Rex v Milne and Erleigh (7)

• Jurisdiction: South Africa
• Citation: 1951 (1) SA 791 (A)

Rex v Milne and Erleigh (7)
1951 (1) SA 791 (A)

1951 (1) SA p791

Citation	1951 (1) SA 791 (A)
Court	Appellate Division
Judge	Centlivres CJ, Greenberg JA, and Schreiner JA
Heard	October 3, 1950; November 21, 1950
Judgment	December 15, 1950

Flynote : Sleutelwoorde F

Criminal law — Persons, Liability of — Managing directors of G public companies charged with and convicted of common law crimes of theft and fraud and contraventions of the Companies Act, 46 of 1926 as amended — Incitement — Contravention of Act 27 of 1914, sec. 15 (2) (b) — What amounts to — When section applicable — Theft — Managing director of a secretarial company appropriating share H certificates debited to such company and taken out of its possession as controller in its strong-room of the pool of companies to which it acted as secretary — Evidence that another company in pool obliged to deliver such shares to such director — Shares proved to have been taken for own benefit — No benefit to any company — Wide powers given to director not including power to transfer obligations and allocate profits — Defence that director thought he had such

1951 (1) SA p792

powers not a reasonable possibility — Joint managing director properly convicted as his partner — Act 31 of 1917, sec. 384 (7) — Whether incorporeals capable of being subject of theft — Whether mistaken belief in regard to facts to be a defence must be reasonable. A — Whether belief in regard to question of law in same position as one in regard to fact where claim of right put forward — Removal of shares from strong-room in which shares of different companies mixed — Whether stolen from a particular company where none of companies retained real right in them — Company under duty to deliver certain B shares to managing directors — Company after selling some not possessed of sufficient shares — Managing directors instructing official of company to credit them with a share of profits in lieu of such obligation — Effect — Fraud — Managing director with power to sell without consulting board selling shares at a price less C than he could have obtained — Effect — Duty of managing director to exercise power honestly — Circumstances constituting a conspiracy to commit fraud — Criminal procedure — Trial — Irregularities in — Presiding Judge pronouncing on credibility of D Crown witness still under cross-examination — Judge refusing to recuse himself — Accused thereafter not giving evidence — Accused giving this as their reason for not doing so — Invalidity of such reason — Absence of prejudice in circumstances — Sentence — Suspension of — No previous convictions — Ill health. — E Serious offences — Refusal of — Appeal — To Privy Council — Stay of execution pending application for special leave — Principles applied by Privy Council in such applications — Privy Council unlikely to grant leave — No statutory power to grant bail — No special circumstances — Refusal of — Companies. — F Contravention of sec. 84 (5) read with 84 (2) of Act 46 of 1926 as amended — Company commencing business before obtaining certificate from registrar — Sentence — Severity of — Contravention of sec. 225ter (1) — Publication of a false statement — What amounts to — Mere approval by directors of an already published G statement not constituting — Contravention of sec. 70quin, sub-sec (1) read with sub-sec. (2) — Failure by director to disclose interest in a contract entered into with company — Provisions of sub-sec. (3) not an additional element in such offence — No obligation on Crown to prove general notice not given — Act 31 of 1917, sec. 127 (b), — Statute — Interpretation of — Section H of Act capable of two meanings — Court to adopt less onerous one.

Headnote : Kopnota

During the cross-examination of a Crown witness the defence applied for an order to compel the witness to produce certain letters. The learned Judge, in refusing the application, stated that on any question of fact which was testified to by the witness he 'accepted him as a truthful and honest witness, extremely careful in his statement of facts, and with a very great regard for accuracy'. The learned Judge, however, after the adjournment of the Court revised his judgment and made an explanation in reply to a protest by

1951 (1) SA p793

defending counsel to his remarks. This statement was accepted by the defence without reservations. The Court adjourned for the week-end and, on resumption of the trial, the Judge was asked to recuse himself which he refused to do. A special entry was made at the end of the trial that such statement was prejudical to the accused in relation to any evidence which might have been available to the defence to rebut or explain any evidence given by the witness.

A Held, that the passage of the judgment read in its context afforded no reason why the appellants should not have given evidence.

The construction of section 15 (2) (b) of Act 27 of 1914 is irrelevant where the incitee does the act which he was incited to do, for if the act is a crime the inciter should not be charged under that section but should be charged with the substantive offence. In practice, therefore, B the construction of that section is only of real importance is cases where the incites does not do the act which he has been incited to do.

Where an inciter incites an incitee to do an act which to the knowledge of the inciter would not be a crime on the part of the incitee on the ground that he has no mens rea, but would be a crime on the part of the inciter, the latter is not guilty of contravening section 15 (2) (b) of Act 27 of 1914.

C Where there are two possible meanings to a section of an Act the Court should adopt the less onerous one.

Appellants, joint managing directors of the N.U.G. Company, had been convicted of the theft of 80,000 'Coronation' shares from the Company. Second appellant had instructed an official of the Company to deliver 40,000 of these shares (i.e. share certificates) to each of them under D two sale notes at 5/ - per share on behalf of the Company and at its expense, the market price of such shares at the time being 25/ - per share. There was evidence that another company in the group of companies to which the N.U.G. acted as secretary had assumjed a liability to provide them with the 80,000 'Coronation' shares on call at 5/ - per share, but at the time of the removal the shares were not only debited E to N.U.G. but were taken out of N.U.G.'s possession as controller of the pool in its strong-room. There was also evidence that both appellants had been given very wide powers in the group and that, rightly or wrongly, they exercised unlimited authority in all transactions effected by these companies.

Held, that second appellant had not by implication or otherwise been empowered to transfer obligations and allocate profits and that there F was no reasonable possibility of his having mistakenly relied on the existence of powers which he did not possess.

Held, further, as the action of second appellant was a wrongful taking with the object of benefiting himself at the company's expense, that he had rightly been convicted of theft.

Held, further, as the first appellant had failed to discharge the onus G on him of proving on a balance of probabilities that he did not take part in and could not have prevented the offence, that he had in the circumstances been rightly convicted as appellant's partner under section 384 (7) of Act 31 of 1917.

The question whether incorporeals could be the subject of theft raised but not decided.

The question whether shares which have been removed from a strong room H in which the shares of different companies have been mixed together can be said to have been stolen from a particular company since none of the companies retained a real right in them, raised but not decided.

The questions (1) whether the statement in Rex v Mbombela, 1933 AD 269, that a whether the statement in Rex v Mbombela, 1933 AD 269, that a mistaken belief in regard to facts, to be a defence in criminal law, must not only be bona fide but also reasonable, is obiter or not, (2) whether it is in conflict with what was said in Rex v Myers, 1948 (1) SA 375 at pp. 382/3, (3) whether the latter case governs the question of mens rea in theft, and (4) whether a belief in regard to a question of law stood in the same

1951 (1) SA p794

position as one in regard to a question of fact where a claim of right was put forward, raised but not decided.

On a charge of contravening section 15 (2) (a) of Act 27 of 1914 in that the appellants had conspired to commit fraud, it appeared that second appellant, E, who had been given the power under a resolution passed by the L Company to sell its shares (V.M. Shares) without consulting the A board of directors, had made arrangements with the A.T. Company for it to sell the V.M. Shares on behalf of the L Company of which the N.U.G. was the secretary. Evidence showed that E had given the A.T. Company instructions to make out the cheque for the sale of such shares at 6s. 3d. per share in favour of the B.C.I. Company, a company of which the N.U.G. was also the secretary. The cheque dated 11th December, 1946, was B paid to the N.U.G. on 30th December and credited to the B.C.I. Company. On 12th December E caused the servants of the N.U.G. to make out a broker's note showing the sales of V.M. shares by L Co. to B.C.I. at 4s. 9d. per share. On the same day first appellant instructed an official in the N.U.G. to make out a 'home-made' broker's note showing that B.C.I. had bought these shares. Two days later he caused another C broker's note to be made out showing the sale of these shares by B.C.I. to Middle Wits Company at 6s. 3d. The Crown relied upon a representation made to L Co. by N.U.G., through its servants and officers, that a sale to B.I.C. of the V.M. shares...