Savoi and Others v National Director of Public Prosecutions and Another (8006/12) [2013] ZAKZPHC 19; [2013] 3 All SA 548 (KZP) (17 May 2013)

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[2013] ZAKZPHC 19
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Savoi and Others v National Director of Public Prosecutions and Another (8006/12) [2013] ZAKZPHC 19; [2013] 3 All SA 548 (KZP) (17 May 2013)

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IN
THE KWAZULU-NATAL HIGH COURT, PIETERMARTIZBURG
REPUBLIC
OF SOUTH AFRICA
Case
no: 8006/12
In
the matter between:
GASTON
SAVOI

First Applicant
INTAKA
HOLINGS (PTY) LIMITED

Second Applicant
FERNANDO
PRADERI

Third Applicant
And
THE
NATIONAL DIRECTOR OF PUBLIC
PROSECUTIONS

First Respondent
THE
MINISTER OF JUSTICE AND CONSITUTIONAL
DEVELOPMENT

Second Respondent
JUDGMENT
MADONDO
J:
Introduction
[1]
The applicants seek an order declaring the definitions of “pattern
of racketeering
activity” and “enterprise” in
section 1 and Chapter 2 of the Prevention of Organised Crime Act 21
of 1998(POCA)
unconstitutional and invalid on the grounds that :
(a)
The definition of “pattern of racketeering activity” in
section
1 is unconstitutional and void for vagueness.
(b)
In addition, the definition of “enterprise” in section 1
of
POCA is overbroad and unconstitutional.
(c)
Consequently, the following sections of POCA, which are predicated on
the definitions
of “pattern of racketeering activity” and
“enterprise”, are unconstitutional, invalid and void for
vagueness:
i.
section 2(1)(a);
ii.
section 2(1)(b);
iii.
section 2(1)(c);
iv.
section 2(1)(d);
v.
section 2(1)(e);
vi.
section 2(1)(f);
vii.
section 2(1)(g).
(d)
Chapter 2 of POCA is unconstitutional in its entirety because it
operates
retrospectively in violation of section 35(3) (1) of the
Constitution and the Rule of Law.
(e)
Section 2(2) of POCA is unconstitutional and invalid because it
violates
the fair trial rights of an accused in section 35 of the
Constitution.
Parties
[2]
The first applicant is the chairman of the various companies in the
Intaka Group of
Companies (“the Intaka Group”),
consisting of inter alia Intaka Manage (Pty) Limited and Intaka
Holdings (Pty) Limited.
[3]
The second applicant is Intaka Holdings (Pty) Limited, a company with
limited liability
duly incorporated and registered in terms of the
Company Laws of the Republic of South Africa, with its registered
address at 4
Bell Crescent, Westlake Business Park, Tokai. It was
previously known as Intaka Investments (Pty) Limited. The company is
indicted
in the KZN Criminal matter in terms of section 332 of Act 51
of 1977, and in such matter is represented by the first applicant.
[4]
The third applicant is Fernando Praderi, an adult Uruguayan male
residing at  [....]
B [....] C [....] Way, Tokai, Cape Town. The
third applicant is an employee of Intaka Group and is indicted as an
accused in the
KZN Criminal matter.
[5]
The first respondent is the National Director of Public Prosecutions
(NDPP) acting
in his official capacity and having the office at the
National Prosecuting Authority, VTMBuilding, 123 Westlake Avenue,
Corner
of Hartley Avenue and WeavingPark, Silverton, Pretoria. The
first respondent is the head of the prosecuting authority in terms of

section 179(1)(a) of the Constitution.
[6]
The second respondent is the Minister of Justice and Constitutional
Development, cited
herein in his official capacity in terms of Rule
10A of the Rules of Court and having interest in the Constitutional
impugnment
of criminalising legislation.
Factual
Background
[7]
All three applicants are charged with racketeering, fraud,
corruption, money laundering
and infringement of Public Management
Act before various courts in the country including KwaZulu-Natal. In
KwaZulu-Natal High Court,
54 charges have been preferred against the
applicants and other co-accused.
[8]
The charges relate to the provisions of Water Purification Plant
and/or Gas Generating
systems and/or Dialysis Machines by the second
applicant to various provincial departments in KwaZulu-Natal and the
Northern Cape
Province as well as to two municipalities in the
Northern Cape Province. However, the application for a declaratory
order in respect
of the unconstitutionality, that is, if it is
ultimately confirmed by the Constitutional Court under section 172(2)
of the Constitution
would also be binding on all other courts.
[9]
The state alleges that senior officials within the provincial
government of KwaZulu-Natal
together with the first applicant and the
third applicant engaged with one another so as to secure contracts
for the second applicant
in respect of the provisions of water
purification and oxygen plants for use by the provincial
administration in municipalities
(in respect of the water
purification plants) and in Provincial Hospitals (in respect of both
water purification plants and oxygen
plants).
[10]
It is alleged that the first and second applicants conspired in
different ways with highly placed
officials within provincial
administration, so to secure contracts by unlawful means for the
provision of water purification and
oxygen plants. The corruption of
public officials to secure valuable contracts at the instance of
persons who do so for their own
enrichment is allegedly part of a
wide spread pattern of corrupt activity that threatens vital
interests of the State and public
good that it serves. Unlawful
procurement and the corruption of the public officials give rise to
wasteful public expenditure,
the misallocation of scarce goods and
the compromising of government’s ability to serve the public
good. Water purification
plants are procured to provide essential
services to the very poorest in the Province. So too, water
purification plants and oxygen
plants are vital equipment for
hospitals that serve the most needy in the society. Public officials
and profiteering individuals
such as the applicants who came together
to compromise the procurement of vital goods for their
self-enrichment at the cost of
public good do grave harm.
[11]
However, on 14 September 2012 the first respondent decided to
withdraw the original indictments
against some of the accused and
prepared new indictments in respect of the applicants and their
co-accused. There are substantive
differences between the original
and new indictments. The new indictment refers only to 11 accused as
opposed to 23 accused charged
under the original indictment, and the
new indictment contains on only 17 counts as opposed to 54 counts in
the original indictment.
[12]
According to the respondents the dropping of charges against some of
the accused came as a result
of the prosecutorial assessment of the
evidence available to it. This was a simple exercise of the
prosecutorial authority and
does not, in anyway, affect the
legislation under which they are charged. The new indictment simply
flows from the first respondent’s
assessment of the strength of
the evidence currently available to the prosecution against each and
every accused. However, nothing
turns on the withdrawal of the
original indictment.
Applicants`standing
to challenge constitutional validity of impugned provisions of POCA
[13]
It is the contention of the respondents that the challenge by the
applicants is abstract and
premature in that it does not say that the
provisions of POCA are vague and overbroad when seen in the light of
the specific allegations
made against the applicants in the
indictments. On this ground alone the respondents submit that this
application should be dismissed.
[14]
The applicants admit that it is not the manner the law has been
applied which is being challenged
but rather the alleged vagueness
and over breadth of the impugned provisions of POCA which allow for
constitutional and arbitrary
application. They allege that the
unconstitutional vagueness of POCA serves as an arbitrary penalty
enhancer and prosecutorial
bargaining tool. In the argument of the
applicants the arbitrary nature of POCA is susceptible to
manipulation. However, on the
whole, it is common case between the
parties that the challenges by the applicants are not predicated on
the application of POCA
or the conduct of the respondents.
[15]
The respondents submit that this Court should not entertain the
applicants` challenges because
they are premature, abstract in nature
and without merit. In the submission of the respondents the
applicants have failed to link
the challenges they bring to the
indictment serving against them, and nor has any effort been made to
adduce evidence under authority
of section 2(2) of POCA. The
applicants’ challenges are pre-emptive and in advance of the
leading of any evidence in the
criminal trial. In support of their
submission the applicants rely on the case of
Director of Public
Prosecutions, Transvaal V Minister of Justice and Constitutional
Development 2009(2) SA 130(CC)
where Ngcobo and Skweyiya JJ
affirmed the importance of resolving constitutional issues in
circumstances where the issue is a live
one and it requires
resolution on the facts of the case.
[16]
In
United States v National Dairy Products Corp,
[1963] USSC 31
;
372 U.S 29
, 33
(1963
) the court discouraged evaluating the constitutionality and
validity of the statute in abstract and held that:
“
The delicate power
of pronouncing an Act of Congress unconstitutional is not to be
exercised with reference to hypothetical cases….
[A] limiting
construction could be given to the statute by the court responsible
for its construction if an application of doubtful
constitutionality
were… presented, we might add that application of this rule
frees the court not only from unnecessary
pronouncement on
constitutional issues, but also from premature interpretations of
statues in areas where their constitutional
application might be
cloudy.”
In
Robinson v United States, 3 24U.S 282(1945),
it was held that
in determining the constitutionality and validity of a particular
statute, a statute must of necessity be examined
in the light of the
conduct complained of.
[17]
In the argument of the applicants they (the applicants) are charged
in the pending criminal trial
with offences involving contraventions
of the impugned provisions of POCA, and such contraventions are
dependent on the impugned
definitions of the Act. They are faced with
charges which can give rise to those procedures being invoked against
them. They are
at risk of those procedures being employed against
them; and if convicted they may face consequences including life
imprisonment
of a fine of R1 billion. In the premises, the applicants
submit that their rights are therefore threatened.
[18]
In Mr Marcus’ submission the applicants are in jeopardy of
being forced to face a trial
based on charges which cannot survive
constitutional scrutiny. The outcome of the application will have a
practical effect on the
proceedings of the criminal trial against the
applicants set down in May 2013. Under
section 85
of the
Criminal
Procedure Act, 51 of 1977
an accused may, before pleading to the
charge under
section 106
object to the charge on the ground –
“
(a)
That the charge does not comply with the provisions of the Act
relating to the essentials of a charge;
(b)
… ;
(c)
That the charge does not disclose an offence;
(d)
… ;
(e)
….”
[19]
In theargument of MrMarcus the applicants are entitled to challenge
the constitutionality of
the sections on which prosecution is based.
The applicants, therefore, have a real and not a hypothetical
interest in the decision.
In support of his argument Mr Marcus relies
on
Ferreira v Levin 1996(1) SA 984(CC) at p1006 para 26, where
the following was said:
“…
. The
Constitutional Court, or any other competent court for that matter,
ought not to restrict its enquiry to the position of one
of the
parties to a dispute in order to determine the validity of the law.
The consequence of such a (subjective) approach would
be to recognise
that validity of a statute in respect of one litigant, only to deny
it to another. Besides resulting in a denial
of equal protection of
the law, considerations of legal certainty, being a central
consideration in a constitutional state, militate
against the
adoption of the subjective approach.”
At
para 97, the court held that the issue of whether a law is invalid or
not does not depend on whether, at the moment when the
issue is being
considered a particular person’s rights are threatened or
infringed by offending law or not.
[20]
In
DPP v Minister of Justice and Constitutional Development
2009(2) SACR 130(CC) at 204 para 225,
it was held that in a
constitutional order it is appropriate for litigants to launch facial
challenges to the constitutionality
of legislation, and for courts to
hear such challenges where it is in the interest of Justice.
[21]
In
TecklaNadjilaLameck and Another v The President of the Republic
of Namibia and others
[2012] NAHC 31
, it was held that broad
approach to standing should be adopted in constitutional challenges.
The applicants are currently charged
with various criminal offences
which include contraventions of impugned provisions of POCA. In my
view, the applicants are entitled
to challenge the constitutional
validity of the provisions of POCA under which they are currently
charged. The said provisions
are pertinent to the impending criminal
trial proceedings against them. Accordingly, it follows that the
applicants have a cause
for concern or fear that their fundamental
rights to fair trial may be infringed or threatened, presumably, by
the unlawful conduct
of the first respondent. They are, therefore,
entitled to claim enforcement and protection of their fundamental
rights. See
Uffindell t/a Aloe Hunting Safaris v Government of
Namibia and Others (P) A 141- 2000 [2009] NAMC 51 (20 April 2009) p19
para 19.
Definitional
Challenge to “Pattern of Racketeering Activity” and
“Enterprise”
[22]
The applicants challenge the definitions of the concepts of “pattern
of racketeering activity”
and “enterprise” as
defined in section 1 of POCA on the basis, mainly, that the
definition of “pattern of racketeering
activity “is vague
and therefore void for vagueness and, that the definition of
“enterprise” is overbroad, and
as a consequence both
definitions are in breach of the principle of legality and hence
unconstitutional. . In support of their
challenge the applicants have
referred me to
H.J Inc. v North-western Bell Tel Co
49 U.S 229
(1989) where
Justice Scalia noted in his concurrence that courts
have been unable to define “pattern” with any meaningful
degree
of clarity, leading to speculate that RICO would be vulnerable
to a vagueness challenge.
See also Cianci v Superior Court 710P.2d
375, 376-77(Cal. 1985).
It is alsothesubmission of the applicants
that the provisions of POCA relating to racketeering are similarly
vague and unconstitutional,
and in violation of the rule of law, in
that they depend on a definition of “pattern of racketeering
activity” which
is impermissibly vague
[23]
The definitional challenge by the applicants involves two
considerations: first, whether the
definition of “pattern of
racketeering activity” is vague and void for vagueness, and
second, whether the definitions
of the concepts of “pattern of
racketeering activity “and “enterprise’’ are
overbroad. In terms of
section 1 of POCA a “pattern of
racketeering activity’’:
“
means the planned,
on-going, continuous or repeated participation or involvement in any
offence referred to in Schedule 1 and includes
at least two offences
referred to in Schedule 1, of which one of the offences occurred
after the commencement of this Act and the
last offence occurred
within 10 years (excluding any period of imprisonment) after the
commission of such prior offence referred
to in Schedule 1.”
The
definition of a “pattern of racketeering activity” is one
of the most important concepts under POCA because it defines
a key
element of each substantive racketeering offence.
[24]
However, statutory definitions in the POCA andthe corresponding
American legislation Racketeer
Corrupt Organizations Act (RICO) of
1970 are not precisely the same.
Section
1961(5) ofRICO provides that a pattern of racketeering activity:
“
requires at least
two acts of racketeering activity, one of which occurred after the
effective date of this Chapter [October 15,
1970] and the last of
which occurred within ten years (excluding any period of
imprisonment) after the commission of a prior act
of racketeering”
[25]
Section 1 of POCA provides that “Enterprise”:
“’
includes
any individual, partnership, corporation, association, or other
juristic person or legal entity, and any union or group
of
individuals associated in fact, although not a juristic person or
legal entity.”
Section 1961(4) of
RICOuses the same language as POCA for the definition of
“enterprise”.
[26]
The Shorter Oxford English Dictionary (Volume1) at P 1046 (1972)
defines the word “include”
to mean:
“
contain,
comprise, embrace: a. as a member of an aggregate, or a constituent
part of a whole, b.as a subordinate element, corollary,
or secondary
feature.”
Pursuant
to United States case law in definitional provisions of statutes and
other writings, the word “include” is
frequently, if not
generally, used as a word of extension or enlargement rather than as
one of limitation or enumeration. See
American Surety Co. v
Marotta,
[1933] USSC 2
;
287 US 513
, 517 (1983); United States v New York Tel.Co.
[1977] USSC 194
;
434
U.S. 159
, 69 (1977).
When POCA is read as whole, it is apparent
that the verb “includes” should be interpreted in that
manner and the list
that follows should be treated as illustrative
rather than exclusive.
[27]
The “enterprise” is not the “pattern of
racketeering activity”, but an
entity separate and apart from
the pattern of activity in which it engages. An enterprise is chiefly
distinguished from the pattern
of racketeering activity by the fact
that it possesses some goal or purpose more pervasive and more
enduring than usual gratification
that can accrue from the successful
completion of each particular criminal act.
[28]
In the contention of the applicants a “pattern of racketeering
activity” as defined
in section 1 of POCA is unintelligible,
vague and meaningless, it is unclear at what point it can be said
that there is a “pattern
of racketeering and the definition is
vague; it is unclear who may be charged with racketeering under POCA,
and it is not objectively
ascertainable at what point a racketeering
offence is committed. In support of their contention the applicants
rely on the judgment
of Justice Scalia in the case of
H J Inc. v
North Western Bell Telephone Co.
[1989] USSC 141
;
492 U.S 229
where the learned
Judge indicated strongly in his concurring judgment that the
definition of “pattern of racketeering activity”
in RICO
was illusive and uninformative. He had also similar difficulties with
the element of “continuity” the state
must prove under
the “pattern of racketeering activity” definition.
VOID
FOR VAGUENESS
[29]
Void for vagueness simply means that criminal responsibility should
not attach where one could
not reasonably understand that his
contemplated conduct is proscribed.
See United States v Harris,
[1954] USSC 62
;
347 U.S 612
, 617 (1954)
. The doctrine of vagueness is founded on
the rule of law, particularly on the principles of fair notice to
citizens and limitation
of enforcement discretion.
SeeChavunduka v
Minister of Home Affairs, Zimbabwe 2000(4) SA 1(ZSC) at 10C-D.
The
void- for- vagueness doctrine reflects the principle that a statute
which either forbids or requires the doing of an act in
terms so
vague that persons of common intelligence must necessarily guess at
its meaning and differ as to its application violates
the first
essential of due process of law.
[30]
In
Connally v General Construction Co.
[1926] USSC 3
;
269 U.S 385
,391 (1926
)
the US Supreme Court held:
“
The terms of a
penal statute creating new offence must be sufficiently explicit to
inform those who are subject to it what conduct
on their part will
render them liable to its penalties is a well recognised requirement
consonant alike with ordinary notions of
fairplay and the settled
rules of law and a statute which either forbids or requires the doing
of an act in terms so vague that
men of common intelligence must
necessarily guess at its meaning and differ as to its application
violates the first essential
of due process.”
It
is a basic principle of due process that an enactment is void for
vagueness if its prohibitions are not clearly defined.
See
Grayned case
[1972] USSC 158
;
408 U.S 104(1972)
at 108-109.
[31]
The elementary considerations of fairness dictate that individuals
should have an opportunity
to know what the law is and to conform
their conduct accordingly. See
Landgraf v U.S I film Products et
al
[1994] USSC 10
;
511 US 244
(1994) at 265.
Legislation must be drafted in such a
way that the readers know what the law expects of them. Legal
certainty and comprehensibility
are not mutually exclusive. The law
cannot fulfil its role to regulate and to order if it cannot be
understood. The law must, therefore,
be sufficiently clear,
accessible and precise that those who are affected by it can
ascertain the extent of their rights and obligations.
See Dawood v
Minister of Home Affairs
[2000] ZACC 8
;
2000 (3) SA 936
(CC) para 47.
[32]
In
President of the Republic of South Africa v Hugo
1997 (4)
SA 1
(CC) at para 12
Mokgoro J said:
“…
. The need
for accessibility, precision and general application flow from the
concept of the rules of law. A person should be able
to know of the
law, and be able to conform his or her conduct of the law. Further,
laws should apply generally, rather than targeting
specific
individuals.”
Similarly,
it is difficult or even impossible for a person to know in advance
precisely what kind of conduct is punishable if the
definitions of
crimes are vague or their content is problematic. There is a
connection between the principle of legality and a
democratic form of
government.
[33]
The concepts; “ongoing, continuous or repeated “simply
capture different ways in
which participation is not once off
criminality with respect to the predicate offences. Ongoing acts must
constitute ongoing unlawful
activities whose scope and persistence
pose a special threat to social well-being.
See International Data
Bank, Ltd Zepkin,
812 F2d 155
(4
th
Cir.1987).
[34]
Continuity, in turn, refers either to a closed period of repeated
conduct, or to past conduct
that by its nature projects into the
future with a threat of repetition. In order to satisfy the element
of continuity it must
be shown that the past act constitutes a threat
of continuing racketeering activity. The threat of continuity is
sufficiently established
where the predicates can be attributed to an
accused operating as part of a long-term association that exists for
criminal purposes.
[35]
The word “repeated “means a repetition of a particular
conduct, and for present conduct
to be said it is repeated it must
bear some resemblance to the past conduct. In the US it has been held
“a criminal conduct
forms a pattern if it embraces criminal
acts that have the same or similar purposes, results, participants,
victims or methods
or commission or otherwise are interrelated by
distinguishing characteristics, and are not isolated events.”
See H.J Inc. V Northwestern Bell Telephone Co.; United States v
Stofsky
[1974] USSC 59
;
415 US 566
(1974).
However, to constitute a pattern, it is
not necessary that the alleged racketeering acts be similar or
related directly to each
other, rather a pattern may consist of
diversified racketeering acts provided that they are related to the
alleged enterprise.
See United States v Eufrosio,
935 F, 3d 533
(3dCir. 1991); H.J. Inc. 492U.S 247
.
[36]
In describing a “pattern” the US Supreme Court s In H.J
Inc.,
492 U.S. 238-39
stated the following:
“
A pattern is an
“arrangement” or order of things or activity …. It
is not the number of predicates but the relationship
that they bear
to each other or to some external organizing principle that renders
them “ordered “or arranged …”
[37]
In the argument of the applicants the principle of legality is one of
the constitutional controls
through which the exercise of public
power is contained. Therefore, in their submission the statutory text
must be clear to potential
wrongdoers what conduct is proscribed by
the specific legislation as well as to enforcement agencies and
officials. In essence,
it is the contention of the applicants that
the principle of legality demands that when legislation is construed,
using the usual
canons of construction with no bias towards
benevolence, it must indicate with reasonable certainty to those who
are bound by it
which act is enjoined or prohibited. If it does, it
is constitutionally acceptable; if it does not, it is
constitutionally offensive.
In their submission the impugned
provisions of POCA are in breach of the principle of legality by
reason of their vagueness.
[38]
Statutes are not automatically invalidated as vague simply because
difficulty is found in determining
whether certain marginal offences
fall within their language. S
ee Jordan v De George, U.S 223, 231
(1951) and United States v Petrillo, 332 U.S.I.
331 U.S 7
(1997).
The vagueness doctrine enquiry in US law is twofold: Firstly, the
court looks at the challenged law in order to determine whether

adequate notice of the prohibited conduct is provided. Secondly, the
court analyses the law to see if creates a potential for arbitrary

law enforcement. If the formulation of a crime is unclear or vague,
it is difficult for the subject to understand exactly what
is
expected of him. According to
CR Snyman: Criminal Law 4
th
Edition atP 46
an excessively widely formulated criminal
provision violates the principle of legality because such provision
can serve as a smokescreen
behind which it wishes to proscribe but,
which, for tactical reasons, it does not wish to name expressly.
[39]
Living under a rule of law entails various suppositions , one of
which is that “all persons
are entitled to be informed as to
what the state commands or forbids”
See Papachuston v City
of Jacksonville
[1972] USSC 42
;
405 US 156
(1972) ; Lanzetta v New Jersey
[1939] USSC 61
;
306 US 451
,
453 (1939).
The statute is not impermissibly vague if the
citizens who desire to obey it will have no difficulty in
understanding it.
See Colten v Kentucky
407 U.S 110-111
(1972). In
United States v Stofsky 415 US,
the supreme Courtin deciding
whether
18 USC 1962(C)
gave an accused adequate warning that the
commission of more than one such criminal act under circumstances
constituted an additional
separate crime for which there was separate
penalty, it held that if the elements of the predicate offences were
well-defined and
established it would be futile for a person to argue
that he had no warning or knowledge that his commission of such acts
would
violate the law.
[40]
A “pattern of racketeering activity” requires at least
two acts of racketeering activity
(any of the offences referred to in
Schedule 1), of which one occurred after the effective date of POCA
and the last offence occurred
within ten (10) years (excluding any
period of imprisonment) after the commission of a prior such offence
referred to in Schedule
1. The statutory definition of a “pattern”
has thereby set forth two technical requirements regarding the time
when
the predicate acts were committed. The last act must have been
committed within ten years of prior act, excluding any period of

imprisonment. This means that the last racketeering act must have
occurred within ten years after commission of a prior racketeering

act and that is essential to establish the requisite two acts. See
United States v Pungitore ,
910 F,2d 1084
,1129 and n 63 (3d Cir.
1990)
[41]
POCA is of general application in that everyone who has engaged in
the prohibited act involving
one of the offences referred to in
Schedule 1 of the Act before the effective date of the legislation is
on prior notice that only
one more act may trigger an offence of
racketeering, which carries a severe penalty. Therefore, an accused
is given a fair warning
that the subsequent act will combine with
prior racketeering activity act to produce the racketeering pattern
activity against
which the definition section is directed. The second
act creates a separate offence based on the commission of predicate
act. In
the premises, upon proper construction the definition of
“pattern of racketeering activity” in section 1 of POCA
is
not vague, but clear and precise, instead. It adequately warns an
accused that an on-going and continuous or repeated commission
of
more than one criminal act listed in Schedule 1 will expose him to
conviction on a charge of a more serious offence of racketeering.
Overbreadth
[42]
Over breadth refers to a principle that “governmental purpose
to control or prevent activities
constitutionally subject to State
regulation may not be achieved by means which sweep unnecessarily
broadly and thereby invade
the area of constitutionally protected
freedom”. Over breadth requires that the means used to achieve
a State object is too
sweeping to attain the object and thereby
infringe some protected right. See
ReitzerPharmaticals (Pty) Ltd v
Registrar of Medicines 1998(4) SA 660(T) at 670; NAACP v Alabama Ex
rel. Flowers U.S 307- 08(1964)
[43]
The enquiry into the issue whether the definitions of the concepts of
“pattern of racketeering
activity “and “enterprise’’
are overbroad is twofold: first, is to ascertain the aim and object
of POCA,
and second, to determine whether in their application the
impugned provisions infringe the constitutionally protected
fundamental
rights and values.
(a)
Object of POCA
[44]
In terms of the purpose – orientated approach, the purpose of
the legislature is the prevailing
factor in interpretation. The
context of the legislature as well as social and political policy
directions is taken into account
to establish the purpose of the
legislation. The object of POCA is stated in it as follows:
“
To introduce
measures to combat organised crime, money laundering and criminal
gang activities; to provide for the prohibition of
money laundering
and for an obligation to report certain information, to criminalise
certain activities associated with gangs;
to provide for the recovery
of the proceeds of unlawful activity; for the civil forfeiture of
criminal property that has been used
to commit an offence; property
that is the proceeds of unlawful activity or property that is owned
or controlled by, or on behalf
of, an entity involved in terrorist
and related activities; to provide for the establishment of a
Criminal assets recovery account;
to amend the
Drugs and Drug
Trafficking Act, 1992
, to amend the International Co-Operation in
Criminal Matters Act, 1996; to repeal the
Proceeds of Crime Act,
1996
; to incorporate the provisions contained in the
Proceeds of
Crime Act, 1996
; and to provide for matters connected therewith.”
[45]
In
Heydon’s case [1584] EWHC EXCH J 36 76 ER637
, it was
resolved that for the sure and true interpretation of all statutes in
general (be they penal or beneficial, restrictive
or enlarging of the
common law) three things are to be discerned and considered:
(i)
what was the common law before the making of the Act?
(ii)
what was the mischief and defect for which the common law did not
provide?;
(iii)
what remedy the parliament had resolved and appointed to cure the
disease of the common wealth?
[46]
Prior to the enactment of POCA the government considered the common
law of conspiracy and common
purpose to be inadequate to deal with
the sophisticated methods used by modern crime syndicates, organised
crime in particular,
organised crime has a number of features that
make successful prosecutions difficult at common law. Those who
orchestrate organised
crime as the heads of crime syndicates use
sophisticated methods to hide their involvement in the criminal
conduct of subordinates
and take elaborate measures to disguise the
proceeds derived from their crime. It is the nature of the organised
crime that those
who are responsible for planning and orchestrating
criminal activities are not the persons who carry out the activities.
One of
the intractable features of organised crime is that it
utilises modern business organization methods so to make it very
difficult
to trace those who are in leadership positions and
ultimately benefit from the greater part of the spoils of crime.
[47]
Organised crime has developed complex organizational structures, with
many layers and structures
that conceal ultimate control and which
makes it difficult to trace those who benefit from the proceeds of
crime. Organised crime
also utilizes seemingly lawful activities and
enterprises both to carry out criminal activity and also to launder
the proceeds
of crime. The United States of America had also a
similar experience and the legislative response to the scourge of
organised crime
was the enactment of (RICO) in 1970. The Act is aimed
at preventing racketeers from investing or reinvesting in wholly
illegal
enterprises and from acquiring through a pattern of
racketeering activity in wholly illegitimate enterprises such as
illegal gambling
business or loan sharking.
[48]
The statement of findings that prefaced the Organised Crime Control
Act of 1970 (OCCA) in US
reveals that:
“
The Congress finds
that (1) organised crime in the United states is highly sophisticated
diversified, and widespread activity that
annually drains billions of
dollars from America’s economy by unlawful conduct and illegal
use of force, fraud, and corruption;
(2)organized crime derives a
major portion of its power through money obtained from such illegal
endeavours as syndicated gambling,
loan sharking, the theft and
fencing of property, the importation and distribution of narcotics
and other dangerous drugs and other
forms of social exploitation; (3)
thus money and power are increasingly used to infiltrate and corrupt
legitimate business and
labour unions and to subvert and corrupt our
democratic processes; (4)organised crime activities in the United
states weaken the
stability of the nation’s economic system,
harm innocent investors and competing organisations, interfere with
free competition
seriously burden interstate and foreign commerce,
threaten the domestic security, and undermine the general welfare of
the nation
and its citizens, and (5) organised crime continues …
to grow because of defects in the evidence gathering process of the

law inhibiting the development of the illegally admissible evidence
necessary to bring criminal and other sanctions or remedies
to bear
on the unlawful activities of those engaged in organised crime and
because the sanctions and remedies available to the
Government are
unnecessarily limited in scope and impact.”
[49]
In the light of the above findings, it was the declared purpose of
the Congress to seek the eradication
of organised crime in the United
States by strengthening the legal tools in the evidence gathering
process, by establishing new
penal prohibitions, and by providing
enhanced sanctions and new remedies to deal with the unlawful
activities of those engaged
in organised crime.
See Turkette case,
p923.
It is the contention of the respondents in the present case
that without the legislation that is conceptually adapted to these
sophisticated structures, the undertaking of criminal prosecutions
that have a prospect of reaching those who control organised
crime
will remain illusory.
[50]
It is evident from the above that common law remedies could not
resolve the increased problems
of organised crime and POCA seeks to
provide enhanced sanctions and drastic remedies to assist the State
to combat intolerable
situation of a large increase in organised
crime. The main objective of the POCA is to prevent criminals from
benefiting from the
proceeds of crime and to discourage the use of
property for criminal purposes. This also appears more fully in the
affidavit of
Ebrahim Ahmed Kadwa, a Brigadier in the South African
Police Service attached to the Organised Crime Investigations
Component of
the Directorate of Priority Crime Investigation, that
the world has seen the proliferation of organised crime. Organised
Crime
groups are constantly expanding and diversifying their
operations into new markets. It has internationally been identified
as a
security threat. According to Kadwa’s investigations, even
in our country, organised crime groups are described as being dynamic

and adapting to the circumstances in order to maximise their profits
and minimise their risks. Managers of criminal enterprises
normally
give orders and directions in the commission of criminal activities.
However, they are not actually involved in the commission
of crime.
Corruption is the strongest weapon in the hands of organised crime
groups in the furtherance of their criminal ventures.
It is
essentially about corrupting the powerful and terrorising the
innocent. It is through the complicity of corrupt officials
the
organised crime groups are able to successfully smuggle contraband,
secure government contracts, and they intimidate, threaten
and
assassinate witnesses.
(b)
Interpretation of POCA legislation
[51]
The concept of “racketeering” as a tool to fight crime
originated from United States in
1970 with the enactment of RICO. The
concept was then adopted by South Africa in 1998 with the enactment
of POCA. The Supreme Court
of Appeal in
De Vries and another v S
[2012] 1 All SA 13(SCA)
at 42-3
acknowledged that POCA was
modelled on RICO and held that as a result of similarities between
the two statutes the jurisprudence
of the United States is of
“considerable assistance” in developing case law in POCA
matters.
[52]
The fundamental principle in statutory interpretation is that the
purpose of the legislation
must be determined in the light of the
spirit, purpose and objects of the Bill of Rights in the
Constitution. Where the law is
clear and unambiguous, and in keeping
with the spirit of the Bill of Rights, the court must give effect to
its meaning.See
section 39(2) of the Constitution of the Republic
of South Africa Act, 108 of 1996 (the Constitution),
which
provides:
“
When interpreting
any legislation and when developing the common law or customary law,
every court, tribunal or forum must promote
the spirit, purport and
objects of the Bill of Rights.”
[53]
The most important principle is to determine and apply the purpose of
the legislation in the
light of the Bill of Rights. The ordinary
meaning must be attached to the words.
See Union Government v Meck
1917 AD 419.
In Volschenk v Volschenk 1946 TPD486
, it was decided
that the most important rule of interpretation was to give words
their ordinary, literal meaning
. In Association of Amusement and
Novelty Machine Operators v Minister of Justice 1980(2) SA 636(A)
the Court held that this means colloquial speech. A meaning must be
assigned to every word. See
Keyter v Minister of Agriculture
1908
NLR 522.
[54]
In
S v Lawrence; S v Negal; S v Solberg 1997(4) SA 1176(CC) at
p1198 para 52
Chaskalson P said:
“
The purpose of
particular legislative provisions has ordinarily to be established
from their context, which would include the language
of the statute
and its background…”
The
intention of the legislation must essentially be gathered from the
language used. In
Greenshields v Willemburg (1908) 25SC, 568,
it was held that a court should not extend the meaning of the
legislation beyond that of the words used. The court should give

effect, to what the legislature has said, and not try to cover
eventualities that the legislature has, for whatever reason omitted

to cover. See also
R v Kirk
1914 CPD 564
at 567
.
[55]
In
Dadoo Ltd and others v Krugersdorp Municipal Council
1920 AD
530
, the Appellant Division acknowledged that there was a
casus
omissus
(an omission) but refused to add the omission, to give
effect to the law makers obvious intentions, more recently, in
Stafford v Special Investigating Unit
[1998] 4 All SA 543(E)
553b-c,
the court held:
“
Acourt cannot act
upon mere conjecture and speculate as to whether or not the
legislature might have overlooked something, it cannot
supplement a
statute by providing what it surmises the legislature omitted. The
court therefore must give effect to what the act
says and not what it
thinks it ought to have said…”
[56]
The court has to measure the legislation against the provisions of
the constitution and decide
whether or not the legislation is valid.
The spirit and purport of the fundamental rights have to be taken
into account during
the interpretation of statutes. The difference
between constitutional and “ordinary” interpretation was
explained by
Froneman J in
Matiso v Commanding Officer, Port
Elizabeth Prison 1994(4) SA 592(SE) at 597 G-H
as follows:
“
The interpretation
of the constitution will be directed at ascertaining the foundational
values inherent in the constitution, whilst
the interpretation of the
particular legislation will be directed at ascertaining whether the
legislation is capable of an interpretation
which conforms to the
fundamental values or principles of the constitution.”
[57]
In
Nortjie v Attorney-General of the Cape 1995(2) SA 460(C) 471
B-D
the following was said about the supremacy of the
Constitution:
“
A supreme
constitution is not a finely tuned statute designed ad hoc to deal
with one particular subject, or to amend or repeal
another
specifically named statute or a specifically identified rule of the
common law. It is
sui
generis
.
It provides, in the main, a set of societal values to which other
statutes and rules of the common law must conform and with which

government, and its agencies must comply, in carrying out other
functions. It is short on specifics and long on generalisation.”
[58]
In
Zondi v MEC for Traditional and Local Government Affairs and
others 2005(3) SA 589 (CC) at 619 para 90
Ngcobo J said:
“…
. The
purpose and effect of a statute are relevant in determining its
constitutionality ….If a statute has a purpose that
violates
the constitution; it must be held to be invalid regardless of its
actual effects. The effect of legislation is relevant
to show that
although the statute is facially neutral its effect is
unconstitutional. This will be the case where, for example,
the
legislation has a discriminatory impact on a particular racial group.
In
interpreting the legislation in question the principles of
international human rights law and foreign law must be applied, but

with due regard for the South African Context.
See S v Zuma
1995(2) SA 642(CC) 651J-I, Nortje v Attorney-General, Cape 471B-C; S
v Mankwenyane 19956(3) SA 391(CC) 406E-407C; Du
Plessis v De Clerk
1996(5) DCLR 658(CC) para 123.
[59]
The applicants contend that the definition of “pattern of
racketeering” includes
offences which could not ever have been
intended to be “racketeering” and imposes severe
punishments thereon. Mr Kemp
also for the applicants has argued that
under racketeering charges the accused have to submit to an ordeal by
lengthy trial where
their involvement may only be peripheral when
they could, but for the racketeering provisions, have resorted to
misjoinder proceedings
as of right. Multiplicity of charges may
lengthen the trial with prejudice to the accused.
[60]
It is the very nature of organised crime that those who are
responsible for planning and orchestrating
criminal activities are
not persons who carry out the activities and it is very difficult to
trace those who are in leadership
positions and ultimately benefit
from the greater part of the spoils of crime. It is also a feature of
organised crime that its
organizational reach is wide and tentacles
of the organization stretch into many areas of commercial and
governmental activity.
The concept of “pattern of racketeering
activity” seeks to prohibit connections between conducts that
might otherwise
seem disparate but are in fact connected through the
orchestrated activities of an organised criminal organization.
[61]
It is undeniable fact that prior to the promulgation of POCA the
principles of common law could
not deal effectively with organised
crime in the form of corruption, money laundering and racketeering
due to the fact that common
law was limited in scope and impact and
consequently difficulties in detection and successful prosecution of
organised crime were
encountered. S
ee National Director of Public
Prosecutions v Van Staden and others 2007(1)
32 SACR 338(SCA)
at para
7; Heyden’s case, supra
[62]
In the submission of the applicants the effective scope of the term
“racketeering activity”
is broad in that it includes not
only the actions of mobsters but also the conduct of “legitimate”
businessmen who
engage in “garden variety” commercial
fraud. A pattern of racketeering activity” is intended to
encompass the
activities of organised crime families associated with
organised crime.
See United States v Pungitore
910 F 2d 1084
, 1104
(3
rd
Cir1990)
.The concept of a pattern
of racketeering activity is thus tailored to meet the way in which
the organised crime manifests itself.
The purpose is to protect the
public by preventing, restricting or disrupting involvement by the
person concerned. Should the statute
simply target only those who
have committed specific offences the State would fail to reach such
activity which is ultimately the
outcome of those who control large
criminal syndicates that work in different areas of economic
activity, utilizing different agents
and organizations and thereby
commit various offences, overtime, in complex combinations.
[63]
However, POCA should be limited to organised crime. In
National
Director of Public Prosecutions v Van Staden and others 2007(1) SACR
338 (SCA) para7,
Nugent J said the following:
“
I have already
observed that organised crime is but one of the targets of the Act ….
Incursions upon conventional liberties
that are justified by the
particular difficulties encountered in the detection and successful
prosecution of organised crime are
not similarly justified in cases
of ordinary crime that do not present those difficulties …”
[64]
It is the contention of the applicants that Schedule 1 of POCA
contains a laundry list of crimes
which may constitute the predicate
acts on which a racketeering charge is based, as follows:
1.
murder;
2
rape;
3.
kidnapping;
4.
arson;
5.
public violence;
6.
robbery;
7.
assault with intent to do grievous bodily harm;
8.
indecent assault;
9
the statutory offence of –
(a) unlawful carnal
intercourse with a girl under a specified age;
(b) committing an immoral
or indecent act with a girl or a boy under a specified age;
(c) soliciting or
enticing such girl or boy to the commission of carnal or indecent
act;
10.    any
offence under any legislation dealing with gambling; gaming or
lotteries;
11.
contravention of section 20(1) of the Sexual Offences Act, 1957 (Act
23of 1957);
12.    any
offence contemplated in Part 1 to 4 or section 17, 18, 20 or 21 of
chapter 2 of the
Prevention and Combating of Corrupt Activities Act,
2004
;
13.
extortion;
14.
child stealing;
15.
breaking or entering any premises whether under the common law or a
statutory provision, with intent to commit
an offence;
16.
malicious injury to property;
17.
theft, whether under the common law or a statutory provision,;
18.    any
offence under section 36 or 37 of the General Law Amendment Act 1955
(Act 62 of 1955);
19
fraud;
20.
forgery or uttering a forged document knowing it to have been forged;
21.
offences relating to the coinage;
22.    any
offence referred to in section 13 of the Drugs and Drug Trafficking
Act. 1992 (Act 140 of 1992);
23.    any
offence relating to the dealing in or smuggling of ammunition,
firearms; explosives or armament and the
unlawful possession of such
firearms, explosives or armament;
24.    any
offence in contravention of section 36 of the Arms and Ammunition
Act, 1969(Act 75 of 1969);
25.
dealing in, being in possession of or conveying endangered, scarce
and protected game or plants or parts or
remains thereof in
contravention of a statutory or provincial ordinance;
26.    any
offence relating to exchange control;
27.    any
offence under any law relating to the illicit dealing in or
possession of precious metals or precious
stones;
28.    any
offence contemplated in section 1(1) and 1A (1) of the Intimidation
Act, 1982(Act 72 of 1982);
29.
defeating or obstructing the course of justice;
30.
perjury;
31.
subornation of perjury;
32.    any
offence referred to in Chapter 3 or 4 of this Act;
33.    any
specified offence as defined in the Protection of Constitutional
Democracy against Terrorist and Related
Activities Act, 2004 (in term
32A inserted by 527(1) of act 33 of 2004);
34.    any
offence the punishment wherefore may be a period of imprisonment
exceeding one year without the option
of a fine;
35.    any
conspiracy; incitement or attempt to commit any offence referred to
in this Schedule.
[65]
A clear and precise enactment may nevertheless be “overbroad”
if in its reach it
prohibits constitutional protected conduct. See
Grayned v City of Pock Ford
408 U.S 115
(1972).
The question
then arises whether under POCA the definition of “pattern of
racketeering activity” sweeps within its
prohibitions what may
not be punished under the constitution. It has been argued on behalf
of the applicants that “pattern”
applies to a discrete
set of criminal acts. The rule is that the provisions which create
crimes or describe criminal conducts should
be interpreted strictly
rather than broadly. See
C R Snyman: Criminal Law 4
th
Ed at p40.
The word “pattern” should be construed
as requiring more than accidental or unrelated instances of
prescribed behaviour.
Under section 3575(e) of the Organized Crime
Control Act(OCCA) of 1970:
“…
Criminal
conduct forms a pattern if it embraces criminal acts that have the
same or similar purposes, results, participants, victims,
or methods
of commission, or otherwise are interrelated by distinguishing
characteristics and are not isolated events.”
[66]
The court has construed the word “pattern” as including a
requirement that the racketeering
acts must have been connected with
each other by some common scheme, plan or notice so as to constitute
a pattern and not simply
a series of disconnected acts.
See United
States v Petrillo
332 U.S 1
,8,
67 SCT; 1538
, 154, 2 91L Ed 1877, 1883
(1947
). However, under American case law every court of appeal
that has decided the issue has held that racketeering acts need not
be
similar, or directly related to each other; rather, it is
sufficient that the racketeering acts are related in some way to the
affairs of the charged enterprise. But, each element of each
predicate offence must be proved beyond a reasonable doubt.
See
also United States v Stofsky 409F. Sup 609,617(U.D, N, Y 1973).
[67]
Under OCCA “racketeering activity” means “any act
or threat involving”
state law crimes, any “act”
indictable under specified federal statues, and certain federal
“offences”.
See section 196(1
).A “pattern”
requires “at least two acts of racketeering activity”
within a 10 year period. The predicate
Act must be shown to form part
of the operation or activities of the gang. In
Evassen v S
[2009]
1 All SA 32(SCA)
at p 35 para
9 the court held:
“
The participation
must be by way of on-going, continuous or repeated participation or
involvement. The use of ‘participation’
widens the ambit
of the definition. So does the use of the words ‘on going
continuous or repeated’. ‘On going’
conveys the
idea of ‘not as yet complete’, ‘continuous’
(as opposed to continual) means uninterrupted in
time or sequence.
‘Repeated’ means recurring.”
[68]
Continuity requires long–term criminal activity. The predicate
acts must be part of a prolonged
criminal endeavour. See
Menasco
Inc. v Wasserman 886F 2d 681, 683 (4
th
Cir.
1989)
. However, courts have frequently found sufficient
continuity where even, a few, short-lived racketeering acts were
committed in
furtherance of the affairs of a criminal enterprise that
existed for a considerable period of time.
See H.J inc., 492 U.S.
at 240-243
. The word “pattern”, therefore, should be
construed as requiring more than accidental or unrelated instances of
prescribed
behaviour. But the acts are limited to those predicate
acts explicitly set forth in Schedule 1 of POCA.
[69]
In NAACP case, supra,
377 U.S 307
the following was said:
“
The power to
regulate must be so exercised as not, in attaining a permissible and,
unduly infringe the protected freedom.
Count
well v Connecticut,
310 U.S. 304
.
…
Even though the
governmental purpose be legitimate and substantial. That purpose
cannot be pursued by means that broadly stifle
fundamental personal
liberties when the end can be more narrowly achieved.”
[70]
In order to achieve the object of POCA, namely, to prevent, arrest
and totally root out organised
crime the definition of “pattern
of racketeering activity” must liberally be construed so to
create a wider and all-embracing
offence than the common law offence.
See S v Xaba and another 1996(2) SACR 259(N). See also Scagel and
others v Attorney – General Western Cape 1997(2) SA 368(CC)
at
374E-G.
However, such interpretation should be limited to
organised crimes.
[71]
This Court has to determine whether or not any right has been
infringed or unjustifiably swept
within the prohibitions of “pattern
of racketeering activity”. See
Christiaan Education South
Africa v Minister of Education 2000(4) SA 757(CC)
. Upon proper
construction, in its general application, the definition of ‘’pattern
of racketeering activity’’
is not overbroad. In the
present case, in the absence of the reality of the conduct alleged to
have interfered with the constitutionally
entrenched rights to fair
trial or freedoms of the applicants, it is difficult and even
impossible to determine whether or not
the definition of “pattern
of racketeering activity” sweeps within its prohibitions what
may not be punished under
the constitution.
See Perna V Italy (App
no.48898/99)2003 (ECR) 6 May 2003 p15; Grayned case, supra,
408 U.S.
115
[72]
It is the contention of the applicants,firstly,that the definition of
enterprise is “exceptionally
broad” and includes an
enterprise that is lawful, formal or informal and, secondly , that
the definition of “enterprise”
covers a single person as
well as every other connections between persons either known to the
law or existing in fact. In the argument
of the applicants the
requirement that the accused “participated in the conduct
directly or indirectly of the enterprises
affairs” in the light
of the definition of “enterprise” is overbroad, vague and
in effect meaningless, as to
be unworkable. The word “enterprise”
simply defines as offence where any person, whilst managing or
employed or associated
with any enterprise, conducts or participates
in the conduct directly or indirectly, of such enterprise’s
affairs through
a pattern of racketeering activity. According to the
applicants the enterprise must be one that is either managed by a
person or
employed by it.
[73]
In
United States v Turkette
452 U.S 575(1981)
the United
States Supreme Court squarely held that the term “enterprise”
encompasses both legitimate and illegitimate
enterprises. Enterprise
has an on-going organization, formal or informal i.e. various
associates of the enterprise must function
as a continuing unit. It
has a hierarchical or consensual structure within the group for
making decisions, and it has mechanism
for controlling and directing
the affairs of group on an on-going basis. See
United States v
Riccobene; 709F, 2d214, 223-224 (3d Cir) (1083).
Enterprise could
be a group of person associated together for a common purpose of
engaging in criminal cause of conduct.
[74]
With regard to the contention of the applicants that the definition
of “enterprise”
is so broad as to cover a single person
as well as every other connection between persons either known to the
law or existing in
fact. POCA’s proscriptions are directed
against the conduct not connection. It is applicable to a person or
to a group of
persons whose sole purpose is to engage in illegal
activities. See also
United States v Martino 648F. 2d 376, 381(5
th
Cir. 1981).
An accused person need not be among the
enterprise`s ‘’control group’’ to be liable
for a substantive POCA
violation.But, an accused must have intention
to perform acts that are related to, and foster the operation or
management of the
enterprise
. See United States v Pasada- Rios,
[1998] USCA5 1796
;
158,F, 3d 832
,857 (5
th
Cir.1998); United
States v Darden ,70F.3d 1507,1542-43(8
th
Cir.1995).
The word “conducts” simply means the
performance of activities necessary or helpful to the operation of
the enterprise.
See
United States v Tucker,
638 F 2d 1292
(5
th
Cir. 1981)
[75]
Both RICO and POCA require that the affairs of the enterprise be
conducted through a “pattern of
racketeering activity.”
In United States v Starrett,
55 F.3d 1525
, 1542-43(11thCir. 1995),
the court found two components to this requirement. First, the
accused person’s predicate acts must
be related to the
enterprise charged (the relationship requirement).Second, the
predicate acts taken all together must form a pattern.
The State may
establish the relationship requirement by showing that the
racketeering activity affected the “every day operations
of the
enterprise.” The relationship requirement may also be
demonstrated by “proof that the facilities and services
of the
enterprise were regularly and repeatedly utilised to make possible
the racketeering activity.
[76]
Where the enterprise is commercial, courts in the United States have
consistently construed “enterprise”
broadly in the light
of the Congress’ mandate that the provisions of Title 1X of the
Act “shall be liberally construed
to effectuate its remedial
purpose.” See
United States v Altex 542F.2d 104, 106 (2d
Cir. 1976); United States’ v Huber 603F 2d 387, 393 (2d Cir.
1979)
.The rationale for liberal interpretation where the
enterprise is commercial was that the Congress was concerned about
the impact
on the American economy of the infiltration of organised
crime into interstate commerce. All lawful infiltration, regardless
of
form, should be eradicated. To view “enterprise” as
excluding groups of corporations would make it too easy to avoid

RICO, forfeiture sanction; one could simply transfer assets from the
corporation whose affairs had been conducted through a pattern
of
racketeering activity to another corporation whose affairs had up to
that point not been so conducted.
See United States v Huber case.
[77]
It is apparent from the above that the Congress focused on some of
the kinds of activities by
which individuals and associations engaged
in organized crime maintained their income or influence. Section 1962
of RICO (18 U.S
s 1962) makes such activities unlawful no matter who
engages therein.
See also United States v Campanale 518F. 2d 352,
364 (9
th
Cir.1975)
. In
Papa Christou
v City of Jacksonville
[1972] USSC 42
;
405 U.S 156
, 162 (1972
) the court held
that in the field of regulatory statutes governing business
activities, where the acts limited are in a narrow
category, greater
leeway is allowed where the Congressional purpose is to eradicate
criminal means of acquiring, maintaining and
conducting any
enterprise affecting commerce.
[78]
The perversion of legitimate business may take many forms. The goals
of the enterprise may themselves
be perverted, or the legitimate
enterprise may be continued as a front for unrelated criminal
activity or the criminal activity
may be pursued by some persons in
direct conflict with the legitimate goals, pursued by others or the
criminal activity may indeed,
be utilized to further otherwise
legitimate goals. The term “enterprise” is defined in
18
U.S.C 1961(4)to
include “any individual, partnership,
corporation, association, or other legal entity, and any union or
group of individuals
associated in fact although not a legal entity.
The term “enterprise” as used in RICO encompasses both
legitimate and
illegitimate enterprises. See
also United States v
Turkette;
[1981] USSC 152
;
452 U.S 576
, 580 – 582.
[79]
In order to secure a conviction under RICO, the State must prove both
the existence of an “enterprise”
and the connected
“pattern of racketeering activity”: The enterprise is an
entity, for present purposes a group of
persons associated together
for a common purpose of engaging in a course of conduct. The pattern
of racketeering activity is, on
the other hand, a series of criminal
acts as defined by the statute,
18 U.S.C 1961(1)
(1976); Supp 111.
The former is proved by evidence of an on-going organization, formal
or informal, and by evidence that the various
associates function as
a continuing unit. The latter is proved by evidence of the requisite
number of acts or racketeering committed
by the participants in the
enterprise while the proof used to establish these separate elements
may in particular cases coalesce,
proof of one does not necessarily
establish the other. The “enterprise” is not the “pattern
of racketeering activity”,
it is an entity separate and apart
from the pattern of activity in which it engages. The existence of an
enterprise at all times
remains a separate element which must be
proved by the State.
[80]
POCA extends the scope of the meaning of the concepts of “pattern
of racketeering activity”
and “enterprise” in order
to promote adequate protection to the victims of organised crime.
However, such wider ambit
should be restricted to acts referred to in
Schedule 1 of POCA and organised crime activities. The facts of this
case do not show
that the definitions of “pattern of
racketeering activity” and “enterprise” have been
applied to such an
extent that they sweep everything broadly within
their prohibition so to invade constitutionally protected rights. The
purpose
of defining the concepts of “pattern of racketeering
activity” and “enterprise” is to protect the public

by preventing, restricting or disrupting involvement by the person
concerned, and by facilitating proof of the committed organised

crime. A single enterprise may engage in a pattern of racketeering
and invests the fruits in itself.
[81]
In the premises, I agree with Mr Unterhalter for the respondents that
it is the diversity of
criminal activities, situated in complex
organizational structures, occurring overtime where the lines of
authority are deliberately
obscured, that renders legislation such as
POCA a necessity. In order to discourage people engaged in these
activities and ultimately
to prevent, arrest and root out the scourge
of corruption, racketeering, money laundering and fraud detection,
swift prosecution
and conviction of those involved in such activities
under POCA is for the State a solution. The Legislature has extended
the scope
of POCA in order to ensure and promote adequate protection
of the victims of organised crime.
Section
2(1)(a) – 2(1)(g) of POCA
[82]
The applicants contend that since section 2 (1) of POCA is premised
entirely on the concepts
of “pattern of racketeering activity”
and “enterprise” is also unconstitutional, invalid and
void for vagueness.
In
Affordable Medicines Trust and others v
Minister of Health 2006(3) SA 297 (CC) at paras 108 -109
Ngcobo J
said:
“
The doctrine of
vagueness is founded on the rule of law, which, as pointed out, is a
foundational value of our constitutional democracy.
It requires that
the law must be written in clear and accessible manner. What is
required is reasonable certainty and not perfect
lucidity. The
doctrine of vagueness does not require absolute certainty of laws.
The law must indicate with reasonable certainty
to those who are
bound by it what is required of them so that they must regulate their
conduct accordingly. The doctrine of vagueness
must recognise the
role of government to further legitimate social and economic
objectives …, the Court may first construe
the regulation
applying the normal rules of construction including those required by
constitutional adjudication. The ultimate
question is whether, so
construed, the regulation indicates with reasonable certainty to
those who are bound by it what is required
of them. ”
See
also R v Jopp
1949 (4) SA 11
(N) at 13-14; S v Galguts Garage 1968(4)
SA 725(T) at 729H.
Where a statue is broadly worded, it is not
reasonably clear what conduct is prohibited, could be impugned by a
court of law on
the basis that it does not satisfy the requirements
of the limitations clause (s 36).
See Burchell, South African
Criminal Law and Procedure: General Principles of Criminal Law Vol.1
at p 29.
[83]
Section 2(1) (a) – 2(1) (g) of POCA dealing with offences
relating to racketeering activities
provides as follows:
“
2 Offences
(1)
Any person who-
(a)(i) receives or
retains any property derived, directly or indirectly, from a pattern
of racketeering; and
(ii) knows or ought
reasonably to have known that such property is so derived; and
(iii) uses or invests,
directly or indirectly, and part of such property in acquisition of
any interest in, or the establishment
or operation or activities of,
any enterprise;
(b)(i) receives or
retains any property; directly or indirectly, on behalf of any
enterprise; and
(ii) knows or ought
reasonably to have known that such property derived or is derived
from or through a pattern of racketeering
activity;
(c) (i) uses or invests
any property, directly or indirectly, on behalf of any enterprise or
in acquisition of any interest in,
or the establishment or operation
or activities of any enterprise; and
(ii) knows or ought
reasonably to have known that such property derived or is derived
from or through a pattern of racketeering
activity;
(d)Acquires or maintains,
directly or indirectly, any interest in or control of any enterprise
through a pattern of racketeering
activity;
(e)Whilst managing or
employed by or associated with any enterprise, conducts or
participates in the conduct, directly or indirectly,
of such
enterprises’ affairs through a pattern of racketeering
activity;
(f)  Manages the
operation or activities of an enterprise or activities of an
enterprise and who knows or ought reasonably
to have known that any
ay person, whilst employed by or associated with that enterprise,
conducts or participates in the conduct
directly or indirectly, of
such enterprise’s affairs through a pattern of racketeering
activity;
or
(g)Conspires or attempts
to violate any of the provisions of paragraphs (a),(b),(c),(d), (e)
or (f), within the Republic or elsewhere,
shall be guilty of an
offence.”
[84]
Section 2(1)(a)- 2(1)(d) involves actions with proceeds from
Racketeering activity or infiltration
of existing businesses by means
of racketeering activity. In so far as the ‘’participation’’
is concerned,
RICO and POCA differ to some degree on the type of
relationship that may exist between the accused and the enterprise
and between
the accused and pattern of racketeering activity.
However, such difference in statutes is lessened by American case law
interpretation
of the RICO statute. Section 1962(c) of RICO defines
the relationship between the accused and the enterprise as one of ‘’

employed by or associated with’’ and defines the
relationship between the accused and the pattern of racketeering
activity as conducting or participating in the enterprise’s
affairs ‘’through a pattern of racketeering. Whereas
POCA
provides for broader liability.
[85]
However, section 2(1)(e) is similar to RICO section 1962(c) in that
it provides that the relationship
between the enterprise and the
accused may be one of three types : (1) employed by; (2) associated
with, or managing. Section 2(1)(e)
provides that the relationship
between the accused and the pattern of racketeering as conducting or
participating in the enterprise’s
affairs ‘’through
a pattern of racketeering activity.’’ Section 2(1)(f)
extends liability to an accused
who is a manager and who knows ,or
should have known , that the pattern of racketeering took place or is
taking place, but in the
latter instance , there is no requirement
that the accused participated , directly or indirectly in any of the
acts of racketeering.
[86]
In the argument of the applicants section 2(1) (f) of POCA covers any
person who manages the
operation or activities of an enterprise and
who knows or ought reasonably to have known that any person, while
employed by or
associated with that enterprise, participates in a
pattern of racketeering. It is therefore the contention of the
applicants that
there is no implied crime of racketeering under RICO
on the said basis, and that actual participation in the acts of
racketeering
is required. Further, that the standard of proof is
lowered to such an extent that persons who were negligently engaged
in racketeering
may be held liable through the presumption of
constructive knowledge.
[87]
For an accused to be convicted of racketeering he must have actually
committed an offence of
racketeering or participated therein. A
person well knowing that a particular act is associated with
racketeering and continues
to deal with the enterprise in question,
he thereby encourages, aids and abets the commission of racketeering
and renders himself
liable.
[88]
The commission of the offence of racketeering requires conscious and
deliberate intention. A
voluntary act and
dolus
, however, are
two discreet requirements for a conviction. The accused must have the
requisite intent to commit racketeering. Intent
in the form of
doluseventualis
or legal intent is also at some time required
to commit racketeering. The test for
doluseventualis
form is
twofold:
(a)
did the accused subjectively foresee the possibility of his conduct
constituting an offence of racketeering?
(b)
did he reconcile himself with that possibility?
See
also
S v De Oliveira 1993(2) SACR 59(A) 65 i-j.
Sometimes the
element in (b) is described as “recklessness” as to
whether or not he has subjectively foreseen the possibility
ensuing.
See S v Gwahla 1967(4) SA 566(A) at 570.
[89]
A person who has committed an act capable of encouraging, aiding and
abetting the commission
of racketeering, it must be proved that he
had the necessary intention to encourage, aid and abet the
performance of an act which
would amount to the commission of
racketeering.
See also section 45 and 47(2) of the United Kingdom
Serious Crime Act 2007.
He must have known that the act would
encourage or assist the commission of racketeering and was reckless
as to whether or not
such eventuality occurred. What is then required
to be proved is recklessness. In terms of section 45(b) (i) (ii) of
Serious Crime
Act of United Kingdom a person commits an offence if he
believes that the offence will be committed, and that his act will
encourage
or assist its commission.
[90]
However, a person cannot be convicted on the ground that the
circumstances were foreseeable consequences
of his conduct. The
requirement that the accused ought reasonably to have known that his
conduct would constitute an offence of
racketeering calls for the
application of an objective test in determining whether or not the
accused “ought reasonably to
have known”; because the
fictitious reasonable person would have known that his conduct
constituted racketeering activity.
However, such a conclusion would
constitute negligence and not
dolus
in any form.
See also
Jacob Humphreys v The State (424.12)
[2013] ZA SCA 20
(22 March 2013)
para 13.
This renders the accused exposed to conviction for an
offence he had not committed. In the circumstances, the possibility
of punishing
an unintended, insensible or unconscious conduct cannot
be excluded, and that would in the decision in Humphreys` case,
supra,
conflate different tests for
dolus
and negligence.
[91]
The same can be said for deductive reasoning on the ground that the
process of inferential reasoning
also starts from the premise that,
in accordance with common human experience the possibility of the
consequences ensuing would
have been obvious to any person of normal
intelligence. There is no certainty as to whether actual or
constructive knowledge is
a requirement for the contravention of
section 2 (1) (a) – 2(1) (g) of POCA.Such a confusion has the
effect of rendering
the provisions of section 2(1)(a)(ii), (b)(ii),
(c)(ii) and (f) vague and unintelligible, and as a consequence such
provisions
are unconstitutional and, therefore, invalid to the extent
only of the words “ought reasonably to have known” in
each
paragraph referred to above.
Chapter
2 of POCA – Retrospectivity
[92]
It is the contention of the applicants that Chapter 2 of POCA is
unconstitutional in its entirety
because it operates retrospectively
in violation of section 35(3) (l) of the Constitution and the Rule of
Law. According to the
applicants Chapter 2 is a retrospective measure
in that the new offence of racketeering which did not exist prior to
the commencement
of POCA applies to activities which were conducted
or committed before POCA came into effect, and upon which POCA is
parasitic.
This is notwithstanding that the first two offences could
never have constituted racketeering when they were committed and the
last offence, committed after the commencement of POCA, could never
in and itself constitute racketeering without more.
[93]
In the premises, Mr Marcus for the applicants have argued that the
retrospective operation of
the “pattern of racketeering
activity” renders its definition unconstitutional and invalid
on the ground of the rule
of law, and also section 35(3)(l). All
sections which rely on this definition are similarly rendered
unconstitutional and invalid.
The act or omission referred to must
constitute an offence. However, no reference is made to acts or
commissions that constitute
an element of an offence. Lastly, the
provision is concerned with the acts or omissions that did not
constitute an offence at the
time such act was committed or omitted.
[94]
Mr Unterhalter for the respondents has argued that any element of the
offence that is used to
constitute the offence of a pattern of
racketeering that derives from the conduct pre-dating POCA is a
warranted inclusion in the
definition, given the nature of organised
crime and the importance of showing how such conduct is manifested
through complex organisational
forms overtime. He went on to argue
that if this Court finds that there has been a breach of the
principle of retroactivity of
the legislation, such breach is
justified on the basis that the use of POCA of past predicate
offences is to establish an element
of wrong doing in the past for
the purposes of prosecuting the prospective conduct of organised
crime in dealing with the fruits
of those predicate offences. To
prevent the legislature from doing so would significantly curtail the
efficacy of POCA because
it would mean that the stream of benefits
that accrue to organised crime from past wrongdoing and are being
utilized after the
introduction of POCA by organised criminals would
be beyond remit of criminal prosecution.
[95]
A retrospective statute operates forwards, but it looks backwards in
that it attaches new consequences
for the future to an event that
took place before the statue was enacted.
See Benner v Canada
(Secretary of state)(1997) 42 CRR (29) 1 (SCC); Elmer A Drieger,
(1978) 56 Canadian Bar Review 267
at 268-9; see also Bareki NO and
another v Glen Cor 2006(1) SA 432 (T) as per de Villiers J; Adampol
(Pty) Ltd v Administrator,
Transvaal 1989(3) SA Joubert and
HoexterJJA,
A retroactive statute is one that operates as of a
time prior to its enactment, retroactive statute operates for the
future only.
A statute is said to be retrospective if it creates a
legal consequence for a conduct only after that conduct has occurred.
See National Director of Public Prosecutions v Basson 2002(2) All
SA 255(SCA) para 11-12.
[96]
In Polyukhovich v The Common Wealth of Australia and anther
(1991), 172CLR 501F. C. 91/026
, Ivan Polyukpvich was charged with
war crimes in respects of acts allegedly committed by him during
World War II. He initiated
a challenge to the constitutional validity
of the War Crimes Act, on the basis that the Act:
(i)
purported to operate retrospectively; and
(ii)
granted jurisdiction over individuals for alleged crimes which had no
connection with Australia.
The
court held that the Act was not retrospective in operation because it
only criminalized acts which were war crimes under international
law
as well as “ordinary” crimes under Australian law at the
time were committed.
[97]
In Polyukhovich case, Brennan J emphasised that:
“
International law
not only refuses to countenance retrospective provisions in
international criminal law, it condemns as offensive
to human rights
retrospective municipal criminal law imposing a punishment for crime
unless the crime was a crime under international
law at the time when
the relevant act was done.”
Blackstone
in his commentaries 17
th
ed. (1830) vol1, p 46 with
reference to law making post conduct a crime and inflicting
punishment on the person committed it said:
“
Here it is
impossible that the party could foresee that an action, innocent when
it was done, should be afterwards converted to
guilty by a subsequent
law: he had therefore no cause to abstain from it, and all punishment
for not abstaining must of consequence
be cruel and unjust.”
[98]
In
Cummings v The State of Missouri
[1866] USSC 23
;
(1866) 71 US 277
, it was
held that on
ex post facto
law is a retrospective law which
makes past conduct a criminal offence. In
Calder v Bull
(1799) 3
US 385
, at 390
Chase J said:
“
An ex post facto
law includes: 1
st
.
Every law that makes an action done before the passing of the law,
and which was innocent when done, criminal; and punishes such
action.
2
nd
.
Every law that aggravates a crime or makes it greater than it was,
when committed.”
[99]
A statutory provision declaring past conduct to have been a criminal
offence constitutes a usurpation
of judicial power in that, once it
is established that the accused has committed the past act, the
question whether the act constituted
a criminal contravention is made
simply irrelevant. To that extent the court determination of criminal
guilt is ousted by legislative
decree. The point can be illustrated
by dividing the legislation into its essential components. One
component of such legislation
is the requirement that there be a
“trial” in the courts, in which judicial process must be
observed, to determine
whether it is established beyond reasonable
doubt that a particular person knowingly engaged in the designated
conduct. The second
component is the enactment that , if it be
established that the particular person did in fact engage in that
past conduct which
was not criminal when done he is guilty of a
punishable crime. The second component of the legislation invades the
heart of the
exclusively judicial function of determining criminal
guilt that is to say, of determining whether past conduct,
constituted a
criminal contravention of the law. The court’s
participation in that process, would also be inconsistent with the
doctrine
of separation of powers in that it would represent an
abdication of the judicial function of determining in a criminal
trail whether
past conduct has contravened the law in favour of the
legislature’s decree that a past war criminal act is to be
punished
as a crime. See
Polyukhovich case, supra, at PP 101-102;
Victoria v Australian Building Construction Employees’ and
Builders Labours’
Federation (1982) 152 CLR25, at p107.
[100]
Where an
ex post facto l
aw penalizes a past activity by means
of a generally applicable rule rather than specifying the persons to
be subjected to the penalty,
a court is still left to determine
whether an individual is guilty of having engaged in a prohibited
activity. Where it is apparent
that the legislature intended the
conviction of specific persons for conduct engaged in the past, the
law may do that by penalizing
specific persons by name or by means of
specific characteristics, which in the circumstances identify
particular person, a court
in applying such law is in effect confined
in its inquiry to the issue of whether or not an accused is one of
the persons identified
by the law. If he is, his guilt follows. The
proper judicial inquiry as to whether an accused has been guilty of
prohibited conduct
has thus been usurped by the legislature. In
United states v Brown (1965) 381, 450 U.S
, the Supreme Court
struck down as amounting to a bill of attainder an act which made it
a crime for a member of the communist party
to serve as an officer
(except in clinical or custodial positions) or as an employee of
labour organization.
[101]
In international law the principle of non- retroactivity is enshrined
in article 15(1) of the International Covenant
on Civil and political
Rights, (1966), which reads, inter alia:
“
no one shall be
held guilty of any criminal offence on account of any act or omission
which did not constitute a criminal offence,
under national or
international law, at the time when it was committed.”
See
also Act 7 of the European Convention for the Protection of Human
Rights and Fundamental Freedoms (1950); Art.11(2) of the Universal

declaration of Human Rights, (1948); Art.9 of the American Convention
on Human Rights,(1969) and Art.7 of the African Charter on
Human and
Peoples’ Rights (1981).
[102]
In Calder v Bull
(1798) 2 U.S 385
at 388 Chase J said:
“
no man should be
compelled to do what the laws do not require; nor to refrain from
acts which the laws permit.”
All
these general objections to retroactively applied criminal liability
have their source in a fundamental notion of justice and
fairness.
They refer to the desire that individuals are reasonably free to
maintain control of their lives by choosing to avoid
conduct which
will attract criminal sanction; a choice made impossible if conduct
is assessed by rules made in future.
[103]
It follows that the creation of a crime with retrospective effect
(that is
ex post facto
creation of a crime) is in breach of
the principle of legality; this means that any provision by any
legislative body which creates
a crime with retrospective effect is
null and void. The principle of legality (
nullumcrimen sine lege
(no crime without Law) can be described as a mechanism to ensure that
the state, its organs, and its officials do not consider
themselves
to be above the law in the exercise of their functions but remain
subject to it. In the field of common law the principle
fulfils the
important task of preventing the arbitrary punishment of people by
state officials, and of ensuring that the determination
of criminal
liability and the passing of sentence correspond with clear and
existing rules of law.
See C R Snyman: Criminal Law at p39.
[104]
The principle of legality is incorporated in section 35(3) (l) and
(n) of the Constitution. This means that every
provision in a statute
or common law which is in conflict with the Bill of Rights may be
declared null and void by a court. Section
35(3) of the Constitution
provides that every accused person has a right to a fair trial, and
paragraph (l) of this sub-section
provides that this right to a fair
trial includes the right “not to be convicted for an act or
omission that was not an offence
under either national or
international law at the time it was committed or omitted.” In
terms of paragraph (n) a right to
a fair trial includes the right “to
the benefit of the least severe of the prescribed punishments if the
prescribed punishment
for the offence has been changed between the
time that the offence was committed and the time of sentencing.”
A court may
not find a person guilty of an act or omission that was
not an offence at the time it was committed or omitted. It,
therefore,
follows that a court does not have the power to create a
crime. If there is an omission in law, in terms of the
casus
omissus
rule the courts may not supply an omission in law, as
this is the function of the legislature.
Casus omissus
is
derived from the principle
iudicis est ius dicere sed non dare
(the function of the court is to interpret law and not to make it)
See Exparte Slater v Walker Securities (SA) Ltd
1974 (4) SA
657(W).
[105]
The upholding of the sacrosanctity of the rule of law as one of the
foundational principles of our Constitution
is paramount to success
of any nation on earth.
See Veldman v Director of Public
Prosecutions, WLD 2006(2) SACR 319(CC).
The rule of law is the
absolute supremacy or predominance of regular law as opposed to the
exercise of the arbitrary power by government.
Secondly, the rule
means equality before the law or the subjection of all classes to the
ordinary courts. In essence the doctrine
of the rule of law amounts
to that nobody maybe deprived of rights and freedom through the
arbitrary exercise of wide discretionary
powers by the executive, and
that nobody is above the jurisdiction of the ordinary courts. See
Dicey: An Introduction to the Study of the Constitution.
[106]
Not every situation involving events which took place before the Act
came into operation necessarily involves
a retrospective application
of the Act. A statute is said to be retrospective if it creates a
legal consequence for a conduct only
after the conduct has occurred.
See National Director of Public Prosecutions v Basson 2002(2) All
SA 255(SCA) paras 11-12.
The enactment would be given
retrospective effect if it attaches a new duty, penalty or disability
to an event that took place
before the enactment.
See Benner v
Canada (Secretary of State) (1997) 42 CRR (29, 39) 1 (SCC).
[107]
“Every statute, which takes away or impairs vested rights
acquired under existing laws, or creates a new
obligation, imposes a
new duty, or attaches disability, in respect to transactions or
considerations already post, must be deemed
retrospective ….”
Calder v Bull; 3 Dalli, 386)1798) Dash v Van Kleek, 7 Johns, 477
(NC.Y 1811).
[108]
The court must, first, ask itself whether the new provision attaches
new legal consequences to events completed
before its enactment.
See
Land Graf v US 1 Film Products
[1994] USSC 10
; ,
511 U.S 244
(1994).
The statutory
definition of a “pattern” sets forth technical
requirements regarding the time when the predicate acts
were
committed
.
A “pattern of racketeering activity”
requires at least two acts of racketeering activity, one which
occurred after the
effective date of POCA and the last of which
occurred within ten (10) years (excluding any period of imprisonment)
after the commission
of a prior act of racketeering activity. In
orderto avoid a
post facto
principle POCA provides that the
last act must have been committed within ten years of prior act. The
requirement that one act of
racketeering be committed after effective
date of POCA eliminates any
expost facto
problems , even if
some acts of racketeering occurred before the effective date.
See
United States v Pungitore, 910F2d 1084, 1129
[109]
Upon proper construction the primary purpose of Chapter 2 of POCA is
not punitive in that it does not attract
liability to conviction for
the past acts, but it merely refers to the past conducts as the
predicates of racketeering activity.
In essence, Chapter 2 only
punishes the current conduct of racketeering charged and in so doing
it incorporates the past conducts
by reference into the current
offence of racketeering charged, as its elements. The racketeering
offence involves elements that
must be proved for a conviction for
commission of an offence that are part of the pattern of racketeering
activity.
See United States v Crosby, 20F, 3r 480, 484 (D.C
Cir.1994
In order to prove a pattern of racketeering activity a
prosecutor must show at least two racketeering predicate acts that
are related
and amount to or threaten the likelihood of continued
criminal activity.That is established, the court has on evidence to
determine
whether or not such past acts constitute a pattern of
racketeering activity.
See United States v 67 Crosby, 20F, 3r 480,
484 (D. C. Cir. 1994
;
United States v Morgan
139 F, 3d 1358
(7
th
Cir. 1994.
In essence, a causal
connection between the conduct of an individual and the commission of
organised crime activities, and a pattern
of racketeering activity
must be established.
See Grayned v City of Rockford
408 U.S 113.
For the State to achieve that objective, each element of each
predicate offence must be proved beyond reasonable doubt.
See
United States v Stofsky 409,609,617(UDNY 1973).
[110]
Reference to the past act as an element of the offence charged is
also permissible under
section 211
of the
Criminal Procedure Act, 51
of 1977
when the previous conviction as a fact is an element of an
offence with which the accused is charged. However, the trial court
still has to determine whether or not the accused has committed the
alleged offence. In a prosecution of racketeering offences under
POCA
the following three common elements of racketeering must be proved:
(a)
the existence of an “enterprise”;
(b)
a “pattern of racketeering activity” (as defined in
section 1
of POCA);
(c)
proof that the accused participated in the conduct of the enterprise`
affairs, directly or indirectly.
[111]
In order to secure conviction under
section 2(1)
(e) of POCA the
State must do more than merely prove the underlying predicted
offences. It must also demonstrate the accused’s’

association with an enterprise and a participatory link between the
accused and enterprise’s affairs by way of a pattern
of
racketeering. In essence a POCA conviction requires proof of a fact.
The previous offences in a charge of racketeering are only
used to
show that the predicate acts are part of an on-going entity regular
way of doing business. The attribution of predicate
acts to an
accused operating as part of a long-term association that exists for
criminal purposes, does not constitute punishment.
As a necessary
consequence Chapter 2 does not attach any legal consequence to past
acts, and as such, it is not retrospective in
its operation. See also
National Director of Public Prosecutors v Carolus and others
2000
(1) SA 1127
(SCA) 1145A-B
[112]
It has also been the contention of the applicants that POCA by
permitting the inclusion of a prior conviction
as one of the
racketeering acts that comprise part of the pattern of racketeering
may violate protection against a “double
jeopardy” rule.
The ‘same offence test’ may simply be stated as that if
there is any difference in the elements
to be proved, the two
instances are not the same offence. See
Blackburger v United States
[1932] USSC 4
;
284 U.S 299
, U.S Ct 180, 76 I.ED 306 (1932)
. United States case
law has conclusively and uniformly held that there is no double
violation on the basis that racketeering offence
involves elements
that must be proved for a conviction for commission of an offence
that is part of the pattern of racketeering
activity.
See United
States v Crosby, 20F, 3r 480, 484 D.C Cir. 1994; United States v
Baler; 63F, 3d 1478, 1994 (9A Cir. 1995); United States
v Morgano
39F, 3d 1358 (7
th
Cir. 1994).
[113]
I now turn to consider whether reference to the previous offences as
referred to in Schedule 1 of POCA in the
definition of “pattern
of racketeering activity” offends against thenotions of basic
fairness and justice and the provisions
of the Constitution. In my
view, reference to the previous offence or an act committed or
omitted in the past in order to establish
a link between the
predicate act and the current racketeering offence charged, is not
offensive to the notions of basic fairness
and justice and the
provisions of the Constitution because such a reference would not in
itself afford the definition of “pattern
of racketeering
activity” a retrospective effect. There is nothing in the
Constitution prohibiting incorporation by reference
of a previous
offence into the current offence charged as its element. However, the
Constitution only forbids the criminalisation
of the conduct which
was not a criminal offence when it was committed. The predicate
offences referred to in Schedule 1 of POCA
were and have all been
criminal offences under common law and statutory law of South Africa.
The Constitution cannot therefore
render something lawful which was
formerly unlawful .
See S v Basson
[2004] ZACC 13
;
2004 (1) SACR 285(CC)
at 303
para 13
;
Article (2) of European Convention for the Protection
of Human Rights and Fundamental Freedoms, 1953
. This is
conclusive of the fact that also under the Constitution Chapter 2 of
POCA is not a retrospective enactment.
Procedural
Challenge
[114]
It is the contention of the applicants that section 2 (2) of POCA is
unconstitutional because it allows for the
admission of certain
classes of evidence in violation of an accused’s right to a
fair trial in terms of section 35 of the
Constitution. Evidence that
is excluded in criminal trials, be it hearsay, similar fact evidence
or evidence relating to previous
convictions is excluded by the
courts on the ground that the admission of such evidence would render
the trial unfair. Section
2(2) provides:
“
The court may hear
evidence, including evidence with regard to hearsay, similar facts or
previous convictions, relating to offences
contemplated in subsection
(1), notwithstanding that such evidence might otherwise be
inadmissible, provided that such evidence
would not render a trail
unfair.”
Section
35(5) of the Constitution reads as follows:
“
Evidence obtained
in a manner that violates any right in the Bill of Rights must be
excluded if the admission of that evidence would
render the trial
unfair or otherwise be detrimental to the administration of Justice.”
[115]
In the submission of the applicants the basis of their challenge to
the provisions of section 2(2) of POCA is
that the right to a fair
trial is immediately compromised by their permitting the admission of
otherwise inadmissible evidence.
There is no way of knowing in
advance because section 2(2) is silent on the issue. The inherent
prejudice, therefore, cannot be
articulated and guarded against. In
relation to hearsay, not even the criteria laid down under the
Law of
Evidence Amendment Act of 1988
are incorporated into the section.
Hearsay evidence, similar fact evidence and evidence of previous
conviction is ordinarily inadmissible
for good reason. Such evidence
is inherently unreliable, prejudicial or unfair which
section 2(2)
of
POCA permits. In order to guard against possible violation of a right
to fair trial and to prevent the admission of the evidence
in the
manner detrimental to the administration of justice
section 2(2)
of
POCA must itself set the guidelines for the admission of certain
classes of evidence in racketeering criminal proceedings.
Section
2(2)
is according to the applicants, therefore, irrational
meaningless and unconstitutional and should, as a consequence, be
declared
invalid. However, in the argument of the respondents
section
2(2)
was enacted in order to cure the defect in the standard of proof
by achieving flexibility in the standard of proof so to secure

conviction in the present sophisticated criminal matters. The use of
more flexible rules of evidence is necessary given the complexity
of
organised crime and the way in which its activities are manifested
over time – hence, the way to use hearsay, similar
fact
evidence and evidence of past wrong doing so as to allow the court to
draw inferences that maybe warranted. Some greater flexibility
as to
proof in no way changes what inferences might not properly be drawn,
nor does such proof interfere with the ultimate standard
of proof in
a criminal trial.
[116]
The admissibility of the evidence is governed by the general
discretion of the courts to exclude the evidence
which would render
the trial unfair. The laws of evidence in criminal matters have
developed in order to safeguard the fair trial
right of the accused;
first under the common law and more recently under the Constitution.
In determining whether or notthe accused
will have a fair trial if a
certain class of evidence is admitted, the court has to exercise its
discretion. In exercising that
discretion an appropriate guide line
would be that the discretion be exercised in favour of excluding the
evidence if the admission
thereof would render the trial unfair or
otherwise be detrimental to the administration of justice.
See S
vAimes and another 1998(1) SACR 343(C) at 350 a-c.
[117]
Evidence of previous convictions is ordinarily legally irrelevant
because of the highly prejudicial effect it
has on the trier of
facts. S
ee R v Dominic
1913 TPD P2
. However, where the
probative value of such evidence outweighs its admissibility in terms
of so-called ‘similar fact rule’,
and also, where the
fact of a previous conviction is an element of an offence with which
the accused is charged, such evidence
is admitted.
See section 211
of the Criminal Procedure Act, 51 of 1977 (CPA).
[118]
Generally, it is not competent for the prosecution to adduce evidence
tending to show that the accused has been
guilty of criminal acts
other than those covered by the indictment, for the purpose of
leading to the conclusion that the accused
is a person likely from
his conduct or character to have committed the offence for which he
is being charged. But, similar fact
evidence is admissible to show
the commission of the crime and is relevant if it bears upon the
question whether the acts alleged
to constitute the crime charged in
the indictment were designed or accidental, or to rebut a defence
which would otherwise be open
to the accused.
See Makin v Attorney
General for New South Wales
[1894] AC 57
at 65.
[119]
Section 210 of CPA provides that no evidence as to any fact, matter
or thing shall be admissible which is irrelevant
or immaterial and
which cannot conduce to prove or disprove any point or fact at issue
in a criminal proceeding. The word relevant
means that any two of the
acts to which it is applied are so related to each other that
according to the common cause of events
one, either taken by itself,
or in connection with other facts, proves or renders probable the
past, present of future existence
of the other.
See R v Mpanza
1915 AD 348
, 352 – 3; R v Trapedo 1920 AS 58, 62.
[120]
In
De Vries v The State [2011] ZA (SCA) 162
the court held
that “a trained judicial officer is able to restrict the effect
of otherwise inadmissible evidence to charges
in respect of which it
is admissible and also to exclude it from consideration in respect of
charges in which it is not. Under
common law there is, generally, a
duty on a judicial officer not to allow prejudicial evidence in
respect of previous offences
to be led, especially where the accused
is undefended.
See S v Zimmerie En ‘n Ander 1989(3) SA
484(CC) at 492
. The admission of the otherwise inadmissible
evidence is entirely dependent upon the determination whether or not
the admission
of such evidence will interfere with the fairness of
the trial. Section 2(2) of POCA does not preclude the trail court in
determining
evidence from making its own examination and
determination of facts and general principles of evidence with
reference to the provisions
of section 35 of the Constitution, which
creates an obligation on the judicial officer to exclude evidence
obtained in contravention
of a fair trial right. The Constitution
reigns supreme, and as such, is the frame of reference within which
everything must function,
and against which all actions must be
tested. As such the Constitution is the fundamental law (
lex
fundamentalis
) of the South African legal order.
[121]
Under section 2(2) of POCA the admission of certain classes of
evidence is expressly allowed subject to the consideration
that the
evidence would not render the trail unfair. This language upholds the
constitutional standard of fairness, and does not
violate it. In
S
v Mfene and another 1998(9) BCLR 1157(N) at 1167C and 1168B-D
it
was affirmed that the question as to the admissibility of evidence is
determined in accordance with the provisions of section
35(5) of the
Constitution.
See also S v Ngcobo 1998(10) BCLR 1298(N) at 1252E
.
Under section 35(5) of the Constitution the evidence must be excluded
“if the admission of that evidence would render the
trial
unfair or otherwise be detrimental to the administration of justice.”
In the premises, the need for the guidelines
relating to the
admissibility of certain classes of evidence under section 2(2) of
POCA does not arise.
[122]
It appears from the case law that the admissibility of the evidence
is governed by the discretion of the trial
court. The court has
discretion to exclude illegally and improperly obtained evidence. In
essence, it falls squarely within the
discretion of the judicial
officer to admit or exclude evidence. Most often than not, it will be
the case when the state seeks
to introduce evidence which was
obtained in violation of the rights of an arrested or detained
person. In each case the question
is determined having regard to all
other circumstances of a particular case. Under
Canadian Charter
of Rights and Freedoms (Schedule B to 1982 Constitution)
evidence
shall be excluded if it is established that, having regard to all the
circumstances, admission of it in the proceedings
would bring the
administration of justice into disrepute.
See also Fedics Group
(Pty) Ltd and another v Matus and others 1977(2) SA 617 (C).
It,
therefore, follows that without the determination of such
circumstances , it would be impossible to determine whether or not
a
particular class of evidence will be admitted, and if admitted, what
effect it will have on the fairness of the trial.
.
[123]
In Ferreira v Levin NO. and others 1996(1) SA 984(CC) at 1001 para
14
, it was held that the question of the admissibility of
evidence is a matter for the court dealing with the criminal
proceedings
in question. Should the evidence be admitted incorrectly,
and this raises a constitutional issue, the Constitutional Court may
ultimately be called upon to decide the issue, but not before; unless
the issue is one falling within its exclusive constitutional

jurisdiction.
[124]
This discretion is grounded in the trial judge’s duty to ensure
a fair trial. In
S v Dzukuda 2000(4) SA 1078 (CC) para 11
, the
court added that, in a narrower sense, the aim of the right to a fair
trial is to ensure that innocent people are not wrongly
convicted.
Violation of the rights of arrested and detained persons may make the
trial of the accused unfair. The trial of every
accused has to be
fair. In
Director of Public Prosecutions, Natal v Magidela 2000(1)
SACR 458 (SCA) para 18,
it was held that not every breach of the
provisions of the constitution automatically leads to the trial being
unfair. However,
fairness is an issue that has to be decided on the
facts of each case. In the present case, the absence of the reality
of conduct
complained of as interfering with the fair trail rights of
the applicants makes it impossible for this court to establish
whether
or not the presumed interference will occur, and if it
occurs, it will be proportionate and whether the reasons given by the
State
in justification for it would be relevant and sufficient.
See
Perna v Italy case, supra, at p20.
[125]
The concept of the fair trial cannot be extended on the basis of
abstract notions of fairness. In
Klein v A-G, Witwatersrand Local
Division 1995(3) SA 848(W) at 862 C-D
Van Schalkwyk J said:
“
There has,
however, never been a principle that a violation of any of the
specific rights encompassed by the right to a fair trial
would
automatically preclude the trial. Such a rigid principle would
operate to the disadvantage of law enforcement and the consequent

prejudice of the society which the law and the constitution is
intended to serve. Before any remedy can be enforced the nature
and
extent of the violation must be properly considered. It is the duty
of the courts to do so in fulfilment of their obligation
to give
effect to the principle of public policy.”
[126]
There is nothing to suggest that the criminal proceedings pending
against the applicants are or will be tainted.
Neither the
irregularity nor gross departure from the established rules of
procedure is alleged, that the applicants have not been
properly
tried and that that resulted in a failure of justice. Nor has it been
alleged that by the reason of the conduct of the
respondents the
applicants will not be properly tried and that, if that happens it
would result in a failure of justice.
[127]
According to the applicants the danger in the vagueness of POCA is
that it allows itself to operate as an arbitrary
penalty enhancer and
prosecutorial bargaining tool. There is nothing to show that the
applicants have been arbitrarily targeted.
In the argument of the
respondents the indictment against the applicants is a measured legal
response to the facts that point to
their involvement in a serious
criminality involving corruption, money laundering and fraud, inter
alia. There is no basis and
fact offered to substantiate the claim
that POCA is being used in the present case to put pressure on the
applicants. According
to the respondents, the applicants are charged
under POCA because the first respondent believes that there is a
proper case for
them to meet. Nor has any proof been tendered that a
specific conduct as perceived by the applicants has actually
occurred, and
which has negatively impacted on the fairness of their
trial. No has any reason for a perceived fear of infringement of the
applicants’
rights to fair trial has been stated for this Court
to determine its reasonableness and probability. The absence of the
reality
of the conduct complained of as interfering or having the
potential to interfere with the constitutional right of the
applicants
to fair trial makes it impossible for this Court to
establish whether the alleged interference has occurred or might
occur.
[128]
Nor has any violation of the provisions of the constitution been
established save the unconstitutionality and
invalidity of the
provisions of section 2(1)(a)(ii); (b)(ii); (c))ii) and (f)(ii) of
POCA only to the extent of the words: “ought
reasonably to have
known”, as contained in each paragraph referred to above. On
the whole POCA is a valid enactment under
the Constitution and the
Rule of Law. Since no finding has been made as to the interference of
any of the constitutionally protected
rights of the applicants, the
need to balance the interests of the community against that of the
applicants and the question whether
or not the perceived infringement
could constitute a justifiable limitation of the right of fair trial
do not necessarily arise.
For, not only the rights and values of the
individual must be emphasised, but those of the community as well.
This means that the
constitutional state is not only involved in
upholding and protecting the traditional individual rights and
values, but also has
to establish and re-affirm community rights and
values.
Costs
[129]
It is the submission of the applicants that they should not be
mulcted with costs for two reasons; first, that
the applicants are
pursuing a fundamental right claim in an important constitutional
matter that has a wider ramifications beyond
themselves, and, second,
there is not suggestion that the applicants are acting in bad faith
or vexatiously. In support of this
submission they have referred me
to the case of
Biowatch Trust v Registrar, Genetic Resources, and
others 2009(6) SA 232(CC) at paras 21-25.
[130]
Generally, costs should follow the results. However, such rule is
departed where the constitutionality of the
statute is challenged, a
matter which usually be one of public interest.
See Ferreira case,
supra, at 155
. The rationale for the general rule that in
constitutional litigation an unsuccessful litigant ought not to be
ordered to pay costs
is that “an award of costs might have a
chilling effect on the litigants who might wish to vindicate their
constitutional
rights.” There may be circumstances that justify
departure from this rule such as where the litigation is frivolous or
vexatious.
See Affordable Medicines case
. Nor has any
allegation been made that the challenge of the applicants to the
constitutional validity of POCA has been frivolous
or vexatious.
See
Biowatch Trust case, supra, at para 23.
It therefore follows that
it would not be appropriate and just to make a costs order in the
present case.
Order
[131]
(a)       The application for the
relief sought in paragraphs a, b, c, d and e of
the Notice of Motion
save the relief relating to the provisions of section 2(1) (a) (ii);
(b) (ii);
(c)(ii) and (f) (ii) of
POCA is dismissed.
(b)
The provisions of section 2(1)(a)(ii); (b)(ii); (c)(ii) and (f)(ii)
are with immediate effect declared
unconstitutional and invalid to
the extent only of the words; “ought reasonably have known”,
as contained in each paragraph
referred to above;
(c)
No order as to costs is made.
MADONDO
J.
JUDGMENT
RESERVED:

5 MARCH 2013
JUDGMENT
HANDED DOWN:

17 MAY 2013
COUNSEL
FOR APPLICANTS:

GILBERT MARCUS SC
KEMP
J KEMP SC
SARAH
PUDIFIN-JONES
Instructed
by Ens attorneys C/O Larson Falconer Hassan Parsee Inc.
COUNSEL
FOR RESPONDENTS:
D N UNTERHALTER SC
R NAIDU
C
SIBIYA
Instructed
by State Attorney, KZN C/O Cajee Setsubi Chetty Inc.