Van Heerden AJ held that the gambling operation in issue was an offence covered by POCA. POCA did not only apply to discrete areas of organized crime, but could encompass illegal acts outside of money laundering, racketeering, and criminal gang activity. She held further that, in weighing the severity of the interference with Mr Mohunramâs rights to the property against the extent to which the property was used to commit the specific offence in question, the forfeiture in this case was proportionate.
The judge acknowledged the important state objective in regulating gambling and the severe negative effects it can have on communities and its possible connection to other organised crimes. The KwaZulu Natal Gambling Act addressed the seizure of the machines and proceeds used in gambling operations, whereas POCA addressed civil forfeiture of a wider scope by including âinstrumentalitiesâ or property involved in a crime. Here, the property was specifically adapted in various ways to operate a casino over a period of time.
The fact that Mr. Mohunram suffered criminal penalties for his illegal acts does not mean that civil forfeiture under POCA is disproportionate. The property to be forfeited belongs to Shelgate, not to Mr Mohunram. Shelgate had to date lost nothing as a result of its illegal activities. While Mr Mohunram is admittedly the sole member of Shelgate, it does have a separate corporate personality. Mr Mohunram and Shelgate enjoyed the advantages of their separate legal personalities and had to bear the consequences of this arrangement. Even if one disregarded Shelgateâs separate corporate personality, the net profits Mr Mohunram made from his illegal gambling operation offset the total loss he suffered from the other criminal penalties imposed on him and the loss that he and Shelgate would suffer from forfeiture of the property.
Moseneke DCJ, with whom Mokgoro J and Nkabinde J concurred, concluded that leave to appeal should be granted and that the appeal should be upheld with costs.
On the issue whether the property concerned was an âinstrumentality of an offenceâ, he held, in line with van Heerden AJ, that the property concerned was an instrumentality of the offence in question. Moseneke DCJ further held that it was not necessary to decide the issue whether the scope of POCA is designed to reach beyond âorganised crime offencesâ so as to apply to cases of individual wrongdoing.
In deciding whether or not forfeiture of property would be proportionate, Moseneke DCJ held that the instrumentality of the crime must be shown to be sufficiently connected to the main purpose of POCA, that being to remove the incentive for crime and to serve as an adequate deterrent to the individual concerned and to society at large. Having been satisfied that no link was shown to exist, Moseneke DCJ concluded that, on the facts taken as a whole, the forfeiture order was disproportionate and the conduct of Mr Mohunram did not warrant the forfeiture of the immovable property. Sachs J, with whom OâRegan J and Kondile AJ concurred, supported the judgment by Moseneke DCJ. Although he agreed with van Heerden AJ that the property was indeed an instrumentality of the offence, he disagreed with her conclusion that the forfeiture of the property was proportionate.
In his view the closer the criminal activities are to the primary objectives of POCA, the more readily should a court grant a forfeiture order. Conversely, the more remote the activities are from these objectives, the more compelling must the circumstances be. POCA was not adopted with a view to providing either a substitute for or a top-up of ordinary forms of law enforcement.
Though gambling had come to be linked in the public mind with gangsterism and money laundering, there was no evidence that Mr Mohunram was linked to any gangs, and his down-market casino would hardly have served as a meaningful agency for laundering money. Imposing a forfeiture order on top of the penalties imposed as a result of his prosecution was disproportionate. Sachs J pointed to the risk that if the Asset Forfeiture Unit spread its net too widely so as to catch the small fish, it could make it easier for the big fish and their surrounding shoal of predators to elude the law.
The court observed that while civil forfeiture of the property and instrumentalities of crime undeniably had a punitive effect on the Respondents, it equally served the very important purpose of deterring both the Respondents and other people from using or allowing their property to be used for illegal activities, hence a tool of social control.
