The National Director of Public Prosecutions v Tyrell Blythe Venter and Another

The NDPP obtained an ex parte preservation order under section 38 of POCA on 18 April 2024 in respect of immovable property owned by the respondents, located at Erf 753 Florida Township. The property was allegedly used by tenants as a base for drug dealing. An investigation called "Operation Dragoon" commenced in January 2022, led by Sergeant Petrus van der Linde, which uncovered ongoing cannabis dealing by a tenant named Brian Matemela. An undercover controlled purchase was made, and search warrants were executed on 24 May 2022. Although Matemela was not present during the raid, the first respondent was warned about illegal activities on the property. Despite written warnings served on the respondents on 27 October 2022, drug-related activities persisted, resulting in multiple arrests between July 2022 and October 2023. The respondents sought reconsideration of the preservation order, denying the allegations and claiming their tenants assured them they were not drug dealers. They argued they had warned the tenants and threatened eviction, and that even if drug dealing occurred, it did not render the property itself an instrumentality of crime.

• Whether it was appropriate for the NDPP to approach the Court on an ex parte basis for a preservation order under section 38 of POCA
• Whether there were reasonable grounds to believe that the property was an instrumentality of a Schedule 1 offence under POCA
• Whether the property used by tenants for drug dealing qualifies as an instrumentality of crime under POCA
• Whether the owners' lack of knowledge or culpability is relevant at the preservation order stage

1. The respondents' application for the reconsideration and discharge of the preservation order granted on 18 April 2024 is dismissed. 2. The preservation order granted in terms of section 38 of the Prevention of Organised Crime Act 121 of 1998 in respect of the immovable property known as Erf 753, Florida Township, is confirmed. 3. The costs of this application shall be costs in the forfeiture application.

The binding legal principles established are: (1) A preservation order under section 38 of POCA may properly be sought ex parte, as the preventative nature of such orders requires surprise to prevent dissipation of assets. (2) The test for granting a preservation order is whether there are reasonable grounds to believe that the property is an instrumentality of a scheduled offence - this is a prima facie standard lower than balance of probabilities. (3) An "instrumentality of an offence" under POCA requires that the property play a sufficiently direct or functional role in the commission of crime - it is not merely the scene of the crime but must be used to facilitate the offence. A property used as a depot for storing and distributing drugs qualifies as such an instrumentality. (4) POCA forfeiture proceedings are in rem (against the property itself), not in personam (against the owner). (5) The culpability or knowledge of the property owner is irrelevant to whether a preservation order should be granted; the owner's innocence may be raised as a defence at the forfeiture stage under section 52 of POCA, but does not bar a preservation order.

The Court made obiter observations that the respondents' actions upon being informed by police of the illegal activities - warning their tenants and threatening eviction - were commendable and may well form the basis of a powerful "innocent owner" defence at the forfeiture stage under section 52 of POCA. The Court also noted that applicants in ex parte applications bear a duty of uberrimae fides (utmost good faith), requiring full and frank disclosure of all material facts, including those adverse to their case. The Court observed that evidence need not be direct proof at the preservation stage - concrete circumstantial evidence from experienced law enforcement officers can suffice to establish reasonable grounds for belief.

This case reinforces important principles regarding asset forfeiture under POCA in South African law. It confirms that: (1) ex parte applications for preservation orders under section 38 are procedurally appropriate and necessary to prevent asset dissipation; (2) the test for preservation orders is whether there are reasonable grounds to believe property is an instrumentality of crime, which is a lower threshold than balance of probabilities; (3) POCA proceedings are in rem, focusing on the property's use rather than the owner's culpability; (4) property used by tenants as a base for drug dealing qualifies as an instrumentality of crime; and (5) an owner's lack of knowledge or innocent intentions do not bar a preservation order, though they may provide a defence at the forfeiture stage. The judgment provides guidance on the distinction between preservation and forfeiture stages, and clarifies when property becomes sufficiently connected to criminal activity to warrant civil forfeiture proceedings.