Is theft a competent verdict on a charge of fraud?

October 1st, 2014
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By Michael Miller

In the case of Kok v S (WCC) (unreported case no 14552, 2-7-2014) (Henney J), the accused had been charged with fraud. It was alleged that he fraudulently obtained payment of an amount of R 98 668,98 from the Government Employees Pension Fund (GEPF) after he had been dismissed by the South African Police Service (SAPS).

The accused pleaded not guilty to the charge. Before plea, the court ‘warned’ the accused of a possible competent verdict on a charge of theft. This, the court said, was in terms of s 256 of the Criminal Procedure Act 51 of 1977 (the Act). It is important to note that the accused was not charged in the alternative with theft (as is common practice).

A number of witnesses were called. The nature of their evidence does not appear from the judgment, but it would appear that the eventual conviction resulted mainly from the admissions made by the accused after he obtained the services of a new attorney.

At that stage, admissions were made in terms of s 220 of the Act. The effect of these was that the accused admitted that, although he was not guilty of fraud, he was guilty of the theft of the said amount. On this basis, he was convicted of theft and sentenced to an effective sentence of five years’ imprisonment. The five-year sentence was suspended for a period of five years on certain conditions, which included the repayment of the amount to the complainant in full, before 31 July 2013.

Subsequently the matter went on special review in terms of s 304(4) of the Act. That subsection provides for the review of (as opposed to appeal against) a conviction or sentence where the procedure in the trial court was not in accordance with justice. Although the review dealt with the sentence imposed, the court mero motu raised the question of whether the conviction should also be reconsidered.

The question arose whether theft was indeed a competent verdict to fraud. This was because the accused had been charged only with fraud, but was convicted of theft, a crime with which he had not been charged. The magistrate purported to convict the accused of theft because he was of the view that in terms of s 256 of the Act, theft was a competent verdict to fraud.

Where the prosecution does not prove the crime charged but proves some other crime, then provided certain conditions are met, an accused person may be convicted of the other crime, even though it was never charged. Basically there are two rules which must be followed in deciding whether a conviction on a competent verdict is appropriate.

The first is that in terms of Chapter 26 of the Act (ss 256 – 270) it must be provided that it is competent to convict an accused person of such other charge. The sections referred to provide in great detail exactly which crimes an accused person may be convicted of if the crime charged is not proven (competent verdicts). Thus, culpable homicide is a competent verdict to a charge of murder.

The second is that, even though such other offence is indeed a competent verdict, its commission must be proven beyond reasonable doubt. Thus if murder is not proven, but culpable homicide is proven beyond a reasonable doubt, the accused person may be convicted of culpable homicide.

In casu, there was no doubt that – because of the accused’s admission to this effect – the crime of theft had been proven beyond reasonable doubt. The question was whether in terms of ss 256 – 270, theft was indeed a competent verdict to fraud.

Henney J (with Le Grange J concurring) looked in the first instance at s 256 of the Act (under which the magistrate purported to act). That section merely provides that, where a person is charged with a certain offence but only an attempt to commit the offence so charged is proven, then an accused person may be convicted of such attempt. It makes no provision that an accused person charged with fraud may be convicted of theft.

There is indeed no section that provides for competent verdicts on a charge of fraud.

Henney J, however, confirmed the theft conviction on the basis of s 270 of the Act which provides for offences not specified in ss 256 – 269. That section provides that: ‘If the evidence on a charge for any offence not referred to in the preceding sections [in sections 256 to 269] does not prove the commission of the offence so charged but proves the commission of an offence which by reason of the essential elements of that offence is included in the offence so charged, the accused may be found guilty of the offence so proved’.

This section has been interpreted in a number of cases referred to by Henney J as meaning that, as long as the essential elements of the lesser offence are included in the offence charged (the more serious offence), an accused may be convicted of the lesser offence.

The main case in this connection is S v Mavundla 1980 (4) SA 187 (T) where Le Grange J stated at 190H – 191A as follows (my own translation from Afrikaans) –

With respect I suggest that the question is simply whether the alleged (lesser) offence by reason of its essential elements is incorporated in the offence charged. The inquiry is in the first instance directed at the essential elements of the (lesser) offence, in other words the definition of the crime. The second step is to determine if those (essential) elements are included in the offence charged.

What must, therefore, be considered is whether the essential elements of theft are included in the crime of fraud.

According to Snyman CR Criminal Law 5ed (Durban: LexisNexis 2008) at 531 ‘fraud’ is ‘the unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another’.

Snyman lists the elements of the crime as following:

  • a misrepresentation;
  • prejudice or potential prejudice;
  • unlawfulness; and
  • intention.

According to the same writer at 484, the definition of ‘theft’ is –

‘A person commits theft if he unlawfully and intentionally appropriates movable, corporeal property which

(a)      belongs to, and is in the possession of, another;

provided that the intention to appropriate the property includes an intention permanently to deprive the person entitled to the possession of the property, of such property.’

Snyman lists the elements of the crime as:

  • an act of appropriation;
  • in respect of a certain type of property;
  • which takes place unlawfully; and
  • intentionally.

A brief look at the elements as outlined above, shows immediately that the essential elements of theft are not included in the essential elements of fraud. There is, in the crime of fraud, no element of appropriation. Nor is it required that fraud be in respect of movable, corporeal property. Nor does the intention in fraud cases have to be to deprive the person entitled to the possession of the property, of such property.

It follows that a person charged with fraud cannot, on the basis of a competent verdict in terms of s 270, be convicted of theft.

Nevertheless, Henney J confirmed the conviction on the charge of theft on the basis of s 270. He agreed with the magistrate that it was proper to convict the accused of theft. However, he differed with the magistrate in holding that to arrive at such a competent verdict on the basis of s 256 was incorrect.

In my view, Henney J was wrong in confirming the conviction on theft as a competent verdict in terms of s 270. As indicated above, the essential elements of theft are not included in the essential elements of fraud.

Accordingly, the conviction on the charge of theft should, in my view, have been set aside. The prosecution, if so advised, would then be at liberty to charge the accused again because the setting aside of the conviction would not be based on the merits of the case.

Michael Miller BA (NMMU) LLB (Wits) LLM (UJ) is an advocate and legal researcher at Legal Aid South Africa in Johannesburg.

This article was first published in De Rebus in 2014 (Oct) DR 59.

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