Supreme Court Of Appeal Clarifies When Forfeiture Proceedings Are Truly "Pending" Before The High Court

The Prevention of Organised Crime Act 121 of 1998 ("POCA") was enacted to tackle organised crime and cases of serious wrongdoing by individuals. The proceeds of these criminal activities may be dealt with under Chapter 6 of POCA which provides for civil forfeiture of criminal property that has been used to commit an offence or of property that constitutes the proceeds of unlawful activity. Before forfeiture may take place, a preservation of property order must be applied for and granted by a court which will consider, amongst others, whether there is a close enough link between the property and its use to render it an instrumentality of the alleged offence.

In terms of section 40(a) of POCA, a preservation of property order expires 90 days after the date on which notice of the order is published in the Government Gazette unless there is an application for a forfeiture order pending before the High Court in respect of the property which is subject to the preservation order.

This article provides details of a judgment handed down by the Supreme Court of Appeal ("SCA") in South Africa, which dealt with an appeal against an order of the KwaZulu-Natal Division of the High Court of South Africa. The issue before the SCA concerned the definition of "pending before the High Court" as an application for a forfeiture order had been issued, but not yet served, upon the accused individual by the time the 90 days expired in this matter.

Background facts

On 6 March 2021, members of the South African Police Services arrested Mr Gcaba at a petrol station's ATM after he was found to be in possession of 69 Social Security Agency cards and ZAR 46 120 in cash. Following the seizure of this property, which was alleged to be the proceeds of a crime, the National Director of Public Prosecutions ("NDPP") applied for a preservation order which was granted on 28 September 2022. The High Court thereafter ordered the NDPP to publish a notice of the preservation order in the Government Gazette and serve a copy of the preservation application on Mr Gcaba, as well as any other parties with an interest in the property.

The preservation order was subsequently published in the Government Gazette on 14 October 2022, and on 11 January 2023 – while the preservation order was still in force – the NDPP launched an application for the granting of a forfeiture order in terms of section 48 of POCA. However, due to an alleged lack of coordination between the State Attorney and the NDPP, the preservation order and forfeiture application were only served on Mr Gcaba on 17 August 2023. On 27 October 2023, the forfeiture application was heard before the KwaZulu-Natal Division of the High Court but was dismissed on the basis that the preservation order had already expired in terms of section 40(a) of POCA.

The matter before the SCA

When this matter proceeded on appeal to the SCA, the NDPP argued that POCA does not stipulate a specific time limit for the service of a preservation order on a respondent but rather requires service 'as soon as practicable after the making of the order.' Furthermore, POCA does not expressly provide that a preservation order would expire if it is not served within 90 days from the date of the grant thereof. The 90 days commences after the date of the publication of the notice of the making of the preservation order in the Government Gazette.

In the SCA's ruling, the majority judgment held that when dealing with the interpretation of these relevant POCA provisions, the courts have emphasized that the term "pending" in relation to proceedings is dependent on the context in which it is used. In this regard, the SCA held that there are four principal reasons why in order for a forfeiture application to be regarded as "pending" for the purposes of section 40(a), it is not a requirement that there should be issue and service of that application within the period of 90 days.

Firstly, mere issue and not service of the forfeiture application within the 90 days would not unduly infringe upon an individual's property rights which are, at best, only limited for the period of the duration of the preservation order, after judicial sanction, at the time when the preservation order was granted.

Secondly, the alternative interpretation would imply that every forfeiture application would have to be issued and served within the 90 days, even though there might be no one to serve it upon. This risk is particularly so when no one with an interest in the property is known to the NDPP, or those with an interest in the property are unwilling to participate in the proceedings or may not wish to be associated with the property that was seized or is under preservation.

Thirdly, it might happen that while the issue of the forfeiture application is possible within the 90 days, service of that application may not be possible within that period due to various delays which is commonplace in litigation proceedings.

Fourthly, the established jurisprudence in civil proceedings, which would include application proceedings, is that the proceedings are commenced by the issue of the initiating court document. As such, the term "pending" can only mean that the forfeiture application has been issued – service is not required in addition to render it pending.

The majority judgment accordingly concluded that the preservation order was still in force at the time of the hearing of the application, despite the expiration of the 90 day period on 27 October 2023, because the forfeiture application was 'pending' in terms of s 40(a) of POCA. As a result, the NDPP were held to have made out a case for the forfeiture of the property in terms of section 50(1)(b) of POCA. The SCA thus upheld the appeal and set aside and replaced the order of the High Court with an order declaring the property to be forfeited to the State.

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