Bobroff and Another vs. The National Director of Public Prosecutions - (03 May 2021)

High Court has jurisdiction to grant a forfeiture order in terms of the Prevention of Organised Crime Act

Criminal

In present matter, on 28 July 2017, the high Court granted an ex parte application for a preservation order, in terms of Section 38 of the Prevention of Organised Crime Act, 1998 (POCA), in respect of credit balances and interest accrued and held in two accounts in Israel in the name of the first appellant, at the Bank Discount (BD), and the second appellant, at the Bank Mizrahi Tefahot (BMT), respectively.

The NDPP contended that, the credits held in these accounts were proceeds of unlawful activities as defined in the POCA. Both Ronald Bobroff and Darren Bobroff (the Bobroffs), who were temporarily resident in Australia, entered an appearance, in terms of Section 39 of the Prevention of Organised Crime Act 121 of 1998 (POCA), to oppose the granting of a forfeiture order. They challenged the jurisdiction of the high court and argued that the NDPP had failed to establish that the credit balances constituted proceeds of unlawful activities. An application for forfeiture followed on 20 August 2019, and the high court granted an order declaring the credit balances and interest forfeit to the State, in terms of Section 50 of the POCA. The appeal to this Court against the forfeiture order is with leave of the high Court.

The issues before present Court were, firstly, whether the high Court had jurisdiction to grant a forfeiture order in terms of the POCA in respect of property held in Israel by the Bobroffs, who were presently resident in Australia, and, secondly, if so, whether the evidence had established that the said credit balances were ‘proceeds of unlawful activity’ committed in South Africa.

In respect of the first issue the SCA considered the provisions of the POCA and the International Co-operation in Criminal Matters Act, 75 of 1996 (the ICCM Act) and concluded that the POCA provided for the high Court to grant a forfeiture order in respect of the proceeds of crime irrespective of where it may be held. It found that the ICCM Act, which empowers South Africa to request the assistance of a foreign state in enforcing a forfeiture order, provided the mechanism to render the order effective. It accordingly dismissed the argument that the high court did not have the required jurisdiction.

In respect of the second issue, the Appellants had been attorneys and directors in the firm Ronald Bobroff and Partners Incorporated, practising predominantly in the sphere of personal injury litigation in Johannesburg. During the period 2007 to 2014, they frequently concluded contingency fee agreements in terms of which they accepted a percentage of an award for damages made in favour of their clients, which were contrary to the Contingency Fees Act, 1997. In 2014, the Constitutional Court declared that contingency fee agreements unlawful and invalid. The Appellants did not repay the unlawfully obtained fees to their erstwhile clients. In addition, the evidence of a senior bookkeeper made damning allegations of financial impropriety during the period 2008 to 2012 against the Appellants was largely uncontested.

The allegations of dishonesty, theft and fraud had been established on a balance of probabilities. During the period 2009 to 2012, substantial amounts of money from the firm had been channelled to various accounts in Israel and that no adequate explanation for the source of the funds had been provided. Numerous accounts had been opened and closed and the Appellants acknowledged that funds which flowed to the Israeli bank accounts were channelled through different banking institutions.

On the evidence, that the funds in credit balances were, on a balance of probabilities, the proceeds of the unlawful activities and that the money had been laundered to disguise its origin and identity prior to their deposit in the Israeli bank accounts. In respect of the first Appellant, USD 256 217.84 and AUSD 284 785.32 had been separately identified and invested prior to the urged financial impropriety and was unrelated. These funds were accordingly not ‘proceeds of unlawful activity’. Save to this extent, the appeal was dismissed with costs.

Tags : JURISDICTION UNLAWFUL ACTIVITY FORFEITURE ORDER