REPORTABLE

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK
JUDGMENT

CASE NO: POCA 10/2012

In the matter between:

THE PROSECUTOR GENERAL	APPLICANT

And

NEW AFRICA DIMENSIONS CC	1ST RESPONDENT
GERHARD SHILONGO	2ND RESPONDENT
ELIASER SHIKAGE	3RD RESPONDENT

Neutral citation:	The Prosecutor-General // New Africa Dimensions CC And Two others (POCA 10/2012) [2016] NAHCMD 123 (20 April 2016)

Coram:		UEITELE, J 

Heard:		30 October 2014

Delivered on:	20 April 2016

Flynote:	Prevention of Organised Crime - Civil recovery of property in terms of chapter 6 of the Prevention of Organised Crime Act, 2004 (No. 29 of 2004) - Chapter 6's primary focus not on wrongdoers, but on property used to commit offence or which constitutes proceeds of crime - Criminal conviction not condition precedent to forfeiture and property may be forfeited even where no charge pending - Guilt or wrongdoing of owners or possessors of property not primarily relevant to proceedings.

Prevention of Organised Crime - Maxim - Omnia praesumuntur rite esse acta - simply presumes that formal procedural steps that are required to take a valid administrative act or decision have been complied with.

Prevention of Organised Crime - Preservation of property order - Chapter 6 of Prevention of Organised Crime Act, 2004, - Property subject to order-'Proceeds of unlawful activity' defined as property derived, received or retained, directly or indirectly, in connection with or as result of unlawful activity - Applicant for order to show link between unlawful activity and property.

Costs - On legal practitioner and own client basis - When a court entitled to award costs on such basis.

Summary:	The Prosecutor General brought an urgent ex parte application in the High Court, in terms of which she sought an order under s 59 of POCA, 2004 against the respondents, prohibiting them from dealing with certain property specified in the application. The property in question consisted of moveable assets belonging to the respondents, and certain close corporations controlled by the second and third respondents. 

The Prosecutor General and the investigating officer deposed to the founding affidavits in support of the application, in which they asserted that the second and third respondents and certain staff members of the Ministry of Water Agriculture and Forestry committed some fraudulent activities, contravened the Tender Board Act, 1996 and the State Finance Act, 1991 to induce the conclusion of a procurement agreement between the first respondent and the Ministry, they  furthermore sought to demonstrate that the proceeds generated from that agreement fell within the definition of 'proceeds of unlawful activity.'

On 29 June 2012 an order (the 'preservation of property order') was granted as prayed. During November 2012 the Prosecutor General applied for a forfeiture order under s 61 of the Prevention of Organised Crime Act, 2004. The respondents opposed the application for the forfeiture order and denied that the preserved property is the proceeds of unlawful activities and further denied that there are reasonable grounds for the applicant’s belief to that effect. In their opposition of the forfeiture application the respondents raised two preliminary points. The first preliminary point raised by the respondents is that the applicant’s founding papers are allegedly irregular in that the applicant filed more than one founding affidavit. The second preliminary point is the alleged non joinder of certain parties.

Held that the first point raised in limine is baseless because, on 28 May 2014, the court made an order granting the applicant leave to amplify her founding affidavit and that the applicant could only amplify the founding affidavit by filling a supplementary affidavit. The second point in limine (the non-joinder point) misses one fundamental aspect and it is the fact that proceedings under chapter 6 of POCA, 2004 are not concerned with the wrong doers themselves but focuses on the property that has been used to commit an offence or which constitutes the proceeds of crime.

Held, further, that, the onus of proving that the ‘preserved property’ is the proceeds of unlawful activities rests on the applicant. In order to establish that property constituted the 'proceeds of unlawful activity', the applicant had to establish a connection or link between the alleged unlawful activity and the property concerned. In terms of the definition there had to be evidence that the property was derived, received or retained, directly or indirectly, in connection with or as a result of the unlawful activity. 

Held furthermore that the respondents in the answering/opposing affidavit (deposed to by Shilongo) do not in any proper sense put in issue most of the pertinent facts set out by the applicant.  Instead, the answering/opposing affidavit is replete with repeated allegations of dishonesty, malice and other serious unlawful conduct including foolishness, levelled against the applicant. Those allegations (i.e. that the applicant acted in contravention Article 12 of the Constitution, dishonestly, untruthfully and maliciously) in the answering affidavit as conclusions of law, are at best for the respondents inferences, "secondary facts", with the primary facts on which they depend omitted.

Held furthermore that the presumption of regularity simply presumes that formal procedural steps that are required to take a valid administrative act or decision have been complied with.  The presumption is rebuttable and can be rebutted in any proceedings which are pending before a court and not only by review proceedings.

Held furthermore that Mr. Freyer misrepresented to the Ministry that the regions required engines and equipment related to water supply when those engines and the equipment were in fact not needed or required or ordered by the regional officers. The misrepresentations by Mr. Freyer caused prejudice to the Ministry in that the Ministry paid more than N$ 8 000 per engine for those engines, paid for transport in excess of N$ 693 626 in respect of the delivery of the engines and equipment related to water supply and also incurred expenses of purchasing the engines and the equipment related to the supply of water when there was no need to incur those expenses. This is fraud. The court was also satisfied that one of the reasonable inferences that can be drawn from the Shilongo and Shikage’s misrepresentation is that the misrepresentations were calculated to induce the Ministry to effect payment to the first respondent to enable the first respondent to purchase the engines and the equipment In pursuance to the misrepresentations the Ministry to its prejudice effected payment. This is fraud. 

Held furthermore that the evidence adduced by the applicant proved on a balance of probabilities that the fraud, corruption, the contravention of the Tender Board Act, 1996 and the contravention of the State Finance Act, 1996 induced the conclusion of the agreements between the first respondent and the Ministry and as consequence the preserved property is the proceeds of unlawful activities and should therefore be forfeited to the State.

Held furthermore that the unsupported allegations of abuse of process and of engaging in vexatious activities directed at a repository of public functions in exercising public powers itself constitute an abuse and warrant censure. They are to be discouraged by appropriate costs orders when this form of abuse occurs.

ORDER

1	The positive bank balance:

1.1	in an account held at Bank Windhoek, account number 8003042804, held in the name of the first respondent, (New Africa Dimensions CC), in the amount of N$ 1 453 083, 73;

1.2	in an account held at Bank Windhoek, account number 8002979907 in the name of Kage Trading CC (“Kage”), in the amount of N$ 498 527, 86;

1.3	in an account held at Bank Windhoek, account number 8002359254 in the name of (“ C Three Trading CC”);

1.4	in an account held at First National Bank of Namibia, account number 62234053560 in the name of Taleni Multi Media Consulting CC;
are forfeited to the State.

2	The 2010 model, Volkswagen Golf GTI motor vehicle with registration number N 130698 W and engine number CCZ049937, purchased by the first respondent for Shilongo in April 2012 for N$ 320 000 is forfeited to the State.

3	The respondents must, jointly and severally the one paying the other to be absolved, pay the applicants costs in respect of the preservation application and the forfeiture application.  The costs are on the scale as between legal practitioner and own client. 

4	The registrar is directed to provide a copy this judgment, to the Minister of Agriculture, Water and Forestry for his Permanent Secretary to consider whether any actions (against the staff members mentioned in this judgment) contemplated in s 26 of the Public Service Act, 1995 is required.

JUDGMENT

UEITELE, J 

Introduction 

[1]	On 29 June 2012, the Prosecutor General (I will, in this judgment, refer to Prosecutor General as the ‘applicant’) successfully applied to this Court (before Justice Kauta, Acting) for a preservation of property order under s 51(1) of the Prevention of Organised Crime Act, 2004 (I will, in this judgment, refer to this Act as ‘POCA, 2004’).  The property which has been preserved is:

(a)	The positive bank balance in an account held at Bank Windhoek, account number 8003042804, held in the name of the first respondent, New Africa Dimensions CC( NAD), namely N$ 1 453 083.73;

(b)	The positive bank balance in an account held at Bank Windhoek, account number 8002979907 in the name of Kage Trading CC (“Kage”) , namely N$ 498 527.86;

(c)	The positive bank balance in an account held at Bank Windhoek, account number in Bank Windhoek account number 8002359254 in the name of (“ C Three Trading”);

(d)	The positive bank balance in an account held at First National Bank of Namibia, account number 62234053560 in the name of Taleni Multi Media Consulting CC; and

(e)	A 2010 Volkswagen Golf GTI motor car with registration number N 130698 W and engine number CCZ049937, purchased by the first respondent  for Shilongo in April 2012 for N$ 320 000 ( “the Golf”).
(I will, in this judgment, refer to these properties as the ‘preserved property’).

[2]	In terms of that order, Justice Kauta, Acting, authorised Mr. Karl Patrick Cloete of the Anti-Corruption Commission or any member of the Anti-Corruption Commission to take the property into his or their custody and exercise control over the properties. The court further ordered the applicant must serve the preservation of property order on Gerhard Shilongo and Eliaser Shikage and on any person who has an interest in the property and who intends to oppose an application to forfeit the ‘preserved property’ to the State. 

[3]	The applicant caused a notice of the ‘property preservation order’ to be published in the Government Gazette on 13 July 2012 and served the preservation order of 29 June 2012, through the Deputy Sherriff for the District of Windhoek, on Gerhard Shilongo on 13 July 2012 and on Eliaser Shikage on 5 July 2012. On 13 August 2012, the second and third respondents (Shilongo and Shikage) filed an application in terms of s 58(3) of POCA, 2004:

(a)	to rescind the preservation of property order and the resultant seizure of property order granted on 29 June 2012; and 

(b)	for the court to direct the payment from the property preserved of the respondent’s reasonable legal expenses.

[4]	On 30 August 2012, the applicant signified her opposition to the application for rescission of the preservation order. The applicant simultaneously also filed an application in terms of rule 30 of the now repealed rules of this court to declare the notice in terms of s 52(3) of POCA, 2004 by the second and third respondents as an irregular proceeding. On 21 September 2012 the applicant filed her affidavit in opposition to the rescission application. In her opposing affidavit the applicant raised two points in limine. The first point in limine was to the effect that in terms of s 52 (4)(c) only a person affected by the preservation order and who has given a notice in terms of s 52(3) of POCA, 2004 could apply for a rescission order as contemplated by s 58(3) of POCA, 2004. The second point in limine was that the notice in terms of s 52 (3) of POCA, 2004 delivered by the second and third respondents signifying their intention to oppose the granting of an order forfeiting the preserved property to the State, was not filed within the time periods prescribed by s 52(4) of POCA, 2004. I set down the two applications for a hearing on 25 July 2013.

[5]	On 25 July 2013 I heard the applications and found that the respondent’s notice in terms of s 52 (3) of POCA, 2004 was filed out of time and accordingly upheld the second point raised in limine by the applicant. My finding that the notice in terms of s 52 (3) of POCA, 2004 was filed out of time rendered it unnecessary for me to hear the rescission application and the application for the payment of the legal expenses. Pursuant to my finding on 25 July 2013 the respondents filed an application for the condonation of the late filling of the notice in terms of s 52 (3) of POCA, 2004. I set down the hearing of the condonation application on 6 March 2014, on that day (i.e. 6 March 2014) I however postponed the hearing to 28 May 2014.

[6]	It is cornerstone of our jurisprudence, both at common law in terms of the maxim audi alteram partem and in terms of Article 12 of the Constitution, that in general a party should be heard before an order is given which may adversely affect that party's rights. There is a plethora of cases which deal with the audi principle I therefore find it unnecessary to quote those authorities here. The procedure envisaged in chap 6 of POCA, 2004 constitutes a gross invasion of the rights of a person affected by a preservation of property order; I accordingly exercised my discretion and condoned the respondents’ failure to file their notices as contemplated by s 52(3) of POCA, 2004.  After I condoned the noncompliance with s 52(4) of POCA, 2004 the respondents did not pursue the rescission application they opted to oppose the application for a forfeiture order, which as I indicate below was filed on 09 November 2012. The application to direct the payment of legal expenses from the preserved property was pursued and was heard on 15 April 2015. I have prepared a separate short judgment in respect of that application.

[7]	In the notices filed by the respondents the respondents gave notice that they will oppose the forfeiture application in respect of all the ‘preserved property’ but at the hearing of this matter the second and third respondents limited their opposition to the property belonging to the first respondent and the Volkswagen Golf. No notice of opposition was delivered in relation the property of Kage CC, C Three Trading CC or Taleni Multi Media Consulting CC. On 9 November 2012, the applicant launched an application for the forfeiture of the property preserved in terms of s 51(1) of POCA, 2004 and that is the application that this judgment is concerned with.

The basis upon which the applicant seeks a forfeiture order

[8]	The basis on which the applicant is seeking an order in terms of s 61 of the POCA, 2004 is that, she is of the view that on a balance of probabilities Messrs Shilongo, Shikage (the members of New Africa Dimensions CC) and some staff members of the Ministry committed some offences and that the preserved properties are the proceeds of the unlawful activities. The unlawful activities referred to in the applicant’s founding affidavit are fraud, tender fraud, offences in contravention of ss 35(1)(b), 35(2)(b) and 35(3)(b) of the Anti-Corruption Act, 2003, offences in contravention of the State Finance Act, 1991 offences in contravention of the Tender Board Act, 1996, offences in contravention of the Income Tax Act, 24 of 1981, as amended (the Income Tax Act) and offences relating to money laundering in contravention of ss4 and 6 of POCA, 2004. 

[9]	The first, second and third respondents admit that the preserved property belong to the first respondent but deny that the preserved property is the proceeds of unlawful activities and further deny that there are reasonable grounds for the applicant’s belief to that effect.
The procedures under Chapter 6 of POCA, 2004 and the applicable test

[10]	Chapter 6 of POCA, 2004 focuses on property that has been used to commit an offence or which constitutes the proceeds of crime rather than on the wrong doers themselves. In the matter of National Director of Public Prosecutions v Swart Leach J opined that:

‘The purpose of POCA is to counteract organised crime and criminal gang activities. It is the culmination of a protracted process of law reform aimed at attempting to ensure that criminals do not benefit from their crimes. Chapter 6 … is focused on property that either has been used to commit an offence or which constitutes the proceeds of crime, rather than on the wrongdoers themselves. It provides for forfeiture of the proceeds of and instrumentalities used in crime, but is not conviction-based and may be invoked even where there is no prosecution.’

[11]	Chapter 6 of POCA, 2004 establishes a two-stage asset forfeiture mechanism or procedure. The first stage is a preservation of property order and the second stage is the forfeiture of asset order. As a general rule the procedure followed is the following, the Prosecutor General may, under s 51(1), apply, (she normally does so ex parte) to this court for an order prohibiting a person from in any way dealing with any property mentioned in the notice of motion . The order granted is referred to as the 'preservation of property order' - such as that granted in this matter on 29 June 2012, which may be granted if the court has reasonable grounds to believe that the property concerned is either:

(a)	An 'instrumentality' of an offence referred to in Schedule 1 to POCA, 2004; or 

(b)	Is the proceeds of unlawful activities. 

[12]	Once the court has granted the 'preservation of property order' the Prosecutor General is then obliged to give notice of the 'preservation of property order' to all persons known to have an interest in the property (the notice to a person who the Prosecutor General knows has an interest in the property must be served in the manner in which a summons whereby civil proceedings in the High Court are commenced is served or in any manner prescribed by the minister) and to publish the notice in the Government Gazette. Once a notice has been given in this way s 51(3) goes on to provide that a person who has an interest in the property which is subject to the preservation of property order may give written notice of his or her intention to oppose the making of a forfeiture order or apply, in writing, for an order excluding his or her interest in the property concerned from the operation of the preservation of property order. A notice under s 51(3) must be delivered to the Prosecutor General within, in the case of person on whom a notice has been served, 21 days after the service of the notice; or in the case of any other person, 21 days after the date on which a notice was published in the Gazette and must and is to contain various particulars.

[13]	A preservation of property order expires 120 days after the date on which notice of the making of the order is published in the Gazette except where there is an application in terms of s 59(2) for a forfeiture order pending before this court in respect of the property which is subject to the preservation of property order; or there is an unfulfilled forfeiture order in force in relation to the property which is subject to the preservation of property order; or the order is rescinded before the expiry of that period. Where the Prosecutor General applies for a forfeiture order the preservation of property order expires when the hearing of the application for a forfeiture order is concluded without the making of a forfeiture order and in respect of an unfulfilled forfeiture order the preservation of property order expires when the forfeiture order is fulfilled in terms of section 68.

[14]	A forfeiture order can only be issued in respect of property which is the subject of an existing preservation order under s 51. The power of this court to issue a forfeiture order is to be found in s 59 read with s 61(1) which provides:

‘59	Application for forfeiture order

(1)	If a preservation of property order is in force the Prosecutor-General may apply to the High Court for an order forfeiting to the State all or any of the property that is subject to a preservation of property order.

(2)	…
60	

61	Making of forfeiture order

(1)	The High Court must, subject to section 63, make the forfeiture order applied for under section 59(1) if the court finds on a balance of probabilities that the property concerned-
(a)	is an instrumentality of an offence referred to in Schedule 1; or

(b)	is the proceeds of unlawful activities.’

[15]	The terms ‘proceeds of unlawful activities’ and ‘unlawful activity’ are both defined in s 1 of POCA, as follows:

‘proceeds of unlawful activities’ means any property or any service, advantage, benefit or reward that was derived, received or retained, directly or indirectly in Namibia 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 and includes property which is mingled with property that is proceeds of unlawful activity’

‘unlawful activity’ means any conduct which constitutes an offence or which contravenes any law whether that conduct occurred before or after the commencement of this Act and whether that conduct occurred in Namibia or elsewhere as long as that conduct constitutes an offence in Namibia or contravenes any law of Namibia.’  {Underlined and italicised for emphasis}.

[16]	In the case of The National Director of Public Prosecutions v Carolus and Others  Blignaut J held that:

‘… the applicant must establish a connection or link between the alleged unlawful activity and the property concerned. In terms of the definition there must be evidence that the property was derived, received or retained, directly or indirectly, in connection with or as a result of the unlawful activity carried out by any person.’

[17]	I am of the view that the question which I have to decide in his matter is whether:  The positive bank balance in an account held at Bank Windhoek, account number 8003042804, held in the name of the first respondent, (New Africa Dimensions CC); the positive bank balance in an account held at Bank Windhoek, account number 8002979907 in the name of Kage Trading CC (“Kage”); the positive bank balance in an account held at Bank Windhoek, account number 8002359254 in the name of (“C Three Trading”); the positive bank balance in an account held at First National Bank of Namibia, account number 62234053560 in the name of Taleni Multi Media Consulting CC; and the 2010 Volkswagen Golf GTI motor car with registration number N 130698 W and engine number CCZ049937, purchased by the first respondent for Shilongo in April 2012 are proceeds of unlawful activities. 

The version of the applicant in support of the ‘forfeiture application’

[18]	Both applications (i.e. for a preservation order and for a forfeiture order) were supported by two affidavits, one deposed to by Ms Imalwa the Prosecutor General (applicant) and the other (as a supporting affidavit) by Karl Patrick Cloete. Cloete, in his affidavit, in support of the application for a forfeiture order, explained that he is an Investigation Officer employed by the Anti–Corruption Commission. His function, he said, was that of investigating corrupt practices. 

[19]	In her affidavit, in support of the application for a forfeiture order, the applicant alleges that during June 2011 the Tender Board of Namibia on behalf of the Ministry of Agriculture, Water and Forestry (I will, in this judgment, refer to this Ministry as the “Ministry”), under tender number A18/2-4/2011, called for tenders for: “The supply and delivery of stationary air and water cooled diesel engines (rated from 2.0 kw up to 17 .0 kw @ 650 to 1500 rpm): 01 July 2011 to 30 June 2012.” 

[20]	On 23 September 2011, the Tender Board awarded, as a term tender (tender number A18/2-4/2011) for the supply of stationary air and water cooled diesel engines to the Ministry of Agriculture, Water and Forestry for a period ending on 30 June 2012 to Continental Spares CC, Conserve Engineering CC and First Investments CC.  She furthermore alleges that the effect of the tender award was that whenever, during the ‘tender-period’ (that is the period between 1 July 2011 and 30 June 2012) the Ministry required a stationary air or water cooled diesel engine, it had to approach one of the successful tenderers and source the engine from the tenderer (i.e. Continental Spares CC, Conserve Engineering CC or First Investments CC).

[21]	The applicant furthermore stated, in her affidavit, that despite the fact that a term tender was awarded and was still valid, an official in the Ministry, a certain Mr Benedictus Freyer (I will, in this judgment, refer to him as “Freyer”) on 6 February 2012, approved 11 purchase orders (one purchase order for each of the eleven rural water regions in Namibia) for the purchasing of 110 Lister Engines of 4.5 kw (ten Lister Engines for each of the eleven rural water regions in Namibia) from New Africa Dimensions (I will, in this judgment, refer to this company as the first respondent) at a cost of N$ 26 782.30 per engine excluding transport. When Mr Freyer approved the orders for the purchasing of the Lister Engines he purported to act under the authority of tender exemption number E1/18/1-120113.25. In a statement, which Freyer made under oath, Freyer, amongst other things, justified his decision to purchase the Lister Engines from the first respondent as follows:

‘I authorised the requisition for the purchase orders of Lister engines that was above the price that was indicated by the Regional Head of Karas Region. Before doing such a purchase I consulted Ms Hoeses and Mr Karabo (Regional Head of the Otjozondjupa Regional Office) about the quality of the Lister engines on the annual tender and other Lister engines. Upon discussions with them I concluded, based upon their advice that the Lister engines on the annual tender were not the original TR 1 Lister engines. I then concluded that it will be better to buy engines with better technical specifications. This was done due to the fact that I do not personally have the technical know –how about which engines are so called “pirate engines” and which are “original”. It is against that background that the decision was taken collectively (it was not a decision which was taken solely) that we buy TR 1 Lister engines. I tasked Ms Hoeses to get quotations for TR Lister engines. She got quotations from Agra, New Africa Dimensions and Continental Spares. New Africa Dimensions quotation was the cheapest amongst the quotations presented to me with the requisition. I signed the requisition because I found it to be in order when presented to me by Ms Hoeses.  I did not find any reason to doubt the credibility of the documents presented by Ms Hoeses to me. Furthermore I belief Mr Bezuidenhoudt, the Regional head of Karas regional office used the tender amounts only for estimation purposes.’

[22]	On 22 February 2012 the first respondent issued three invoices (Invoice Numbers 201201, 201203 and 201202) to the Ministry for the supply of thirty (ten per region) ‘TR 1 Air Cooled Variable Speed Lister Engines’ to the Omusati, Kunene and Omaheke regions respectively. On the same day (i.e. on 22 February 2012) a certain Ms Angeline Howaes certified that the goods (i.e. the thirty Lister engines) were received and were taken charge of and their performance was satisfactory.  
[23]	On 13 March 2012 the first respondent issued seven invoices (Invoice Numbers 2012115, 2012117, 2012116, 2012114, 2012119, 2012118, and 2012121,) to the Ministry for the supply of seventy (ten per region) ‘TR 1 Air Cooled Variable Speed Lister Engines’ to the Erongo, Hardap, Karas, Kavango, Otjozondjupa, Ohangwena and Caprivi regions respectively. On the same day (i.e. on 13 March 2012) a certain Mr Sadiek Meintjies certified that the goods (i.e. the seventy Lister engines) were received and were taken charge of and their performance was satisfactory. 

[24]	During the period between 30 November 2011 and 9 March 2012, fifty four purchase orders for the purchasing of different equipment related to water supply were issued to the first respondent. During that same period the first respondent issued fifty four invoices to the Ministry to provide the different equipment related to water supply to the different regions of Namibia. During the same period (i.e. the period between 30 November 2011 and 9 March 2012) a certain Mr Sadiek Meintjies certified, in respect of fifty one of the invoices that the goods were received and were taken charge of and their performance was satisfactory and a certain Ms Sylvia Hoeses certified, in respect of three of the invoices that the goods were received and were taken charge of and their performance was satisfactory.

[25]	On 24 February 2012 three cheques (in respect of the thirty Lister Engines) were issued to the first respondent and on 20 March 2012 seven cheques (in respect of the seventy Lister Engines) were issued to the first respondent. Between the period February 2012 to June 2012 payments amounting to N$ 9 834 143, 91 were made to the first respondent in respect of the Lister Engines and the equipment related to water supply. When the payments in respect of the Lister engine and the equipment related to water supply were made, the goods were not yet delivered to the Ministry. Some staff members of the Ministry picked up these irregularities and reported the irregularities to the Ministry’s management who in turn reported the irregularities to the Anti-Corruption Commission.

[26]	The Anti-Corruption Commission, through Mr Cloete, investigated the irregularities and after its investigations formed the view that some unlawful activities in the form of fraudulent acts, tender fraud, money laundering, contravention of the State Finance Act, 1991 and contravention of the tender Board Act, 1996 were committed. 

(a)	Fraud

(i)	Cloete alleges that fraud was committed when Mr Freyer the Acting Director of the Directorate: Rural Water Supply in the Ministry, knowing that a term tender under tender number A18/2-4/2011 for the procurement of LT and TR air or water cooled diesel engines was awarded to Continental Spares CC, Conserve Engineering CC and First Investments CC, deliberately and under false pretence (in that he misrepresented to other officials of the Ministry that there was a tender exemption for the Lister engines whilst he knew that there was no such exemption in terms of s17(1)(c) of the Tender Board of Namibia Act, 1996 ), disregarded that tender awarded and unlawfully procured goods (TR air or water cooled diesel engines) from the first respondent. The applicant further alleges that these acts by Freyer has prejudiced the State as the engines supplied by the first respondent were not only more expensive than those supplied by the tenderer, but additional, inflated delivery costs were also charged by the first respondent. 
 
(ii)	Cloete furthermore alleges that fraud was committed when Mr Shilongo and Shikage (the second and third respondents) also falsely certified, in respect of 50 invoices, that the goods (equipment related to water supply) were delivered to Ministry, whilst they well knew it was not the case and Mr Freyer, Ms Hoeses and a certain Meintjies also misrepresented to other officials of the Ministry that the goods (equipment related to water supply) were delivered to the Ministry whilst they well knew the goods were not delivered. These misrepresentations caused the Ministry to issue purchase orders and to make payments to the first respondent when the payments were not yet due as the payments only ought to have been made once the goods were delivered. In some instances the Ministry made payments to the first respondent while the first respondent had (at the time the investigation was conducted i.e. June 2012) not yet delivered the goods to the Ministry.

(iii)	Cloete furthermore alleges that he interviewed some of the staff members from the Ministry’s regional offices, who, under oath and their statements were attached to his affidavit, denied that they complained about the quality of the Lister engines procured by the Ministry from Continental Spares.  Some of the staff members went to the extent of stating that they did not request Lister Engines from Mr Freyer and they also did not need those engines from the first applicant as they had sufficient engines (supplied to them by Continental Spares) under the term tender, tender number A18/2-4/2011) in stock. According to staff members of the Ministry’s different regions, goods to the value of approximately N$ 3 000 000 which were confirmed to have been delivered by the first respondent were in fact not delivered.

(b)	Tender fraud 

[27]	The applicant supported by Cloete alleges that tender fraud was committed by Freyer in collusion with other staff members of the Ministry in that Freyer knew that the term tender for the supply and delivery of stationary air and water cooled diesel engines (rated from 2.0 kw up to 17 .0 kw @ 650 to 1500 rpm): 1 July 2011 to 30 June 2012 was awarded to Continental Spares, but despite that knowledge called for quotations for the supply and delivery of stationary air and water cooled diesel engines (rated from 2.0 kw up to 17 .0 kw @ 650 to 1500 rpm) during the currency of the tender. According to Cloete three companies (namely New Africa Dimensions who quoted N$ 26 782, 30, DFL Trading Enterprises Mariental who quoted N$ 27 669 and Express Bearing Centre CC who quoted N$ 23 770, 50) submitted quotations for the supply of the engines. As is evident from the amounts quoted the cheapest quote was not that of the first respondent but Freyer furthermore misrepresented that the first respondent’s quote was the cheapest.

[28]	In terms of the term tender, tender number A18/2-4/2011, the prices of the engines had to include the delivery costs. In the case of the engines supplied by the first respondent delivery costs were additionally charged.  The first respondent did not have a truck of its own to deliver the engines, which it bought from Continental Spares, to the Ministry. The first applicant accordingly contracted a company known as Wenrod Trading Investments (“Wenrod”) and two other private companies to collect the engines from Continental Spares and to deliver the engines to the different regions in Namibia at the costs of the Ministry. Mr Cloete’s investigations further more revealed that Wenrod did not have a truck of its own. It hired trucks from Sirkel Transport to deliver the engines and the water related equipment to the different regions.  Sirkel Motors, charged Wenrod N$ 192 574 to deliver the engines and the equipment to the different regions. Wenrod in return charged the Ministry for the same service (actually rendered by Sirkel Motors) the amount of N$ 693 626. The same Lister engines were therefore delivered by first respondent to the Ministry for N$ 8 500 more per engine plus additional transport costs “under the tender exemption”. 

[29]	I find it appropriate to interpose here and briefly explain how exemption (from calling for tenders) is obtained from the Tender Board of Namibia to procure goods or services on behalf of the Government of the Republic of Namibia. The procurement of goods or services, or the letting or hiring of anything or the acquisition or granting of any right for or on behalf of, or the disposal of property of, the Government without publicly inviting the providers of such services or goods to tender for the provision of the goods or the rendering of services is provided for in section 17 of the Tender Board of Namibia Act, 1996 which provides as follows:

‘17	Exemption from tender procedures

(1)	If, in respect of the procurement of goods and services for, or the letting or hiring of anything or the acquisition or granting of any right for or on behalf of, or the disposal of property of, the Government-

(a)	the estimated value thereof does not exceed N$ 10 000;
(b)	the opposite party to an agreement to be entered into is-

(i)	a statutory body, local authority or regional council in Namibia approved by the Minister; or
(ii)	the government of, or any statutory body, local authority or regional council in, a country other than Namibia, which statutory body, local authority or regional council the Minister has likewise approved; or

(c)	the Board in any particular case for good cause deems it impracticable or inappropriate to invite tenders, the Board need not comply with the provisions of section 11; and

(2)	In the application of subsection (1)(c), the reasons for not inviting tenders shall be kept on record by the Board.’

[30]	From the above quoted section it is clear that nobody may procure services or goods on behalf of the government without inviting tenders except, where there is an exemption from inviting tenders for the rendering of the specific services or the procurement of the specific goods. I now return to this matter. In respect of the acquisition of the air or water cooled diesel engines, Mr Opperman the Control Officer responsible for contract and tender management in the Ministry, under oath, stated that he was responsible for compiling the requests, for exemption from tender procedures as contemplated in s 17(1)(c) of the Tender Board of Namibia Act, 1996. He further stated that he did compile a request in terms of s 17(1)(c) which request was approved by the Tender Board of Namibia on 27 May 2011, but that request and the approval did not cover or include the acquisition of air or water cooled diesel engines, the acquisition of the engines had to be done in terms of the term tender (tender number A18/2-4/2011).

(c)	Contravention of the State Finance Act, 1991 

[31]	Mr Cloete in his affidavit alleges that he interviewed the then Deputy Permanent Secretary in the Ministry, Ms Anna Ndahambelela Shiweda (“Ms Shiweda”) who was also the chairperson of the Ministerial Tender Committee and she explained that once a tender is awarded, the successful tenderer and the specific Government Ministry, Department or Agency conclude an agreement and if  the tenderer fails to deliver the goods as per the specifications, the Ministry, Department or Agency is expected to inform the Tender Board for advice, before taking action. The State Finance Act, 1991 in s 21 provides as follows:

‘21	Prohibition on variation of contracts or settlement or waiver of claims, without Treasury authorisation

Notwithstanding anything to the contrary in any law contained-
(a)	no contract in which the State is a party shall be cancelled or varied to the detriment of the State;

(b)	no claim by the State resulting from any loss or damage or unjust enrichment contemplated in section 11, whether or not instituted by way of judicial proceedings, shall be waived or settled;

(c)	no claim against the State shall be settled,

without the authorisation of the Treasury.’

[32]	Cloete alleges that when Freyer decided to call for quotations for the supply of air or water cooled diesel engines he contravened s 21 of the State Finance Act, 1991. Cloete furthermore alleges that he interviewed a certain Ms Tuulimoupyu Kakolonyah, a Chief Clerk in the Ministry and a certain Ms Albertina Nankela, the Deputy Director of Finance in the Ministry, who under oath, explained that payments may only be effected upon fulfilment of contractual obligations by service providers. They confirmed that it is not practice to pay service providers in advance. Cloete alleges that during his investigation he perused the bank statements relating to the first respondent’s bank account held at Bank Windhoek and the bank statements revealed that the first transaction on that account was a deposit of N$300 made by Mr Shilongo and thereafter, that is, the period between 15 December 2011 and 18 June 2012 fifteen deposits totalling N$ 9 279 032, 72 were made by the Ministry.

[33]	Cloete, perused the mobile telephone records of Hoeses, Freyer, Shilongo (the second respondent) and Shikage (the third respondent) and established that these persons had mobile telephonic communication with each other on approximately 281 occasions between 5 June 2011 - 20 January 2012. He also established that apart from the telephonic communication Freyer on five different occasions send five ‘sms’ to Shilongo between the period 1 June 2011 - 20 January 2012. Cloete accordingly concluded that because the first respondent did not have the funds to pay for the engines and the equipment related to water supply, Meintjies and Hoeses made false declarations that the goods were received when in fact the goods were not received so as to enable the first respondent to be paid in advance to be in a position purchase the engines and the equipment related to water supply. 

(d)	Money Laundering 

[34]	The applicant furthermore alleges that in a number of instances the money that was paid into the account of the first respondent by the Ministry were not used to purchase the goods procured by the Ministry but was in fact transferred to the accounts of other entities such as, Kage CC, C Three Trading CC or Taleni Multi Media Consulting CC.  

[35]	The applicant alleges that the second and third respondents (i.e. Shilongo and Shikage) are the only members of first respondent. Shikage (the third respondent) is the only member of Kage Trading CC. On 20 April 2012 the first respondent transferred an amount of N$ 200 000 to Kage Trading CC. On 19 December 2011 the first respondent transferred an amount of N$ 20 000 to C Three Trading CC and on 18 June 2012 the first respondent transferred two amounts, N$ 135 000 and N$ 100 00 to C Three Trading CC.

[36]	The applicant furthermore alleges that Taleni Multi Media Consulting CC has one member, namely Shilongo (the second respondent). On 22 May 2012 and 7 June 2012 the first respondent respectively transferred amounts of N$ 400 000 and N$ 295 000 to Taleni Multi Media Consulting CC. On 30 April 2012, Shilongo (the second respondent) purchased a 2010 model Golf GTI for the amount of N$ 320 000 and paid the purchase price from the bank account of the first respondent.  Mr Shilongo registered the 2010 model Golf GTI in his name. The second and third respondents failed to explain why the amounts were paid into the accounts of the entities. The applicant accordingly alleges that the respondents contravened ss 4, 5 and 6 of the Prevention of Organised Crime Act, 2004. 

(e)	Other unlawful activities

[37]	The applicant also alleges that both Messrs Shilongo and Shikage are employed by the Office of the Prime Minister and Ms Mbako, the Permanent Secretary in the Office of the Prime Minister has informed Cloete that neither of them had permission from the Public Service Commission to perform remuneration work outside the Public Service.

[38]	Cloete furthermore states the he contacted the offices of the Receiver of Revenue who informed him that:

(i)	For the tax year 2011 the first respondent submitted Income Tax Returns indicating that it (first respondent) is dormant;

(ii)	For the tax year 2012/2013 the first respondent did not submit any Income Tax Return.

(iii)	Messrs Shilongo and Shikage did not declare any additional income received on their annual Income Tax Returns, although Shilongo did on 10 March 2012 and 5 May 2012 receive the amounts of N$ 35 000 and N$ 20 000 respectively  from the first respondent.

[39]	Through his investigation Cloete further more alleges that he established that the documents for the registration of Wenrod indicated that Wenrod is a Close Corporation whose only two members are a certain Mr Hoeseb, the brother of Ms Hoeses and a certain Mr Gomeb, Mr Hoeseb’s uncle. He furthermore established that three cash deposits (amounting to N$ 80 000 in total) were made into Ms Hoeses’ bank account as follows:
(i)	On 13 February 2012 an amount of N$ 30 000 was deposited, the reference of the depositor was given as a certain S Hoeses;

(ii)	On 15 February 2012 an amount of N$ 20 000 was deposited, the reference of the depositor was given  as a certain W Gomeb; and 

(iii)	On 02 April 2012 an amount of N$ 30 000 was deposited, the reference of the depositor was given as a certain W J Gomeb.

[40]	 On the basis of the evidence summarised in the preceding paragraphs the applicant submitted that all the contracts between the first respondent and the Ministry were fraudulently and corruptly procured to the detriment of the Ministry and the money paid into the account of the first respondent is the proceeds of the fraudulent and corrupt contracts and the moneys transferred from the account of the first respondent to other accounts are also proceeds of the fraudulent and corrupt contracts.

The respondents’ version in opposition of the ‘forfeiture application’

[41]	As I have indicated above the respondents oppose the forfeiture application in respect of the property of the first respondent and the 2010 model, Volkswagen Golf GTI motor car with registration number N 130698 W and engine number CCZ049937. Before I deal with the respondents’ explanation for the conclusion of the contracts between the first respondent and the Ministry I find it appropriate to first deal with two preliminary issues raised by Mr Shilongo (who deposed to the affidavit on behalf of the respondents) in his answering affidavit and also touched on by Mr Bhana, at the hearing of the forfeiture application, who appeared for the respondents. 

[42]	The first preliminary point raised by the respondents is that the applicant’s founding papers are allegedly irregular. Mr Shilongo, in the opposing affidavit states that the applicant is entitled to a founding affidavit, the respondent to an answering affidavit and the applicant may reply by filing a further sets of affidavits known as the replying affidavits. He proceeds to state that ‘instead the Applicant without the leave of court filed two (2) excessively lengthy and boringly repetitive set of Founding and Supplementary Founding Affidavit wherein the Applicant traverses ad nausea detail of the procurement transactions.’ This point is in my view baseless because, on 28 May 2014, I made an order granting the applicant leave to amplify her founding affidavit.  The applicant could only amplify the founding affidavit by filling a supplementary affidavit.

[43]	The next preliminary point raised by Mr Shilongo (and as I said repeated by Bhana) is the alleged non joinder of certain parties. He states that the applicant traverses the ‘purported conduct’ of parties who are not before court and who are unable to answer the accusatory allegations because they are not party to these proceedings. The parties referred to by Mr Shilongo are the staff members (Freyer, Hoeses, Meintjies, Shiweda, Mootseng, Da Cuncha Fausto Ramires, Victor, Lebereki, Kakolonyah, and Nankela) of the Ministry, the Tender Board of Namibia and some service providers such as Mr Helm from Sinclair Services, Mr Nakoma from Tube-O-Flex and Messrs Hoeseb and Gomeb from Wenrod.

[44]	The non-joinder point misses one fundamental aspect and it is the fact that proceedings under chapter 6 of POCA, 2004 are not concerned with the wrong doers themselves but focuses on the property that has been used to commit an offence or which constitutes the proceeds of crime. The guilt or wrongdoing of the owners or possessors of property is, therefore, not primarily relevant to the proceedings. The non-joinder point furthermore loses sight of the fact that, once the court has granted a preservation of property order the Prosecutor General is then obliged to give notice of the preservation order in the Gazette and any party who has an interest in the property may file a notice opposing the granting of a forfeiture order or apply for the exclusion of certain properties from the operation of the preservation order.  The notice was published in the Gazette and if any party (this includes the staff members of the Ministry and other persons who the respondents complaint are not joined) who has an interest in the matter so wished to join the proceedings that party should have indicated their interest and opposed the making of the forfeiture order or apply for the exclusion of certain properties from the forfeiture order. The non-joinder point is in my view also without merit.

[45]	One of the basis on which the respondents oppose the application for the forfeiture of the persevered property is their denial of the allegation, by the applicant, that the preserved property is the proceeds of unlawful activities. They allege that the preserved property is legitimate proceeds of public procurement transactions devoid of any fraud, theft, or money laundering on the part the respondents. Mr Shilongo alleges that the first respondent of which he is a member was contracted by the Ministry to provide it with Lister engines and other equipment related to water supply pursuant to an exemption by the Tender Board of Namibia to call for tenders. Mr Shilongo furthermore alleges that the engines which the first respondent supplied to the Ministry are different from the engines which Continental Spares quoted for under tender number A18/2-4/20112. Mr Shilongo furthermore alleges that the respondents are not conversant with the Ministry’s internal procurement procedures and as such the alleged unlawful activities of the Ministry’s staff members cannot be attributed to the respondents.

[46]	In respect of the averments that the respondents, in contravention of the State Finance Act, 1991 were paid in advance prior to them delivering the goods ordered, Mr Shilongo alleges that the advance payments were not peculiar to the respondents. He alleges that the Ministry’s finance department arranged to effect advance payments to all suppliers, including Continental Spares (Pty) Ltd to avoid roll overs of outstanding payment commitments to the new financial year. 

The opposing contentions and an analysis of them

[47]	The facts in this application are to be approached in accordance with the well established approach to disputed facts in motion proceedings laid down in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd, consistently followed by this court. In accordance with this approach, application proceedings will be adjudicated on the facts as set out in the applicant’s founding affidavits which are admitted by the respondents together with facts alleged by the respondents, unless a denial by the respondents is of such a nature so as not to raise a genuine or a bona fide dispute of fact or is so farfetched that a court is justified in rejecting it merely on the papers. 

[48]	In approaching the questions raised in this matter, my task is alleviated by reason of the fact that the respondents in the answering/opposing affidavit (deposed to by Shilongo) do not in any proper sense put in issue most of the pertinent facts set out by the applicant.  Instead, the answering/opposing affidavit is replete with repeated allegations of dishonesty, malice and other serious unlawful conduct including foolishness, levelled against the applicant. I will below just quote few examples to demonstrate what I say. In paragraph 21 of her founding affidavit the applicant makes the following allegations:

‘21	The evidence gathered through the criminal investigation shows on a balance of probabilities that Mr Shikage, Shilongo (members of New Africa Dimensions CC) and employees of the Ministry of Agriculture, Water and Forestry (‘MWAF”) committed the following offences and the property mentioned above are the proceeds of these offences:

21.1	FRAUD: Ben Freyer (Mr Freyer) the Acting Director of the Rural Water Supply, a department within the Ministry of Agriculture, Water and Forestry knowingly that there was a tender awarded for Lister Engines under Tender number A18/2-4/20112 with the specific Lister type Engines series LT and TR Lister Engines in favour of Continental Spares CC, Conserve Engineering CC and First Investments CC awarded a contract for the same Lister Engines to New Africa Dimensions CC (“NAD”) to  the detriment of the MWAF and the companies that were awarded the tender. Mr Freyer made misrepresentations to the contractors that the Lister Engines required by the Regional Offices could be procured by way of contract. This was done to the determent (sic) of the MWAF and the contractors who were awarded the Tender for the Lister Engines by the MWAF).

21.2	Corruption: The NAD contravened section 35 (3) of the Anti-Corruption (Act No.8 of 2003) (“ACA”). In terms of section 35(3) of the ACA ‘A person commits an offence who-	(a) knowingly gives to an agent; or being an agent, knowingly uses, any receipt, account or other document in respect of which the agent's principal is interested and which contains any statement which is false or erroneous or defective in any material particular and which to the knowledge of that person or the agent, as the case may be, is intended to mislead the principal or any other person.’

21.3	Fraud: NAD certified 50 invoices of goods delivered as delivered to the MWAF totalling an amount of N$ 9 834 143- 91. The goods were not delivered on the date certified by NAD or NAD‘s authorised representative. These misrepresentations to the MWAF caused the MWAF to make payment to NAD where in fact were only due to the NAD after delivery of the goods. In some instances as set out below the   goods were not delivered at all. 

21.4	Money laundering: In a number of the money that was paid into the account of NAD from MWAF were not used to purchase the goods the MWAF. Instead the accounts were transferred to entities of which the two members of NAD were also members. There was no explanation given by NAD members why these amounts were paid into the accounts of other entities in which Mr Shikage and Mr Shilongo held an interest.…’

[49]	Mr Shilongo on behalf of the respondents responded as follows to the above allegations. I find it necessary to quote from Shilongo’s affidavit more extensively than I would have preferred. I have underlined the portions where Shilongo accuses the applicant of improper conduct simply to highlight the absence of the primary facts on which the conclusions are based. 

‘14	AD Paragraphs 21 thereof

14.1	The respondents deny commission of any offence whatsoever and states that the averments in this paragraph constitute or degrading or demeaning abuse of powers and functions of the Prosecutor-General contrary to the provisions of Article 12 of the Constitution of the Republic of Namibia which:

•	Guarantees in the determination of any civil rights or obligations or any criminal charges any criminal charges a fair and public hearing of an independent impartial and competent Court.

•	Guarantees a trial within a reasonable time and presumes all persons accused of offences innocent until proven guilty according to law.
AD Sub- Paragraph 21.1 thereof

14.2 	Law enforcement is a serious matter that is why the Prosecutor-General is as a Public Authority required per Article 88 (1) (b) of the Constitution to prosecute by virtue of experience, conscientiousness an integrity in the name of Republic of Namibia and not in the name of:

•	Continental Spares ( Pty) Ltd;
•	Converse Engineering CC; and
•	First Investment CC.

The aforementioned entities are not Complainants in casu against the Respondent but the Prosecutor-General dishonourably alleges at the behest of the said entities that they suffered loss of contract or profit in that Prosecutor General alleges that Ben Freyer, (and not the Respondents) the acting Director of the Rural Water Supply, a Department of MAWF, whilst knowing that “a tender was awarded for Lister Engines Under Tender A18\2-4\ 2011 with  specifications Lister type Engines series LT and TR Lister Engines in favour of the aforesaid entities but awarded the contract for the same Lister Engines to NAD to the detriment of the companies that were awarded the tender.”

14.3	The Prosecutor-General further alleges that Mr. Freyer made a misrepresentation to these entities “the Contractors” that the Lister Engines required by Regional Office could be procured by way of contract.

14.4	The Prosecutor-General also alleges that the above conduct was done to the detriment of MAWF and Contractors who were awarded the tender for the Lister Engines by the MAWF.

14.5	The above purported framing of the offence of fraud by the Prosecutor- General raises immediate questions of impropriety pointing to conduct of malicious proceedings on the part of the Prosecutor –General in that:

14.5.1	There is no complainant from the Permanent Secretary of MAWF or from the Ministry of AWF itself that Mr Freyer is guilty of unlawful, blameworthy acts or omission.
14.5.2	In fact the Tender Board duly granted a Tender Board exemption for procurement of goods that was effected by Mr Freyer, in his capacity as Acting Director of Rural Water Supply and the issue of “The Contractors” holding the tender does not arise.

14.5.3	what has Mr Freyer’s conduct got to do with the Respondents’ or NAD? It is submitted that the first general requirement of criminal liability is conduct and since this conduct is extraneous to the Respondents, why is the said extraneous conduct asserted in the course of application for forfeiture of Respondents assets.

14.5.4	MAWF has never filed an Affidavit wherein they are asserting that they have suffered any detriment.  To the contrary, NAD has in fact delivered all Lister engines ordered from it by MAWF and the total of the NAD order in respect of Lister Engines was only N$ 2 946 053.00 and not the exaggerated amount exceeding N$8.9 Million asserted by the Prosecutor-General and or is investigator, Mr Karl Cloete. See attached annexure marked“NAD4”.

14.5.5	On the Prosecutor-Generals’ own version “the Contractors” who themselves have never filed a complaint that they suffered any detriment, were only awarded the (the now expired tender) the tender for Lister Engines by the MAWF.  it therefore means that all other items such as all couplings, bolts and nuts, washers, computers, valves, t-shirts, water meters, elbow galf, pipes and fitting procured by MAWF from NAD are irrelevant for the purpose of this Forfeiture proceedings as “The Contractors” on whose behest the Prosecutor- General appears to be acting could logically not have suffered any detriment in respect of supply of goods for which they did not hold a tender.

15.	AD Sub-Paragraph 21.2 thereof

The allegation in this sub-paragraph constitute conclusive proof of malicious proceedings on the part of the Prosecutor-General.  The prosecutor-General‘s conduct is aggravated by the fact that the Prosecutor General disposes to an affidavit wherein the Prosecutor General alleges without any foundation or justification and without any complaint of misleading from MAWF or its Permanent Secretary or any of its Directorate that;

15.1	by necessary implication by MAWF is the principle and Mr Freyer or any unnamed employees of MAWF is the agent;

15.2	That a receipt or account in respect of this procurement transaction of Lister  Engines represented by annexure “ NAD4” was given  to the Agent  in respect of which the MAWF or any other person.

15.3	that to knowledge of NAD and or its member or Agent of MAWF, the receipt, account or document was false and was intended to mislead the principal being MAWF or any other person.

15.4	that to the knowledge of  NAD and or its members or Agent of  MWAF, the receipt, account or document was false and was intended to mislead  the principal being MWAF or any other person.

16.	It is submitted that the foregoing averments in this sub-paragraph are false and were deliberately made under oath for the purpose of deceiving and misleading the Court. To get to the bottom of this matter the Prosecutor-General is invited to in its Replying Affidavit deal specifically with this allegation of misleading and state the basis for Prosecutor-General  in making these allegation, state who was misled, by whom  misled, by means of what receipt, account or other document the act of misleading was committed, state the agent and the principal and indicate the Affidavit  that provided the basis for the Prosecutor-General making the allegation it has made under oath. Specifically provide the Honourable Court and the Respondents with  an assurance  that the Prosecutor-General  has not in deposing to sub-paragraph  21.2, deliberately deposed to untruths  under oath in subparagraph 21.2 for the purpose of wrongfully obtaining a Forfeiture Order against  the Respondents or NAD. The Respondents also specifically invite Ms. Boonzaaier of the office of the Prosecutor-General to specifically state whether she is the draughtsman of this sub-paragraph 21.2, specifically in her capacity as a Legal Practitioner for the purposes of Legal practitioners Act 15 of 1995.

17.	AD Sub-Paragraph 21.3 thereof

The allegations in this sub-paragraph constitute a further and aggravating instance of malicious proceedings by the Prosecutor-General warranting an award of punitive Costs Order on an Attorney-and-own client scale against the Prosecutor-General. There is to the knowledge of both Ms Boonzaaier and Mr Cloete no basis of alleging misrepresentation or complaining about undue advance payments for the following reasons:

17.1	Per attached self-explanatory email dated 13 January 2012 and marked “NAD5” Ms Albertina-Taina Nankela of MAWF, clearly  acting on behalf of MAWF caused all suppliers to be informed to submit all invoices for outstanding commitments / printed orders at the accounts payable/ creditors section for payment.  This was to avoid roll-overs of the outstanding commitments to the new financial year if invoices are received on time. (Sic-meaning clearly late).

17.2	The above email was followed up with attached self-explanatory public newspaper advert and notice to all Suppliers and Contractors marked “NAD6”.

17.3	It is pursuant to these invitations that all Suppliers including NAD submitted invoices to MAWF for advance payment.

17.4	By way of brief example we attach a self-explanatory proof advance payment to the Contractor” Continental Spares  (Pty) Ltd in respect of invoice no. 40536, which was  certified by Continental  Spares (Pty) Ltd for payment and MAWF paid the sum of N$ 115 000.00 on 13 March 2012 for deliveries  effected  on 26 May 2012.  This advance payment is marked “NAD7” Continental Spares (Pty) Ltd  also received  advanced payment in the sum of N$ 266 708.00 in respect of invoice no: 40353 on 5 March 2012 but effected delivery on 11 September 2012.

17.5	The Prosecutor-General’s Investigator Mr Karl Cloete knew about this practice of advance payment  to Suppliers, was specifically informed by the Respondents at occasions when Respondents made representations to him during the course of his investigation have established that all Suppliers were beneficiaries of advance payment but that circumstances notwithstanding the said investigator in suppression of such reality, isolated NAD and unfairly sought to taint advance payment made to NAD in an unlawful and deceitful attempt to secure a Forfeiture Order against NAD.

18.	AD Sub-Paragraph 21.4

18.1	 It is submitted regard being had to preceding sub-paragraphs 21.1-21.3 that there is no basis in fact or law of alleging fraud or corruption.  The proceeds derived by NAD for Supply Lister Engines to MAWF are legitimate proceeds under all circumstances.  We have already indicated that all Lister Engines were delivered.

18.2	Beyond this point, the Prosecutor- General deliberately or unwittingly seeks to mislead both the Respondent and the Court in that all along the substances of the complaint was the supply by NAD of Lister Engines that were on tender held by “the contractors”   The “Contractors” did not hold a tender for other goods of MAWF, NOW what other goods which MAWF did not complain of, was NAD supposed to purchase with money paid into NAD account by MAWF.

18.3	The averments in this paragraph are contrary to the principle of legality in that the Prosecutor-General now places itself outside the law in demanding that an explanation be given why monies were paid into accounts of other lawful entities.  There is no clear and existing legal rule we aware of in Namibia that forbids legitimate transfer of funds to accounts of other entities.’

[50]	Mr Bhana, on 30 October 2014, when the matter was argued before me took the attacks on the applicant to another level he said:

‘…We will then show Your Lordship that even if you are not with us on this point that on the issues of fact our Learned Friends are fundamentally incorrect that in fact firstly the engines are not the same engines, secondly they are wrong on the exemption and Your Lordship will also recall that apart from all of that don’t forget very fundamentally the engines only make up one component of procurement, we will show you the issue that they make so much of what has been used called a pre-payment or a payment shortly before delivery is one that in fact they have condoned and applied to people like Continental, one asks again why is there a witch hunt against [ my client] My Lord, is it because it is a B.E.E company making inroads into the establishment and I will show Your Lordship our Continental is treated fundamentally differently to my client, on their own Affidavit so Your Lordship will recall just to give you a flavour for this, ringing’s and ringing’s of papers generated on this aspect that an invoice was generated before delivery was made and there was something fundamentally wrong, there was a misrepresentation that my client committed against the department, let me give Your Lordship a flavour of why there is an unequal application of the law … Act and why this entire issue of prepaying is a red herring.’ {Underlined for emphasis}

[51]	Mr Shilongo, in his answering affidavit, had to, in respect of the allegations levelled against the applicant, furnish facts in the form of evidence of the nature of the applicant’s dishonesty, untruthfulness, malice and witch hunting.  As regards the evidence which Mr Shilongo had to put before the Court in the respondents’ answering affidavits, I echo the words of Kumleben, then AJA, in Radebe and Others v Eastern Transvaal Development Board: that the allegations (i.e. that the applicant acted in contravention of Article 12 of the Constitution, dishonestly, untruthfully and maliciously) in the answering affidavit as conclusions of law, are at best for the respondents inferences, "secondary facts", with the primary facts on which they depend omitted. In the matter of Willcox and Others v Commissioner for Inland Revenue  Schreiner JA explained the concept of ‘primary’ and ‘secondary’ facts as follows: 

‘Facts are conveniently called primary when they are used as the basis for inference as to the existence or non-existence of further facts, which may be called, in relation to primary facts, inferred or secondary facts.’

[52]	Having found that the respondents did not place primary facts before me from which I could infer that the applicant acted dishonestly, or maliciously I am of the view that the respondents and Mr Bhana have no basis, in law or in fact, on which they could level their accusations against the applicant. I am of the view that the respondents’ accusations towards the applicant were aimed at deflecting the real inquiry in this matter and they have failed in that regard. I will, when I consider the question of costs, return to the accusations levelled by the respondents against the applicant.

The proceeds of unlawful activities
 
[53]	I now turn to consider the next crucial issue, namely whether or not the applicant has proved on a balance of probabilities 'that the property preserved is the proceeds of unlawful activities'. The onus of proving that the ‘preserved property’ is the proceeds of unlawful activities rests on the applicant. The Supreme Court quoting with approval from the matter of Govan v Skidmore said:

'Now it is trite law that, in general, in finding facts and making inferences in a civil case, the Court may go upon a mere preponderance of probability, even although its so doing does not exclude every reasonable doubt …for, in finding facts or making inferences in a civil case, it seems to me that one may …. by balancing probabilities select a conclusion which seems to be the more natural, or plausible, conclusion from amongst several conceivable ones, even though that conclusion be not the only reasonable one.’

[54]	I have indicated above that the applicants maintain that the ‘preserved property’ is legitimate proceeds of public procurement transactions devoid of any fraud, theft, or money laundering on the part the respondents. Mr Bhana argued that the respondents have acquired the interest concerned (i.e. the preserved property) legally and for a consideration the value for which is not significantly less than the value of the interest. He argued that there was a quid pro quo, the respondents gave the engines, pipes and couplings and in return they got paid (although the payment allegedly included a small mark-up) for the goods they delivered so there is a quid pro quo.

[55]	Mr Bhana further argued that it is clear on the pleadings that neither the Ministry nor any other competent agency of government has filed an application or instituted action to review and set aside the agreement concluded between the Ministry and the first respondent. He further argued that as at the time of hearing the forfeiture application no competent court had set aside the agreement between the Ministry and the first respondent, he thus submitted that the decision to conclude the agreement with the first respondent as well as the resultant agreements to supply the Ministry with certain goods remain valid and bears legal consequences. He thus argued that: 

‘In the circumstances we submit that the applicant cannot, in law, challenge the validity of the agreement in these proceedings and contend that the quid pro received by respondents is unlawful. We submit that the legal position in respect of an irregular and unauthorised administrative act (which in any event is disputed in this matter) has been the subject matter of several decisions of our courts.’

[56]	Mr Bhana accordingly referred me to the following matters the Rally for Democracy and Progress and others v Electoral Commission of Namibia and others  where the court dealt with the presumption of regularity of administrative decision and stated that the presumption:

‘…is a seminal one, on which the operation of the entire edifice of state administration and administrative law rests. The operation of the administrative state would be completely untenable without it.   Consequently, administrative acts are valid until they are found to be unlawful by a court of law.’

The court further noted that an administrative act or decision:

‘…is still an act capable of legal consequences. It bears no brand of invalidity upon its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders.’

[57]	Mr Bhana further referred me to the decisions of Oudekraal Estates (Pty) Ltd v City of Cape Town and others where the South African Supreme Court of Appeal (per Howie P and Nugent JA) observed:

'The proper functioning of a modern State would be considerably compromised if all administrative acts could be given effect to or ignored depending upon the view the subject takes of the validity of the act in question. No doubt it is for this reason that our law has always recognised that even an unlawful administrative act is capable of producing legally valid consequences for so long as the unlawful act is not set aside.'

[58]	The fallacy in Mr Bhana’s argument (in respect of the quid pro quo argument) lies in the fact that it misses the fact that what the applicant is complaining about is not the ‘sell and purchase’ transaction itself but the acts of Mr Freyer when he misrepresented that the Lister engines can be acquired on a tender exemption, number E1/18/1-120113.25. As I have indicated above the respondents do not answer the pertinent allegations made by the applicant. I have indicated above (in paragraph [30]) that a certain Mr Opperman the Control Officer responsible for contract and tender management in the Ministry, under oath, stated that he was responsible for compiling the requests for exemption from tender procedures as contemplated in s 17(1)(c) of the Tender Board of Namibia Act, 1996. He further stated that he did compile a request in terms of s 17(1)(c) which request was approved by the Tender Board of Namibia on 27 May 2011 (as tender exemption number E1/18/1-120113.25.) but that request and the approval did not cover or include the acquisition of air or water cooled diesel engines (whether of 1500 RPM or 2500 RPM), the acquisition of the engines had to be done in terms of the term tender (tender number A18/2-4/2011). This allegation by the applicant is not gainsaid by the respondent. I therefor accept that Mr Freyer made misrepresentations in order to secure the conclusion of an agreement between the first respondent and the Ministry.

[59]	It will also be remembered that Mr Freyer in his statement under oath avers (without annexing a single supporting affidavit) that the regional officers’ of the Ministry complained that the engines procured under (tender number A18/2-4/2011) were ‘pirate engines’ and not original. These allegations were dispelled by the applicant who attached to her affidavit and the affidavit of Mr. Cloete statements under oath from some regional officers. I will briefly refer to some of the regional officers’ comments. The Chief Clerk of the Regional Store in the Oshakati and Ohangwena Regions, a certain Mr Patrick Hamulungu, after scrutiny of the documents of the first respondent in  respect of the engines delivered to the Oshikoto and Ohangwena regions stated that he did not requisition those engines, nor has he or the region requested equipment related to the water supply. Mr Johannes Hanse, the Chief Clerk at Otjiwarongo states that 10 Lister engines were delivered to them on 13 June 2012 which their office had not requested. He stated that they had already received 15 Lister engines under the annual tender (i.e. tender number A18/2-4/2011) that were still in their store when the additional 10 arrived. 

[60]	Mr Laurence Mootseng of the Omaheke Region, Gobabis disavowed knowledge of the first respondent. He also denied that the region ordered 10 Lister engines through Mr Freyer. Ms Victoria Wermann, the Chief Clerk at Rural Water Supplies for the Omaheke Region denied that she completed the requisition forms for the purchasing of the engines and the water pipes and couplings (i.e. the equipment related to water supply). She denied that the equipment related to water supply were delivered to her office. The Chief Clerk of the Regional office in Karibib, Asser Garoeb, also denied the authenticity of purchase orders of Lister engines issued to the first respondent. He stated, under oath, that on 13 March 2012, 25 Lister engines were delivered to their office by Continental as it was ordered as a result of the term tender under (tender number A18/2-4/2011) awarded to Continental. He continued and said on 12 June 2012, a private truck delivered 10 more Lister engines. He clearly stated that the supplier of the engines was unknown to him and that he did not need the engines or ordered them. 

[61]	I am therefore satisfied that Mr Freyer misrepresented to the Ministry that the regions required engines and equipment related to water supply when those engines were in fact not needed or required or ordered by the regional officers. The misrepresentations by Mr Freyer caused prejudice to the Ministry in that the Ministry paid more than N$ 8000 per engine for those engines, paid for transport in excess of N$ 693 626 in respect of the delivery of the engines and equipment related to water supply and also incurred expenses of purchasing the engines and the equipment related to the supply of water when there was no need to incur those expenses. This is fraud. I am of the further view that Mr Freyer, Hoeses and Meintjies conduct does not only amount to fraud but the conduct is in clear contravention of the State Finance Act, 1991 and the Tender Board Act, 1996.

[62]	Mr Bhana’s argument that, since the agreement entered into between the first respondent and the Ministry has not been reviewed or set aside, the agreement remains valid and lawful, is also fallacious. I say so for the following reasons. Baxter opines that the maxim omnia praesumuntur rite et solemniter esse acta simply creates a presumption that, in the absence of evidence to the contrary, all the necessary procedural formalities pertaining to an official act have been complied with. He proceeds and argues that the exact scope of this presumption, which is usually confined to technicalities, is unclear. 

[63]	In the matter of Rex v Joffe and Another, Millin, J, had occasion to consider whether the presumption was applicable in a criminal case he said the following with respect to the presumption:

'The truth is that the presumption, omnia rite esse acta, … is, in my opinion, a presumption with regard to matters rather of form than of substance and finds its typical exemplification in the doctrine that formal requisites to judicial, official or public acts or to titles to property which are good in substance will be presumed. (Hailsham, Vol. 13 sec. 705, p. 635; and compare sec. 543, p. 475). The rule is well explained in Best on Evidence, sec. 353 (twelfth ed., p. 312) where the following appears: 

“The true principle intended to be conveyed by the rule (which the author cites in the form omnia praesumuntur rite et solemniter esse acta) seems to be that there is a general disposition in Courts of justice to uphold official, judicial or other acts rather than to render them inoperative; and with this view, where there is general evidence of acts having been legally and regularly done, to dispense with proof of circumstances, strictly speaking, essential to the validity of those acts and by which they were probably accompanied in most instances, although in others the assumption rests solely on grounds of public policy”.

[64]	From the opinion of Baxter and the case of Joffe (which I quoted above) it is quite clear that the presumption of regularity simply presumes that formal procedural steps that are required to take a valid administrative act or decision have been complied with.  The presumption is rebuttable and can be rebutted in any proceedings which are pending before a court and not only by review proceedings, this much is clear from the case Rally for Democracy and Progress and others v Electoral Commission of Namibia and others where the court said that and administrative decision or act will be presumed valid except where the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset it. In the present case the respondents have not placed before court there any evidence that the procedure leading to the conclusion of the contracts between the first respondent and the Ministry was legally done, in contrast the evidence before me shows that the formal procedures were not followed. In my view the applicant has discharged the onus resting on her and she has proven that fraud was committed in the process of concluding the contracts.

[65]	In respect of the applicant’s allegation that Shilongo and Shikage committed fraud when they certified that goods were delivered when they were in fact not delivered Mr Shilongo on behalf of the respondents again, in my opinion, does not deal with the pertinent allegations but go astray and argue that there is to the knowledge of both Ms Boonzaaier and Mr Cloete no basis of alleging misrepresentation or complaining about undue advance payments because Ms Albertina-Taina Nankela the deputy director of finance in the Ministry, caused all suppliers to be informed to submit all invoices for outstanding commitments/printed orders at the accounts payable/creditors section for payment.  He says that this was to avoid roll-overs of the outstanding commitments to the new financial year if invoices are received on time.  Shilongo goes ahead and attach an invoice from Continental Spares and alleges that Continental Spares also received advance payments. Shilongo further alleges that the Ministry has never filed an affidavit wherein they are asserting that they have suffered any detriment.  

[66]	What Shilongo fails to realize is that in respect of all the invoices of the first respondent (i.e. the eleven invoices in respect of the one hundred and ten Lister engines and the fifty invoices in respect of the equipment related to water supply) Shilongo and Shikage on behalf of the first respondent certified that goods were received and were in good condition whereas Shilongo only submitted one invoice in respect of Continental Spares. The applicant in her affidavit explained that the reason why Continental was paid in advance in respect of that invoice was because there was a special arrangement with Ministry.  

[67]	Shilongo, in my view, also overlooks the fact that, Mr Nehemiah the then under Secretary for Water Affairs in the Ministry, states under oath, that he was alerted to some of these irregularities by a staff member of the Ministry, he investigated the reports, found suspicious transactions which he reported to the Ministry’s management and the management decided to report the irregularities to the Anti-Corruption Commission with a request for further investigations into the irregularities. Shilongo furthermore overlooks the fact that the request by Ms Albertina-Taina Nankela was in respect of outstanding commitments. The electronic mail by Ms Nankela to the Ministry’s management on which Mr Shilongo relies to justify the advance payments, amongst other things, reads as follows:

‘It is again this time of the year to prepare for the ending of the financial year. This mail is to remind you as usual that the printing of the Purchasing Orders would be closing on the 15th February 2012, and only critical urgent requests would be processed.   You are also being reminded to inform your suppliers that by the 15th of March 2012 all invoices for outstanding commitments/printed orders should be in at the Accounts Payable/Creditors Section for payments. This is basically to avoid rollovers of the outstanding commitments to the new financial year if invoices are received on time.

The deadlines are being set for the Accounts Payable/Creditors Section to have enough time to process the payments before the 31st March 2012…

Your co-operation would be highly appreciated in this regard!’ 
The newspaper advertisement reads as follows: 

‘The Ministry of Agriculture, Water and Forestry is requesting all suppliers and contractors (especially those working on capital projects) with outstanding accounts to submit purchase orders and invoices for payment preferable before or latest 15th March 2012.’

[68]	Both the electronic-mail and the newspaper advert refer to outstanding accounts or outstanding purchase orders. The electronic mail does not make mention of advance payments.  I am therefore satisfied that one of the reasonable inferences that can be drawn from the Shilongo and Shikage’s misrepresentations is that those misrepresentations were calculated to induce the Ministry to effect payment to the first respondent in order for the first respondent to acquire the goods. In pursuance to the misrepresentations the Ministry to its prejudice effected payment. This is fraud.

[69]	In respect of the applicant’s allegation that by transferring money from the first respondent’s account to other entities (such as C Three Trading CC, Kage Trading CC and Taleni Multi Media Trading CC) without any explanation, Shilongo on behalf of the respondents again does not address the pertinent allegation but resort to ridiculing the applicant. When the applicant demands an explanation for those transfers she is not acting contrary to the principle of legality and ‘now places itself outside the law in demanding that an explanation be given why monies were paid into accounts of other lawful entities.’ It may be true that there is no legal rule in Namibia that forbids legitimate transfer of funds to accounts of other entities, but there certainly is an obligation in terms of ss 4 to 6 of POCA, 2004 placed on parties to explain the origin and the basis of transferring the money. If a party fails to explain the origin and the basis of the transfer of the money they commit the offence of money laundering.

[70]	Mr. Breitenbach who appeared for the applicant submitted that the evidence adduced by the applicant proved on a balance of probabilities that the fraud, corruption, the contravention of the Tender Board Act, 1996 and the contravention of the State Finance Act, 1996 induced the conclusion of the agreements between the first respondent and the Ministry and as consequence the preserved property is the proceeds of unlawful activities and should therefore be forfeited to the state. I agree with Mr. Breitenbach.

[71]	In conclusion I accordingly find that the applicant succeeds with its application and that the respondents' opposition of the application should be dismissed. This leaves the question of costs.

Referral to the Minster of Agriculture Water and Forestry 

[72]	Before I deal with the question of costs I find appropriate to emphasize that this court stated that the inter-related purposes of chapter 6 of POCA, 2004 include: (a) removing incentives for crime; (b) deterring persons from using or allowing their property to be used in crime; (c) eliminating or incapacitating some of the means by which crime may be committed; and (d) advancing the ends of justice by depriving those involved in crime of the property concerned. The material placed before me in this matter makes it abundantly clear that some of the staff members in the Ministry (particularly Messrs Freyer, Meintjies and Ms Hoeses if they are still in the employment of the Ministry) have allegations to answer.  If the said staff members are not held accountable for their actions then the stated purposes of POCA, 2004 will be frustrated. 

[73]	It will be remiss of me if I do not bring this matter to the attention of the relevant authorities for their further action as deemed appropriate. I will accordingly request the registrar of this court to refer this matter to the Minister of Agriculture, Water and Forestry for his Permanent Secretary to consider whether any actions (against the staff members mentioned in this judgment) contemplated in s 26 of the Public Service Act, 1995 is required.

Costs 

[74]	I have indicated above that the respondents attributed 'malicious prosecution”, “dishonourable conduct”, “untruthful evidence under oath” “statements made for the purpose of deceiving and misleading the court with the purpose of wrongfully obtaining a forfeiture order against the respondents or NAD” and of “placing herself outside the law” against the applicant. They also accused her of conspiracy, red herring and witch hunt on two different occasions. I have found that all of these allegations are not substantiated by any evidence.

[75]	The applicant implored me to make a special order as to costs in view of the unfounded and unsupported allegations of fraud and dishonesty levelled against her. As I said I agree that the allegations against the applicant are entirely unjustified in the sense that the primary facts upon which they are based have not been placed before me. I certainly consider that such an order is warranted in the circumstances of this case as a mark of disapproval of the unsubstantiated allegations of fraud and dishonesty levelled by the respondents against the applicant. I fully agree with what Smuts J (as he then was) said in the case of The Prosecutor-General v Xinping namely that:

‘... Unsupported allegations of abuse of process and of engaging in vexatious activities directed at a repository of public functions in exercising public powers itself in my view constitute an abuse and warrant censure. They are to be discouraged by appropriate costs orders when this form of this abuse occurs. All too often I encounter a resort to unsupported and unwarranted allegations of dishonesty or moral turpitude or abuse by a deponent in affidavits when dealing with the approach taken or allegations made by a public official. These unfounded attacks upon integrity are to be discouraged and in my view warrant a special order as to costs.’
 
[76]	I accordingly make the following order:

5	The positive bank balance:

5.1	in an account held at Bank Windhoek, account number 8003042804, held in the name of the first respondent, (New Africa Dimensions CC), in the amount of N$ 1 453 083, 73;
5.2	in an account held at Bank Windhoek, account number 8002979907 in the name of Kage Trading CC (“Kage”), in the amount of N$ 498 527, 86;

5.3	in an account held at Bank Windhoek, account number 8002359254 in the name of (“ C Three Trading CC”);

5.4	in an account held at First National Bank of Namibia, account number 62234053560 in the name of Taleni Multi Media Consulting CC;
are forfeited to the State.

6	The 2010 model, Volkswagen Golf GTI motor vehicle with registration number N 130698 W and engine number CCZ049937, purchased by the first respondent for Shilongo in April 2012 for N$ 320 000 is forfeited to the State.

7	The respondents must, jointly and severally the one paying the other to be absolved, pay the applicants costs in respect of the preservation application and the forfeiture application.  The costs are on the scale as between legal practitioner and own client. 

8	The registrar is directed to provide a copy this judgment, to the Minister of Agriculture, Water and Forestry for his Permanent Secretary to consider whether any actions (against the staff members mentioned in this judgment) contemplated in s 26 of the Public Service Act, 1995 is required.

_____________
SFI UEITELE 
Judge

APPEARANCES

APPLICANT:		A Breitenbach SC (assisted by M Boonzaaier
Instructed by Prosecutor-General 

FIRST TO THIRD RESPONDENTS:	R Bhana SC (assisted by Mr P T Phatela)
Instructed by Murorua & Associates