In May 2021, the Supreme Court of Appeal delivered a judgment with two important principles namely:
- The High Court has jurisdiction to make a forfeiture order in terms of section 50(1)(b) of the Prevention of Organised Crime Act, 1998 (POCA) in respect of property situated outside the territory of South Africa and belonging to persons who are presently resident elsewhere.
- Although the rationale for the principle of effectiveness is that courts should avoid hearing cases when their judgments will prove hollow, because meaningful execution is not possible, a guarantee of satisfaction is not necessary, rather it will suffice that there is a mechanism for the satisfaction of the order.
In July 2017 the High Court granted a preservation order in terms of POCA, in respect of credit balances and interest held in two accounts in Israel in the name of the Ronald and Darren Bobroff. The court found that the credits in the accounts were proceeds of unlawful activities as defined in POCA. Following the preservation order, there was an application for forfeiture and the High Court declared the credit balances and interest forfeit to the State. The forfeiture order was the subject of the appeal. The Bobroffs, who reside in Australia, challenged the jurisdiction of the High Court and the finding that the credit balances were the proceeds of unlawful activities.
The SCA highlighted that the jurisdiction test has two legs:
- Whether a recognised jurisdictional ground exists; and
- If a jurisdictional ground is established, whether an effective judgment can be granted.
The SCA noted that the Superior Courts Act, 2013 is not the only relevant legislation when dealing with jurisdiction. The historical idea that a court’s jurisdiction is limited to its State’s territory is losing ground especially in light of criminal law around transnational crimes and money-laundering – which POCA deals with. The wording of POCA expressly covers assets outside of South Africa – especially when POCA is read alongside the International Co-operation in Criminal Matters Act, 1996 (ICCM Act). The court thus held that a jurisdictional ground existed.
On the second leg of the test (ie effectiveness), section 19 of the ICCM Act seeks to ensure the effectiveness of a forfeiture order by making provision for the State to request assistance from another country in enforcing forfeiture orders. Seeing that a guarantee of satisfaction is not necessary, the second leg of the test was met.
On the further question of whether the Bobroffs had committed an offence, the SCA held that attorneys overreaching in charging their clients, coupled with retention of their gains knowing that they were not entitled to the money, constitutes theft.
The case is: Bobroff_and_Another_v_NDPP_2021_ZASCA_56_1620242494
*This article was co-authored by Alaika Alli