Willard Chidambo Maseko & Anor v The State

### Preamble
Judgment No. SC 42/20
1
Civil Appeal No. SC 852/17
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REPORTABLE	(39)

(1)      WILLARD     CHIDAMBO     MASEKO     (2)     DONNA     MTENJWA     MASEKO

v

THE     STATE

SUPREME COURT OF ZIMBABWE

GWAUNZA DCJ, GOWORA JA & MAKONI JA

HARARE, SEPTEMBER 13, 2018

T. T. G. Musarurwa, for the appellants

T. Mapfuwa, for the State

GOWORA JA

[1]	This is an appeal against a judgment of the High Court which dismissed an appeal mounted by the appellants after their conviction by the magistrates court on a charge of contravening s 136 of the Criminal Law (Codification and Reform) Act, [Chapter 9:23], (the “Criminal Code”). Pursuant to the conviction, each of the appellants was sentenced to a term of 24 months imprisonment with six months being suspended on conditions of good behavior.

[2]	After hearing the parties, the court dismissed the appeal in its entirety and indicated that our reasons would follow. These are they.

[3]	The common cause facts which are the following:

The appellants are husband and wife. Sometime in 2009, the appellants and one Effie Zituta (the complainant) entered into an agreement in terms of which the latter leased her residential property to the appellants. The appellants were, apart from paying rentals for the property, required to look after and secure the contents of containers which were kept at the property in question. It is common cause that the complainant was residing in Namibia where she was employed.

[4]	In June of the same year, the complainant’s sister discovered that the appellants had stolen hardware material that had been stored in the containers. On 25 June 2009 both were arrested on allegations of theft. They admitted that they had stolen the property in question and offered to settle the matter with the complainant. They then suggested that a property registered in the name of Zancomm Services (Pvt) Ltd in which they were directors and had beneficial interests be pledged as security for the due payment of the debt by them.

[5]	Following upon the offer the appellants were released from custody. A memorandum of understanding was executed recording their agreement and the immovable property was duly pledged as security for payment by the appellants of an amount of US27 473. It was a term of the agreement that if the appellants failed to pay the amount in question within a stipulated period the complainant could take transfer of the immovable property. The original deeds of title were handed over to the complainant’s duly appointed representative.

[6]	It is common cause that the appellants did not pay the debt. Despite the pledge and the memorandum of understanding, the appellants sold the property to one Freddy Matukanzvimbo who took transfer in 2012. In order to cause transfer to be effected the appellants made an application to the Registrar of Deeds alleging that they had lost or misplaced the original title deeds. A replacement deed of title was issued to them and they were able to transfer the property to the purchaser. This process enabled them to bypass the memorandum of understanding without recourse to the original title deeds which were held by the complainant as security under the memorandum of understanding. These actions led to their arrest and subsequent conviction for fraud.

[7]	Although before the High Court they sought to challenge the facts upon which the conviction was premised, before us, Mr Musarurwa accepted that the findings of fact by the magistrates court and confirmed on appeal by the High Court could not be assailed. In my view this concession is proper.

[8]	According to Mr Musarurwa, the appellants take issue with the reasoning by the court in relation to its interpretation of s 157 of the Criminal Code. The sole ground of appeal upon which the appellant approached this Court is couched as follows:

The court a quo erred and seriously misdirected itself in confirming a conviction on fraud of a residential stand valued at USD27 473.00 when the evidence that was led at the trial clearly showed that the residential stand did not belong to the complainant but to the appellants and thus she could not have been prejudiced of a stand that did not belong to her. The facts as proven did not, at law, satisfy the element of actual prejudice, as alleged, thus warranting the conviction of fraud to be set aside.

[9]	The ownership of the stand was never an issue. The premise upon which the appellants were charged with fraud was that they had misrepresented to the Registrar of Deeds that they had mislaid the title deeds and yet they were well aware that they had deposited the same with the complainant’s representative in terms of a memorandum of understanding. As part of the state case presented at the trial was an affidavit deposed to by the second appellant. In it she stated that:

“the deed of transfer No 0003621/2003 was stolen/lost or destroyed and all efforts to locate it have been fruitless.

…………………………………………………………..

Further to the best of my knowledge, at the time it was stolen/lost or destroyed the Deed was not pledged or ceded to any person or otherwise detained as security for a debt or otherwise and should it be found, we undertake to surrender it to the Registrar.”

[10]	Clearly on the facts the averments contained in the affidavit were outright lies. They were intended to induce the Registrar to issue a duplicate deed. Had the registrar known that the deed had been pledged as security for the due payment of a debt he would not have issued a duplicate deed and, without this deed, the appellants would not have been able to successfully conclude the agreement to sell the property to Matukanzvimbo.

[11]	In any event, the charge of fraud was to the effect that they had misrepresented to the Registrar of Deeds that the title deeds to the stand had been lost or misplaced well knowing that they had pledged the same to the complainant. The court a quo found that the misrepresentation to the Registrar of Deeds had resulted in actual prejudice to the complainant, and that it was not necessary that the prejudice be felt by the actual person to whom the misrepresentation was made. In making this finding the court a quo placed reliance on s 157 of the Criminal Procedure and Evidence Act [Chapter 9:07], commonly referred to as the C P & E Act. Section 157 is to the following effect:

157 Allegation of intent to defraud sufficient without alleging whom it is intended to defraud

(1) It shall be sufficient in any indictment, summons or charge in respect of—

(a) forgery or fraud; or

(b) ......

(c) obtaining anything by means of a fraudulent trick or device or any other fraudulent means; or

(d) inducing, by means of any such trick or device or fraudulent means, the payment or delivery of any

money or thing; or

(e) attempting to commit or to procure the commission of any such offence;

to allege that the accused did the act with intent to defraud, without alleging the intent of the accused to be to defraud any particular person.

[12]	In construing the above provision the court a quo stated:

“The import of s 157 is therefore that it is not necessary to identify the person whom the appellants intended to defraud in order for them to be found guilty. As it happened in the present case, although the misrepresentation was directed at the Registrar of Deeds the person intended to be defrauded was the complainant.”

[13]	In his submission before the court, Mr Musarurwa contended that the conviction for fraud was unsustainable in the absence of a nexus between the misrepresentation and the person intended to be prejudiced by it. He sought reliance for this proposition on S v Ostilly & Others 1977(2) 104.  A perusal of that authority will tend to confirm that the interpretation of s 157 of the C P & E Act by the learned judge in the court a quo was actually premised on common law principles on fraud and that the interpretation of the provision was correct. At p115F-116F of the judgment in S v Ostilly & Others (supra), the court stated:

“’To constitute the crime of fraud there must be a willful pervasion of the truth with the intent to defraud, and to the prejudice of another.’

(R v Jones and More, 1926 A.D. 350 at p352). See too Mattheus, De Criminbus, 48.7.11; Voet, 48.10.1; Van der Linden, Koopmans-handboek, 2.6.4.”

“The concept of potential prejudice in this generally accepted definition of fraud has proved to be the controversial one. It is, however, settled law that a wide interpretation is to be given to it. It need not relate to a financial or proprietary interest.  A misrepresentation calculated to disrupt, inconvenience or frustrate an aspect of public administration, would amount to potential prejudice (cf. R v Ressel, 1968 (4) S.A.224 (A.D.) at p 232). Such prejudice need not relate to the person to whom the misrepresentation is made. Thus in R v Nel, 1952 (4) S.A. 535 (T), CLAYDEN, J as he then was, said:

“But fraud can, I think, be committed though the statement is made to a person other than an agent. It seems to me that whatever the relationship between the person to whom the misrepresentation is made and the person who is prejudiced, if it can be proved that the prejudice was designed in the statement which was made, and came about or was likely to come about, then there is fraud.”

“The causative link between any misrepresentation and the actual or potential result is, to my mind, an important element of the offence and a vital aspect of the enquiry in this case. In this regard I respectfully agree with the observations by Hunt in South African Criminal Law and Procedure, vol. II, that this causative element is implicit in the concept of potential prejudice. At p 728 the learned author says:

“It is often stated that there must a causal link between the misrepresentation and the actual or potential prejudice. The word ‘potential’, however, incorporates in itself a test of causation. ‘Potentiality’ is a way of referring to causation. It is therefore logically redundant to say that the misrepresentation must cause the potential prejudice: if the misrepresentation is potentially prejudicial, the law’s causation requirements will have been satisfied.”

“What is the test to be applied to determine whether this requirement is in fact satisfied? In the above cited passage from the judgment of CLAYDEN, J, the learned judge postulates proof that the designed prejudice “was likely to come about”. Subsequently, in R v Bester, 1961 (2) S.A. 52(F.C.) at p54, he qualifies the use of the word “likely” in the light of the remarks of SCHREINER, J.A., in R v Heyne, 1956 (3) S.A. 604(A.D.), which are as follows:

“The false statement must be such as to involve some risk of harm which need not be financial or proprietary, but must not be too remote or fanciful, to some person, not necessarily the person to whom it was addressed.”

“Similar phraseology has been used in other case to convey the nature of this requirement. Thus in R v Seabe, 1927 A.D 28 at p 32, WESSELS, J.A. said:

“It seems to me therefore that where there is some risk, though perhaps slight, the element of prejudice necessary to support crimen falsi exists.”

“This approach to the question accords with the views expressed by VAN DEN HEEVER, A.J.P., as he then was in R v Frankfort Motors (Pty) Ltd and Others 1946 O.P.D. 255. After an exhaustive review of Roman Law authorities, in which there is no reference to prejudice as a requirement, and of our common law writers, from which it appears that this element was incorrectly incorporated in the definition of fraud by certain of our later common law writers, the learned judge pleads in effect for no further “regdwaling ad consequetias”, inter alia, by not taking too narrow a view of ……….”

[14]	Although this is not an issue that the grounds of appeal addressed the court decided to allow Mr Musarurwa to argue the point on the basis that it was an issue of law which can be raised at any time during proceedings.

[15]	Even though the court a quo resolved the issue on the basis of the provisions of s 157, it is clear that what is provided for in the provision is a common law principle. Fraud can be committed even if the person intended to be defrauded is not the person to whom the misrepresentation is communicated. In this case there was a misrepresentation to the Registrar. The misrepresentation presented risk to the complainant. A duplicate title deed was issued which resulted in the transfer of pledged property to some person other than the complainant. As a result of the misrepresentation the complainant was prejudiced to the sum of USD27 473.00. If the Registrar had not been inveigled into releasing a copy of the title deeds the complainant would have been protected by the memorandum of understanding and the title deeds. Clearly the crime of fraud was established and the court a quo was correct in its decision to dismiss the appeal by both appellants.

[16]	In the premises the appeal lacks merit and it is for the above reasons that the court dismissed it.

GWAUNZA DCJ:          I agree

MAKONI JA:            	I agree

Maeresera & Partners, legal practitioners for the appellants

The National Prosecuting Authority, legal practitioners for the State