Knoop NO and Others v National Director of Public Prosecutions

The National Director of Public Prosecutions (NDPP) obtained a preservation of property order under section 38 of the Prevention of Organised Crime Act 121 of 1998 (POCA) on 23 March 2022 in the Gauteng High Court. The order targeted shares and business assets of Optimum Coal Mine (Pty) Ltd (OCM) and related entities (Optimum Coal Terminal and Tegeta Exploration and Resources) that were all in business rescue under Chapter 6 of the Companies Act 71 of 2008. The NDPP alleged these assets were proceeds and instrumentalities of crimes connected to State Capture, specifically the corrupt acquisition of Optimum by the Gupta family. The preservation order appointed a curator bonis with designated powers over the property. A business rescue plan for OCM had already been approved by creditors prior to the preservation order, contemplating disposal of the business to Liberty Coal (Pty) Ltd, controlled by Daniel McGowan. The NDPP contended that the claims underlying the business rescue plan were themselves tainted as proceeds of crime. The preservation order effectively halted implementation of the business rescue plan, which had a deadline of 28 March 2022. The business rescue practitioners, along with Liberty, Templar Capital Limited, and the National Union of Mineworkers (NUM) appealed the preservation order.

• Whether a preservation of property order granted under section 38 of POCA (Chapter 6) is appealable
• Whether the Supreme Court of Appeal's decisions in Phillips v NDPP and Singh v NDPP are definitive on the appealability of preservation orders
• Whether a preservation order satisfies the three requirements of the Zweni test for appealability: (a) finality, (b) definitiveness of rights, and (c) disposal of substantial relief
• Whether the scheme and procedure of Chapter 6 of POCA (civil forfeiture) differs materially from Chapter 5 (criminal forfeiture) for purposes of appealability
• Whether the specific circumstances of a case (such as proceeding on notice rather than ex parte, or alleged incompetence due to conflict with the Companies Act) affect the appealability of a preservation order

The appeal was struck from the roll with costs including the costs of two counsel, such costs to be borne jointly and severally by the first to eleventh, twelfth and thirteenth, and fourteenth appellants respectively.

Preservation of property orders granted under section 38 of Chapter 6 of POCA are not appealable. While they may be final in the sense of not being alterable by the court that granted them, they do not satisfy the second and third requirements of the Zweni test for appealability: they are not definitive of the rights of parties, nor do they dispose of substantial relief. The entire legislative scheme of Chapter 6 is directed at determining rights and granting relief at the forfeiture stage, not the preservation stage. Chapter 6 deliberately positions the right to audi alteram partem at the post-preservation, forfeiture stage through the notice procedure in sections 38 and 39. Preservation orders under Chapter 6 are intended as short-term, stop-gap measures to secure tainted property pending determination of the main issue at the forfeiture stage. The symbiotic, time-sensitive relationship between preservation and forfeiture stages under Chapter 6 differs materially from the relationship between restraint and confiscation orders under Chapter 5. Allowing appeals against preservation orders would undermine the legislative scheme, create practical absurdities (as forfeiture applications would typically be determined before any appeal), and could render the forfeiture process nugatory due to automatic suspension provisions. The specific circumstances of how a preservation order is obtained or its particular terms do not affect its appealability, which is determined by the statutory nature of preservation orders generally as a matter of principle and certainty under the rule of law.

The Court noted that while the judgment in Phillips v NDPP found restraint orders under Chapter 5 of POCA to be appealable, and Singh v NDPP appeared to extend this to preservation orders under Chapter 6, Singh gave no considered analysis to the distinct Chapter 6 procedure and scheme. The Court observed that its conclusion in Phillips regarding restraint orders should be understood with reference to the particular characteristics and consequences of Chapter 5 proceedings, where a defendant subject to a restraint order faces an indefinite period before resolution through the criminal justice system, conviction, and complex confiscation procedures. The Court commented that orders pertaining to the appointment and powers of a curator bonis under section 47(2) of POCA may be rescinded or varied on application by an interested party, and thus these aspects of a preservation order are not final in any sense. The Court emphasized that the question of appealability goes to "the DNA of preservation orders under POCA" and must be determined as a matter of principle applicable to all preservation orders, not dependent on the circumstances of individual cases. The Court noted that the case involved complex issues relating to State Capture, the corrupt acquisition of Optimum by the Gupta family, and alleged money laundering through claims underlying the business rescue plan, but did not determine these substantive issues as they properly belong at the forfeiture stage.

This judgment provides important clarification on the appealability of preservation orders under Chapter 6 of POCA, distinguishing them from restraint orders under Chapter 5. It effectively qualifies or limits the application of the Phillips and Singh precedents to restraint orders under Chapter 5, holding they are not definitive for preservation orders under Chapter 6. The judgment emphasizes the distinct legislative schemes underlying the two forfeiture regimes in POCA, highlighting that Chapter 6's civil, in rem, non-conviction-based forfeiture proceedings have a fundamentally different structure and purpose than Chapter 5's criminal asset forfeiture. The decision reinforces the legislative choice to make forfeiture proceedings under Chapter 6 expeditious, with the main opportunity for affected persons to be heard occurring at the forfeiture stage rather than preservation stage. It prevents piecemeal appeals that would delay and potentially frustrate the entire asset forfeiture process. The judgment is significant for asset forfeiture proceedings generally, and has particular relevance for State Capture-related asset recovery efforts. It also demonstrates the principle from TWK Holdings that appealability requirements must be clearly defined to provide certainty consistent with the rule of law. The decision has implications for the intersection between POCA proceedings and business rescue proceedings under the Companies Act, though the Court emphasized that the appealability question is one of general principle rather than depending on the specific circumstances of any particular case.