About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: High Court, Northern Cape Division, Kimberley
SAFLII
>>
Databases
>>
South Africa: High Court, Northern Cape Division, Kimberley
>>
2008
>>
[2008] ZANCHC 72
|
|
S v Lombard (CA&R 125/05) [2008] ZANCHC 72 (12 December 2008)
Reportable:
Yes / No
Circulate
to Judges: Yes / No
Circulate
to Magistrates: Yes / No
IN THE HIGH COURT
OF SOUTH AFRICA
(Northern Cape
Division)
Case
no: CA&R 125/05
Date
heard:
2008-12-01
Date
delivered:
2008-12-12
In
the appeal of
:
WILLEM
LOMBARD
APPELLANT
versus
THE
STATE
RESPONDENT
Coram:
MAJIEDT
J
et
STEYN
AJ
JUDG
MENT
ON APPEAL
MAJIEDT J:
The
Appellant was convicted in the local Regional Court on two counts of
fraud arising from the provision
s
contained in the Value-added Tax Act, 89 of 1991 (“
the
Act”
)
as well as his sentence of an effective 4 years imprisonment. The
Appellant was granted leave to appeal only against sentence
by the
Court
a
quo
,
but on petition to this Court, he was also granted leave to appeal
against his aforementioned convictions.
The
Appellant had adumbrated a number of appeal grounds in his Notice of
Appeal and these were further expanded by Mr. Cloete
on his behalf
during oral argument. In my view the matter can be decided on a
crisp point of law, namely whether the State had
proved an intention
to defraud on the part of the Appellant
on
the basis averred in the charge sheet
.
It is consequently not necessary to deal with the evidence in great
detail and most of the material facts are in any event
either common
cause or have not been seriously placed in issue at the trial.
The
State called a number of witnesses to prove the charges against the
Appellant.
It is important, however, to commence by setting out
verbatim
the
charges contained in the charge sheet. The Appellant was charged as
follows:
“
Count
1.
The accused is guilty of the offence of fraud.
UPON
or during September 1996
at
or near Kimberley in the district of Kimberley and in the Regional
Division of Northern Cape, the said accused unlawfully, false
(sic)
and with the intent to defraud, gave out and pretended to the
Receiver of Revenue, Kimberley, that he was entitled to claim
input
tax in the amount of R11 690,00 (eleven thousand six hundred and
ninety rand) from the Receiver of Revenue being the
value-added tax
for capital goods purchased by him at Senwes Limited on the 22 of
August 1996 and that he there and then by means
of these false
pretences caused the said Receiver of Revenue Kimberley to the
potential prejudice of the Receiver of Revenue to
believe that he is
entitled to the said claim and to refund him.
WHEREAS in truth and
in fact when the said accused gave out and pretended to the said
complainant as mentioned he knew that he was
not entitled to claim
the above-mentioned amount from the Receiver of Revenue as the
transaction for the purchase of the capital
goods was never finalised
and/or never realized.”
The
accused was charged
in
the alternative to Count 1 with theft, but it is not necessary to set
out the details of the alternative charge, nor is it necessary
to set
out the details of the second alternative which relates to offences
contained in s59(1)(a) and s59(1)(d) of the Act (as
alternatives).
Count 2 reads as follows:
“
Count
2
That the accused is guilty of the offence of fraud.
UPON
or during January 1998 at or near Kimberley in the district of
Kimberley and within the Regional Division of the Northern Cape,
the
said accused unlawfully, false (sic) and with the intent to defraud,
gave out and pretended to the Receiver of Revenue Kimberley
that he
was entitled to claim input tax in the amount of R94 012.80
(ninety four thousand and twelve rand and eighty cents)
from the
Receiver of Revenue being value-added tax for capital goods purchased
by him at Senwes Limited on the 28
th
of December 1997 and that he there and then by means of these false
pretences caused the said Receiver of Revenue Kimberley to
the
prejudice or potential prejudice of the Receiver of Revenue to
believe that he is entitled to the said claim and to refund
him.
WHEREAS in truth and
in fact when the said accused gave out and pretended to the said
complainant as mentioned he knew that he was
not entitled to claim
the above-mentioned amount from the Receiver of Revenue as the
transaction for the purchase of the capital
goods was never finalised
and/or never realized.
In
Count 2 the Appellant was also charged with theft as a first
alternative and
with
a contravention of s59(1)(a) or s59(1)(d) of the Act as a second
alternative.
With
the
charges as background I now turn to discuss briefly the evidence.
In
order to prove these charges, the State led the evidence of the
following witnesses:
4.1 Ms
EJ van der Walt
is a specialist inspector in the section Criminal Investigations
within the office of the South African Revenue Services (“
SARS”
).
Her evidence briefly explained the provisions of the Act with regard
to input and output tax claims and refunds. She also testified
about
her investigation into the matter concerning the Appellant’s
two claims which forms the basis of the two charges of
fraud against
him. In the course of her investigations she conducted interviews
and took statements from the State witnesses,
Messrs Oberholzer,
Klopper and Basson.
4.2 Mr
JA Oberholzer was at all material times herein employed at Senwes (a
co-operative) in Bothaville as a Mechanisation Manager.
He testified
about count 1,
supra
and referred in particular to Exhibits “F” and “G”
before the Court. Exhibit “F” is a copy
of a document
issued by Senwes on 22 August 1996 to the Appellant, while Exhibit
“G” is a copy of an original Senwes
delivery note dated
28 August 1996, issued to the Rauten Family Trust. Mr. Oberholzer
described Exhibit “F” as a faxed
copy of an invoice,
while Exhibit “G” was a copy of a delivery note. Of some
significance concerning these two documents
is that they had the same
serial number, namely 299718. The witness had with him in the
witness box the original invoice book
of Senwes Bothaville and he was
able to find the original document of serial number 299718 in that
book. He explained that every
invoice book had three pages, namely a
white page, which was the original, a green page, which was the
second copy and a pink page,
which was the third copy. He explained
further that the white original would always stay in the book, one of
the copies, usually
the green one, would go to the client and the
pink copy would go with the computer generated invoice to be retained
on file. There
are certain striking disparities between the two
documents with the same serial number, namely Exhibits “F”
and “G”,
inter
alia
the
fact that it was made out to different persons: Exhibit “F”
was made out to the Appellant and Exhibit “G”
to the
Rauten Family Trust. Furthermore the amounts thereon differed,
Exhibit “F” related to a S55 flexi spray, whereas
Exhibit
“G” related to a Laverda harvester and the dates thereon
also differed. Mr. Oberholzer was unable to explain
how these two
vastly dissimilar documents containing the same serial number had
come into existence.
4.3 Mr.
PJ Klopper testified that he was at all material times herein a
manager a
t
Senwes, Ottosdal. His testimony related to count 2. He confirmed
the evidence of Mr. Oberholzer with regard to the method of
operation
of Senwes regarding its invoice book and the white, green and pink
copies therein. He testified further that he had
during 1998 been
engaged in a transaction with the Appellant, who wanted to purchase
new tractors from Senwes and who in turn had
certain used equipment
and machinery which he wanted to trade in to Senwes. This
transaction ultimately did not materialise for
reasons which are not
germane here. He also testified about Exhibits “AA1”,
“AB”, and “AE”
before the trial court.
Exhibit “AA1” is a copy of a VAT-invoice made out to the
Appellant by Senwes which the Appellant
used to claim input tax in
the amount of R94 012.80 from SARS. It bears serial number
065782 and relates to certain goods,
including tractors and a
Volkswagen Chico motor vehicle. It is dated 28 December 1997.
Exhibit “AB” in turn is an
invoice from Senwes also made
out to the Appellant with the same serial number (065782) with the
same inscription regarding the
tractors and the Volkswagen Chico
motor vehicle thereon, but which has a line drawn through it with the
words “
kanselleer”
written on top of that line. In addition, this particular document
is undated and has a number of handwritten entries on the right
hand
side thereof with the heading “
inruile”
and which apparently relate to the goods which the Appellant was
desirous of trading in to Senwes. Mr. Klopper explained that
the
document, Exhibit “AB”, was cancelled because the
transaction with the Appellant failed to materialise. He was
also
shown Exhibit “AE” which bears the same serial number as
Exhibits “AA1” and “AB”, namely
065782. This
document resembles Exhibit AB, except that it has some other entries,
namely “
maize
master – mieliemeule”
.
Mr. Klopper also testified that the date on “AA1”,
namely 28 December 1997 was, according to the calendar, a Sunday.
He
explained that Senwes never does business on a Sunday in the normal
course of events. An examination of the invoice book also
indicated
that this transaction, according to the sequential numbering of the
serial numbers, could not have been done in December,
but must in
fact have taken place during late January 1998.
4.4 Mr.
M Basson worked during all material times as a VAT auditor at SARS in
Kimberley. He testified that he had performed a VAT
audit on a
transaction of the Appellant, who was unknown to him. He referred to
Exhibit
“AA” before the Court which is an audit report on the
Appellant for the December 1997 VAT-period. He compiled
his audit
report on the basis of the information contained in Exhibit “AA1”
to which I have already referred. He agreed
that there were a number
of differences between Exhibits “AA1”, “AB”
and “AE”. According to
him he would have queried this
transaction if Exhibit “AE” had been known to him,
because there was no date on it and
there were also trade-ins written
on that document, whereas “AA1” had no such trade-ins.
He conceded that he did not
notice that the date on Exhibit “AA1”
was in fact a Sunday.
4.5 The
last
State witness was Mr. A van Heerden, a deputy-director at SARS head
office dealing with VAT law administration. His office
assists VAT
offices throughout the country with legal interpretations and rulings
and they would issue practice notes in the course
of their business.
He explained to the trial court the VAT invoice system and the
requirements of a valid VAT invoice as defined
in s1 of the Act.
According to his evidence a faxed tax invoice was not acceptable to
claim input tax. He also testified that
if VAT input tax had been
claimed and there was a refund to the tax payer/claimant, and
thereafter the transaction failed to materialise
or was cancelled,
s21(6) of the Act placed an obligation on the tax payer/claimant to
add back the tax claimed or to account for
it through output tax.
He was shown Exhibits “F” and “G” on count 1
as well as Exhibits “AA1”
and “AE” on Count
2. He agreed that one would be able to claim VAT based on Exhibit
“AA1”, because it
appeared regular on the face of it.
One would not be able to claim VAT input tax on Exhibit “AE”
on the other hand,
because it contained no date. He testified that
one could not claim input tax on Exhibit “F”, because it
was a faxed
copy and, as far as Exhibit “G” is concerned,
he testified that it was only a normal invoice and not a tax invoice.
The
crux of this case is to be found in Mr Van Heerden’s evidence
in cross-examination where he testified that, as far as
a cancelled
transaction or a transaction which fails to materialise is concerned,
the intention to defraud on the part of the taxpayer
is key to a
finding whether there is criminal or civil liability on the part of
the taxpayer
.
In this regard he explained fully the details of the relevant
legislative provisions contained in the Act.
At
the end of the State’s case the Appellant’s attorney
brought an application for the Appellant’s discharge
in terms
of s174 of the
Criminal Procedure Act, 51 of 1977
.
This application was, correctly so, refused by the Court
a
quo
.
The Appellant thereafter testified and explained how it came about
that he had claimed input tax in terms of the provisions
of the Act,
based on the documents Exhibit “F” (which he had faxed
to SARS in Kimberley) and Exhibit “AA1”
(which he had
handed in to SARS). The Appellant explained that Exhibit “F”
was faxed to him by Senwes and he in
turn had faxed it to SARS.
With regard to Exhibit “AA1” he testified that Klopper
had come out to visit him at his
farm to view the secondhand
tractors and machinery which the Appellant wanted to trade in on the
new tractors and the vehicle
to be purchased from Senwes. In the
course of their discussions Klopper had noted the trade-ins in the
invoice book, the Appellant
had signed it and Klopper had thereafter
torn out an invoice from this invoice book and handed it to the
Appellant. He confirmed
that the transaction did not materialise
and that he claimed input tax on Exhibit “AA1” which he
had later handed
in to SARS. He denied that he had the intention to
defraud at the time that he had claimed the input tax on the two
occasions,
however he appeared to concede that he still owed SARS in
respect of the VAT refunds that was paid to him.
The
Magistrate convicted the Appellant and in doing
so,
found that the State had proved that he had the requisite
mens
rea
to
defraud SARS at the time that the Appellant had submitted his claims
for input tax.
The
following facts were
,
in my view, common cause at the trial (both Counsel before us appear
to accept that this was so):
7.1 That
the Appellant had handed in to SARS the so-called VAT 201 claim forms
and the respective invoices referred to in counts
1 and 2 (exhibits
“F” and “AA1”) in support of his claims.
7.2 That
the Appellant was duly registered for VAT in terms of the Act.
7.3 That the Appellant
had received the two amounts set out in counts 1 and 2 as VAT refunds
based on his aforementioned claims.
7.4 That the transactions
on which the VAT refunds were based, failed to materialise.
7.5 That the Appellant is
liable in law to repay the said refunds to SARS.
8.1
Fraud
has been defined as follows:
“
The
unlawful and intentional making of a representation which causes
actual prejudice or which is potentially prejudicial to another.”
See:
Snyman
Criminal Law 4
th
Ed at 520
.
“
Fraud
consists in unlawfully making, with intent to defraud, a
misrepresentation which causes actual prejudice or which is
potentially
prejudicial to another.”
See:
Burchell & Hunt: South African Criminal Law and Procedure Vol
2, by JRL Milton at 702
.
Compare
also:
S
v Van den Berg 1991 (1) SACR 104 (T) at 106;
S
v Campbell 1991 (1) SACR 503 (Nm) at 505 b-c.
8.2
It
is plain therefore that the State has to prove the following elements
of the offence beyond reasonable doubt:
a) Misrepresentation
b) Unlawfulness
c) Intention
d) Prejudice/potential
prejudice.
8.3 It
is trite that misrepresentation may consist of an act or of an
omission in circumstances where there is a legal duty to disclose.
Compare:
S
v Heller and another (2) 1964 (1) SA 524 (W) at 536 F;
S v
Harper and another 1982 (2) SA 638 (DCLD) at 655 D-E.
8.4 It
has been held in a number of cases that
,
in order to establish criminal liability for fraud based on
non-disclosure, the State must prove an intention to mislead where
an
accused person fails to disclose while under a legal obligation to do
so.
See,
inter
alia
:
S v
Western Areas Ltd and others 2004
(4)
SA 591 (W)
at pars [7.1], [7.2]. [25] and [26].
S v
Yengeni 2006
(1)
SACR 405 (T)
at
par [31].
S v
Burstein 1978
(4)
SA 602 (T)
at 604 H – 605 B.
S v
Rosenthal 1980
(1)
SA 65 (A)
at
85 B-C.
Mr.
Cloete on behalf of the Appellant has, quite understandably, laid
much
emphasis during his argument on the fact that the State had worded
the charge sheet in the manner set out herein. Consequently
the
State had to prove beyond reasonable doubt that when the Appellant
had submitted his claims for input tax as per Exhibits
“F”
and “AA1”, he knew that the claims were false or that he
had no belief in its truth. Put differently,
the State had to prove
beyond reasonable doubt that the Appellant had no reasonable belief
at the time of the submission of the
aforesaid claims that the
respective transactions would materialise or would not be cancelled.
Ms Kersten, for the State, has
valiantly attempted to persuade us
that the Magistrate was correct in finding that the State had in
fact discharged this onus
of proof. I cannot uphold her contention.
Even on the State’s case it was clear on the evidence of
Klopper that he and
the Appellant were in continued negotiations up
until April 1998 regarding the transaction relating to count 2.
There was also
no issue between Klopper and the Appellant concerning
the reason why the transaction had failed, namely due to the fact
that
the Appellant’s cash flow did not permit him to write a
cheque for the full amount for the goods which he wanted to purchase
from Senwes. The evidence of the Appellant is unchallenged that he
could not wait for a cheque from Senwes to be paid to him
in respect
of the secondhand goods which he wanted to trade in. The Appellant
explained in his evidence (and this was not challenged
at all) that
what he had in mind was in fact a set-off between Senwes and himself
regarding the amounts for goods to be purchased
and for goods to be
traded in. With regard to the first transaction, relating to count
1, the Appellant’s evidence that
he was continuously in
contact with Senwes to ascertain when the flexi spray would arrive
from the USA, from which it had to
be imported, was undisputed and
not challenged at all in cross-examination.
In
the light of the aforegoing, it is
plain
that the Sate failed to prove beyond reasonable doubt that the
Appellant had the intention to defraud at the time that he
submitted
his claims. Furthermore, the Magistrate in my view erred in making
the following findings:
a) “
Accused
made the representation to the South African Revenue Services that he
is entitled to claim whereas it was not the correct
position. He
never declared output tax which omission accounted (sic) to a
misrepresentation of the correct position on his part
to the effect
that the transaction succeeded and he was entitled to such monies
claimed to as it was not the case.”
The
Magistrate is wrong in the aforementioned findings in two respects,
firstly the Appellant’s evidence that he
bona
fide
believed
that he was entitled to claim when he handed in his VAT claim forms
in both instances was not challenged at all. Furthermore,
it became
common cause between the State and Defence at the trial that the
source documents on which the Appellant’s claims
are based,
namely Exhibits “F” and “AA1”, were valid for
purposes of his claims (save insofar as Van Heerden
at a very late
stage in his evidence stated that a faxed copy was not acceptable,
but this was clearly not strictly applied at
the Kimberley office).
Moreover and importantly, the State’s case itself through the
evidence Van der Walt, was that a taxpayer
was not obliged to hand in
source documents to substantiate his claim, but that a claim form
itself was sufficient. SARS could
then request the substantiating
source documents afterwards, should it wish to do so. Secondly the
Magistrate is wrong in the
second sentence quoted above. The State
never charged the Appellant, nor was it its case, that the Appellant
had committed fraud
through an omission. The State’s case
always was (and this was accepted by both parties at the trial and on
appeal before
us) that the Appellant was guilty of fraud through
positive conduct (commission).
b) The
Magistrate
also
found:
“
He
continued to enter into further business transactions to the
exclusion of ones on count 1 and 2 which transaction on count 1
and 2
he conceded he later knew they were not successful and did not
materialise. And it is the evidence before Court that for
a period
of plus-minus four to six years until Mrs Van der Walt knocked on his
door, he never declared output tax or refunded Receiver.”
The
same misdirection in law occurs in these findings as the ones in the
preceding paragraph. While it is so that the Appellant
may have
incurred civil liability to SARS for repayment of the amounts
refunded to him, this does not prove fraud on the basis
as charged
and as averred by the State in the charge sheet.
c) The next finding which
I discuss is the following:
“
There
was not supply as required and expected as envisaged in the
Value-added Tax (Act), no payment of goods hoped to be bought,
not
even orders placed, no deliveries made to accused. Proposed
transactions between accused and Senwes Bothaville and Ottosdal
did
not materialise. The accused knew of that and did nothing to remedy
the position …. On circumstances that the Court
had indicated
the Court believes that accused when he submitted this claims and
submitted this supporting invoices had no intention
of the said
proposed transactions to materialise.”
I am
of the view that the Magistrate has erred in material respects in the
aforementioned findings
:
i) It
was conceded on behalf of the State by both Van der Walt and Basson,
that the documents in question, namely Exhibits “F”
and
“AA1” qualified as tax invoices in terms of s20(1) read
with s20(4) of the Act. The claims were regarded as valid
on the
face of it as conceded by both these witnesses and even by Van
Heerden who was called as a
quasi
expert witness by the State. Of course it will be recalled, that Van
Heerden only had problems with Exhibit “F” insofar
as it
was a faxed copy which he said was not acceptable in terms of SARS
directives. It became clear, however, during the course
of the trial
that the Kimberley office did not apply this particular directive
very strictly.
ii) Van
Heerden made an important concession under cross-examination to the
effect that if the Appellant had the intention to actually
buy the
goods (in both instances set out in the two charges) and if he had
submitted these invoices he would have allowed him to
claim input
tax. He did qualify this concession in respect of “F”
which was an unacceptable fax copy. There was no
evidence to gainsay
the Appellant’s contention in his testimony that he had the
bona
fide
belief
that these transactions would materialise. It is common cause that
the transactions did not materialise for reasons which,
objectively
speaking, were really out of the Appellant’s control. It will
be recalled that on the first count the reason
for the transaction
not materialising was that the flexi spray could not be acquired
timeously from the USA and in the second instance
in count 2, the
Appellant had a problem with the method with which Senwes wanted to
do the deal with regard to payment by and repayment
to the Appellant.
Quite significantly, the Appellant testified that he had asked
Klopper what he should do about the VAT which
he had already claimed
in respect of the transaction in the second count. According to him
Klopper’s reply was that he should
not worry and that he
(Klopper) would sort it out. This aspect was pertinently put to
Klopper by the Appellant’s attorney
in cross-examination, but
Klopper could neither recall, nor could he directly deny it.
iii) The
Magistrate’s finding above that there was no supply as
envisaged in the Act and no payment of the goods or
orders
placed or deliveries made, completely loses sight of the fact that
the Appellant on count 1 was awaiting delivery of the
flexi spray
from the USA where it was manufactured and in the second instance,
was awaiting Senwes’ decision on how to structure
the payment
deal for the goods to be purchased by the Appellant and those to be
traded in by him. In the structure of the Act,
a transaction
includes an agreement whereby the goods are to be delivered in
future. In s1 of the Act “
sale”
is defined as “
an
agreement of purchase and sale and includes any transaction or act
whereby or in consequence of which ownership of goods passes
or
is to pass
from one person to another”.
To
summarise
:
the State failed to prove the charges as it is framed in the charge
sheet, i.e. that the Appellant is guilty of fraud committed
as a
positive act (
commissio
)
with the intent to defraud at the stage when he submitted his VAT
claim forms and supporting documents on counts 1 and 2. The
manner
in which the State has chosen to formulate the charges is of great
importance in this regard. I am of the view that the
State has
failed to prove beyond reasonable doubt any intention to defraud on
the charges as they stand.
I
deem it necessary
to
say something about charge sheets and the manner in which they are
framed. The
Criminal Procedure Act, 51 of 1977
, contains detailed
prescripts regarding charge sheets and the charges contained
therein, see
inter
alia
sections 84
,
85
,
86
,
88
and
144
thereof. The State is, in terms of
s35(3)(a) of the Constitution of 1996, obliged to set out in the
charge sheet sufficient
detail so as fairly to inform an accused
person about the charge/s which he/she faces.
See:
National
Director of Public Prosecutions v Rautenbach and others 2005 (1)
SACR 530 (SCA) at 539 b.
See
also:
S
v Hugo 1976 (4) SA 536 (A) at 540 E-F
where Miller JA puts it thus:
“
An
accused person is entitled to require that he be informed by the
charge with precision, or at least with reasonable degree of
clarity,
what the case is that he has to meet and that is especially true of
an indictment in which fraud by misrepresentation
is alleged.”
The
learned Appeal Judge refers
inter
alia
to
R
v Alexander and others
1936 AD 445
where Wessels CJ at 457 says the following:
“
What
is the object of an indictment? Its real purpose is to inform the
accused in clear unmistakable language what the charge is
or what the
charges are which he has to meet. It must
not
be framed in such a way that an accused person has to guess or puzzle
out by piecing sections of the indictment or portions
of sections
together what the real charge is which the Crown intends to lay
against him.”
I
n
Ex
parte Minister of Justice: In re Rex v Masow and another
1940 AD 75
at
90-91 Centlivres JA sets forth the essentials that are to be
contained in a charge sheet:
“
It
will be noticed that the two essentials that must be set forth are
firstly the offence and secondly the particulars as to time,
place,
person and property and that both these essentials must be set forth
in such manner ‘as may be reasonably sufficient
to inform the
accused of the nature of the charge’. In other words the
accused must be informed of the offence of which
he is charged and
with particulars as to time, place, person and property ……
To put it in another way, everything
which is an essential element in
the offence must be set forth in the charge.”
In
S
v Hugo,
supra,
the
Appellant had been charged and convicted in a Provincial Division of
inter
alia
fraud.
In further particulars to the indictment the State specified two
misrepresentations to the complainant which the Appellant
was
alleged to have made. At the trial the State led the evidence of
another misrepresentation not alleged in the indictment
or the
further particulars supplied thereto. In the Court
a
quo
the
Trial Judge had overruled an objection to the admissibility of such
evidence. On appeal it was held that the potentiality
of serious
prejudice to the Appellant if evidence were to be considered in
respect of allegations not made in the charge sheet,
was in the
circumstances of the particular case manifest and the conviction and
sentence were consequently set aside. At 540
F-G Miller JA states
that:
“
It
is of vital importance to such an accused to know what he is alleged
fraudulently to have said or done and he ought not to be
left to
speculate as to the true nature of the misrepresentations laid to his
charge, nor to spell out of the charge possible misrepresentations
upon which the State might have intended to rely but which it did not
reasonable clearly describe. And when the State clearly
specifies
the misrepresentations upon which it relies the accused is entitled
to regard them as exhaustive and to prepare his defence
in respect of
those representations and no other.”
M
iller
JA also refers to
S
v Heller and another,
supra
at
535 H where Trollip J held as follows:
“
What
I have to decide is whether, in regard to the fraud charges, the
State has at this stage of the trial adduced prima facie proof
not
merely that the accused have committed fraud but has committed it in
the manner alleged in the indictment, because precision
in pleading
and charging fraud is generally, a fortiori in a case of this
complexity and magnitude, essential.”
14.1
The
above
dictum
of
Trollip J in
S
v Heller and another
,
is particularly apposite to the facts of this case. There was in my
view a duty on the State to set forth with clarity and precision
the
basis on which it alleged that the accused had made
misrepresentations. More particularly, the State was obliged to set
forth
whether it relied on a commission or omission on the part of
the Appellant. Having taken the route of formulating charges based
on a commission, the State could then not thereafter seek to rely on
an omission on the part of the Appellant. Moreover and in
any event,
the evidence adduced before the Magistrate at most, in my view,
merely established a case for civil liability on the
part of the
Appellant based on his omission to rectify the erroneous refunds.
That this constituted at most civil liability on
the part of the
Appellant was correctly conceded by Van der Walt in her evidence when
she was re-examined by the prosecutor.
14.2 In
S
v Burstein,
supra
,
at 604 H, Coetzee J expounds a very useful distinction between
civil and criminal liability for fraud as follows:
“
The
question whether non-disclosure is criminally fraudulent is not an
easy one. As pointed out by Hunt in SA Criminal Law and Procedure
vol
2 at 716, silence may well constitute civil fraud without
constituting criminal fraud.
The
distinguishing feature lies mainly in the presence or absence of the
necessary intention to defraud
.
There are very few cases of criminal non-disclosure. The most
comprehensive judgment on this topic is that of TROLLIP J (as he
then
was) in S v Heller and Another (2)
1964 (1) SA 524
(W) at 536 - 538,
which I adopt, with respect, as an authoritative statement of the
law. For the purpose of dealing with the facts
of the present case
more conveniently, I would summarize the requisites of this type of
fraud, as discussed by the learned Judge,
as follows:
(a) a duty to disclose
the particular fact;
(b) a wilful breach of
this duty under such circumstances as to equate the non-disclosure
with a representation of the non-existence
of that fact;
(c) an intention to
defraud which involves
(i) knowledge
of the particular fact;
(ii) awareness
and appreciation of the existence of the duty to disclose;
(iii) deliberate
refraining from disclosure in order to deceive and B induce the
representee to act to its prejudice or potential
prejudice;
(d) actual
or potential prejudice of the representee.”
(
emphasis
added)
In
the circumstances therefore and for the reasons set out he
reinabove,
the appeal against conviction must succeed. It is therefore
unnecessary to deal with the sentence imposed. In passing
I might
add that it strikes me as shockingly severe.
I
deem it necessary to say something
in
conclusion about the highly unacceptable state that the record was
in. We received the trial exhibits only on the Friday preceding
the
Monday on which the appeal was heard. This only came about after I
had addressed a memorandum to the Appellant’s attorneys
to
point out this omission from the record. It is obvious that the
Exhibits, being documentary proof, were highly relevant and
was an
essential requisite to a sensible reading of the voluminous record.
The omission of this vital part of the record
is completely
unacceptable. Secondly the record did not contain the proceedings
on petition to this Court where the Appellant
was granted leave to
appeal against the conviction. This is another serious oversight.
We pointed these omissions out to Appellant’s
Counsel at the
commencement of the hearing and indicated to him that we were
however keen to have the matter finalised given
the
prima
facie
view
which we had taken regarding the merits of the appeal. I must make
it very clear that under ordinary circumstances, the
appeal would
have summarily been struck from the roll as is provided for in the
Rules of Court. Our indulgence granted to the
Appellant on this
occasion must not be interpreted as a waiver or relaxation of the
Rules with regard to the preparation of the
records for appeals in
this Court. In the present matter the record was particularly
voluminous and made for difficult reading,
given the relative
complexity of the case and such difficulty was greatly exacerbated
by the initial absence of the trial exhibits.
The following order is
issued:
THE
APPEAL SUCCEEDS. THE APPELLANT’S CONVICTION
S
AND SENTENCE ARE SET ASIDE.
___________
______________
SA MAJIEDT
JUDGE
I
CONCUR:
___________
______________
EJ STEYN
ACTING
JUDGE
FOR
THE APPELLANT :
ADV
D CLOETE
INSTRUCTED
BY :
JL
STEYN ATTORNEYS
FOR
THE RESPONDENT :
ADV
C KERSTEN
INSTRUCTED
BY
: THE
DPP