South Africa : NDPP v RAMLUTCHMAN: CONVICTION BASED FORFEITURE
Benefit amount is not net profit. It is all the proceeds of unlawful
activities, that is, the entire contract of R52 million.
The ultimate amount of confiscation order that is ordered is an exercise
of a court’s discretion taking into consideration various factors. If a lower
amount is arrived at, this is so because of the discretion and not because the
benefit is not R52 million.
The distinction between whether or not a defendant benefits, by how much,
and the final amount to be ordered are three distinct questions and steps in
the confiscation enquiry. To miss one step will lead to an erroneous position
such as what happened. One starts with the overall benefit and then possibly
reduces it to arrive at an appropriate order. The “appropriate amount” may not
be the full amount of the benefit.
Discretion of the court in making an appropriate
confiscation order
A number of factors may be taken into consideration.
The well known Shaik judgements lists some important factors such as the type
of crime involved.
Para 7 “In the exercise of its discretion to make
a confiscation order a court must have regard to the main objects of the
legislation, which is to strip criminals of the proceeds of their criminal
conduct... to deprive the convicted person of ill-gotten gains…”
Para 21 “When considering the amount to be
confiscated a court must have regard to the extent to which the property to be
confiscated derived directly from the criminal activities.”
Para 23 “In the circumstances it would be unjust to
grant a confiscation order for the full amount of the contract. As a matter of
fact the projects were completed by
the respondent and ownership of the building now vests with the DPW KZN.
It cannot be denied that the DPW KZN
is utilising and enjoying the benefits of the buildings completed by the
respondent. It would seem to me that the cost of the construction component of
the proceeds received is, in the circumstances of this case, a materially
relevant factor to the exercise of the discretion in respect of a confiscation
order.”
The court took into consideration costs and the
fact that the contract had been delivered on.
5.
Nature of confiscation proceedings: it was finally
clarified that the nature of confiscation proceedings whilst they are indeed
“civil in nature” (s13 of POCA), they are not in the form of a motion court
application. They are inquisitorial in nature. This impacts how a court arrives
at a decision. It descends into the arena. The SCA criticised the High Court
for not acting as such:
“[28]: What the section provides is that the
presiding officer must have regard to all the evidence and facts placed before
him or her before making an appropriate order. If the presiding officer is not
satisfied with the evidence placed before him (as the regional magistrate was),
to make a confiscation order, he or she is entitled to call such further
evidence as may be necessary to assist him or her.”
Overall this
was a very successful case and settles a number of key points in conviction
based forfeiture which have been long awaited.
