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SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE KWAZULU-NATAL HIGH COURT, PIETERMARITZBURG

REPUBLIC OF SOUTH AFRICA

CASE NO: 6867/08

DATE: 28 AUGUST 2015

In the matter between:

THE NATIONAL DIRECTOR OF PUBLIC PROSECUTIONS.........................................Applicant

And

JOYCE THEMBELIHLE KOMANE............................................................................1^st Respondent

GLADYS MAKHOSAZANA MAKHAYE...................................................................2^nd Respondent

SIKHUMBUZO EUGENE MBATHA...........................................................................3^rd Respondent

ORDER

I accordingly make the following order:

1. That the property listed in the Annexure hereto is declared forfeit to the state in terms of the provisions of Section 50 of the Prevention of Organised Crime Act, No. 121 of 1998 (the POCA).

2. That the curator bonis appointed by this Court in terms of the preservation order dated 4 June 2008 continue to act as such with authority to perform all the functions specified in the POCA subject to the provisions of the Administration of Estates Act, No. 66 of 1965, and to the supervision of the Master of the High Court.

3. The curator bonis is authorised, as of the date on which the forfeiture order takes effect to:

3.1       dispose of the property by way of public auction;

3.2      deduct his fees and expenditure which were approved by the Master of the High Court;

3.3      deposit the balance of the proceeds into the Criminal Assets Recovery Account, established under Section 63 of the POCA, with account number 80303056 held at the South African Reserve Bank, Vermeulen Street, Pretoria;

3.4      Perform any ancillary acts which, in the opinion of the curator bonis, but subject to any directions of the Criminal Assets Recovery Committee established under Section 65 of the POCA, are necessary.

4. That the Registrar of this Honourable Court, or the State Attorney (Kwazulu-Natal) on the request of the Registrar, must publish a notice of this order in the Government Gazette as soon as practicable after the order is made.

 

5.    That in terms of Section 50(6) of the POCA, this forfeiture order shall not take effect before the period allowed for an application under Section 54 of the POCA or an appeal under Section 55 of the POCA has expired or before such application is disposed of.

 

6.    The first, second and third respondents are ordered, jointly and severally, to pay the applicant’s costs, including all reserved costs (if any), such costs to include the costs of two counsel.

ANNEXURE TO ORDER

1.    Portion 11 of Erf 1187 Pietermaritzburg Registration Division FT in the Pietermaritzburg/Umsunduzi Transitional Local Council Area, Province of KwaZulu-Natal, 1264 square metres in extent, held under Deed of Transfer No. T17368/2001, physical address being 33 Carey Road, Pelham, Pietermaritzburg.

2.    A Unit consisting of Section No. 11 as shown and more fully described on Sectional Plan No. SS 392/99 in the scheme known as Pitlochry in respect of the land and buildings situate at Pietermaritzburg, the Pietermaritzburg Local Council Area, of which section in the floor area, according to the said plan is 37 square metres in extent, held under Deed of Transfer No. ST41026/2001, physical address being Flat 11 Pitlochry, Commercial Road, Pietermaritzburg.

3.    A Unit consisting of Section 10 as shown and more fully described on Sectional Plan No. SS392/99 in the scheme known as Pitlochry in respect of the land and building or buildings situate at Pietermaritzburg, the Pietermaritzburg/Umsunduzi Transitional Local Council Area, of which Section the floor area, according to the said Sectional Plan is 37 square metres in extent, held by Deed of Transfer No. ST60551/2000, physical address being Flat 10 Pitlochry, Commercial Road, Pietermaritzburg.

 

4.    Portion 1216 (of 988) of the farm Northdale No. 14914, Registration Division FT, situate in the Pietermaritzburg/Umsunduzi Transitional Local Division Council Area, Province of KwaZulu-Natal in extent of 3989 square metres, held under Deed of Transfer No. T32775/2001, physical address being 33 Marion Road, Northdale, Pietermaritzburg.

 

 

5.    Sub 52 (of 1) of Lot 1777 Pietermaritzburg, situate in the Pietermaritzburg/Umsunduzi Transitional Local Council Area, Administrative District of Natal, Province of KwaZulu-Natal in extent of 1039 square metres, held under Deed of Transfer No. T3963/97, physical address being 17 Huntley Road, Bisley, Pietermaritzburg.

 

6.    Motor Vehicle, Audi 500, Registration No. NP58686, Engine No. PR 008323, Chassis No. AAAZZZ44ZKU001891.

JUDGMENT

SEEGOBIN J:

 

INTRODUCTION

 

[1]   This is an application for the forfeiture of certain assets seized by the applicant under the provisions of the Prevention of Organised Crime Act 121 of 1998 (POCA).  The statute in question has been the subject of a number of judgments by our courts and the legal principles emanating therefrom are well-settled.  This judgment raises no novel questions of law but deals essentially with the application of the Act to the facts as they unfolded in this application.   

 

[2]    The matter came before me for the hearing of oral evidence on one issue only and that is ‘whether the assets seized under the preservation order are proceeds of unlawful activities contemplated by section 50(1)(b) of the Prevention of Organised Crime Act’.[1]  The unlawful activities in this case concern alleged drug dealing on the part of the first respondent.  I heard evidence on this issue for a total of eleven days during March and October 2012.  In all eight witnesses testified on behalf of the applicant.  The evidence of the witness AMOD KHALIL HOOSEN was formally admitted by the respondents.  From the respondents’ side it was only the first and second respondents who testified.  Apart from the viva voce evidence that was led, the papers in the matter were voluminous comprising nine lever-arch files.  These not only included the application papers in this matter but also certain relevant extracts from the transcript of the criminal trial which was finalized sometime in July 2009.  The criminal trial itself was by all accounts a protracted one which ran for more than a year before the Regional Court, Pietermaritzburg.  The present matter was fully argued before me on 12 and 13 June 2013.  The applicant was represented by Mr Govindasamy SC, assisted by Ms B Mothilal and the respondents by Mr SD Slabbert.  I am indebted to counsel for their assistance in this matter.

[3]    The applicant is the National Director of Public Prosecutions (NDPP).  All of the respondents are natural persons who are related to each other:  the second respondent is the mother of the first respondent and the third respondent is a relative.  In summary, the applicant’s case against the first respondent in particular is that she was involved in illegal drug dealing activities in the Pietermaritzburg area for a number of years.  According to the applicant the assets referred to above were acquired by the first respondent from monies she received from such activities.  While some assets were acquired in her own name others were acquired and registered in the names of other persons including the second and third respondents in order to falsely create the impression that they do not belong to her.  It is to be noted that the references to ‘Joyce’ by the witnesses either in oral testimony or in written statements are in fact a reference to the first respondent.

[4]    On 4 June 2008 the applicant obtained a preservation order pursuant to the provisions of section 38 of POCA.[2]  The applicant thereafter applied for a forfeiture order in respect of the assets forming the subject matter of this hearing pursuant to the provisions of section 48 and 50(1)(b) of the Act.  This application was opposed by the respondents and it is this application that was referred for the hearing of oral evidence on the issue referred to above.

SEIZED ASSETS

[5]    The assets seized under the preservation order comprise five immovable properties and a motor vehicle.  The immovable properties are those situated at 33 Carey Road, Pelham, Pietermaritzburg; Flat 11 Pitlochry, Commercial Road, Pietermaritzburg; Flat 10, Pitlochry, Commercial Road, Pietermaritzburg; 33 Marion Road, Northdale, Pietermaritzburg and 17 Huntley Road, Bisley, Pietermaritzburg.  The motor vehicle in question is an Audi 500 sedan bearing registration numbers NP58686.  Before dealing with the evidence of the various witnesses who testified before me, it is perhaps convenient at this stage to set out certain background facts which have a bearing on the issue to be decided.

RELEVANT BACKGROUND

 

[6]   The founding papers on behalf of the applicant were deposed to by MOHAMBRY MOODLEY (‘Moodley’), a deputy director of Public Prosecutions in the employment of the applicant, TREVOR MALCOLM SUBRAMANIEN (‘Subramanien’), who was employed as a Senior Special Investigator by the National Prosecuting Authority in the office of the Directorate of Special Operation and ALLAN LENNERT WILLIAM HORNE (‘Horne’), a Detective Inspector in the South African Police Service (SAPS), attached to the Organised Crime Unit.  These affidavits are replete with allegations relating to drug dealing activities on the part of the first respondent.  The first respondent has constantly been described as a ‘kingpin’ of a syndicate conducting drug dealing activities in the Pietermaritzburg area over many years.

 

6.1 The following allegations in this regard are to be found in Moodley’s affidavit:

 

‘8.

UNLAWFUL ACTIVITIES

 

With reference to the evidence contained in Subramanian and Horne’s respective affidavits I draw to the attention of this Honourable Court to the following:

 

8.1       Joyce had an apparent history of involvement in unlawful activities.  From about 1975 to 1992 she was charged and convicted on 17 occasions for theft.  The said charges related to her involvement in a series of shoplifting activities.  She served a 4 year imprisonment term as a result of her involvement in the said offences;

8.2       investigations indicate that Joyce’s drug dealing activities date back to the late 1980’s when she started selling drugs on a small scale.  At the time she commenced the said drug dealing activities she was not gainfully employed and she did not have a legitimate source of income.  She subsequently established herself as the main supplier and distributor of mandrax tablets and cocaine;

 

8.3       over the period of her involvement in drug dealing activities Joyce was the subject of numerous police investigations and amongst others, on or about the 24^th January 1995 she was arrested and charged for being in possession of 121 mandrax tablets;

 

8.4       on or about the 19^th March 2003 she was again identified as a member of a drug dealing syndicate and she was investigated for her alleged involvement in drug dealing activities. 

9.

As will further appear from Subramanian and Horne’s respective affidavits Joyce’s modus operandi was established as follows:

 

9.1       she was the syndicate’s kingpin and she supplied and distributed, on a whole sale basis, large quantities of drugs to a network of several drug dealers on a regular and frequent basis and over an extended period of time;

 

9.2       she was the focal point in the distribution and flow of drugs to several drug dealers that she supplied with quantities of drugs;

 

9.3       she had at her disposal large quantities of drugs and she stored and kept the said drugs at various locations including her residential premises;

 

9.4       she collected, on a regular and frequent basis, large amounts of monies in cash representing the proceeds from the sale of drugs from the several drug dealers that she supplied with drugs;.

 

10.

10.1     As is further evident from the respective affidavits of Subramanian and Horne observation duties and surveillance were conducted at the various locations and addresses where the drugs were being sold.  Authority for the use of an undercover Agent was applied for and obtained in terms of Section 252A of the Criminal Procedure Act 51 of 1977.

 

10.2     The involvement of Joyce and the identified drug dealers in drug dealing activities was confirmed.  In this regard Joyce’s involvement as the main supplier of drugs to a network of drug dealers was confirmed.  The said drug dealers and their respective Runners were observed concluding drug dealing transactions.  The Agent concluded several drug purchases with the aforesaid drug dealers.

 

10.3     The said drugs purchased from, amongst others, Joyce and the identified drug dealers and or their respective Runners were sent to the Forensic Science Laboratory for chemical analysis and they were confirmed to be prohibited substances in terms of the Drugs and Drug Trafficking Act 140 of 1992 (“the Drugs Act”).  Joyce’s involvement in the delivery of the drugs and collecting the proceeds from the sale of drugs was also confirmed. 

 

 

 

11.

11.1     I submit that findings of the investigations clearly confirm that Joyce conducted her drug dealing activities in an apparently organized and well structured manner and in a repetitive ongoing basis and as an integral part of a syndicate.

 

11.2     Both Subramanian and Horne’s evidence clearly indicate that the syndicate’s organizational structure consisted of three levels. The evidence indicates that there was a visible flow and movement of drugs from the top level where Joyce was positioned as the main supplier to the identified drug dealers at the second level lower level.  The Third level consisted of several persons that were employed and or used by the said drug dealers to sell the said drugs to the public. (“the Runners”).

 

11.3     The flow of the proceeds from the sale of the drugs adopted a bottom-up direction.  Upon the selling of the drugs to members of the public the Runners would pay up the proceeds from the sale of drugs to their respective drug dealers.  The said dealers would in turn pay to Joyce any amounts owing in respect of the drugs supplied and delivered and further place more orders for drugs.  I submit that the evidence indicates that from time to time Joyce collected large amounts of monies representing the proceeds from the sale of drugs.’

 

 

6.2       Arising out of the investigations conducted against the first respondent with regard to drug dealing, Moodley goes on to aver that the first respondent, having established herself as a drug supplier, acquired several assets and proprietary interests including certain business interests.  In this regard the following extracts from paragraph 15 of his affidavit are relevant:

 

‘15.2    At the time she acquired the said assets and proprietary interests she did not have any legitimate sources of income to justify the acquisition of the said assets and proprietary interests.

 

15.3     Amongst the assets and proprietary interests that she acquired and established are several immovable properties, motor vehicles and certain business interests, namely as a hawker selling meat and clothing to the public, a Boutique selling clothing and a coffee shop.  Investigations further revealed she was involved in a savings club (“stokvel”).’

 

6.3       After dealing with the investigations concerning the first respondent’s business and sources of income, Moodley asserts the following in sub-paragraphs 27.4 and 27.5 of his affidavit:

 

‘27.4    I submit that Joyce conducted a very sustainable and thriving drug dealing enterprise.  My submission in this regard finds support in, amongst others, large cash amounts that were generated from the sale of drugs, the apparent access of large quantities of drugs and the large cash amounts that she evidently had access to on a continuous basis.

 

27.5     I further submit that a clear pattern has been established wherein Joyce deliberately acquired and financed property and registered it in other persons’ names with the intention of concealing the identity of the true owner thereof and the sources of funds used to acquire the said property.’

 

 

6.4       Similar allegations are made by Subramanian in his affidavit albeit in greater detail and supported by a number of affidavits from various people pertaining to alleged drug dealing on the part of the first respondent and one Ranjini Chetty.  It seems that most of these affidavits were procured for the criminal prosecution that eventually followed.  Annexed to Subramanian’s affidavit are also a number of documents pertaining to the first respondents alleged sources of income and her financial position.

 

6.5       HORNE in his affidavit asserts that his office embarked on an investigation relating to certain criminal activities involving the illegal dealing in narcotics in contravention of the Drugs and Drug Trafficking Act 140 of 1990 (‘the Drugs Act’).  This investigation was conducted under a project known as ‘Operation Dixie’.  The main focus of the investigations was on the drug dealing activities of an identified drug dealing syndicate in the Pietermaritzburg area.

 

 

6.6       According to Horne the syndicate consisted of a defined organizational structure apparent in three levels.  At the top level was the main leader or kingpin who was the main source and supplier of mandrax tablets and cocaine.  The first respondent was identified as the syndicate’s leader and main supplier of drugs.  One Ranjini Chetty was identified, amongst others, as the first respondent’s close associates and drug dealer manager.  The second level consisted of several drug dealer managers whose function it was to manage and oversee the drug dealing activities from several identified locations and addresses in and around the Pietermaritzburg area.  These managers were also responsible for recruiting and employing persons commonly referred to as ‘Runners’ who were used to sell drugs to members of the public.  The ‘Runners’ constituted the third level in the syndicate’s organizational structure.

 

 

6.7       In the course of the investigations by the project, several agents were used to purchase drugs mainly from premises belonging to Ranjini Chetty at 19 and 21 Queen Street, Pietermaritzburg.  This is where the runners operated from.  Affidavits relating to these purchases are put up from the various agents who were tasked to do this by the project.

 

 

[7]    The following further background facts appear from the heads of argument filed on behalf of the respondents.  These facts are not disputed.  On 3 August 2001 the Directorate of Special Operations (DSO) was authorized to run a project known as ‘Project Eagle’ in terms of POCA.  The specific focus of these investigations was on the drug dealing activities in the Pietermaritzburg/Midlands area.  In due course the project was authorized to focus on the drug dealing activities of a specific dealer namely Ranjini Chetty (to whom reference is made above).  It seems that unbeknown to the DSO the South African Police Services (SAPS) were simultaneously investigating the same targets under ‘Operation Dixie’.  This operation commenced in June 2005.  The DSO was thereafter authorized by the Directorate of Public Prosecutions to conduct a trap in terms of section 252A of the Criminal Procedure Act 51 of 1977 (CPA).  A number of purchases were made by a DSO agent who usually dealt with one Lungi Princess Mchunu, a runner employed by Ranjini Chetty to sell drugs on her behalf.  It is not disputed that Lungi Mchunu testified in the criminal trial in terms of section 204 of the CPA. 

 

 

[8]    On 25 November 2005 Ranjini Chetty, the first respondent and certain other persons were arrested.  The first respondent was charged with racketeering as an associate of the enterprise conducted by Ranjini Chetty from premises situated at 19 and 21 Queen Street, Pietermaritzburg.  She was also charged with a number of other drug offences in terms of the Drugs Act.  The first respondent was subsequently convicted of two counts of dealing in drugs in the Regional Court, Pietermaritzburg.  She was also convicted of racketeering as provided for in section 2(1)(e) of POCA.  It is common cause that the first respondent’s appeal against these convictions was upheld by a Full Bench of this Court on 12 October 2010.

 

 

[9]    Insofar as the present proceedings are concerned it is common cause that on 25 November 2005 the applicant made an application in terms of section 38 of POCA for a preservation order against the property of Ranjini Chetty.  No such application was brought against the first respondent at the time.  However, such an application was brought against her on 4 June 2008, about two years and seven months later.  The answering affidavits on behalf of the respondents were delivered on 28 October 2008.  The replying affidavit of the applicant was filed on 17 December 2010, more than two years after the answering affidavits were filed. 

 

 

[10]   Against the above background what follows is the oral testimony of the various witnesses who were called by the respective parties.

 

 

APPLICANT’S WITNESSES

 

LUCKY GORDON (GORDON)

 

[11]    Gordon testified that he resided at Eastwood from where he operated a tavern.  He admitted making two written statements[3] concerning the first respondent.  He is married to one Luthobile who he met in 1981.  Luthobile and the first respondent were friends and that is how he came to know the first respondent.  He considered the first respondent to be a trusted friend of his wife.  His relationship with the first respondent evolved to the point where they regarded each other as brother and sister.

 

 

[12]    Gordon lost his job in 1987.  He started earning a living by selling liquor. By about 1989 he also started selling drugs.  This came about when he realized that people in Eastwood were ‘smoking’ mandrax.  His supply of mandrax was obtained from one Eric Terry from Woodlands.  He was unable to say where Terry obtained the drugs from.  His wife Luthobile was aware that he was selling mandrax.  He emphatically denied that he obtained any mandrax from the first respondent.  This was contrary to what he said in his first affidavit to the effect that his wife was aware that he was getting mandrax from ‘Joyce’ and that his wife was present when the delivery took place.  He persisted with his earlier testimony that he received his supply of mandrax from Terry.  When it became obvious that the witness was recanting on the version contained in his previous statement (TMS4), Mr Govindasamy applied to have him declared a hostile witness.  That application was granted.  The witness was thereafter subjected to a full and effective cross-examination by Mr Govindasamy on the contents of TMS4.

 

 

[13]    When Gordon was taxed on the allegations concerning his acquisition of drugs from the first respondent, he first maintained that ‘they’, meaning the investigators for the NDPP, had convinced him that his statement should be consistent with his wife’s statement in the criminal proceedings.  He later maintained that the allegations made by him against the first respondent were merely made to please ‘them’, again referring to the investigators.  He emphatically denied consulting with the applicant’s legal team on the contents of his first statement in preparation for giving evidence in this matter.

 

 

[14]    In view of the fact that Gordon’s evidence completely contradicted his previous statement (TMS4) concerning his involvement with the first respondent on the issue of drug dealing, it is necessary to refer to the relevant portions of that statement which read as follows:

 

‘4.

In 1987 I became unemployed and began selling alcohol for a living.  Whilst conducting this business from home, I was once visited by Joyce who offered to supply me with mandrax to create a market in Eastwood.  She told me that she would give me the mandrax tablets on appro and that I could pay her after I sell the mandrax.  As time went on, she increased the supply of stock.  At this point in time I was the only person selling mandrax in Eastwood and being the only one in this business my clientele increased substantially.  In 1992 Luthobile moved in with me and Joyce continued to deliver mandrax to me personally.  Luthobile was aware that I was receiving mandrax from Joyce because she was present when the deliveries took place and when the money was collected by Joyce.  During this period Joyce was driving a blue Chev sedan.

 

5.

I then moved into my current place of residence and my clientele increased and I began taking larger quantity of mandrax from her.  At times when my mandrax stock was depleted I would go to Joyce’s house in Sobantu and purchase mandrax stock personally.

 

6.

Joyce used to visit my house frequently and Luthobile used to accompany Joyce to the Northdale to do drug deliveries and collection of monies.  Luthobile used to tell me that Joyce was controlling Northdale with the sale of drugs and that she had many Indian customers who purchased drugs from Joyce.  Luthobile also told me that Asam who lived in Allandale area was one of Joyce’s biggest customers.  Asam was well known to me.  On many occasions, Joyce let mandrax with Luthobile and Asam would collect it from us.  The other customers that Luthobile also spoke about were Nades and Hoosen.  Hoosen is well known to me as a drug dealer.  I know Hoosen personally.  There were many others whose names I now cannot recall.

 

7.

 

During the early 1990’s I can recall that I ran out of mandrax stock and decided to go to Sobantu to purchase mandrax from Joyce.  After purchasing 50 mandrax tablets from Joyce and whilst walking to Eastwood the police arrested me in possession of the mandrax tablets.  I was found guilty and sentenced to a fine of R3000-00 and a five year suspended sentence.  I later established that Joyce had informed the police that I was in possession of mandrax tablets.  I wish to state that Joyce personally sold the 50 mandrax tablets to me.

 

8.

During the mid 1990’s Joyce opened a boutique opposite Supa Save in Retief Street.  Luthobile’s sister Khando Nxumalo worked for Joyce at the Boutique.  During this period Luthobile told me that Joyce was going to India with Asam’s wife.  Prior to Joyce leaving to India, she visited us at my residence and confirmed that she was in fact going to India to purchase clothing stock for her Boutique.  She informed us that she had supplied her customers with large stock of drugs for the period that she would be away and that she had instructed them to drop off the cash with us in respect of the drugs she supplied to them.  Prior to Joyce departing to India, she gave me sufficient mandrax stock to carry me till she returns.

 

9.

During the period that Joyce was in India, many of her Indian customers came to my house and paid Luthobile large sums of money in my presence.  I can recall some of their names such as Asam, Mananaz, Shanni, Nades and a short person from Copesville.  I will be able to point out the other Indian persons who came and gave money to Luthobile.  Whilst Joyce was abroad we kept in contact telephonically and on her return she settled our telephone bill.  I cannot recall the telephone number that was allocated to me at that stage.

 

10.

When Joyce returned from India, she came to my house where she and Luthobile counted all the monies received and Joyce took all the cash.  I cannot recall the exact amount however I know it was well over one hundred thousand rand.

 

11.

After her return from India, Joyce requested my wife to accompany her to Cape Town to purchase clothing for the boutique.  When my wife returned from Cape Town, she informed me that the wife of a policeman by the name of Dumisani Mhlongo also accompanied them to Cape Town.

 

12.

On three occasions, Joyce came to my house in the company of an Indian female and told me that this Indian woman is part of her stokvel.  She introduced this Indian female as Ranjini from Queen Street and said that she was Hoosen’s wife.  Luthobile told me that Ranjini was also selling cocaine in Queen Street.

 

13.

During September 1997 I won the Natal Lotto to the amount of R1.8 million.  At the time of winning the lotto I owed Joyce R36 000-00 for drugs which I had short paid her over a period of time.  I settled this amount with Joyce and my wife and I decided to stop selling drugs.  From hereon we kept away from drugs.  Joyce still visited us and my wife still accompanied Joyce on her trips.

 

14.

Sometime after winning the lotto, Joyce told us that she opened a restaurant in Witness Lane and she asked by wife to take over this restaurant because she did not have the time to oversee it.  My wife started working at the restaurant and during this period my wife and I had a personal problem and she moved into 33 Carey Road, Pelham.  This house belonged to Joyce.  I knew that my wife had a problem with Joyce due to the manner in which Joyce treated Luthobile.  Luthobile then decided to go to Cape Town.  After a few months we settled our differences and my wife returned home.

 

15.

I know that Joyce is married to a person named Mike Komane.  I know that Mike was arrested for armed robberies and served a lengthy jail sentence and on his release he opened a garage in Greytown.  I was invited to the official opening of the garage in Greytown.  This garage closed down after a while and Mike Komane purchased taxi’s.  I do no tknow what his involvement was in respect of drugs however I certainly know that Joyce was the main kingpin in the drug world in Pietermaritzburg.

 

16.

I know that Joyce had a Mercedes Benz which was registered in the name of his cousin, Mrs Cele who is a nurse at Edendale Hospital.’

 

 

[15]    Gordon’s second affidavit (TMS23) which was deposed to on 2 April 2006, dealt mainly with his involvement in a ‘lottery’ or ‘stokvel’, as it is commonly referred to, together with the first respondent and various other people.  In view of the fact that nothing really turns on this affidavit, I do not consider it necessary to set out the contents herein.

 

 

SINDISIWE MKHATSHWA (MKHATSHWA)

 

[16]  Mkhatshwa testified that she regarded the first respondent as a family friend.  She met the first respondent through her sister who was a friend of the first respondent.  In 1996 she was employed by the first respondent in her boutique initially earning R600 per month.  This was subsequently increased to R1000 per month.  On 29 March 2006 she deposed to an affidavit[4] to the police concerning her employment at the first respondent’s boutique and about the monthly income generated by this business at the time.  When she was asked about the amount of money that was made by this business she indicated that it was between R10 000 – R15 000 per week.  This response contradicted the witness’s affidavit in which she states that the shop sales averaged about R4 000 per month.  As with the witness Gordon, Mr Govindasamy applied to have this witness declared hostile so that she could be cross-examined on the contents of her previous statement.  That application was granted.  The witness was thereafter effectively cross-examined by Mr Govindasamy on the contents of TMS17.

 

 

[17]    Mkhatshwa then attempted to explain this apparent contradiction by saying that the figure of R4 000 referred to by her in her affidavit was the amount that she was banking and not what the business was making.  To place this contradiction in perspective it is perhaps convenient to set out the material portions of her affidavit.  These read as follows:

 

‘4.

The following day I started work and Joyce arrived with the stock.  The stock which was brought in by Joyce comprised of clothing for men and women.  She offered to pay me a salary of R600-00 a month.  Two months later Joyce increased my salary to R1000-00, which was paid to me in cash.  At some stages when the shop was in operation, Joyce did not pay me when I was due to receive my salary because she had to pay her overheads such as rent, lights and water.

 

5.

Most of the customers purchased clothing on a lay-by basis.  There were very few customers who came in and purchased for cash.  The lay-by customers would come in on Fridays, on the 15^th, 25^th and on the last day of the month to make payment.  Business from Mondays to Thursdays was very quiet.  At times I did not even have a sale sometime I would only sell one item for the day.  Only on days when customers came in to make their lay-by payments I would have money as takings for the day.  There were occasions when Joyce took cash from the shop.  The shop sales averaged about R4000-00 a month.

 

6.

I would normally do banking in the middle of the month and at month end at FNB East Street branch.  At times I did not bank on these days because there was no money.  Joyce used to be in the shop almost daily for the exception of those days she purchased stock.  I know that Joyce went to Durban, Cape Town and Johannesburg to purchase stock.  Joyce was always in the company of my sister, Thobile.

7.

On a monthly basis I would pay the rent to an attorney in Longmarket Street.  I would take money from the shop to pay rent and if there was no money in the shop, Joyce would give it to me.  I cannot recall the amount I paid monthly as rent.

 

8.

In December 2000 I went on leave and when I returned I found that the shop closed down.  Joyce told me that she moved the stock to the restaurant she opened.  I have been unemployed since then.

 

9.

In 1996 my sister’s husband, Lucky Gordon was arrested for being in possession of mandrax.  Thobile told me that Joyce sold the mandrax to Lucky.  This is the first time that I came to know that Joyce was dealing in drugs.’

 

 

GONASEELAN CHETTY (CHETTY)

 

[18]  Chetty is a 34 year old male who currently resides at Northdale, Pietermaritzburg.  He is the brother of Ranjini Chetty. As I have already mentioned Ranjini and the first respondent were charged in the Regional court, Pietermaritzburg, together with certain other persons for dealing in drugs and other related offences.  Ranjini was convicted and is presently serving a ten year jail sentence.

 

 

[19]    Chetty had testified in the criminal proceedings.  His evidence before me can be summarized as follows:  When he was about 17 years old and whilst employed in a shoe factory, he started assisting his sister, Ranjini, by driving her to pick up mandrax from her suppliers.  He thereafter started selling drugs for her at her premises at 19 and 21 Queen Street, Pietermaritzburg.  It was while working for his sister that he met the first respondent. He went to her house on several occasions from the early 1990’s up to approximately 2000.  He accompanied Ranjini to the first respondent’s home at Sobantu from where Ranjini used to collect drugs.  On this occasion which seems to be the first occasion, Ranjini entered the house and when she emerged she was in the company of the first respondent.  Ranjini told him to remember ‘this house’ as he would be required to collect drugs from there in the future.  Ranjini then handed the mandrax tablets or ‘buttons’ as it was commonly referred to over to him and told him that if the police came he should throw the tablets out of the vehicle.  He estimated the number of tablets to be in the region of 50-100 at the time.

 

 

[20]    On another occasion he went to the first respondent’s house by himself.  On this occasion the first respondent handed him a packet of mandrax which she retrieved from under her pillow in her bedroom.  On this occasion as well the tablets were in the region of 50-100.  He testified that there were also times when he took his nephews as well as one Bradwin Surdat, Ebrahim Mohammed and Joe Maharaj to the first respondent’s house to collect mandrax.  On one occasion he even took his neighbour, Nicolene Marion, who started working for Rajini, to collect drugs from the first respondent’s house.  Again the drugs amounted to between 50-100 and were contained in a plastic bank packet.

 

 

[21]    Chetty testified that the first respondent and his sister were ‘good friends’.  Whilst selling drugs at Ranjini’s house over a period of approximately ten years, he frequently saw the first respondent there.  He estimated that she would be at his sister’s house at least twice or thrice per week.  On such visits the first respondent would remove the drugs from her bag and hand these over to his sister.  His sister in turn would hand the drugs over to him to hide them at the back of the house.  He mentioned earlier that one of the places where the drugs would be hidden was in the drain pipes.  According to him each tablet had a street value of R20-R25.

 

 

[22]   Under cross-examination by Mr Slabbert, Chetty initially refuted any suggestion that the only reason why he made a statement to the police was because he was allegedly threatened with arrest. However, when he was referred to the record of the criminal case he conceded this to be the position. Chetty was also questioned on whether it was only mandrax that he saw being handed over by the first respondent to his sister at the latter’s house at Queen Street. His response was that he later also observed cocaine or ‘hard rock’ being handed over. He was hard-pressed to concede that he had never informed counsel acting for the applicant about this. It was further suggested to the witness that he had falsely implicated certain other people who were not involved in drug dealing activities. He attempted to explain that there were occasions when his sister obtained drugs from her ex-husband Hoosen who initially got her involved in selling drugs.

 

JULIANA SONIA POLE (POLE)

[23]    The witness testified that during 1996 she was the owner of the property situated at 17 Huntley Road, Bisley, Pietermaritzburg. She placed her house on the market for the sum of R180 000. She first met the first respondent when the estate agent brought her to view the house. The first respondent informed her that she wanted to buy this house for her mother and that she had just bought her own house in Montrose. The purchase price was not discussed at this initial meeting. Later, however, the estate agent returned with an offer of R160 000 which she accepted.

 

[24]    Pole testified that the first respondent returned one evening in the company of a friend. The first respondent informed her that she liked the curtains in the house. Pole told her that she could have them for R6000. The first respondent agreed to purchase the curtains for R6000. The following night the first respondent came and paid her R6000 in cash. Pole remembered that the person who accompanied the first respondent was a young woman. She also remembered that when the first respondent came on the first occasion, the first respondent was driving a BMW motor vehicle whereas when she came to purchase the curtains with her friend, she was now driving a Mercedes Benz motor vehicle. This prompted Pole to remark that the first respondent has ‘smart cars’ to which the first respondent said that her BMW had gone for a service. Pole confirmed making a sworn statement[5] regarding the sale of her house to the first respondent. While under cross-examination she indicated that she did not see who had signed the offer to purchase, she remained adamant that it was the first respondent who had purchased the property. She further reiterated that it was the first respondent who had purchased the curtains and collected certain building plans from her.

 

AMOD KHALIL HOOSEN

[25]    As I indicated at the outset of this judgment the respondents admitted this witness’s evidence as contained in a summary which was delivered by the applicant in terms of Rule 36(9)(b)[6] of the Uniform Rules. Just for completeness, however, I point out that the witness is a Colonel in the SAPS attached to the Organised Crime Unit, KwaZulu-Natal. Apart from his various other duties, he was also the Section Commander: Narcotics Investigations. As far as the relevance of his evidence is concerned, he was instructed by the offices of the State Attorney KwaZulu-Natal acting on behalf of the NDPP to furnish an opinion on whether the drugs described by the various deponents to affidavits in this matter as well as by witnesses in the criminal proceedings in which the first respondent was charged with dealing in drugs, are in all probability mandrax tablets. From his many years of working and investigating drug related matters, attending a number of national and international workshops, conferences and training both on organised crime and drug investigation, the witness opined (for the reasons set out in his summary) that when the various witnesses referred to different street names of drugs during their involvement in drug dealing activities with Ranjini Chetty and/or the first respondent, their description of the drugs was consistent with the description of mandrax tablets.

 

ADMISSION BY THE RESPONDENTS

[26]    On behalf of the respondents it was admitted that the documents appearing as item 25 in the applicant’s bundle evidences proof of the application made by the second respondent to the Department of Social Security for a social grant on 3 March 1998.

LEONARD NGCOBO (NGCOBO)

[27]    The facts to which this witness was to testify as set out in the summary[7] of his evidence were not disputed by the respondents.  In 2006 the witness was the Human Resource Administrator of BNS Medical which was previously known as Smith & Nephew. In his capacity as Administrator he had access to all files of the employees of Smith & Nephew. According to the records available to the witness the deceased ‘T.G. Mngadi’ with identity number 560421 0808 089 was employed at Smith & Nephew from July 1983 until her death in December 2001. At the time of her death the deceased earned R526.89 after deductions. A trust fund was created after her death from the proceeds of her provident fund in the sum of R88 259.39. The interest from the trust fund was paid to the deceased’s sister Nonhlanhla Claudia Cele who was the guardian of the deceased’s daughter Lindiwe Mngadi. During her lifetime the deceased had not taken any loans against the proceeds from the provident fund.

 

[28]    Question by Mr Slabbert the witness agreed that there was nothing in his file to indicate whether the deceased had owned a flat in Pietermaritzburg. The witness was asked to confirm whether the signature that appeared on a copy of the Last Will and Testament of Thembisile Gladys Mngadi was in fact her signature. The witness compared the signature appearing on this document with the other documents in his possession and confirmed that it was her signature.

 

DUMISANI JEREMIA ZONDI (ZONDI)

[29]    The witness is a colonel in the SAPS. He was a member of a task team involved in investigating the first respondent and others with regard to drug dealing activities. In view of the fact that this was a fairly large task team, certain investigators were given specific mandates on what they were required to do. The witness was responsible for obtaining statements from one Emmerentia Busaphi Mngadi, Nonhlanhla Claudia Cele, Skumbuso Eugene Mbatha and Sindisiwe Mkhatshwa. He was also responsible for making photocopies of the original statements. In preparing for this matter he was required to locate the original documents, but he was unable to locate all of them. When this witness’s evidence was being led, Mr Slabbert indicated that the respondents’ were admitting the summary of the witness’s evidence as set out in paragraphs 1.4–1.14.[8]

 

[30]    In the course of the investigations it emerged that a flat viz Flat no. 10 Pitlochry had been bequeathed by the deceased Thembizile Gladys Mngadi (Mngadi) to the first respondent. There was also a motor vehicle viz a Mercedes Benz which although registered in the name Nonhlanhla Claudia Cele, was being used by the first respondent. It thus became necessary for the witness to obtain statements in order to verify the information obtained. There was no dispute that Nonhlanhla Claudia Cele is the daughter of Emmerentia Mngadi who in turn was the sister of the deceased Thembisile Gladys Mngadi. There was no dispute that Emmerentia Mngadi herself is now deceased. The deceased Thembisile Gladys Mngadi was employed by Smith & Nephew. The issue of the flat was discovered by Thembisile Emmerentia Mngadi when she and/or her sister went to Smith & Nephew to make enquiries about the deceased’s deductions.

 

[31]  This information led Colonel Zondi to record a statement from Emmerentia Mngadi.[9] Since there was no dispute regarding the contents of this statement it was merely read into the record. The statement reads as follows:

                                                                        ‘3.

My deceased daughter Gladys Thembisile Mngadi have always resided with me as she did not get married but she did have her children who also resided with us. My late daughter had a son Xolani Mngadi who is ± 25 years old and a young daughter Malon Mngadi and she is 11 years old. Deceased Gladys Thembisile Mngadi. Deceased got sick for one week and the second week she was hospitalized at the Midlands Hospital where she later died and I cannot remember the date she passed away.

 

                                                            4.

Deceased was employed at Smith & Nephew in Pinetown and rented a room in Clermont. I cannot recall the years of employment. I have never visited deceased at her work place.

                                                            5.

I also know that deceased had bought the building material to build a house in Clermont where they were given sites for free. The house is still incomplete but most of it is the roof. I cannot also mention the expenses involved in the buying of the material. Deceased stated that this house need not to be sold for the sake of her two dependants. The family must complete structure and roof and rent the house out to the people and thereafter collect rent for the dependants to survive. My daughter are planning to complete the house and when complete it will be rented out. I had never heard of any other properties elsewhere because if she did have I was the first person to know because as by now I would have at least sold some of the property to maintain her dependants other than using my pension money and the least money that is the grant money from Smith & Nephew for the younger dependant and I have nominated my other daughter to collect such grant. Other then that I receive no any other income. I recall that my deceased daughter was so excited when she managed to pay R2000-00 for the foundation and come to Impolweni to show me the receipt and plan of the foundation saying it would be the first time that she occupy the property of her own and I so delighted to see that and died before her dreams could come true…

                                                            6.

About the flat Investigator Zondi explains to me becomes a surprise that it is for the first time I hear about this from the time Investigator Zondi called at Impolweni explaining their investigation to me. I have also sincere concern that some other information may arise because as from then the family has become too suspicious even of more items hidden that they don’t know of and I myself wish that all this to be solved by the law because I am the only one to explain how Joyce came on board to issues of my wedlock family. The friendship with Joyce Majola and my children is because of me as her aunt but I am hearing nothing from her and no close visits and talking with me. I have also not knew of anything that had been involved with her of such nature even when my brother was alive. That is all I can say in this matter. I know and understand the contents of this statement. I have no objections to taking the prescribed. I consider the prescribed oath to be binding on my conscience.’

 

[32]    The next statement[10] which the witness was responsible for taking was that of Sikhumbuzo Eugene Mbatha who is the third respondent in these proceedings. Mr Slabbert indicated that the third respondent would not be testifying. He pointed out that the third respondent had filed an opposing affidavit in the forfeiture application. There was no dispute regarding what the witness had recorded from the third respondent. The contents of that statement read as follows:

 

                                                                        ‘2.

I know Joyce Komane as she is the daughter of my step-sister Gladys Makhaye. Joyce Komane was only introduced to me by her mother during the year 1991. Prior to this I did not know Joyce however after the introduction I seldom met with Joyce.

                                                            3.

During the year 2000 I was a member of a stokvel scheme of which Joyce Komane was a member. I only contributed once towards the stokvel and Joyce Komane informed me that she will continue payments thereafter on my behalf. When the stokvel money was due to me, Joyce informed me that she has an investment form me. I enquired as to what type of investment it was and she told me that there was a house in Northdale that was for sale and it was reasonably priced at R30 000-00. She took me to this house and I told Joyce that I was interested in purchasing it. Joyce took the stokvel money in the amount of R20 000-00 that was due to me and paid a deposit for this house. She told me that she would borrow that balance of the money from her friends and would settle the total purchase price. I signed documents with an attorney and the house was registered in my name. Joyce told me that she would collect the rent of R600 a month and repay her friends. I know for the fact that the house in question was rented out to tenants as from the date I purchased the house.

 

                                                            4.

For the past six year, I did not receive any income from the house. Joyce has been collecting the rental from the tenants. All correspondence in respect of this premise was directed to Joyce’s mother’s house at 448 Kwezi Street, Sobantu.

 

                                                            5.

As I mentioned in paragraph 3, Joyce paid the stokvel on my behalf and when the money was due, she collected it and paid the deposit for the house. Since the purchase of this house I have not received any income from the rental of the house nor have I been responsible for the rates and general maintenance of the house.

                                                            6.

From the manner in which the entire deal was conducted and the manner in which she has taken control of the premises I feel that Joyce merely used my name and her scheme to acquire this property for herself.’

 

[33]    Colonel Zondi explained that although he interviewed the deponent, it was Colonel Herbst who typed the statement as he was fast at typing. There was no dispute that the third respondent had testified in the criminal trial.

 

[34]    The next statement recorded by the witness was from the witness Sindisiwe Mkhatshwa who already testified (see paragraph 16 supra). I have already dealt with the contents of her statement above. Colonel Zondi confirmed that he recorded her statement as it was given to him. If the witness had told him that the average sales for the boutique were between R10000 – R15000 per week, he would have recorded it as such.  This is not what she told him.

 

[35]    Under cross-examination the witness maintained that he was not tasked to investigate whether the first respondent had owned a butchery or a boutique. He was unaware that the first respondent and her husband, Mike Komane, had a butchery at Chesterville. He was also unaware that they owned a Caltex garage at Greytown. He was unable to say whether anyone else from the task team had investigated these businesses. The witness emphatically denied that the purpose for which the statements were required was to assist the applicant in the asset forfeiture application. The effect of his evidence was that the task team was merely following up on information as and when such information was received concerning the first respondent.

 

XOLANI NGCOBO (NGCOBO)

[36]    The applicant intended calling this witness merely to confirm that a consultation did in fact take place between the witness Lucky Gordon and counsel for the applicant. Mr Slabbert, however, indicated that the respondents would accept that such a consultation took place.

 

QUINTON VAN DER HOOGEN

[37]    He was a member of the Pietermaritzburg Organised Crime Unit. On 25 November 2005 he was part of a group that was required to execute a search warrant at the premises of the first respondent which they mistakenly believed was Flat 11 Pitlochry. Flat 11 was one of several flats in one block. As the main gate to the block was closed they jumped over the gate. They quickly established that Flat 11 was in fact occupied by an elderly white male and that the first respondent actually lived at Flat 10.

 

[38]    While here they noticed a black male whom they later identified as Sihle Petro Ndlovu exit through the main gate. The witness, realising that Ndlovu was in possession of a remote control device, pursued and confronted him. Ndlovu was in possession of a bunch of keys and a key to Flat 10 as well as a remote control device. Ndlovu explained that his uncle Wiseman Bayeni who occupied Flat 10 had given him the keys and remote.

 

[39]    Acting under powers vested in him in terms of section 11 of the Drugs and Trafficking Act 140 of 1992, the witness decided to search Flat 10. Before he could enter Flat 10, however, he received a call to the effect that the first respondent had been arrested and was being brought to the flat. He was requested to wait until the first respondent arrived. When the first respondent arrived permission was sought from her to search the flat. The first respondent flatly refused to consent saying that she wanted nothing to do with the search as she knew that drugs would be found in the flat because the police were trying to frame her. The first respondent put up what the witness described as a ‘charade’. When the witness and his colleague Allan Nixon searched the flat they found approximately 10 000 mandrax tablets hidden in various places in the flat.

 

[40]    The cross-examination of this witness was uneventful. The witness confirmed that only Ndlovu had been arrested in connection with these drugs.

 

AKBAR ALLY (ALLY)

[41]    This witness is an accountant by profession. He was mandated to provide the NDPP with an opinion relating to the first respondent’s financial position and to consider whether the monies used by her to acquire certain immovable properties could reasonably be justified from the sources of income alleged by her. He was also required to provide an opinion on the second respondent’s financial position. Before proceeding to summarise the witness’s evidence and the conclusions drawn by him in relation to the first respondent’s financial position, it is perhaps convenient to contextualize the manner in which the first respondent’s financials were dealt with in the criminal trial and in the pleadings in this matter.

 

 [42]    In the founding papers in this application, Senior Special Investigator Subramanien averred that during the search and seizure operation at the first respondent’s residence at 17 Huntley Road, Pietermaritzburg, amongst the various documents that were seized were documents that purported to be Annual Financial Statements[11] in respect of a coffee shop at No.6 Witness Lane and a boutique at No.170 Retief Street.  These documents reflected the financial position of the two businesses as at 30 November 2000.  The documents comprised (a) a report by the bookkeeper declaring that the financial statements fairly represented the respective business concerns’ financial positions, (b) a statement of income and expenditure and (c) a balance sheet and an estimated budget for the year ending 31 December 2001.  The documents reflected the first respondent as being the sole proprietor of these businesses and thus her financial position.

 

 

[43]    Subramanien goes on to aver that the income and expenditure statement records that for the 12 month period of 1999 the total income generated from both the coffee shop and the boutique was given as R517 200.  After deductions of the operating expenses the income before tax was R180 150 for the 11 month period beginning 1 January 2000 to 30 November 2000.   The income generated from both the coffee shop and the boutique was given as R510 400.  After deducting the operating expenses the income before tax was given as R196 748.  The balance sheet reflects the net current assets in the amount of R389 642 as at 30 November 2000.  The stock on hand from the coffee shop for the period is given as R28 000 and the value of the equipment is stated to be R66 000.  These financial statements were signed by the first respondent and one A.L. Nel who attested to the fact that the statements fairly reflect the respective businesses’ financial position as at 30 November 2000.  He further declared that the business operations were in accordance with the Generally Accepted Accounting Practices (GAAP). 

 

 

[44]    Subramanien avers that the picture portrayed from these statements is that of two profitable enterprises that were in a significantly good financial position and which consequently depict the first respondent to be in a financially profitable position in relation to these businesses.  Subramanien states that in the course of his investigations he identified the said ‘AL Nel’ to be Arnold Nel (Nel) who was employed as a property consultant at Natal Property Consultants in Pietermaritzburg.  Nel disclosed that he had several dealings with the first respondent regarding the purchase of certain immovable property.  He also disclosed that he had prepared the financial statements for the first respondent in order to assist her to obtain a bond over the property at 33 Carey Road, Pietermaritzburg.  Nel compiled the financial statements based on information provided by the first respondent without any documentary proof of the information provided by her.[12]                     

 

 

 [45]    It is common cause that Nel testified in the criminal trial on behalf of the State. The relevant portions of Nel’s evidence in the criminal trial[13] which have bearing on the issue in this matter and Ally’s findings in respect thereof read as follows:

 

            ‘Is it so that in November 2000 she came to see you yet again?

Yes that is correct. She came to see me because she was interested in something for a Bed & Breakfast. I said I will try to see what I got and I think in about 10 days or so a property came in at 33 Carey Road.

The deal would be R210 000,00 a R30 000,00 deposit and the balance on a bond. I think the initial bond was declined and then it was approved by another bank, if my memory serves me correct.

Is it so that during this time you were then required to assist her with drawing up documents relating to her finances to help with her bond application? For a bond on R190 000,00 the bank wanted financial statements and so I sat with her in my office, drawing up some figures. I asked her about her business, one was a coffee shop cum sports bar and the other was a ladies boutique. I sat with her, asking her some figures about the sports bar, what was the income of the sports bar and what was the sales in the sense of food. The coffee shop, what was the liquor sales and at the end of the day it was working out it was a very profitable coffee shop. My figures showed me that she was probably getting out R10 000,00 a month from the coffee shop, which was a very profitable little business.

Did she actually produce any slips to you?

No, we just sat and drew it up. I recall I did go and visit the coffee shop once and it was a very busy place.

And the boutique, how was that going?

Fairly well if you look at the position, it was downtown. It was not doing as well as the coffee shop/sports bar. I think R6 000,00 profit that she was making there. The two businesses were making a good income for her.

Then the issue of the financials is dealt further on page 1062, the prosecutor raises the question: Now the handwritten figures on the top copy, is that just the figures you wrote down while you were talking to her?

Yes, as I was just writing and looking at purchases where they were coming from, like Macro, Kismet, just roughly food … [inaudible] salaries, DSTV and transport. Having a bit of financial background from working in the bank, I knew what the bank would need to get the bond approved. I looked at it basically if you are running a coffee shop type thing, what you should be spending money on. I looked at the assets and the stock, the value of the equipment, fridges, stoves and bar counter. We worked out basically what was her income and expenditure and what the net profit should be in that type of business.

Then the next significant part of that is on the following page 1063: Now which year was that done for?

Taking the handwritten figures, which was done in 2000, we did the 11 months of 2000 and we then just in a sense unfortunately fabricated figures for 1999. Joyce did not have the figures for the past and so we just fabricated just to show the bank that this business is a lucrative business to get the finance. That was just to help the bank to convince the bank, to show them that you know if she was to do a Bed & Breakfast, because we show the coffee bar, Joyce’s boutique and then Joyce’s Bed and Breakfast and what the income would be on a monthly basis as against an annual basis.’ (my emphasis)

 

[46]    In her response to the allegation concerning the financial statements prepared by Nel, the first respondent, stated in the criminal trial that she did not realize that he was fabricating figures and that she only heard of this in that court.

 

[47]    With the above background in mind I revert to the testimony of Ally before me.  This evidence should be read in conjunction with the expert summary filed by the applicant in terms of rule 36(9)(b).[14]  I first deal with his findings and opinions regarding the assets acquired by the first respondent.  In providing his opinion Ally had regard to the application papers filed in this matter together with annexures, the relevant portions of the criminal record when the first respondent was tried in the regional court for dealing in drugs, information gleaned from certain specific documents as well as from information obtained from consultations with the applicant’s legal team.

 

[47.1]    The immovable properties which were required to be considered were those situated at 33 Carey Road, Pelham and Flat 11 Pitlochry, Loop Street, Pietermaritzburg.

 

[47.2]    The alleged sources of income according to the first respondent[15] were the following:

 

INFORMAL TRADING

The first respondent alleged that during the early 1980’s she and her husband sold meat as street vendors and that they jointly generated a turnover of approximately R6000 per week.  She also claimed to have sold clothing on an informal basis.

 

JOYCE’S BOUTIQUE

The first respondent alleged that in 1996 she commenced the business of ‘Joyce’s Boutique’.  This business was closed in December 1999.  She thereafter re-opened the business at 7 Witness Lane, Pietermaritzburg, in 2000. 

 

COFFEE SHOP

The first respondent commenced the business of a coffee shop at 6 Witness Lane, Pietermaritzburg, during 2000.  The coffee shop closed in October 2004 as the lease was terminated.

 

 

OTHER ALLGED SOURCES OF INCOME

 

GARAGE

According to the first respondent, she and her husband, Mike Komane (now deceased), operated a garage in Greytown.  This garage was allegedly sold for R200 000 and she received the sum of R100 000 as her half share.  She claimed to have utilised R30 000 from this amount to pay a deposit on the purchase price for the property at 33 Carey Road, Pietermaritzburg.  Although she alleged that she owned butcheries in Pietermaritzburg and Chesterville, no information was provided by her regarding the income from these businesses.

 

[47.3]    As corroboration for the first respondent’s allegations relating to their sources of income, Ally had regard to the financials prepared by Nel and which were signed by the first respondent during 2000.  These reflect that she had a net profit of approximately R16 000 per month when she purchased the property at Carey Road.  According to a letter drawn by Nel dated 20 December 2000 he states that the first respondent was drawing an average of R10 000 per month from both the coffee shop and Joyce’s Boutique.  This was the letter that was used in support of an application for a mortgage bond in respect of the Carey Road property.  Ally observed, however, that Nel claims to have fabricated the financials for the purpose of ensuring that the first respondent had sufficient income to qualify for the bond. 

 

[47.4]   With regard to the coffee shop, a statement obtained from Irshad Edris, the landlord of the premises, confirms that a lease agreement was concluded with the first respondent on 10 January 2000.  The first respondent herself confirms in her opposing affidavit that she commenced the coffee shop business in 2000.  Accordingly no income could have been generated from the coffee shop in 1999.  In the result Ally found that the financial statements reflecting an income of R361 200 cannot be correct.  Consequently the only income for 1999 would have been derived from the boutique.  Although Ally considered the expenses attached to the coffee shop, he cautioned that these were based on fabricated figures as evidenced by Nel’s testimony in the criminal trial. 

 

[47.5]    Ally’s first exercise was to exclude the income and expenditure in respect of the 1999 year.  The amount that was excluded was the sum of R361 200.  The next step was to exclude the expenditure relating to the coffee shop in the sum of R206 063.  This amount was based on all the expenses directly related to the coffee shop as given by Nel in the financial statements.  From the total expense of R328 050, the sum of R206 063 was excluded leaving an amount of R121 987 which was then apportioned as expenses for the boutique.  This theoretically left a net income of R34 013 (i.e. R156 000 for 1999 less R121 980).  Utilising the figure of R40 000 per month mentioned by the witness Mkhatshwa in her affidavit the approximate turnover of the boutique would have been between R48 000 and R50 000 per annum.  When the expenses of R121 987 are deducted, the first respondent would have incurred a loss of approximately R71 987. 

 

[47.5]    From bank statements obtained by the applicant from First National Bank in respect of the boutique, Ally determined that the only amounts deposited were the following: R9 040 for the year ending December 1998; R7 820 for the year ending December 1999; R11 621.32 for the year ending December 2000 and R1 300 for the year ending November 2001.  The total amount deposited was the sum of R29 781.32.  He also determined that on at least five occasions debit orders were not honoured because of insufficient funds.

 

[47.6]    For the year 2000, Ally determined that the coffee shop would have generated a net profit of R150 074.  However, this was based on Nel’s letter to the effect that the first respondent was drawing R10 000 per month from both the coffee shop and the boutique.  The witness accordingly refused to accept the profit of R150 074 as being realistic in the circumstances.  On the assumption, however, that the coffee shop was more profitable he allocated 60 % of the profit to the coffee shop.  Accordingly in his view the coffee shop would not have generated more than R72 000 per annum. 

 

[47.7]    On the figure provided by Mkhatshwa, Ally concluded that the boutique would have sustained a loss of approximately R72 000 at the end of 1999.  According to the witness even if the increased purchase price for stock for the boutique meant an increased volume of stock, such increase would have to be limited to stock to the value of R5 500.  In these circumstances, according to Ally, it is highly improbable that the first respondent could have altered her net loss of approximately R72 000 to a net profit of approximately R46 675 estimated as follows:

 

1)         Income before tax per financial statements                        196 748

2)         Less Nett income attributable to the coffee shop               150 074

3)         Nett income attributable to the boutique                               46 675

 

[47.8]    Ally estimated the reasonable living expenses of the first respondent in 2000 to be R66 858  In addition, the first respondent claimed to have participated in a  ‘stokvel’ to which she contributed R1000 per week.  Her expense for the eleven month period would have increased by approximately R44 000 resulting in total expenses of R110 858.  Other payments made by the first respondent in 2000 were made up of the following:  R6 000 as instalments (R1500 x 4) in respect of Flat 11; R7 000 as a deposit in respect of flat 11; R6 000 as a deposit (given as a loan to Mngadi) for flat 10; R15 000 for furniture and R5 000 for jewelry.  The total of these amounted to R39 000.  Accordingly her total expenditure for the year would have been approximately R 149 858 made up as follows: living   expenses (R66 858); stokvel (R44 000) and other expenses (R39 000).  Her income would have been approximately R118 000 based on the R72 000 from the coffee shop and R46 000 from the boutique.   Based on the above analysis the first respondent would have made payments of at least R31 858 in excess of what was available to her.

 

 

[47.9]  Dealing with the first respondent’s income in 2001, Ally noted that there was no independent verification in respect of such income.  The bank statement for Joyce’s Boutique reflects only one deposit of R1 300 in 2001.  Based on the income of R118 000 in 2000 Ally estimated that this would have increased by 10% giving an estimate income for 2001 of R129 800.  He also estimated that her living expenses of R66 858 would have increased by 10% from 2000 to R73 543.  Her other payments during 2001 were in respect of the following:  R9 000,00 for installments in respect of Pitlochry, R1 260 in respect of the bond for Pitlochry; R3 000 as a deposit for Carey Road, R20 000 as installments for Carey Road; and R14 000 in respect of transfer costs for Carey Road.  The total expenses were R74 260.  The first respondent’s total expenses for 2001 amounted to R147 803 made up of living expenses (R73 543) and other expenses (R74 260).  Based on this analysis, Ally calculated that the first respondent made payments of at least R18 003 in excess of what might have been available to her.

 

 

[48]      Having performed the above exercises and analysis, based on the limited information provided by the first respondent, Ally concluded that the first respondent would not have been able to pay for the Carey Road property or the bond instalments for that property and 11 Pitlochry Road, based on her alleged legitimate sources of income that might have been derived from the coffee shop and boutique businesses. 

 

 

[49]    The next issue which Ally was required to consider was whether the second respondent (first respondent’s mother) could reasonably have afforded to purchase the property at 17 Huntley Road, Pietermaritzburg, from her own source of income.  The following factors were considered:

 

[49.1]    In an application for a bond to finance the purchase of the property in 1996, the second respondent stated that she received an income of R7 500 per month as a self-employed hawker.  She also claimed to have two investments at Nedbank in the amounts of R20 940 and R37 857 respectively and a savings account in the sum of R20 000.[16]  The second respondent had signed an affidavit[17] on 13 March 1999 when she applied for a social grant.  In this affidavit she declared inter alia (a) that she was employed by a Mr Antel from 1982 until 1992; (b) that she earned no formal income as at March 1999; (c) that she regarded herself as unemployed and supported herself by selling meat from which she earned R50 per week; and (d) that her late husband last worked in 1976 and thereafter he received a disability grant.

 

[49.2]    Having regard to her income as disclosed in the affidavit referred to above, Ally expressed the view that if indeed there were investments and a saving account as stated in her bond application these investments and savings could not have been funded from any source of employment described by her.  He was unable to find any documentary evidence substantiating any benefit allegedly received from the second respondent’s former employer.  Having regard to the second respondent’s late husband’s employment history as set out in the affidavit, it appeared highly unlikely that an amount of R20 000 was available to pay as a deposit for a property in 1996.

 

[49.3]    Ally thereafter had regard to the Nedbank loan account statements.  From these statements it appeared that the initial instalments (March and April 1997) were in the form of debit orders and were paid from her bank account.  These were the only two payments paid via debit order.[18]  The following amounts totaling R76 969.23 were paid by cheques and transfers from investments.  These payments were made on the following dates:[19]  R17 000 on 9 April 1997, R37 587.46 on 10 April 1997, R22 136.15 on 12 April 1997 and R24 562 on 12 April 1997.  It is interesting to note that all these payments were made in the same month.

 

[49.4]    Ally determined that the debit orders were reversed on 16 occasions during the period 7 May 1997 to 7 August 1998.  This could only have occurred if there were insufficient funds to pay the bond instalments on these occasions.  After the debit orders were returned unpaid large amounts of cash totaling R65 386.63 were deposited into the bond account between 2 June 1997 to 7 August 1998.  In fact the final payment to settle the outstanding amount owing was made on 7 August 1998 in an amount of R25 000.  A total amount of R146 585.86 was paid into the bond account over a period of 18 months.[20] 

 

 

[50]    Having regard to above, Ally was of the view that the second respondent could not have afforded to pay the deposit for the property in question, nor could she have afforded to pay the bond instalments.  He accordingly concluded that the deposit and the instalments were funded by sources other than her personal income or savings received from her late husband.

 

 

[51]    As far as Flat 10 Pitlochry is concerned, Ally was required to determine whether the deceased Thembisile Gladys Mngadi was in a financial position to pay the deposit for the purchase of this property and whether there were sufficient funds from the rentals received to finance the bond and levy payments after her death.

 

 

[52]    There is no dispute that the deceased Mngadi was employed at BNS Medical (formerly Smith & Nephew) from 1 July 1983 until her death on 28 December 2001.  Her net salary was R526.89 per week and this approximated to R2 107.56 per month.  She was employed as a packer. She purchased Flat 10 Pitlochry for R46 000.[21]  The purchase and sale agreement was signed by her on 5 August 2000.[22]   She paid R7 000 on 15 August 2000 and R2 000 on 28 September 2000 towards a deposit.  The first respondent admitted that she lent Mngadi the sum of R6 000 to pay towards the deposit.  The balance of R37 000 was financed by a bond from People’s Bank (now part of Nedcor). 

 

 

[53]    In her application for a bond Mngadi stated that her salary was R2 901.  She also stated that after deductions from her salary and taking her living expenses into account, she had a surplus amount of R1 364 available to pay the bond and levies in respect of the flat.[23]  The levy in respect of the flat was R119 per month and the bond instalments were R473 per month in 2000.  The total amount payable in respect of the bond instalment and levies was R592.60.  The flat had an existing tenant who paid a rental of R650 per month.[24]  Until her death the bond instalments were paid from Mngadi’s Standard Bank account.  After her death no funds were deposited into this account resulting in all debit orders being returned unpaid.[25] A total amount of R51 404.78 was paid in cash to settle the amount outstanding on the bond after her death.  These payments were made up of one payment in the amount of R700, twenty three (23) installments of R800, eleven (11) instalments of R1 000, one (1) instalment of R1 500 and a final payment of R19 804.78 on 30 June 2005.[26]  These amounts were paid during the period 4 March 2002 to 30 June 2005.

 

 

[54]    The first respondent admits that she paid all the bond instalments after Mngadi’s death.[27]  She also admits that she collected the rental prior to and after Mngadi’s death.[28] The first respondent stated that after Mngadi’s death her family would not have been able to afford the bond payments.[29]  Mngadi’s children were supported through funds from a provident fund.[30]  In terms of Mngadi’s last Will and Testament the flat was bequeathed to the first respondent.

 

 

[55]    Based on the above, Ally was of the view that the deceased Mngadi could not afford to pay the deposit or the instalments for the property from her income.  He concluded, however, that after Mngadi’s death the rental received from letting of the property would have been sufficient to meet the bond instalments and levies on the property.

[56]    Under cross-examination by Mr Slabbert the witness refuted the suggestion that his findings were based on ‘creative accounting’, rather than on the true facts.  Ally maintained that the first respondent had not shown that she was able to afford the assets in question.  He maintained that the figures set out by Nel in the financial statements were a fabrication and could not be relied on.  He also maintained, as far as second respondent is concerned, that she did not have adequate funds to acquire the property in question. 

 

 

[57]    That was the sum total of the evidence led on behalf of the applicant.  Before closing the applicant’s case Mr Govindasamy placed on record the applicant’s reasons for not calling the evidence of the witnesses Nicolene Marion and Victoria Chetty.  It seems that the applicant attempted to serve a subpoena on Nicolene Marion and although she initially agreed to consult with the applicant’s legal representatives, she thereafter became evasive and avoided further contact with them.  Victoria Chetty on the other hand refused flatly to testify on behalf of the applicant.

 

 

APPLICATION FOR ABSOLUTION

 

[58]    At the conclusion of the evidence led on behalf of the NDPP, Mr Slabbert applied for absolution from the instance.  That application was refused on the basis that the applicant had established a prima facie case which called for an answer.  It was in any event questionable whether the respondents were entitled to apply for absolution bearing in mind that the provisions of rule 39(6) really apply to a trial in the true sense.

 

 

RESPONDENTS’ CASE

 

[59]    As already mentioned, only the first and second respondents testified on behalf of the respondents.  The third respondent seemed not to show any interest in these proceedings despite filing an opposing affidavit in the application.

FIRST RESPONDENT

 

[60]    The first respondent testified that on 25 November 2005 she was arrested and charged on various counts of drug dealing.  She and five others were subsequently prosecuted in the Regional Court, Pietermaritzburg on 36 counts.  In the course of that trial the Asset Forfeiture Unit (AFU) arrived at her premises at 17 Huntley Road, Pietermaritzburg, in the company of the Sheriff.  In the criminal trial she also faced 3 counts of money laundering in respect of the Huntley Road property, the Marion Road property and Flat 10, Pitlochry.  She faced no charge in respect of the Carey Road property.  The allegation at the time was that she had purchased certain properties which were then registered in the names of other people and that she had paid for these properties with the proceeds of drugs.  She denied that she ever dealt in drugs.

 

[61]    According to the first respondent there was no dispute that the Huntley Road property was purchased and registered in the name of her mother, the second respondent.  There was also no dispute that the property was purchased from
Mrs Pole and that the sale agreement was signed on 12 October 1996.  She denied, however, that the property was purchased by her.  She averred that the property was purchased by her parents.  She testified that on the first occasion when she went to see Mrs Pole she was accompanied by the estate agent.  On the second occasion she was accompanied by her mother.  These were the only two occasions on which she went to see Mrs Pole.  Although the property was purchased by both her parents, it was only her mother who had signed the sale agreement. The property is accordingly registered in her name.  As far as the payment of the bond was concerned, she testified that both her parents were making payments to the bank but that her mother was more involved.  She herself made no payment towards these instalments or towards the purchase price.

 

 

[62]    As far as Flat 10 Pitlochry is concerned, she emphatically denied that she was either the true purchaser or that she had paid anything towards the purchase price.  She maintained that this property was purchased by Thembisile Gladys Mngadi.  According to the sale documents the property was purchased by Mngadi on 5 August 2000 for the sum of R46 000.  Mngadi applied for and was granted a home loan.  However, since the deposit that was required was R9 000 and Mngadi only had the sum of R3 000, the first respondent agreed to lend her the R6 000 and that Mngadi would repay this amount to her.

 

 

[63]    According to the first respondent when she purchased Flat 11 Pitlochry she used her maiden surname namely ‘Ngqulunga’ and not Komane which is her marriage name.  With regard to the Carey Road property, she testified that she purchased this on 8 December 2000.  She paid a deposit of R30 000.  On the issue of the bond repayments in respect of these properties, she testified that when she purchased Flat 11 Pitlochry there was already a tenant in occupation.  She utilized the rental paid by him to service the bond on the Carey Road property.  Her intention was to convert this into a bed & breakfast place.  From about 2000 she placed an advertisement at the university to let out some of the rooms.  On this basis five of the seven rooms are let out and the rental received is utilized to pay the bond.

 

 

[64]    She emphatically denied the evidence of Gonaseelan Chetty, supra, that she was involved in the sale of mandrax.  As explanation for where she got the money from to pay a deposit in respect of the Carey Road property and her loan of R6 000 to Mngadi, she testified that she and her husband Mike owned a garage at Greytown.  However, in the course of time she and her husband did not see eye to eye and she requested him to sell the garage.  The garage was eventually sold for R200 000 and from this she was paid the sum of R100 000.  Although she had signed certain documents when the garage was purchased, it was not necessary for her to sign any documents when it was sold.  She was unsuccessful in her efforts to obtain the documents from the attorneys which would prove that she and her husband had purchased this garage in Greytown.  Her share of the R200 000 was given to her in cash by her late husband.

 

 

[65]    While she confirmed that she operated a boutique and the coffee shop as the earlier evidence shows, it was her husband who was involved in the butcheries.  She testified that her businesses were doing well contrary to what the witness Akbar Ally, had testified to.  Although she kept ‘books’ for these businesses she was unable to find them. 

 

 

[66]    The above was the sum total of the first respondent’s evidence-in-chief.  She was thereafter closely and thoroughly cross-examined by Mr Govindasamy over a period of about five days.  It would be an exhaustive exercise and rather tedious to deal with each and every aspect of the first respondent’s evidence under cross-examination.  I accordingly propose to deal with the relevant aspects thereof when I evaluate all the evidence in due course.

 

 

SECOND RESPONDENT

 

[67]    It is common cause that the second respondent is the mother of the first respondent.  Her evidence pertained to the property situated at 17 Huntley Road, Pietermaritzburg.  She testified that this property was purchased jointly by herself and her late husband in 1996.  She averred that the first respondent did not pay a cent towards the house.  She testified that she only saw the house after it was purchased when the first respondent took her to go and view it.  She saw the owner of the house on the first occasion when the owner mentioned that she would be moving and that she would give the curtains to her.  No one assisted her and her husband in acquiring the property.  The idea of buying the house came from her late husband who said that since they were getting on in age they could get people to rent the house for income. 

 

 

[68]    According to the second respondent the owner of the house was a white man who initially wanted R180 000 for the house but after pleading with him the price was dropped to R160 000.  They paid for the house from investments that she and her husband had in the bank.  At the time when the house was bought, neither she nor her husband was working.  However, her husband was engaged in making cupboards and ceilings while she did some hawking, selling fowls, meat, eggs and second-hand clothing from which she earned about R7 500 per month.  When her husband died in 1998 she received an insurance pay-out which she used as payment towards the house.  After the house was registered it was occupied by tenants.  The rental of R2 500 per month that was received was paid towards the house.  She confirmed making application for a social grant in 1999.  She admitted that there was no truth in the information filled out on that form. She maintained that she never said anything about owning a house nor was anything asked of her in that regard.  She also denied saying that she earned the sum of R50 per week selling meat.

 

 

[69]   The second respondent was cross-examined by Ms Mothilal.  To initial questions put to her by the court regarding the earnings of R50 mentioned on the application for a social grant, the second respondent emphatically denied that she said such a thing.  Although she would have told the official completing the form what she earned she was unable to now remember what that amount was.  The second respondent maintained that she was assisted by a while female agent to purchase the house.  The agent came to her house in Sobantu to have some documents signed.  She remembered that a lump sum deposit of R20 000 was paid and thereafter she and her husband continued to pay the monthly installments on the house.  Whenever payments were required to be made she used to telephone her daughter, the first respondent to fetch the money from Sobantu in order to make the payment.  The house was purchased in or about 1996/1997, however in 2004 the first respondent began occupying it when relations between the first respondent and her husband deteriorated.

 

 

[70]    When she was again taxed about the information contained in the application for a social grant, she again denied that she had provided such information.  She maintained that she was merely requested to place her thumb print on the form and to sign.  She admitted, however, that certain personal information appearing on the form could only have come from her.  When it was pointed out to her that there were large amounts of cash deposited into the bond account, she maintained that these came from monies earned by her husband for work involving the making of ceilings and cupboards and from her sales of fowls, eggs, meat and certain second hand goods.  Her net income from such sales was approximately R7 500 per month.

[71]    She further maintained that both she and her late husband had purchased the house.  However, when it was pointed out to her that the bond application documents reflect her as being single, she expressed surprise saying that it was a mistake on the part of the person writing down the information.  When she was asked why the house was registered in her name only while both she and her husband had purchased it, her response was that it was her husband who requested her to take her identity book and do this because ‘he was too much in love with me’. 

[72]    As far as the payment of the purchase price is concerned, she informed the court that she thought that the deposit of R20 000 was taken from the house and paid.  She maintained that they had no dealings with a bank regarding a bond and they did not have a debt with the bank.  All payments to settle the balance of R140 000 were made by herself and her husband from monies kept at home.  She was unable to recall whether the agent had provided them with any documents to sign nor was she able to recall whether she went to the bank to sign any documents.  As far as she was aware the only big lump sum that was paid to the bank was the R10 000 which she received in respect of a funeral policy from Sanlam when her husband died.  She had no knowledge of other big amounts like R30 000 or R40 000 being paid to the bank on her behalf.  She testified that the only assistance that the first respondent gave to them was when she collected monies from them whenever payments to the bank had to be made. 

[73]    She denied Pole’s evidence that the curtains were sold for R6 000.  According to the second respondent, the curtains were merely left in the house.  It was also suggested to her that Pole never met her at all and had no dealings with her regarding the purchase of the house.  She refuted this saying that the first respondent would not have taken someone else to view the house when she knew that the second respondent was looking for one.  When she was questioned about the number of vehicles registered in her name, she maintained that all these vehicles were purchased at auction sales including the Audi motor vehicle.  When it was suggested to her that according to the first respondent she had purchased this vehicle from a Mr Piper, her response was ‘then I do not know’.

[74]    No other evidence was led on behalf of the respondents.  In closing their case Mr Slabbert explained that the reason why the third respondent was not called is because he was already discredited in the Regional Court.

LEGISLATIVE CONTENT AND THE ONUS OF PROOF

[75]    Section 50(1) of POCA provides that:

‘[1]       The High court shall, subject to Section 52, make an order applied for under Section 48(1) if the Court finds on a balance of probabilities that the property concerned–

(a)  is an in instrumentality of an offence referred to in Schedule 1;

(b)  is the proceeds of unlawful activities; or

(c)  is property associated with terrorist and related activities.’

[76]    ‘Proceeds of unlawful activities’ is defined as ‘any property or any service, advantage, benefit or reward which was derived, received or retained, directly or indirectly, in the Republic or elsewhere, at any time before or after the commencement of this Act, in connection with or as a result of any unlawful activity carried on by any person, and includes any property representing property so derived.’

[77]    Dealing with the above definition in National Director of Public Prosecutions v RO Cook Properties (Pty) Ltd; National Director of Public Prosecutions v 37 Gillepsie Street Durban (Pty) Ltd and Another; National Director of Public Prosecutions v Seevnarayan [31] in paragraphs 64 – 72, Mpati DP et Cameron JA (as they then were), held first [in paragraph 67] that the definition should be approached on the basis that, subject to necessary attenuation of the linguistic scope of ‘in connection with’, it should be given its full ambit; and second [in paragraph 72] that bearing in mind that the objective of the Act is to render forfeit the returns that might accrue from unlawful activity, the ‘connection’ the definition envisages requires some form of consequential relation between the return and the unlawful activity, in other words, the proceeds must in some way be the consequence of unlawful activity.

[78]   As far as the issue of the onus is concerned in Sagren Perumal v NDPP [2011] ZASCA 37, Snyders JA pointed out [in paragraph 6] that

‘[a] successful application for forfeiture of assets in terms of s 48(1) of POCA requires      a court to find, on a balance of probabilities, that the property concerned is either an instrumentality of an offence or the proceeds of unlawful activities.  Section 48 is part    of chapter 6 of POCA which focuses, unlike chapter 5, on property and not on the           wrongdoer.  There is therefore no need for an existing criminal conviction or pending           criminal proceedings before the NDPP avails himself of the provisions of s 48 and            there were none in this case.  The court, faced with an application in terms of s 48,         simply asks the question whether the property was an “instrumentality of an offence”            or “the proceeds of unlawful activities”.’

 

[79]    On the issue of the onus, Van Heerden JA in Mohunram and Another v National Director of Public Prosecutions and Another (Law Review Project as Amicus Curiae)[32] in assessing the proportionality of the deprivation held as follows in paragraph 75:

‘[75] …  However, as some of the factual material relevant to the proportionality analysis will often be peculiarly within the knowledge of the owner of the property concerned, the owner who is faced with a prima facie case established by the NDPP would in the usual course be well-advised to place material before the court.  This does not, however, shift the onus of proof to the owner in question; it merely places on the owner an evidentiary burden or, as it is sometimes called, a burden of adducing evidence in rebuttal.’

[80]    In the same judgment Moseneke DCJ made the following observation in paragraph 131:

‘[131]  …   I may add that in terms of s 48(1) read together with s 50(1) of POCA, the NDPP bears the onus to establish on a balance of probabilities that the forfeiture sought is justified.  Naturally, the respondent in forfeiture proceedings will have to adduce evidence if she or he hopes to disturb or rebut the facts that the NDPP relies upon in the founding depositions.’

[81]    In describing the difference between the onus of proof and the evidentiary burden, Corbett JA in South Cape Corporation (Pty) Ltd v Engineering Management Services (Pty) Ltd[33] referred to the following dicta:

‘As was pointed out by Davis AJA in Pillay v Krishna and Another, 1946 AD 946 at pp 952-3, the word onus has often been used to denote, inter alia, two distinct concepts: (i)the duty which is cast on the particular litigant, in order to be successful, of finally satisfying the court that he is entitled to succeed on his claim or defence, as the case may be; and (ii)the duty cast upon a litigant to adduce evidence in order to combat a prima facie case made by his opponent.  Only the first of these concepts represents onus in its true and original sense.  In Brand v Minister of Justice and Another 1959(4) SA 712(AD) at p 715 Ogilvie Thompson JA called it “the overall onus”.  In this sense the onus can never shift from the party upon whom it originally rested.  The second concept may be termed, in order to avoid confusion, the burden of adducing evidence in rebuttal (“weerleggingslas”).  This may shift or be transferred in the course of the case, depending upon the measure of proof furnished by the one party to the other.  (See also Tregea and Another v Godart and Another, 1939 AD 16 at p 28, Marine and Trade Insurance Co. Ltd v Van der Schyff 1972(1) SA 26 (AD) at pp 37-9).’

[82]    As far back as in 1913 Innes J in Union Government (Minister of Railways) v Sykes[34] made the following observation:

‘The important point is that less evidence will suffice to establish a prima facie case where the matter is peculiarly within the knowledge of the opposite party than would under other circumstances be required.’

[83]    As the authors of the Law of Evidence[35] explain that

            ‘the availability of evidential material, the opportunities to obtain it or the fact that one         of the parties has peculiar knowledge of a fact, does not alter the standards for    assessing evidential material nor, normally, do they alter the onus of proof.  The party     having exclusive evidence or peculiar knowledge of a fact is therefore not required to         prove the fact if, according to the usual criteria, the burden rests on his opponent.              Peculiar knowledge is, nevertheless, a factor to be considered when the court has to        decide whether evidence reaches the required standard.’

[84]    As far as the general aims and object of POCA are concerned, it is clear that the statute is designed to reach far beyond ‘organised crime, money-laundering and criminal gang activities’ and clearly applies to cases of individual wrong-doing.[36]  In short, it is meant to serve as an effective tool in the fight against crime.  Having said this of course the effects of forfeiture are draconian and potentially invasive of the rights of people to their properties.[37]   It is for this reason that the applicant (NDPP) is required to exercise his powers with care and circumspection when seeking to attach and/or sieze property believed to be involved in the commission of crime or was the proceeds of such crime.  As pointed out by Ponnan JA in Prophet v National Director of Public Prosecutions[38]  ‘[c]ourts should be vigilant to ensure that the statutory provisions in question are not used in terrorem and that there has been no overreaching and abuse’.

FINDINGS

[85]    I now turn to consider whether the evidence placed before me establishes that during the period 1996-2005 the first respondent was involved in drug dealing and whether the seized assets were acquired from the proceeds of such activities.  In assessing such evidence I am no doubt mindful of the following instructive guidelines set out by Nienaber JA in Stellenbosch Farmers’ Winery Group Ltd and Another v Martell Et Cie & Others:[39]

‘The technique generally employed by courts in resolving factual disputes where there are two irreconcilable versions before it may be summarized as follows.  To come to a conclusion on the disputed issues the court must make findings on (a) the credibility of the various factual witnesses, (b) their reliability, and (c) the probabilities.  As to (a), the court’s finding on the credibility of a particular witness will depend on its impression of the veracity of the witness.  That in turn will depend on a variety of subsidiary factors such as (i) the witness’ candour and demeanour in witness-box, (ii) his bias, latent and blatant, (iii) internal contradictions in his evidence, (iv) external contradictions with what was pleaded or put on his behalf, or with established fact or with his own extracurial statements or actions, (v) the probability or improbability of particular aspects of his version, and (vi) the caliber and cogency of his performance compared to that of other witnesses testifying about the same incident or events.  As to (b), a witness’ reliability will depend, apart from the factors mentioned under (a)(ii), (iv) and (v), on (i) the opportunities he had to experience and observe the event in question and (ii) the quality, integrity and independence of his recall thereof.  As to (c), this necessitates an analysis and evaluation of the probability or improbability of each party’s version on each of the disputed issues.  In the light of its assessment of (a), (b) and (c) the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it.  The hard case occurs when a court’s credibility findings compel it in one direction and its evaluation of the general probabilities in another.  The more convincing the former, the less convincing will be the latter.  But when all factors are equipoised, probabilities prevail.  (Paragraph 5 at 14I-15E.)’

re: FIRST RESPONDENT’S DRUG DEALING ACTIVITIES

[86]    I start first with the evidence of LUCKY GORDON.  As I already pointed out, at the commencement of his evidence Gordon sought to recant his allegations implicating the first respondent in drug dealing.  He claimed that he implicated her only because he was asked by the investigators to provide an affidavit similar in content to that provided by his wife Luthobile Gordon.  Since Gordon was declared to be a hostile witness and since he was cross-examined on the contents of one of the two affidavits he had deposed to, I was urged by Mr Slabbert not to accept his evidence for the following reasons:  (a)  that Subramanien was not called by the applicant to confirm Gordon’s statement or to rebut his testimony that he made the statement to comply with a request by the police that he should keep his version in line with that of his wife’s statement; (b)  that the statement made by Gordon is hearsay and should be rejected; and (c)  that there was no corroboration for any of the evidence in his statement.

[87]    Gordon in my view was a singularly unimpressive witness.  In fact he was a dishonest witness.  Having deposed to two affidavits (in one of which he implicates the first respondent directly in extensive drug dealing) and having agreed to testify on behalf of the applicant in these proceedings, it was clear to me that he was bent on wrecking the case for the applicant.  Gordon displayed all the hallmarks of a compulsive liar.  On his own version he had stated several untruths in a sworn statement.  Bearing in mind the close relationship he shared with the first respondent, it is highly improbable, in my view, that he would have deliberately implicated the first respondent falsely on such serious allegations.

[88]    For the above reasons I consider the submissions and criticisms made by
Mr Slabbert to be without merit.  The fact that Subramanien was not called by the applicant is of no consequence.  There is some force in the submissions advanced by Mr Gonvindasamy in this regard:  Gordon cannot be equated to an accused in a criminal trial.  His statement was procured not to establish any guilt on his part.  It was procured to establish his relationship and dealings with the first respondent and in that context to provide direct evidence of the first respondent’s drug dealing activities. 

[89]    It is trite that it is not necessary for a party to call witnesses to rebut every version provided by witnesses.  Where the nature of the evidence and the facts and circumstances are such that the evidence is inherently improbable or clearly a fabrication, as is clearly the case with Gordon’s evidence, it is not necessary to rebut such evidence.[40] 

[90]    With regard to Mr Slabbert’s further submissions, it is not clear on what basis it can be contended that Gordon’s statement is hearsay.  Gordon himself confirmed that he made the statement.  It is not clear what further corroboration was required.  Of significance is that Gordon provided no reasons why he willingly agreed to appease the police or ‘them’ (referring to the investigators herein) when he incriminated the first respondent in his statement.  In the circumstances the contents of Gordon’s affidavit (TMS4) must be accepted as representing the truth of the allegations surrounding the drug dealing activities on the part of the first respondent.  Gordon not only identifies her as a drug dealer but goes on to provide details of the numerous times that he purchased drugs from her for resale.

[91]    I have already set out the relevant extracts from TMS4 in paragraph 14 supra.  In spite of the damning evidence in his affidavit, Gordon made every effort in his oral testimony not to implicate the first respondent so much so that he even denied consulting with the applicant’s legal team in preparation for testifying in this matter.  It is common cause that Gordon never testified in the criminal trial.  In my view, he may have been lulled into a false sense of security believing that he was not required to give incriminating evidence against the first respondent with whom he shared a close relationship.  This of course changed when he realized that he was required to testify in these proceedings.

[92]    I deal next with the evidence of Gonaseelan Chetty.  Mr Slabbert was quite scathing in his criticism of Chetty’s evidence.  He contended that no reliance whatsoever could be placed on Chetty’s evidence for the following reasons:  (a)  that he was a self-confessed liar who contradicted ‘nearly every statement’ in this court and confessed to lying in the Regional Court; (b)  that since he falsely implicated Hoosen Mohamed and Joe Maharaj, his evidence in this trial implicating the first respondent should be rejected; (c)  that an adverse inference must be drawn from the applicant’s failure to call Nicolene Marion as a witness; (d)  that he contradicted his summary of evidence; (e)  that he was unable to establish the correct period of the first respondent’s drug dealing activities; and (f)  that he did not witness any exchange of money between the first respondent and Ranjini Chetty.

[93]    Whilst some of the criticism might be justified it is trite that the entire evidence of a witness who is found to be lying on some aspects does not fall to be rejected solely on account of such lies.[41]  Although Chetty’s evidence was unsatisfactory in certain respects, he was not shaken in respect of certain material aspects which in my view have a ring of truth about them.  These relate to the following:  (a) that he met the first respondent and went to her house on several occasions from the early 1990’s up to approximately 2000; (b)  that he accompanied his sister Ranjini to Sobantu where he was introduced to the first respondent and from whom Ranjini collected drugs; (c)  that he was told by his sister that he should remember the house as he would be required to collect drugs from there in the future; (d)  that on another occasion he went to the first respondent’s house by himself when the first respondent handed him a packet of mandrax tablets; (d)  that he accompanied one Nicolene Marion to the first respondent’s house to collect mandrax tablets on Ranjini’s instructions; (e)  that on other occasions he took Bradwin Surdat, Ebrahim Mohammed and Joe Maharaj to the first respondent’s house to collect mandrax tablets, and (f) that he saw the first respondent frequently over a period of approximately 10 years at Ranjini’s house at 19 and 21 Queen Street, Pietermaritzburg, and the first respondent supplied his sister with drugs on these visits.

[94]    Having regard to Chetty’s damaging evidence of the first respondent’s drug dealing activities, the first respondent attempted to neutralize such evidence by claiming that she did not really know Chetty that well.  While she claimed to know Nicolene Marion who was not even closely related to Ranjini, she desperately tried to distance herself from Chetty.  She created the impression that as far as she was concerned Chetty was non-existent.  This can hardly be the truth and must be rejected as a deliberate lie particularly when one has regard to inter alia the undisputed evidence that at least for ten years she regularly visited Ranjini’s house almost twice or thrice a week and that Chetty was always at his sister’s house during this period.  The only inference to be drawn is that the first respondent is lying about her relationship with Chetty because she clearly has something to hide.

[95]    Lastly, as far as the acceptance of Chetty’s evidence is concerned, it should be pointed out that whilst an effort was made on behalf of the respondents to suggest that Chetty was motivated (for fear of being locked up) to make a statement, it was never suggested to him that the investigators had asked him to deliberately and falsely implicate the first respondent in drug dealing.  Nor did the first respondent lead any evidence to suggest this.  All in all, I am satisfied that Chetty’s evidence implicating the first respondent in drug dealing over an extensive period must be accepted and the first respondent’s denials thereof fall to be rejected as being false.

[96]    As far as the evidence of Van der Hoogen is concerned, I have already pointed out [para 40 supra] that his cross-examination was uneventful.  It will be recalled that his evidence dealt with the discovery of about 10 000 mandrax tablets from Flat 10, Pitlochry.  When the first respondent was cross-examined about this, she conceded that her boyfriend Wiseman Bayeni lived at Flat 10 but went on to add that ‘he then got a job far away and the flat was then sub-rented by a lady, Lindiwe Mkhize’.  The first respondent denied living at Flat 10 at any stage.  She explained that after she was arrested she was taken to Huntley Road and whilst there she overheard the police talking to each other over the phone stating that there was a boy who was caught with a key to Flat 10 and that ‘tablets had been found’ and that she should be taken to Flat 10. 

[97]    When she arrived at Pitlochry, she identified Sihle Ndlovu as being related to her boyfriend Wiseman Bayeni.  She was then informed by the police that they wanted to conduct a search and that she had to be a witness.  She refused saying that she had heard earlier that something had been found in the flat and she suspected that they would make it look ‘as if it was a sudden discovery’.  She explained that she had no fear of being incriminated because she had nothing to do with the drugs.  She disputed Van der Hoogen’s evidence that she was quite agitated and had accused the police of framing her.  When it was suggested to her that she did not want to enter Flat 10 because she was in fact aware that drugs would be found there she disputed this and went on to give a garbled explanation that she had already heard that drugs had been found when she was arrested at Pinetown.  Because she heard this she was not prepared to become a witness.

[98]    There is clearly no dispute about the following facts: (a)  that at least 10 000 mandrax tablets were found at Flat 10, Pitlochry; (b)  that the keys to Flat 10 were found in Ndlovu’s possession; (c)  that Ndlovu was related to Bayeni; (d)  that Bayeni was the first respondent’s boyfriend, and (e)  that Ndlovu’s behavour upon his arrival at the flat and his hasty departure was highly suspicious.  In her evidence the first respondent distanced herself from Flat 10 saying that she never lived there at all.  She also attempted to distance her boyfriend from the flat saying that it was sub-let to Lindiwe Mkhize.

[99]     The first respondent’s evidence that Bayeni was not living at the flat falls to be rejected as being false.  Van der Hoogen’s enquiries on the date of the search on
25 November 2005 established and/or led him to believe that Bayeni occupied the flat as at that date.  This evidence was not challenged.  Furthermore, contrary to her evidence in court, the first respondent stated in an affidavit filed in support of her bail application that she did in fact live at Flat 10, Pitlochry after she had separated from her husband.[42]  According to the evidence she had separated from her husband during or about 2004.

[100]    It is of some significance that Van der Hoogen was not challenged on the contents of his statement as well as his evidence-in-chief to the effect that the first respondent had complained that she was being framed.  Her evidence that she had learnt that drugs were found at the flat whilst she was at Huntley Road as a result of conversations she allegedly overheard must be rejected as a fabrication.  In any event the first respondent contradicts herself in this regard when she states that she knew that drugs were found at Flat 10 when she was arrested in Pinetown.  It seems to me that this explanation was fabricated to explain the presence of the drugs that were in fact found there. 

[101]    Van der Hoogen’s direct evidence was that the drugs were only found after the search was conducted when the first respondent had already been taken away from the flat.  He was not challenged on this aspect at all.  His evidence in this regard contradicts and puts paid to the first respondent’s version that drugs had already been found at Flat 10 prior to her arrival there.  I am accordingly satisfied that the probabilities favour the applicant’s version that the drugs found at Flat 10, Pitlochry, belonged to the first respondent.

[102]    From the cumulative evidence of the witnesses GORDON, CHETTY and VAN DER HOOGEN, I am driven to conclude on a preponderance of probabilities that the first respondent was engaged extensively in drug dealing activities from about the mid 1990’s to about 2005.

re:  FIRST RESPONDENTS FINANCIAL POSITION

[103]    As far as the first respondent’s financial position is concerned the applicant relied on (i) the affidavit deposed to by SINDISIWE MKHATSHINA dated
29 March 2006; (ii) financial statements prepared by the first respondent’s bookkeeper ARNOLD NEL for the coffee shop and the boutique, and (iii) an overview and analysis by AKBAR ALLY of the financial statements and the transactions appearing in the first respondents bank account for ‘Joyces Boutique’.  I have already dealt extensively with Ally’s findings regarding the first respondent’s financial position.  The findings here below should be read in conjunction with his report appearing in the applicant’s notices bundle.

[104]    As I pointed out earlier Nel had admitted in the criminal trial that the financial statements prepared by him were fabricated.  The admitted purpose of these financials was to persuade a bank to approve a loan of R180 000 for the first respondent.  However, the coffee shop did not exist in 1999 and accordingly all the figures in these financials relating to the coffee shop are false.  Consequently in my view other figures using the fictitious 1999 amounts have to be rejected as false and unreliable.  The first respondent’s evidence that the financial statements were drawn from entries recorded by her in various ‘books’ must be rejected as being false.  The boutique closed down at the end of 1999.  The boutique was thereafter re-opened at a different address in 2000 but only operated for a period of six months.  Consequently the financials in respect of the boutique are also flawed.  In my view no reliance whatsoever can be placed on these financials.  The first respondent, however, placed substantial reliance on these financials to justify an income of approximately R16 000 per month in 2000.

[105]    The first respondent has not placed any cogent evidence to rebut the evidence presented by the applicant regarding her financial position.  She adopted a supine attitude taking the view that the applicant had all the means at his disposal to find whatever information he required.  This attitude of course misconstrues the nature of the evidentiary burden which was cast on her.  While she admitted in her evidence that she kept ‘books’ for her businesses she failed to produce these books to justify her sources of income.  I set out hereunder what the evidence revealed insofar as the first respondent’s alleged sources of income are concerned:

THE BOUTIQUE

[105.1]    The applicant placed complete reliance on the evidence of Mkhatshwa as contained in her sworn affidavit regarding the income generated from the boutique.  I have already set out material portions of Mkhatshwa’s affidavit [paragraph 17 supra].  Mkhatshwa, like the witness Gordon, attempted to recant her evidence and was declared hostile.  There exists no reason why her evidence on affidavit should be rejected.  It must be regarded as the truth of what she said at the time. 

 

Her evidence paints a rather bleak picture of the business.  In her oral testimony she attempted bravely to assert that the business made
R10 000 – R15 000 per week.  This evidence was no doubt designed to be in line with that of the first respondents save that the first respondent asserted that it was ‘per month’.  I gained the distinct impression that Mkhatshwa was trying desperately to give evidence favourable to the first respondent.  It is highly probable that she and the first respondent discussed this evidence prior to Mkhatshwa testifying. 

 

[105.3]    I have already dealt with Ally’s findings with regard to the boutique.  His findings show that the boutique was unable to meet its expenses and was trading at a loss.  The first respondent has simply failed to produce any records of any sales, purchases, invoices and the like for the six month period when the boutique operated in 2000.  Nor were any records produced when it operated between 1996 to 1999 from the old premises. 

 

[105.4]  In the absence of any information from the first respondent, Ally’s opinion regarding the losses sustained by the boutique must be accepted.  It should be pointed out that the first respondent did not challenge the methodology employed by Ally in his report nor did she testify to any other manner of determining these expenses.

 

THE COFFEE SHOP

[105.2]    Once again the first respondent provided no bank statements, sales records or vouchers in support of any income or expenditure in respect of the coffee shop.  On Ally’s analysis as set out in his report, it must be accepted that the coffee shop like the boutique would have sustained continuous and substantial losses over the years.

 

PROCEEDS FROM ALLEGED SALE OF GARAGE

 

[105.3]    According to the first respondent she and her husband Mike Komane jointly invested monies for the acquisition of a garage at Greytown.  However, as a result of her husband’s infidelity they were fighting all the time and she then demanded ‘her share of the garage’.  Her late husband then allegedly sold the garage for R200 000 and gave her R100 000 in cash.  From this amount the first respondent claimed that she paid the deposit of R30 000 in respect of the Carrey Road property and loaned an amount of R6000 to the deceased Mngadi.  Her evidence-in-chief in respect of the sale of the garage went as follows:

 

‘Now the money that you put down as a deposit on 33 Carey Road and no. 11 Pitlochry and the R6 000,00 that you lent to Thembizile Mngadi, where did you get that money from? --- My husband and I had a garage in Greytown.  And it so happened that in the course of time we could not see eye to eye with my husband pertaining to certain activities that I did not like, which were taking place in Greytown.  And I thereafter told him to sell this garage and give me my share.  We agreed.  He started making advertisements and got himself engaged in all the transactions and finally he told me that he sold the garage for an amount of R200 000,00.

 

Right. Now when the garage was purchased, did you sign any documentation? --- Yes, we did sign documents at the attorney’s office.  It would be somewhere in the corner of Longmarket Street.

 

Right, and when he said he sold it, was it necessary for you to sign documents at the offices of the attorney? --- No.

 

And in order to get the documents you signed when you purchased the property, what did you do in respect of that? …

 

When you were looking for the documents that you signed to show you purchased the garage in Greytown. --- Yes.  Yes, I did approach the attorneys, who then said that those papers cannot be located.  I then instructed an attorney, who then wrote to them and up to now those documents are not available.

 

How many times did you go to the attorneys, who you say got the documents? --- I went to the attorney’s office on two occasions to such an extent that I was later being obstructed, I was not even able to speak to the attorney himself, but ended up speaking to the receptionist.

 

Right, so you could not get any documents? --- Yes.

 

Now did you receive any money as a result of the sale of the garage? --- Yes, I received R100 000,00.

 

Who gave you the money? --- It was Mike, my husband.

 

And did he give it to you in what form, a cheque or in cash?  How did he give it to you? --- It was cash.

 

Now you were talking about Mike Komane.  You were married to him? --- Yes.

 

Were you separated later on? --- Yes.

 

When was that? --- Around 2004.’

 

[105.4]    Under cross-examination the first respondent was pertinently asked about the circumstances surrounding the acquisition of the garage.  This is what followed:

 

‘I assume you had invested a lot of money in this garage? --- My husband and I were owning taxis and we sold them and bought this garage.  The business belonged to both of us.

 

Do you recall how much was put into the business, or what the purchase price of that business was? --- I cannot remember, but when the business was eventually sold it was sold for R200 000.00 and I lost out because that is not the amount that we had invested, although I cannot remember what he amount was.

 

Now is my understanding correct that this garage was purchased by you all in about 1995 or thereabout? --- On or about, Yes

 

But prior to that you all had a taxi business operating? --- Yes

 

For approximately how long was that taxi business? --- With regard to the taxi business, my husband was more involved that I.

 

Ok, well let us just try to work a little backward.  When were you married? --- 1994.

 

Now as the taxi business in operation before you married? --- Yes

 

Approximately how long? --- I cannot remember

 

You all married in April 1994 and at that time … did your husband have the taxi business? --- Yes

 

And then the taxi business was closed during 1994? --- He sold some of the taxis and returned the others.’

 

 

[105.5]    It is highly unlikely that she was a party to such purchase.  If she was there exists no reason why she would not have been a party to any agreement when the garage was sold.  Significantly she was unable to produce a single document relating either to the alleged sale of the garage or its business activities while it traded.  No records were produced from the Receiver of Revenue pertaining to any direct or indirect tax connected with the business.  It is highly improbable in my view that the first respondent made any significant contribution towards the acquisition of the garage.  Her evidence in this regard is vague, incoherent, contradictory and unsubstantiated.  The probabilities suggest that the garage was the exclusive business of her late husband.  This is apparent from paragraph 15 of Gordon’s affidavit, supra, where he stated:

 

‘I know that Joyce is married to a person named Mike Komane.  I know that Mike was arrested for armed robberies and served a lengthy jail sentence and on his release he opened a garage in Greytown.  I was invited to the official opening of the garage in Greytown.  This garage closed down after a while and Mike Komane purchased taxis …’

 

[105.6]    In order to fortify the first respondent’s position that she indeed received R100 000 from the sale of the garage, Mr Slabbert referred to the following excerpt of her evidence in re-examination.  This evidence was elicited in the following manner:

 

‘Mrs Komane, just to start where my learned friend ended now, I want to take you to the applicant’s bundle, page 157, that is that scribbling of Mr Nel, page 157.  Now, I just want to refer there, it appears like he had drawn a line between the shebeen which was deleted later on and Joyce’s Boutique 170 Retief Street, do you see that? … Yes.  Now this was in 2000 that you referred to that investment of R70 000? … Yes.  Now that was before you bought Carey Road? … Yes.’

 

[105.7]    Significantly the first respondent never testified that she invested R70 000 of the R100 000 allegedly received as her share from the garage.  Her own evidence contradicts that suggestion.  When I asked her whether she could give an indication as to when she opened the boutique, she responded as follows:

 

‘Maybe the only way I can assist the court would be to say that when I opened the boutique it was after I had received my share, because p art of the money that I used to set up the boutique was from that share.  Because from that share I took out R30 000 and paid a deposit towards the house.  And also the deposit was paid in respect of the flat no.11 was also from that share.  And thereafter as I say I utilized some of that money to set up the boutique and making purchases.’

 

[105.8]    It is also significant that the alleged investment of R70 000 was not included in the financial statements prepared by Nel.  In the circumstances, the first respondent’s evidence that she received the sum of R100 000 cash from her late husband arising out of the sale of the garage, is so inherently improbable that it can safely be rejected as being false.  It follows in my view that the first respondent fabricated this version in order to justify a legitimate source of income for the deposit and the alleged loan to the deceased Mngadi for the acquisition of Flat 10, Pitlochry.  It is perhaps convenient to deal with this property at this stage.

FLAT 10 PITLOCHRY – Thembisile Gladys Mngadi

[106]    As the applicant’s evidence shows this flat was allegedly purchased by the deceased Mngadi on 5 August 2000.  She allegedly paid a deposit of R9 000 and financed the balance of the purchase price by way of a mortgage bond.  It was common cause that Mngadi died on 28 December 2001 and that an amount of R51 404.78 was paid into the bond account in settlement thereof after her death.  Ally expressed the opinion that Mngadi could not afford to pay the deposit and the various substantial sums paid into the bond account from her income.  He expressed the view, however, that after Mngadi’s death the rental derived from the flat ought to have been sufficient to meet the bond installments and levies on the property.  As already pointed out the first respondent claimed that she lent Mngadi the sum of R6 000 to pay towards the deposit.

[107]    Was Mngadi in a financial position to purchase the property in question?  We know from the evidence that Mngadi was employed as a packer by Smith & Nephew earning an income of approximately R526 per week.  She had no other financial resources.  She occupied a ‘RDP’ house which she was still in the process of completing.  The first respondent’s evidence that she lent her R6 000 towards the deposit begs the question as to why Mngadi would want to invest in a property when she could not even afford to pay the deposit and was still trying to complete her own house.  The first respondent’s evidence that she regarded the R6 000 as a loan is highly suspicious as it is clear that no arrangements were made as to how it was to be repaid.  It is not disputed that no portion of that money was paid from the date of purchase of the property until Mngadi’s death, a period of approximately 18 months.

[108]    There was no dispute that Mngadi left a Will in terms of which she bequeathed the flat to the first respondent.  This Will further provided that upon the first respondent predeceasing her, the first respondents children will inherit the property.  The reasons advanced by the first respondent as to why Mngadi bequeathed the property to her is not only contradictory but also nonsensical:

 

[108.1]    According to the first respondent, when Mngadi was ill she told the first respondent that she should look after the flat or guard the flat, collect the rent, pay for the flat and forward the remaining money to Mngadi’s child Malondi.  Mngadi apparently chose the first respondent to attend to all these matters because her mother would not be able to do so.  When it was suggested to the first respondent that Mngadi’s sister for instance could have attended to all these things her response was ‘well she selected me while she was alive’.

 

[108.2]    The first respondent testified that the flat was bequeathed to her because she and Mngadi were very close and trusted each other.  Mngadi also assisted her by selling clothes.  Having said this she goes on to make the following startling statement:

 

‘And she was aware and in fact she knew that seeing that this flat has been given to me in the form of a Will, but that in actual fact I would transfer the flat to her children and would not selfishly retain ownership.’

 

[108.3]    In her affidavit opposing the forfeiture application the first respondent said the following:

 

‘Before her death she requested me to carry on with the payments of the flat otherwise she will lose the flat.  She also informed me at the time that her family would not be able to pay the outstanding instalments of the flat.’

[108.4] When she was pressed to explain how it was possible that she would lose the flat if she did not carry on with the payments her explanation was the following:

‘When Gladys said this, she meant that I must be the one to continue doing this as I have been doing all along.  In actual fact Gladys is not born Mngadi.  She was born out of wedlock by my aunt and then the aunt came with her.  These are not her real sisters.  It is me who she trusted.  And you would see that all her sisters are educated.  They are teachers, they are nurses, but she is the only one who is uneducated.  She was taking me like her sister.  That is what I can explain to the court.’

[109] In my view the explanations proffered by the first respondent are not only unconvincing but also inherently improbable.  The only conclusion is that the deposit and all payments made subsequent to Mngadi’s death were made by the first respondent who from the outset was the real and effective owner of the flat.

HUNTLEY ROAD PROPERTY

[110] This is the property that was purchased from Juliania Sonia Pole [para. ___ supra].  It is registered in the name of the second respondent who took transfer thereof in her name on 13 February 1997.  Pole was adamant that all her dealings relating to the sale of the house were with the first respondent who she referred to as ‘Joyce’.  She had no dealings with the second respondent at all.  Significantly the second respondent testified that she saw the house only after it had been purchased by the first respondent.  Pole was also adamant that it was the first respondent who purchased the curtains.  She reiterated under cross-examination that the first respondent purchased the curtains in addition to collecting certain building plans.  On the other hand the second respondent testified that the curtains were left behind by Pole and that the plans were given to her.

[111] Pole, in my view, was a good witness whose version has a ring of truth about it.  I have no reason to disbelieve her.  I accept on her version that at all material times she dealt with the first respondent.  She was able to recall vividly the visits made by the first respondent to her house and discussions concerning the sale of the curtains.  The second respondent on the other hand was an evasive witness who when pressed for explanations gave nonsensical and illogical responses.  For instance when it was pointed out to her under cross-examination that the property was registered in her namely only she explained that this was her husband’s wish because ‘he was too much in love with me’.  When she was asked whether she ever took an amount of R20 000 to pay as a deposit her response was ‘I think we took it from home’.  When she was asked by the court about a mortgage bond over the property she stated that she did not know anything about a bond and added ‘we did not borrow any money’.  She had no knowledge of substantial amounts such as R30 000 or R40 000 being paid into her bond account.

[112] The poor quality of the evidence adduced by the second respondent leads me to conclude (i) that she had nothing to do with the purchase of this house; (ii) that she can never be regarded as the true owner of this property and (iii) that she was merely used by the first respondent to create the impression that she (i.e. the second respondent) was the true owner.

MARION ROAD PROPERTY

[113] This property is registered in the name of the third respondent.  He did not appear to defend the order being sought against him.  According to an affidavit[43] deposed to by him he states that he made a single contribution towards a stokvel.  The first respondent then approached him to purchase a house which was subsequently registered in his name.  He further states that from the manner in which the deal was conducted and the first respondent’s involvement in the property it was clear to him that the first respondent acquired the property for herself but merely used his name.  He further averred that he did not collect any rental income and that it was the first respondent who collected all the rental and was responsible for the rates and general maintenance of the house.

[114]    When the first respondent testified she said that she approached the stokvel members and persuaded them to allow the third respondent to receive the sum of R20 000 in advance of his turn and the stokvel members agreed.  She also borrowed an amount of R10 000 on the third respondent’s behalf from the members of another stokvel who charged R3 000 interest thereon.  The agreement concluded by her in respect of the R10 000 loan was that the third respondent would pay it back at the rate of R500 to R600 per month.  Significantly the first respondent did not tender any evidence that the third respondent had in fact made all the contributions to the stokvel particularly as he had derived the full benefit therefrom.  She did not take this issue any further whilst under cross-examination. 

[115] The first respondent was challenged on the alleged agreement and repayment of the loan of R10 000.  It was pointed out to her that at the rate of R500 per month the total repayment after six years would be R36 000.  Her response was ‘I hear what you are saying but this amount in particular which is R13 000 was paid by my uncle over a period of six years’.  Nowhere did the third respondent indicate that he made any repayments whatsoever.  As far as the collection of rental is concerned she explained that the arrangement was that the rental would be collected from the tenant by her and sometimes by her sister’s son Nanana.  The rental would then be handed over by one Linda to the third respondent at the end of each month at Kwahlabisa.  It was pointed out to her that in the criminal trial she testified that the rental was handed over to the third respondent but only after six years and therefore he could not have received the rental.  She then explained that the arrangement concerning repayment was that initially her uncle would pay the amount which he had borrowed without getting any rental.  She then contradicted her earlier evidence that her uncle made the repayments and claimed that she in fact made the payments directly to the members of the stokvel.  She confirmed that part of the money had been used by her for cleaning the yard, paying necessary bills and generally maintaining the property but alleges that the third respondent had asked her to attend to that.

[116] Having regard to what the third respondent has said in his affidavit, I find the first respondent’s version so fraught with contradictions and consistencies that it must be rejected as being false.  If the third respondent was indeed the true owner of this property he no doubt would have done everything possible to resist the forfeiture order.  His failure to do so indicates that he simply has no interest in this property because the rightful owner is in fact the first respondent.

FIRST RESPONDENT AS A WITNESS

[117] I have already made certain comments about the first respondent which have a strong bearing on her credibility as a witness.  She cannot by any stretch of the imagination be regarded as a supine, unknowing witness.  She certainly came across as being a very confident, intelligent and articulate individual with an uncanny ability of wriggling herself out of uncomfortable situations.  This was quite apparent from many of her responses under cross-examination.  Most of these have been dealt with above.  She displayed a contemptuous attitude towards the applicants investigations particularly Subramanien.  This was evident from her occasional outbursts while testifying, in the course of which she blamed them for all her woes.  All in all I consider the first respondent to be a wily witness with an extremely domineering and manipulative personality.

[118] As I stated already the respondents and the first respondent in particular have clearly misconstrued the nature of the onus resting on them in this matter.  They believed that if they sat back and did nothing the applicant would not be able to prove a case against them.  In my view the respondents have dismally failed to adduce any cogent evidence in rebuttal to upset the strong prima facie case presented against them.

CONCLUSION

[119] On a totality of the evidence I accordingly conclude that the issue placed before me for the hearing of oral evidence must be answered in favour of the applicant.  It follows that the applicant is entitled to a forfeiture order in the terms set out hereunder.

[120] Before concluding this judgment it is perhaps necessary to say something regarding the issue of proportionality.  Mr Govindasamy has correctly in my view pointed out that generally this issue is raised and dealt with in applications concerning ‘an instrumentality of an offence’.  In this regard the enquiry relating to proportionality requires an examination of inter alia the nature and severity of the crime in relation to the property concerned.

[121] Whilst proportionality is not strictly a requirement of POCA it is nevertheless a factor to be taken into account in determining whether the forfeiture is arbitrary having regard to the provisions of section 25(1) of the Constitution.  The approach of the Constitutional Court on the issue of proportionality in cases concerning property which is found to be an instrumentality of an offence is the following:

‘[75]  It is the task of the court to ensure that the deprivation of property that will result from a forfeiture order is not arbitrary.  The proportionality assessment is a legal one, based on an evaluation of all the relevant factors in the full factual matrix of the particular case.  The o nus of establishing that all the requirements for a forfeiture order in terms of s 50 of POCA – including that of proportionality – have been met, rests on the NDPP throughout.  However, as some of the factual material relevant to the proportionality analysis will often be peculiarly within the knowledge of the owner of the property concerned, the owner who is faced with a prima facie case established by the NDPP would in the usual course be well-advised to place this material before the court.  This does not, however, shift the onus of proof to the owner in question; it merely places on the owner an evidentiary burden or, as it is sometimes called, a burden of adducing evidence in rebuttal.’[44]

[122] There seems to be merit in the applicant’s argument that in cases dealing primarily with ‘proceeds of crime’ it might be necessary to consider what threshold requirement should be met in determining whether a particular property constitutes the proceeds of crime.  I consider that the same threshold requirement would apply as in ‘instrumentality’ cases the onus being on the NDPP throughout to establish that all the requirements for a forfeiture order have been met.  Once this has been established a duty would rest on the party opposing such an order to adduce cogent evidence to show that the assets were acquired from legitimate sources of income so as to render the forfeiture inequitable having regard to the provisions of section 25(1) of the Constitution.  As I said the respondents have failed to do so in the present matter.

ORDER

[123] The order I accordingly make is the following:

1. That the property listed in the Annexure hereto is declared forfeit to the state in terms of the provisions of Section 50 of the Prevention of Organised Crime Act, No. 121 of 1998 (the POCA).

2. That the curator bonis appointed by this Court in terms of the preservation order dated 4 June 2008 continue to act as such with authority to perform all the functions specified in the POCA subject to the provisions of the Administration of Estates Act, No. 66 of 1965, and to the supervision of the Master of the High Court.

3. The curator bonis is authorized, as of the date on which the forfeiture order takes effect to:

3.1 dispose of the property by way of public auction;

3.2 deduct his fees and expenditure which were approved by the Master of the High Court;

3.3 deposit the balance of the proceeds into the Criminal Assets Recovery Account, established under Section 63 of the POCA, with account number 80303056 held at the South African Reserve Bank, Vermeulen Street, Pretoria;

3.4 Perform any ancillary acts which, in the opinion of the
curator bonis, but subject to any directions of the Criminal Assets Recovery Committee established under Section 65 of the POCA, are necessary.

4. That the Registrar of this Honourable Court, or the State Attorney (Kwazulu-Natal) on the request of the Registrar, must publish a notice of this order in the Government Gazette as soon as practicable after the order is made.

5. That in terms of Section 50(6) of the POCA, this forfeiture order shall not take effect before the period allowed for an application under Section 54 of the POCA or an appeal under Section 55 of the POCA has expired or before such application is disposed of.

6. That the first, second and third respondents are ordered, jointly and severally, to pay the applicant’s costs, including all reserved costs (if any), such costs to include the costs of two counsel.

ANNEXURE TO ORDER

1. Portion 11 of Erf 1187 Pietermaritzburg Registration Division FT in the Pietermaritzburg/Umsunduzi Transitional Local Council Area, Province of KwaZulu-Natal, 1264 square metres in extent, held under Deed of Transfer No. T17368/2001, physical address being 33 Carey Road, Pelham, Pietermaritzburg.

2. A Unit consisting of Section No. 11 as shown and more fully described on Sectional Plan No. SS 392/99 in the scheme known as Pitlochry in respect of the land and buildings situate at Pietermaritzburg, the Pietermaritzburg Local Council Area, of which section in the floor area, according to the said plan is 37 square metres in extent, held under Deed of Transfer No. ST41026/2001, physical address being Flat 11 Pitlochry, Commercial Road, Pietermaritzburg.

3. A Unit consisting of Section 10 as shown and more fully described on Sectional Plan No. SS392/99 in the scheme known as Pitlochry in respect of the land and building or buildings situate at Pietermaritzburg, the Pietermaritzburg/Umsunduzi Transitional Local Council Area, of which Section the floor area, according to the said Sectional Plan is 37 square metres in extent, held by Deed of Transfer No. ST60551/2000, physical address being Flat 10 Pitlochry, Commercial Road, Pietermaritzburg.

4. Portion 1216 (of 988) of the farm Northdale No. 14914, Registration Division FT, situate in the Pietermaritzburg/Umsunduzi Transitional Local Division Council Area, Province of KwaZulu-Natal in extent of 3989 square metres, held under Deed of Transfer No. T32775/2001, physical address being 33 Marion Road, Northdale, Pietermaritzburg.

5. Sub 52 (of 1) of Lot 1777 Pietermaritzburg, situate in the Pietermaritzburg/Umsunduzi Transitional Local Council Area, Administrative District of Natal, Province of KwaZulu-Natal in extent of 1039 square metres, held under Deed of Transfer No. T3963/97, physical address being 17 Huntley Road, Bisley, Pietermaritzburg.

6. Motor Vehicle, Audi 500, Registration No. NP58686, Engine No. PR 008323, Chassis No. AAAZZZ44ZKU001891.

Date of Hearing: 13 June 2013

Date of Judgment : 28 August 2013

Counsel for Applicant : Adv. M Govindasamy SC

Instructed by : Director of Public Prosecution, Durban

Counsel for Respondents : Adv. F Slabbert

Instructed by : Messrs JH Slabbert Attorney

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