The recent case of Bobroff and Another v National Director of Public Prosecutions 2021 (2) SACR 53 (SCA) has reignited the debate surrounding the ability of a high court to exercise extra-territorial jurisdiction in the absence of a basis for jurisdiction.
In Bobroff, the Supreme Court of Appeal had to decide the question whether the Pretoria High Court had jurisdiction to make a forfeiture order in terms of s50(1)(b) of the Prevention of Organised Crime Act 121 of 1998 (POCA) in respect of property situated outside the territory of South Africa and belonging to persons who were resident in a foreign jurisdiction.
On 28 July 2017, the high court heard an ex parte application in terms of s38 of POCA for a preservation order over credit balances and interest accrued and held in two accounts in Israel in the name of the first appellant, attorney Ronald Bobroff, and the second appellant, attorney Darren Bobroff. The National Director of Public Prosecutions (NDPP) contended that the credits held in these accounts were proceeds of unlawful activities as defined in POCA. The Bobroffs, who by that stage had fled to Australia, entered an appearance in terms of s39 of POCA to oppose the granting of a forfeiture order, which was the next step available to the NDPP after the preservation order had been granted. The Bobroffs 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. The NDPP then applied for a forfeiture order on 20 August 2019, and the high court granted that order, declaring the credit balances and interest forfeit to the State in terms of s50 of POCA.
On appeal to the SCA, counsel for the appellants argued that none of the requirements for the high court’s exercise of jurisdiction had been established. He relied on s21 of the Superior Courts Act 10 of 2013 which provides for the jurisdiction of the high courts in both civil and criminal matters. The material portion of s21 provides that: ‘(1) A Division has jurisdiction over all persons residing or being in, and in relation to all causes arising and all offences triable within, its area of jurisdiction and all other matters of which it may according to law take cognisance . .
Counsel for the appellants further argued that the court needed to evaluate whether any of the rationes jurisdictionis recognised by the Superior Courts Act and the common law were present. These include residence; domicile; the location of the subject matter of the action within the jurisdiction; or a cause of action (such as the conclusion of a contract or the commission of a delict) within the jurisdiction. Since none of these bases (rationes) were present in this case, he argued that the court could not exercise jurisdiction over the matter.
Counsel for the NDPP, on the other hand, argued that POCA itself provides for extra-territorial jurisdiction in forfeiture proceedings. He relied on the definition in POCA of ‘proceeds of unlawful activities’, which is defined as ‘any property or any service, advantage, benefit or reward which was derived, received or retained, directly or indirectly, in the Republic or elsewhere, at any time before or after the commencement of this Act, in connection with or as a result of any unlawful activity carried on by any person, and includes any property representing property so derived’.
The SCA, per Eksteen AJA, was of the view that ‘proceeds of unlawful activities’ includes any property ‘derived, received or retained, directly or indirectly, in the Republic or elsewhere’. Moreover, the purpose of s50(1) of POCA, as read with the definition of ‘proceeds of unlawful activities’, in the context of the known developments worldwide in relation to transnational crime, is to strip offenders of the proceeds of their crime wherever they may retain it.
The SCA also considered the provisions of the International Co-operation in Criminal Matters Act 75 of 1996 (the ICCM Act) and in particular s19 of that Act, which provides for South Africa to request a foreign State to assist it in the enforcing of a confiscation order. The SCA concluded that, when s50 of POCA and the definition of ‘proceeds of unlawful activities’ in POCA are viewed together with the ICCM Act, the “ineluctable conclusion” is that they are directed at enlisting international assistance in the enforcement of a forfeiture order made under POCA in respect of property held in another country. Therefore, the jurisdictional inquiry had to be determined in favour of the NDPP.
Analysis of the SCA’s finding
The finding in this case raises several jurisdictional questions that the SCA did not address:
- Does the definition of unlawful activities include crimes not contemplated in POCA? In S v Boekhoud 2011 (2) SACR 124 (SCA), the court refused to uphold the contention by the state that the court could exercise extra-territorial jurisdiction over offences such as theft and fraud because POCA does not confer jurisdiction over those offences. In light of the SCA’s finding in Bobroff that the offences in question involved theft and fraud (not covered by POCA) in addition to money laundering (which is covered by POCA), one can legitimately question whether the SCA and the court a quo had the power to exercise extra-territorial jurisdiction over the fraud and theft elements of the matter.
- The SCA in Bobroff accepted that, in order to exercise extra-territorial jurisdiction, it had to determine whether the relief requested by the NDPP was enforceable (the so-called principle of “effectiveness”). The court then came to the conclusion that the relief sought in this matter was enforceable because the Israeli authorities had agreed to cooperate in returning the seized assets back to the SA government. One can only wonder whether the SCA would have been willing, or indeed would have been able, to exercise its extra-territorial jurisdiction without the cooperation of the Israeli authorities. In other words, the court was not really exercising extra-territorial jurisdiction in terms of POCA as was suggested by the NDPP’s counsel. It was simply exercising jurisdiction over monies that the Israeli authorities had already agreed to repatriate to South Africa.
Closing Thoughts
It appears that POCA has given the NDPP sweeping powers to pursue the proceeds of unlawful activity wherever the activity may have been committed and wherever the proceeds may be located. However, the POCA legislators could never envisaged that all unlawful activities would be covered under POCA. If one has regard to the preamble in POCA, the mischief that POCA seeks to address is organised crime and money laundering. Crimes such as fraud and theft are not covered by POCA unless they also lead to organised crime and/or money laundering. Therefore, if the Bobroffs had escaped the country with the proceeds of theft and fraud only, no court could exercise its extra-territorial jurisdiction over the proceeds of these offences. This principle was established in Boekhoud.
A court must not only be cautious about which crimes it can assert its jurisdiction over in terms of POCA. In its zeal to deter international fugitives from evading justice, a court would also need to be extremely hesitant about exercising its extra-territorial jurisdiction where there was no means to enforce the judgment. It is well known that most foreign jurisdictions have no interest or ability to apprehend a South African fugitive, or repatriate the proceeds of the fugitive’s crimes. Without full cooperation from a foreign jurisdiction, any judgment applying the principle of extra-territorial jurisdiction would be meaningless.
=========================
Ivor Heyman is an advocate at the Johannesburg Bar. He publishes articles of interest to attorneys and their clients. For questions or comments you can reach him at adv.heyman@gmail.com or 061-120-8740.