R v Mall and Others

• Jurisdiction: South Africa
• Citation: 1960 (1) SA 73 (N)

R v Mall and Others
1960 (1) SA 73 (N)

1960 (1) SA p73

Citation	1960 (1) SA 73 (N)
Court	Natal Provincial Division
Judge	Caney J
Heard	November 12, 1959
Judgment	November 5, 1959

Flynote : Sleutelwoorde

Criminal procedure — Indictment — Crown not entitled to A introduce an offence not disclosed by the preparatory examination — When necessary to re-open preparatory examination — Amendment — Charge assuming a different complexion as result of particulars — Quashed as embarrassing and calculated to prejudice accused — Company — Director — Who is — Scope of sec. 185 of Act 46 of B 1926 — Deposed director continuing to act — Not a director but possibly an 'officer' within meaning of sec. 185.

Headnote : Kopnota

The Crown may not charge, or introduce into a charge, an offence not disclosed, in the sense that a sufficient case is not made out for the magistrate to commit for trial, by the evidence at the preparatory C examination. To hold otherwise would deny the accused the right of preparatory examination before trial and all its incidentals, including the right of cross-examination and the opportunity of answering the charge before the magistrate. If the Attorney-General wishes to enlarge an indictment, in consequence of new evidence available to the Crown, his course is to direct a re-opening of the preparatory examination.

Where a person has expressly resigned his appointment as director of a company and another has been expressly put into that office to function D on his behalf, then, although the first person may have continued to exercise the functions of a director with the consent of the only other shareholder and of the appointed director, that does not make him a director for the purposes of the Companies Act and, in particular, for the purposes of section 185 of that Act, though it may suffice to bring him within the term 'other officer' in that section.

Where, on charges of fraud, the allegations in the indictment had E originally disclosed a case of a company obtaining goods by the fraudulent representations of the three accused, but as the result of the supplying of further particulars it now appeared that the case was one of the first accused and two others conspiring to obtain, and obtaining, the goods or their proceeds through the company and their manipulation of it, whilst the situation of the second and third accused in this process was now left uncertain,

Held, that the case had now assumed a different complexion and that the indictment was now embarrassing and calculated to prejudice the accused F and that it should be quashed.

Case Information

Application to quash an indictment. The facts appear from the reasons for judgment.

P. W. Thirion (with him L. C. Hofmeyer), for the Crown.

G. Lowen, Q.C. (with him G. E. Caminsky), for the first accused. G

E. J. Haddad, for the second and third accused.

Cur adv vult.

Postea (November 12th).

Judgment

H Caney, J.:

This is my judgment on the second application to quash the indictment and the alternative exceptions taken to it. In the course of my judgment on the first application and exceptions, delivered on 16th October, I ordered the Crown to supply certain particulars in relation to the fraud counts and counts 288 and 289. [*]

1960 (1) SA p74

Caney J

On October 24th the Crown supplied some fifteen pages of particulars and five days later filed an application for amendment of the particulars it had supplied earlier. Thereupon the first accused applied for still A further particulars, which the Crown supplied on 2nd instant, so that I have now before me the original indictment with the annexures to it, three sets of particulars supplied to the first accused (and an amendment of them), two sets supplied to the second and third accused and the set supplied to all three accused in consequence of my order.

Unlike the first application to quash the indictment and the exceptions B to it, the present are raised on behalf of the first accused only. With a view, so far as possible, to avoiding or reducing repetition, I refer to my earlier judgment which should be read with this one, in which references to sub-secs. (1), (5) and (10) relate to those subsections of sec. 384 and 381 of the Criminal Procedure Acts of 1917 C and 1955.

In relation to the fraud counts, I ordered the Crown to supply particulars of the averment that the first accused was a director within the meaning of sub-sec. (10) after 2nd September, 1952, the date on which he is said to have resigned his appointment as director of the D company; the Crown had also to provide particulars as to the source of his power to control the company. The particulars supplied by the Crown are to the effect that on 9th April, 1952, the first accused and his wife became the holders of both issued shares of the company and thereby acquired control of the company and its affairs; that on the same date E the first accused became sole director of the company; that on 5th May the remaining four hundred and ninety-eight unissued shares were allotted to the first accused's wife.

The particulars go on to allege an agreement between the first accused, Y. C. Meer and Mahomed Amod (Goolbhai), to which I shall refer later. F The purport of the averment is that they agreed upon a fraudulent scheme for obtaining goods on credit and avoiding payment of the price. Then, coming to the time when the first accused resigned his directorship, the particulars aver that, being apprehensive that as director he might be held responsible for the frauds perpetrated in the ordering of goods, he decided to have a person appointed to be the G director, as his nominee; that he persuaded the second accused to accept such appointment on conditions which included one to the effect that the first accused would continue to direct and control the company's affairs as before, either through the second accused or otherwise; the second accused was appointed on 2nd September, 1952, on which date the first accused resigned - the later particulars state H that the second accused was appointed by the first accused and his wife, they being the shareholders. There follows an averment of an agreement between the two accused, said to have been made to give a semblance of regularity to the change in directorship, to pretend that the second accused had bought all the shares of the company and taken over control of it, whereas in actual fact, the averment reads, the second accused 'at no time purchased, received transfer of or acquired any shares of the company'; nor was his name 'entered in the share

1960 (1) SA p75

Caney J

register of the company as a director'. Then the particulars aver conduct on the part of the first accused after 2nd September which, the Crown contends, was in the course of his exercising control of the company. There is no need to set out the conduct in full; it relates to his taking part in the decision of what goods were to be ordered and A from what merchants, and the giving of instructions for goods to be bought and the supervision of correspondence to that end and scrutiny of invoices: deciding what promissory notes and bills for the price of the goods were to be met, and which not, and the providing of funds for deposit in the banking account; the selection of goods for removal and the disposal of them and the receiving of the proceeds.

B I consider that the particulars supplied by the Crown suffice to show, on their face, that the first accused was a director within the meaning of sub-sec. (10) and also to disclose the source of his power to exercise, or take part in exercising, control of the company.

In addition to the relevant information on these heads, however, the C Crown has made the averments, which I have mentioned in passing, of the agreement between the first accused, Y. C. Meer and Mahomed Amod. This agreement is alleged to have been made towards the end of May and the substance of the scheme is set out as follows:

'. . . That they would, either themselves, or through the servants of D the company order certain goods on credit for and on behalf of the company;

that in order to obtain the said goods on credit they would make use of the general good reputation of the company among business men;

that, having taken delivery of the said goods they would sell a small proportion thereof in the ordinary course of business in the business which was being conducted by the company in Wilson Street, Dundee, in order to give a semblance of regularity to this business;

that the bulk of the said goods they would either appropriate to E themselves or dispose of otherwise than in the ordinary course of business;

that they would appropriate to themselves the proceeds of the goods sold or disposed of;

that apart from small payments in order to avoid suspicion being created against the company they would not pay the purchase price of any of the said goods to the suppliers thereof nor would they make provision for funds which would enable the company to pay for the said goods ordered;

F that the company thus being unable to pay its creditors would eventually be placed in liquidation.'

This is followed by the allegation that they (the first accused, Y. C. Meer and Mahomed Amod) commenced to execute this plan from the beginning of June, 1952, and

'in the execution of this plan goods were ordered and disposed of otherwise than in the ordinary course of business'.

G Then follows an averment that the goods forming the subject of the two hundred and eighty-seven counts of fraud in the indictment were at no time paid for.

On behalf of the first accused, Dr. Lowen contended that the Crown has now averred a new case, different from that contained in the original H indictment which charged the three accused, by virtue of sub-sec. (5), with frauds alleged to have been committed...