The Station Wagon, The Heroin and the Preservation Of Property Order: Section 38 of the Prevention of Organised Crime Act, No 121 Of 1998

The Prevention of Organised Crime Act, No 121 of 1998 (POCA) is one of several pieces of legislation in South Africa’s arsenal of anti-corruption and anti-money laundering legislation. 

13 Jun 2018 4 min read Corporate Investigations Alert Article

The purpose of POCA is, amongst others, to:

  • introduce measures to combat organised crime such as money laundering and racketeering activities;
  • provide for the recovery of the proceeds of unlawful activity;
  • provide for the civil forfeiture of property that has been used to commit an offence; and
  • prescribe penalties for those found guilty of committing offences in terms of the Act.

Section 38 of POCA makes provision for preservation of property orders - that is, an order prohibiting any person from dealing with any property in any manner, subject to the exceptions and conditions which are specified in the order.

These orders are obtained by way of an ex parte application by the National Director of Public Prosecutions (NDPP).
Ex parte applications are applications made to court without giving the affected party notice of the application. In order to obtain one, the NDPP may apply to the High Court if there are reasonable grounds to believe that the property concerned is an instrumentality of an offence, the proceeds of unlawful activities or associated with terrorist and related activities. In appropriate circumstances, property which is the subject of a preservation of property order may ultimately be forfeited to the State.

The manner in which these orders are applied for was considered in a recent judgment of the Supreme Court of Appeal: The National Director of Public Prosecution (ex parte application), (905/2017) [2018] ZASCA (86) (31 May 2018).

The facts of the case concerned an application that the NDPP had made to preserve a Toyota Prado station wagon covertly transporting 50 kilograms of heroin from Mozambique to South Africa. The heroin had an approximate street value of R50 million.

The matter was initially heard in the Pretoria High Court, where it was struck off the roll and the NDPP was directed to serve the application on the alleged owner of the motor vehicle prior to the matter being adjudicated. The NDPP was aggrieved by the Pretoria High Court’s decision and sought leave to appeal from the Supreme Court of Appeal.

By providing a mechanism in s38 of POCA to obtain a preservation of property order by way of an ex parte application, the legislature was cognisant of the challenges which are unique to obtaining such an order. In particular, a preservation of property order is likely to be sought on an expedited and confidential basis during an investigation into criminal activity by the South African Police Service. Under such circumstances, it is critical for the property concerned to be preserved as soon as possible. In order to accomplish preservation of the property, s38 of POCA was designed to prevent persons with an interest in the property from attempting to interfere with, dispose of or destroy the property and thereby compromise the investigation process. If notice has to be given to the affected party prior to obtaining the order, there would be a substantial risk of interference or disposition of such property.

In light of the above, s39 of POCA requires the NDPP to give notice to all persons known to have an interest in the property as soon as possible after a preservation of property order is granted. This is consistent with s48 of POCA, which requires the NDPP to give notice of the preservation of property to all persons known to have an interest in it prior to forfeiture of the property to the State. It is evident from the wording of s38 as well as the provisions of s39 and s48 that the legislature intended for notification of a preservation of property order to be provided to persons with an interest in the property after the preservation of property order has been granted and not before that time.

In its decision, the Supreme Court of Appeal overturned the decision of the Pretoria High Court and found that, as soon as possible after an application for a preservation of property order has been filed by the NDPP, a judge in Chambers ought to consider the application and make the appropriate order. In the circumstances, notification to the owner of the relevant property is not required prior to adjudication of the application.

The Supreme Court of Appeal reasoned further that people with an interest in the property which is the subject of a preservation of property order would have been given sufficient opportunity to protect their interests in respect of the property after a preservation of property order is granted and prior to its forfeiture to the State.

The finding of the court accords with the spirit and purpose of POCA, as highlighted in its preamble, to provide for a civil remedy for the preservation, seizure and forfeiture of property which is derived from unlawful activities or is concerned in the commission or suspected commission of an offence.

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