Case No.	Lower Court Judgments	Hearing Date	Judgment Date	Majority Author	Vote
CCT 71/13	Kwazulu-Natal High Court, 17 May 2013	11 Nov. 2013	20 Mar. 2014	Madlanga J	Unanimous

By Duncan Wild and Greg Palmer on 23 March 2014

This case involves a constitutional challenge to certain sections of the Prevention of Organised Crime Act 21 of 1998 (“POCA“). Some of the sections are predicated on the definitions (also challenged) in POCA of “pattern of racketeering activity” and “enterprise” and which the applicants contend are unconstitutional, invalid and void for vagueness. Chapter 2 of POCA is also challenged on the basis that it operates retrospectively in violation of section 35(3)(1) of the Constitution and the Rule of Law, and section 2(2) of POCA is said to violate the fair trial rights of an accused.

The Constitutional Court, in an unanimous judgment authored by Justice Madlanga, and concurred in by Moseneke ACJ, Skweyia ADCJ, Cameron J, Dambuza AJ, Froneman J, Jafta J, Mhlantla AJ, Nkabinde J and Zondo J, dismissed these challenges finding that the impugned sections of POCA were defensible.

The first applicant is the chairman of various companies in the Intaka Group of Companies. The second applicant is one of those companies, Intaka Holdings (Pty) Ltd. The third applicant is an employee of the Intaka Group.

All three applicants are charged with racketeering, fraud, corruption, money laundering and infringement of Public Management Act in relation to the supply of water purification and oxygen plants to the KwaZulu-Natal departments of local government and hospitals.  The state alleges that the applicants conspired in different ways to unlawfully secure the contracts.

The respondents contested the standing of the applicants to bring the constitutional challenge, on the basis that the challenge is abstract and premature. The applicants argued in response that the outcome of the challenge would have a practical effect on the proceedings of the criminal trial. The Constitutional Court accepted that the applicants had standing to bring the application, as the provisions in question were relevant to the charges that they faced.  However, the Constitutional Court noted that were such a challenge is brought, without facts to anchor the challenge, the challenger bears a heavy burden to show that what has been challenged are unconstitutional merely on their face.

Challenge to the definitions of “pattern of racketeering activity” and “enterprise” in POCA:

Here the applicants contended that “pattern of racketeering activity” is void for vagueness, and “enterprise” is overbroad, and as a consequence both are in breach of the principle of legality and are unconstitutional.

In 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 High Court looked closely at the corresponding definitions in the Racketeer Corrupt Organizations Act of 1970 (“RICO) and US case law on definitional provisions. (At paragraph 51 of the  judgment the Court expressly acknowledges that the Supreme Court of Appeal in De Vries and another v S (2012) 1 All SA 13 (SCA) found POCA to have been modelled on RICO and the jurisprudence of the United States to be of “considerable assistance” in developing case law in POCA matters.)

The statutory definition of a “pattern” had set two technical requirements regarding the time when the acts were committed. The last racketeering act must occur within ten years after commission of the prior racketeering act. An accused is still given fair warning, according to the High Court, that a subsequent racketeering act will combine with the earlier act to create a separate offence. The High Court found the definition of a “pattern of racketeering activity” to be clear and precise.

Then, turning to the test for whether the definitions were overbroad, the High Court looked first at the aim and object of POCA, and thereafter whether the provisions, properly applied, swept unnecessarily broadly and infringed constitutional rights and values.

As for the aim and object of POCA, the government had considered the common law to be inadequate in dealing with sophisticated modern crime methods in organised crime. For instance, by the very nature of organised crime, those who are at the head of the syndicate do not carry out the activities and cover their tracks carefully. The objective of POCA is to prevent these criminals from benefiting from the proceeds of crime and to discourage the use of property for criminal purposes.

The High Court found that the legislature had extended the scope of POCA in order to ensure and promote adequate protection of the victims of organised crime, and the facts of the case failed to show that the definitions would be applied to such an extent that they sweep broadly enough to invade constitutionally protected rights.

The Constitutional Court essentially agreed with this finding. It found that the definition of “pattern of racketeering activity” was clear. The standard that the section must meet is that it’s meaning must be reasonably certain, and that standard was met here. In addition, the Constitutional Court noted that “overbreadth” was not a self-standing basis upon which to challenge legislation, rather whether legislation was overbroad was a consideration to be taken into account when considering the limitation analysis contained in section 36 of the Constitution i.e. when considering whether legislation that infringed rights was nevertheless justifiable.

Challenge to sections 2(1)(a) – 2(1)(g) of POCA

These provisions deal with the offences relating to racketeering activities. The applicants argued that because these provisions applied the unconstitutional (according to the applicants) definitions of “pattern of racketeering activity” and “enterprise”, they were similarly unconstitutional, invalid and void for vagueness.

The applicants also argued that, because of the use of the words “ought reasonably to have known” in the provisions, 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, and therefore the provisions are unconstitutional and invalid.

The High Court agreed with the latter argument. In turning to the wording of the provisions, the High Court found that the legislation conflated the test for dolus and negligence. The confusion in whether actual or constructive knowledge is a requirement for the offences rendered the provisions unconstitutional to the extent only of the inclusion of the words “ought reasonably to have known”, said the High Court.

Here, the Constitutional Court disagreed with the finding of the High Court. It found that is appropriate for the Legislature to impose a standard of culpability it deems appropriate, and may therefore impose a requirement of either negligence or intention for a particular offence, and it is only where “it has clearly abandoned any requirement of culpability, or when it has established a requirement of culpability manifestly inappropriate to the unlawful conduct or potential sentence in question” that the provision may be succesfully challenged. The High Court did not consider this standard at all, and no evidence had been placed before it that showed it was a manifestly inappropriate standard. This leg of the challenge was therefore dismissed.

Challenge to Chapter 2 of POCA

The applicants argued that the retrospective application of Chapter 2 of POCA renders it in violation of section 35(3)(l) of the Constitution and the rule of law, and is therefore unconstitutional in its entirety. This is because the new offence of racketeering applies to an activity committed before the commencement of POCA.

The respondents argued that the inclusion of an element of the offence derived from conduct which pre-dated POCA is warranted, given the nature of organised crime and the importance of showing how such conduct is manifested through complex organisational forms over time.

The High Court looked at the principle of non-retroactivity in article 15(1) of the International Covenant on Civil and Political Rights 1996, relevant US jurisprudence, and the principle of legality in the Constitution. It came to the conclusion that, in its essence, Chapter 2 only punishes the current conduct and in doing so incorporates by reference the past conduct into the current offence as its element.

The Constitutional Court again agreed with this finding. POCA stated that it only applied to conduct, an element of which took place after POCA came into force, and therefore was not retroactive in effect.

Fair trial rights challenge

The applicants argued that an accused’s fair trial rights under section 35 of the Constitution are violated, because section 2(2) of POCA allows for the admission of otherwise inadmissible evidence.

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.”

The respondents argued that the provision is necessary in order to achieve flexibility in the standard of proof to ensure that convictions in sophisticated criminal matters are made possible.

In relying on the safeguard in section 2(2) of POCA that the admissibility of the evidence is governed by the general discretion of the courts to exclude evidence which would render the trial unfair, the High Court found that the language upholds the constitutional standard of fairness, and does not violate it.

The Constitutional Court held that this was correct, stating that merely because inadmissible evidence was admitted does not render a trial automatically unfair, but it for a Court to decide whether the admission of otherwise inadmissable evidence would render a trial unfair, taking all the material before it into consideration. Section 2(2) did not interfere with this process and therefore did not infringe the right to a fair trial.

Following the Biowatch principle, although the applicants were largely unsuccessful in their challenges, as the issues raised were important constitutional ones, the Constitutional Court made no order of costs.

Download the judgment here.