does not serve to render the application irregular as a court granting leave in terms of POCA’s 49(3)(b) may make order/s to regulate the further participation of the person granted leave in the forfeiture application proceedings.  That provision serves to justify the respondent’s claims for relief that the applicant contended were extraneous to, and, not envisaged in terms of POCA’s s 49(3).

[39] It follows that I am of the view that no prejudice was caused to the applicant pursuant to the respondent’s 49(3) application.

[40] To deny the respondent an opportunity to oppose and to be heard in the forfeiture application pursuant to technical deficiencies in the respondent’s conduct of the litigation, in the face of the respondent’s attempts to rectify and remedy those failures, would constitute an injustice and offend against the provisions of s 34 of the Constitution.

[41] It is the policy of these courts that litigants should, within reason, be allowed to ventilate, once and for all, their defences to civil claims made against them.  It would be untenable for this Court to deny the respondent such an opportunity in the forfeiture application notwithstanding the technical defects in the respondent’s notice to oppose and its s 49(3) application.  

[42] Indeed, to do so, by granting the Rule 30 application and setting aside the respondent’s s 49(3) application, would amount to a denial of the respondent’s fundamental Constitutional right to the fair hearing of a dispute in which the respondent prima facie has an interest.

[43] Section 34 of the Constitution[4] provides:

‘Everyone 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 or, where appropriate, another independent and impartial tribunal or forum.’

[44] It is trite that the protection of fairness in proceedings before our courts should be stringently preserved no matter the nature of the proceedings, failing which the judicial process becomes tainted as the right to a fair hearing before a court lies at the heart of the rule of law. [5]

‘[56] There can be no doubt about the importance of the fundamental right which is guaranteed by s 34...

“This section 34 fair hearing right affirms the rule of law, which is a founding value of our Constitution. The right to a fair hearing before a court lies at the heart of the rule of law. A fair hearing before a court as a prerequisite to an order being made against anyone is fundamental to a just and credible legal order.” [Footnotes omitted.]’

[45] The applicant contended that in the event that I saw fit to permit the respondent leave to oppose the forfeiture application, that the applicant should be allowed an appropriate period in which to consider the opposition and deal therewith, inter alia by filing a further affidavit. 

[46] Such a right in favour of the applicant is the corollary of the respondent’s right to leave to oppose the forfeiture application.  Fairness is a bilateral concept and in so far as the respondent ought not to be prejudiced, so too should the applicant be allowed a sufficiently appropriate time in which to consider the content of the respondent’s proposed defence and to deal therewith. 

[47] In this regard, I am of the view that it would be appropriate for the applicant to have until 7 May 2018 to file its replying affidavit.  It is hardly surprising that Mr Roux SC on behalf of the respondent agreed to the applicant being afforded an appropriately reasonable period of time.

[48] In the circumstances, I am of the view that the Rule 30 application stands to be dismissed with costs.

[49] I grant the following order:

1. The Rule 30 application is dismissed with costs.

 

_________________________________________________

A A CRUTCHFIELD

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

 

COUNCIL FOR APPLICANT                  Mr W Coetzer

INSTRUCTED BY                                   The State Attorney

COUNSEL FOR RESPONDENT             Mr B Roux SC

INSTRUCTED BY                                   Van Zyl’s Incorporated

DATE OF HEARING                               7 December 2017.

DATE OF JUDGMENT                           4 April 2018.

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