DIRECTOR OF PUBLIC PROSECUTIONS
respondent, the Highlands Water Venture, is a partnership. The
appellant, the Director of Public Prosecutions, elected to indict
as such in a forthcoming criminal trial. A partnership is not a legal
persona and not susceptible to criminal liability and
indictable. Neither the Criminal Procedure and Evidence Act of 1981
nor the Partnership Proclamation, 78 of 1957 creates
appeal facts and the declaratory order of the court a quo is
C of A
(CRI) NO.8 of 2000
LESOTHO COURT OF APPEAL
DIRECTOR OF PUBLIC PROSECUTIONS APPELLANT
WATER VENTURE RESPONDENT
J.H. Steyn, P.
L. v.d. Heever, J.A.
M. Kumleben, J.A.
respondent on appeal was the applicant in the court a quo and the
appellant was the respondent in that court. To avoid confusion
nomenclature I shall refer to the parties as the Highlands Water
Venture ("HWV") and the Director of Public Prosecutions
accused were indicted in the High Court, in various combinations and
en various counts, of bribery and certain other offences.
The HWV was
one of their
It was at all relevant times a partnership at common law and
registered as such in Lesotho. On receipt of the indictment
applied on notice of motion directed at the DPP for an order that,
being a partnership, it is not an entity susceptible
liability and that is inclusion in the indictment is therefore
misconceived and irregular. A declaratory order to that
sought. This contention was upheld in the court a quo (per CULLINAN
A.J.). Its correctness is now before us on appeal.
comments in this regard: First, it was not contended that it was out
of order to raise the issue in a civil proceeding
and not in limine
at the start of the forthcoming criminal trial; and second, in the
indictment the HWV is described as a "consortium"
companies but nothing turns on this. As I have said, we are dealing
with a partnership.
start of his comprehensive and closely reasoned judgment, CULLINAN
A.J. traces the history of the local enactments governing
procedure and evidence relating to corporate bodies and associations.
The learned Judge further compares them with their
counterparts, on which they were and are largely based. However, in
so far as the answer to the question depends
upon provisions relating
to procedure and evidence, the Criminal Procedure and Evidence Act,
1981 ("1981 Code") is the
current and relevant enactment. I
turn to it without reference to its predecessors or counterparts.
Section 338 is the one on which
argument principally concentrated. It
reads as follows:
"338. (1) In any criminal proceedings against a company under
any law or at common law -
act performed, with or without a particular intent, by or on
instructions or with permission express or implied, given by a
director or a servant of that corporate body; and
omission, with or without a particular intent, or any act which
ought to have been but was not performed by or on instructions
by a director or servant of that corporate body in the exercise of
his powers or in the performance of his duties as such
servant or in furthering or endeavouring to further the interests of
that corporate body, shall be deemed to have
been performed, with
the same intent, if any, by that corporate body or as the case may
be, to have been an omission, with the
same intention, if any on the
part of that corporate body.
any criminal proceedings referred to in sub-section (1), a director
or servant of a corporate body shall be cited as a representative
of that corporate body, as the offender and thereupon, the person
so cited may, as such a representative, be dealt with as
if he were
the person accused of having committed the offence in question;
that person pleads guilty, the plea shall not be valid unless the
corporate body authorised him to plead guilty;
at any stage of the proceedings that person ceases to be a director
or servant of that corporate body or absconds or is unable
attend, the court in question may, at the request of the prosecutor,
from time to time substitute for that person any other
person who is
a director or servant of that corporate body at the
time of the substitution, and thereupon the proceedings shall
continue as if no substitution had taken place.
this person representing the corporate body is convicted, the court
convicting him shall not impose upon him in his representative
capacity any punishment, whether direct or alternative, other than a
fine, even if the relevant law makes no provision for the
of a fine in respect of the offence in question, and such fine shall
be payable by the body corporate and may be recorded
read "recovered"]by attachment and sale of property of the
citation of the director or servant of a corporate body to represent
that corporate body in any criminal proceedings against
not exempt that director, servant from prosecution for that offence
under subsection (5).
any criminal proceeding against a company, any record which was made
or kept by a director or servant or agent of that body
within the scope of his activities as a director, servant or agent,
or any document which was at any time in the custody
or under the
control of any such director, servant or agent, shall be admissible
in evidence against the accused.
the purposes of sub-section (3) any record made or kept by a
director, servant or agent of a corporate body or any document
was at any time under his custody or
under his control, shall be presumed to have been made or kept by him
or to have been made or kept by him or to have been in his
under his control within the scope of his activities as director,
servant or agent unless the contrary is proved.
an offence has been committed, whether by the performance of any act
or by failure to perform any act for which a corporate
body is or
was liable to prosecution, any person who was, at the time of
commission of the offence, a director or servant of
body, shall be guilty of that offence, unless it is proved that he
did not take part in the commission of the
offence and that he could
not have prevented it, and shall be liable to prosecution therefor,
either jointly with the company
or apart therefrom, and shall on
conviction be personally liable to punishment therefor.
any criminal proceedings against a director of servant of a
corporate body in respect of an offence -
evidence which was or would be admissible against that company
shall be admissible against the accused;
or not the corporate body is or was liable to prosecution for the
offence, any document, memorandum, book or record
which was drawn
entered up or kept in the ordinary course of business of that
corporate body or which was at any time in the custody or under the
control of any director, servant or agent of that corporate body in
his capacity as director, servant or agent, shall be prima
proof of its contents and admissible in evidence against the accused,
unless he proves that at all material times he had
had no knowledge
of that document, memorandum, book or record, in so far as its
contents are relevant to the offence charged, and
was in no way a
party to drawing up of such document, memorandum or the making of any
relevant entries in such book or record.
a member of an association, not being a corporate body has in
carrying on the business or affairs of that association or
furthering or endeavouring to further its interests, committed an
offence whether by the performance of any act or by failure
perform any act, any person who was, at any time of the commission
of that offence, a member of that association shall be
that offence unless it is proved that he did not take part in the
commission of that offence and that he could not
have prevented it.
that if the business or affairs of the association are governed or
controlled by a committee or other similar governing
sub-section shall not apply to a person who was not at the time of
commission of the offence a member of that Committee
any criminal proceedings against a member of an association under
sub-section (7) any record which was made or kept by any
servant or agent of that association within the scope of his
activities as such member, servant or agent, or any document
was at any time in the custody or under the control of such a
member, servant or agent within the scope of his activities
a member or servant or agent shall be admissible in evidence against
the purposes of sub-section (8) any record made or kept by a member,
servant or agent of an association, or any document which
was at any
time in his custody or under his control, shall be presumed to have
been made or kept by him or to have been in his
control within the
scope of his activities as such a member, servant or agent, unless
the contrary is proved.
provisions of this section are additional to and not in substitution
for or in derogation from any other law which provides
prosecution against companies or their directors or servants or
against associations or persons or their members.
this section the word 'director' in relation to a corporate body
means any person who controls or governs that corporate body
is a member of a body or group of persons which controls or governs
that corporate body or, where there is no such body
or group, who is
a member of that corporate body."
section, one notes, refers interchangeably - and, one may add,
enigmatically - to a "corporate body" and a "company".
It is agreed that for present purposes they are to be regarded as
synonyms and, since a partnership is a species of the genus
"association," I shall henceforth simply use the terms
"company" and "partnership."
that section 338 has three parts: First, it deals with the evidence
and procedure "in proceedings against a company",
acknowledging that a company can be indicted and be held liable for
acts or omissions on the part of its directors or servants
(subsections (1) to (4)); second, it makes a director or servant of a
company vicariously liable for any act or omission "for
corporate body [company] is or was liable to prosecution"
(subsections (5) and (6)); and third, it provides for a
member of an
association being held liable in stated circumstances for an offence
committed by another member. Thus the section
taken as a whole
implicitly acknowledges that a company is capable of being held
criminally liable, but as plainly does not seek
to place a
partnership on the same footing.
reason for this is not far to seek. A company is a legal persona
capable of owning assets or property in its own name distinct
its members, its shareholders,
LTD AND OTHERS v KRUGERSDORP MUNICIPAL COUNCIL 1920 AD 530 at 536).
As such, on conviction it is capable of being sentenced
to a fine
(subsection (2)(c)) and no doubt of being the subject of a
confiscatory order. If necessary, the property of the company
attached to implement the sentence (subsection (2) (c)). The same
cannot be said of a partnership. It is not a legal persona.
(R v LEVY
AND OTHERS 1929 AD 312 at 322). And, as it is put in SACKS v
COMMISSIONER FOR INLAND REVENUE 1946 AD 31 at 40, "[I]t
that during the subsistence of a partnership agreement the
partnership property is owned in common in undivided shares".
shall comment on the meaning of "partnership property"
later in this judgment.) For this reason the conviction of
partnership, after being indicted eo nomine would not be efficacious.
On conviction no more could be achieved than by the citation
conviction of the individual partner criminally liable and any other
partner vicariously liable in terms of subsection (7).
therefore not surprising that the provisions of section 338 do not
envisage a partnership being indicted.
light of the above, Mr. Penzhorn, who appeared for the appellant,
conceded that he had to rest his argument on, as he contended,
applicability of the definition a ''company" in section 3 of the
1981 Code. It reads as follows:
" 'company' means a company incorporated or registered under any
law generally governing companies, or under any special law
letters patent or Royal Charter, and includes a partnership, a firm,
an association of persons, local government body,
or any other
association of persons."
apply this definition to section 338, as pointed out by CULLINAN
A.J., would make no sense of it. Two illustrations will
There is no concomitant definition of a ''director" to include a
"member", and the former term is foreign
to a partnership
-or an association for the matter. The opening words of sub-section
(7) read "where a member of an association,
not being a
corporate body has etc.". If the definition is applicable, it
must be taken to say "where a member of an
being an association...". The word "company" appears
in two sections of the 1981 Code. They are
sections 338 and 134. As
regards the latter section, it is agreed all round, as stated in the
judgment of the court a quo, that
"section 3 is not accommodated
in the provisions of section 134." Mr. Penzhorn argues that for
this reason it must apply
to section 338. Logically this is not so :
it is as feasible that it applies to neither - as would plainly
appear to be the case.
This being so, no reason for the existence of
this definition could be suggested by Mr. Farber, who appeared for
the HWV, nor does
one even speculatively come to mind. But this is
largely by the way, whatever its purpose, if any, it cannot for the
given be made to apply to section 338 and thus
distort its clear and explicit meaning and effect. (Cf: Commissioner
Revenue v Simpson 1949 (4) 678 (A) 692 and Brown v Cape
Divisional Council and Another 1979(l)SA589(A)601E-H.)
argument on behalf of the DDP is fundamentally flawed whether or not
the definition can be said to apply. The 1981 Code,
as its title
states, is concerned with procedure and evidence NOT with substantive
law. It does not create or confer legal status
on a company and a
fortiori not on a company as defined. It correctly presupposes in the
case of a company that a justiciable entity
exists, a legal persona,
to which liability can attach. One cannot, with or without the aid of
brings one to the final submission on behalf of the DPP. It is that
the provisions of the Partnership Proclamation, 78 of 1957,
full in the judgment, justify the inclusion of the partnership in the
indictment. Not so. On the contrary, it explicitly
nothing in it shall confer upon a partnership "the status of a
body corporate." (Cf: RAND MOTOR TRANSPORT
CO AND ANOTHER 1930
AD 353 at 357 and 358.) What follows in the proclamation has a
twofold practical purpose in the interests of
the partners inter sese
and creditors. (Similar provisions are to be found in other
jurisdictions cf MULLER EN'N ANDER 1968 (3)
SA195(A) 202H - 203B).
First, "partnership assets" or "partnership property"
is recognised as distinguishable
from, but not distinct from, that of
the individual partners. (Cf. MICHALOW, N.O. v PREMIER MILLING CO.
LTD 1960 (2) SA 59(a) 61D-H.).
Second, as the proclamation states, in
civil proceedings, and in certain other instances, a partnership is
to be dealt with "as
though it were an entity distinct from the
identity of the individual partners."
up: a partnership is not a legal persona; it cannot therefore be held
criminally liable; the 1981 Code does not purport to
liability; nor does the Partnership Proclamation do so.
appeal is dismissed and the declaratory order of the court a quo is
on this 13th day October 2000.
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