S v Fotoyi (CA&R 74/2004) [2005] ZAECHC 41 (1 April 2005)

IN THE HIGH COURT OF

SOUTH AFRICA

BISHO

CASE NO. CA&R 74/2004

In the matter between:

MZWANDILE

FOTOYI APPELLANT

and

THE STATE

RESPONDENT

APPEAL JUDGMENT

DHLODHLO ADJP:

1. The Appellant who was a company director was charged in his personal capacity and was convicted in the Court a quo (Regional Court sitting at Mdantsane) on four counts of theft under the common law, three counts of fraud and one count of attempted murder. It is alleged that he stole money which belonged to certain people on the pretext that he was going to assist them in purchasing houses. It is further alleged that he later repaid some of the people by cheques which he signed and which were dishonoured. We do not deem it necessary to burden this judgment with all the facts which are detailed in the judgment of the Court a quo.

2. The Appellant was sentenced to undergo imprisonment for two years on each of the four theft charges. The four sentences were ordered to run concurrently. On the fraud charges he was sentenced to imprisonment for two years in respect of each of the charges and the three sentences were also ordered to run concurrently. On the attempted murder charge he was sentenced to undergo imprisonment for five years.

3. An appeal was noted against the convictions and sentences and leave to appeal to this Court was granted by the Court a quo.

It is worth mentioning that the Appellant was one of the three Directors of FHY Home Improvement and Property Developers (Pty) Limited, hereinafter referred to as ‘the company’, a properly incorporated company which had a share capital.

5. It is common cause that the complainants were issued with receipts by the company in respect of amounts they had paid and that the money was deposited into the bank account of the company.

6. The Appellant’s defence in respect of the theft and fraud charges was that he could not be held personally liable for any theft or fraud committed by the company.

According to Nyanisile Hobololo who was one of the directors, all the directors were responsible “to run the company properly and correctly and to do a proper accounting”.

8. Lynette Elaine Anderson was employed by the company on a temporary basis to do its accounts. She said that the company directors did not follow accounting instructions in that, among others, they did not operate a trust account. She said that she told the directors on several occasions that they had to operate a trust account and a business account. Although the cheque book was kept by the Appellant, all cheques required signatures of two persons.

9. It was argued on behalf of the Appellant that offences committed by the company cannot be said to have been committed by the Appellant.

10. The company held the monies in trust. “The expenditure of trust funds is not theft if at the time X has sufficient funds at his disposal to cover the amount expended. If there is no risk because the trustee has what is called an ‘equivalent liquid fund’ the expenditure is not a breach of the trust and thus not theft” (JRL Milton South African Criminal Law and Procedure (Common Law Crimes) Vol II (1996) 609. See also C R Snyman Criminal Law 4 ed (2002) 495 – 6).

11. Mr Koekemoer argued that the State ought to have charged the company in terms of the common law or, alternatively, under statutory provisions, as there was a distinction between the Appellant and the company. He argued further that a company director may be criminally prosecuted in his personal capacity in terms of the Companies Act 61 of 1977 – section 424(3) and that liability in terms of the statute cannot be transferred to common law.

12. Concerning the fraud charges Mr Koekermoer submitted that the State had failed to prove misrepresentation on the part of the Appellant – that is, that he knew that there were insufficient funds in the company account when cheques were issued.

13. Mr Koekemoer referred to the judgment of the Court a quo at page 360, namely:

‘It is clear from the evidence of Ms Anderson that the accused at all material times knew that there were insufficient funds in his accounts to meet the cheques that he issued. It was her evidence that she warned him time after time that he cannot issue a cheque because there is no money. And he assured her that he will deposit money, he is about to receive monies, and that there will be sufficient funds in the account to honour these cheques and which apparently did not happen according to the evidence before me.’

14. Mr Koekemoer’s submission was that Ms Anderson did not testify in respect of specific cheques and that evidence adduced at the trial shows that the Appellant had assured her that there would be sufficient funds in the account to honour cheques.

15. With regard to the attempted murder conviction Mr Koekemoer advanced no argument.

16. In as far as sentences are concerned, Mr Koekemoer argued that the offences were committed in the running of the company and that theft and fraud sentences should have been ordered to run concurrently.

17. Concerning the attempted murder sentence, Mr Koekemoer submitted that the sentence is excessive, that the Appellant has no previous convictions of a violent nature, that he acted out of anger and on the spur of the moment and that a wholly suspended sentence would have been appropriate.

18. Concerning theft and fraud charges, Mr Mbusi said that he would not take the argument any further. With regard to the attempted murder conviction, he submitted that the sentence imposed by the Court a quo is appropriate.

19. We are of the view that, with regard to theft charges, the State did not prove that the Appellant used the monies which had been received from the complainants and had been deposited into the company account. He was one of three directors and two people had signing powers. There is not even slight evidence that the Appellant derived personal benefit from the monies. The theft convictions cannot stand.

20. Concerning the fraud convictions, one question should be asked, namely: Did the Appellant know that there were no funds in the account when cheques were issued?

21. The evidence that Ms Anderson had warned him several times that funds were insufficient does not go far enough to prove that on the occasions when dishonoured cheques were issued he knew that funds were insufficient.

22. It is obvious that the directors of the company were probably not skilled in running a business of that nature properly. It can be said that they were negligent in that they would not first establish that funds were sufficient in the account before cheques were issued. But the knowledge that there were insufficient funds (not that they ought to have known that there were insufficient funds) is essential. In our view the State did not prove the cases beyond reasonable doubt.

23. With regard to the attempted murder conviction, it is clear that the Appellant fired a shot which struck the complainant Phelelani Bakaco in the thigh. The conviction should stand.

24. The Appellant is 50 years old. Mr Koekemoer argued that the sentence of five years for attempted murder is excessive. He referred to the Appellant’s personal circumstances, including that his personal estate of R96 594,00 had been attached and confiscated in terms of the Prevention of Organised Crime Act 121 of 1998. According to the evidence the Appellant fired the shot when the complainant was running away.

25. We do not find that the Court a quo misdirected itself in imposing the sentence. The term of imprisonment is appropriate. Attempted murder through the use of a firearm is very serious. Violent crimes involving the use of firearms are prevalent in this Country.

26. Courts should send a loud and clear message that such crimes will not be tolerated. We however, feel that a period of one year should be conditionally suspended.

27. ORDER

We make the following order:

27.1 The appeal against all the theft and the fraud convictions is upheld. The convictions and sentences in respect of these offences are set aside.

27.2 The appeal against the conviction in respect of the attempted murder charge is dismissed. The conviction is confirmed. The appeal against the sentence in respect of this conviction is also dismissed.

27.3 The sentence is confirmed but it is ordered that a period of one year of the five – year prison term be suspended for five years on condition that he is not again convicted of murder or attempted murder committed during the period of suspension of the sentence.

_________

A

E B DHLODHLO

ACTING

DEPUTY JUDGE PRESIDENT

01 APRIL 2005

I agree

_______

­­­­­­­­­­­­­­­­S

P MAQUBELA

ACTING JUDGE

HEARD ON: 04 MARCH 2005

FOR THE APPELLANT: ADVOCATE J R

KOEKEMOER

FOR THE RESPONDENT: ADVOCATE L L

T MBUSI

DIRECTOR OF PUBLIC PROSECUTIONS

APPELLANT’S ATTORNEYS: SMITH TABATA INC.

KING WILLIAM’S TOWN