CRI/T/111/99

IN THE
HIGH COURT OF LESOTHO HELD AT MASERU

In the
matter between:-

HIGHLANDS
WATER VENTURE Applicant

and

THE
DIRECTOR OF PUBLIC PROSECUTIONS Respondent

In re:-

THE CROWN
V MASUPHA EPHRAIM SOLE & 18 OTHERS

For the
Applicant: Mr G. Farber, S.C.

For the
Respondent: Mr G.H. Penzhorn, S.C,

Mr H.H.T. Woken

Before
the Honourable Mr Acting Justice B.P. Cullinan on the 6th, 7th, and
12th Days

of June
2000.

ORDER

Cases
referred to:

1. R v
   Levy and Others 1929 AD 312;

   
   

2. Palmer
   and Another v The Attorney - General and Another 1930 TPD 50;

   
   

3. Solomon
   v Law Society of the Cape of Good Hope 1934 AD 401;

   
   

2

4. R v
   Loebenstein 1947 (4) SA 362 (C);

   
   

5. R v
   Ah Foo and Another 1926 CPD 167;

   
   

6. R v
   Jasman 1915 TPD 295;

   
   

7. R v
   Van den Berg and Another 1955 (2) SA 338;

   
   

8. S v
   Coetzee 1997 (1) SACK 379 (CC); 1997 (4) BCLR 437 (CC);

   
   

1997(3)SA 527(CC);

9. Ngcwase
   and Others v Terblanche NO and Others 1977 (3) SA 796 (AD);

   
   

10. Shillings
    CC v Cronje and Others 1988 (2) SA 402 (AD);

    
    

11. Commissioner
    for Inland Revenue v Witwatersrand Association of Racing Clubs
    1960(3) SA 291 (AD);

    
    

12. R v
    Commissioner under the Boilers Explosion Act 1882 (1891) 1 QB 703;

    
    

13. Bradley
    v Baylis (1881) 8 QBD 195;

    
    

14. Robinson
    v Barton Eccles Local Board (1883) 8 App Case 798;

    
    

15. London
    School Board v Jackson (1881) 7 QBD 502;

    
    

16. Commissioner
    for Inland Revenue v Simpson 1949 (4) SA 678 (AD);

    
    

17. Brown
    v Cape Divisional Council and Another 1979 (1) SA 589 (AD);

    
    

18. Canca
    v Mount Frere Municipality 1984 (2) SA 830 (Tk SC).

    
    

The
present applicant, Highland Water Venture, was fourth respondent to
an application, wherein I delivered a ruling on 31st May, 2000. As I
said in that ruling (at p2) Highland Water Venture is the third
accused in the above-mentioned criminal trial. In the indictment the
following particulars are stated:-

"Accused 3 is Highlands Water Venture, a partnership registered
in Lesotho under Partnership Proclamation No.78 of 1957 comprising
inter alia Kier International Limited of the United Kingdom and
Impregilo S.p.A. of Italy, and for purposes of these proceedings a
"company" as defined in section 3 of the Lesotho Criminal
Procedure and Evidence Act, No.9 of 1981 ("the Act"), of
"The Site Office", Mohale Dam, Lesotho, alternatively First
Floor, Maseru Book Centre, 4 Kingsway, Maseru, Lesotho, alternatively
Viale Italia, 20099 Sesto. S. Giovanni, Milan, Italy, which is
represented in these proceedings for purposes of section 338 (1) and
(2) of the Act by its director or servant, namely R. Bestagno."

It is not
disputed that the applicant is a partnership registered in Lesotho.
The applicant's notice of motion seeks an order:

3

1. "declaring
   that the applicant has been irregularly and improperly cited as an
   accused in the criminal proceedings.......;

   
   

2. declaring
   that there is no lis between the Applicant and the Respondent;

   
   

3. declaring
   that the Respondent is in law precluded from proceeding with the
   prosecution of the Applicant....."

   
   

The
grounds for the application are two-fold, but the parties have agreed
that the court might separately consider the first of those grounds.
Such ground is contained in a founding affidavit wherein it is
averred that:

"given the true juridical nature of the Applicant, the
Respondent's reliance on the provisions of section 338 (1) and (2) of
the Criminal Procedure and Evidence Act, No.9 of 1981, in citing and
bringing the applicant before this Honourable Court, is
misconceived,"

At the
outset I wish to express my appreciation of the heads of argument and
the formidable body of authority placed before me by Counsel. To
arrive at the correct interpretation of section 338 of the Criminal
Procedure and Evidence Act, No.7 of 1981 ("the Code"), it
is necessary to set out its historical development. The forerunner of
the section was section 322 of the Criminal Procedure and Evidence
Proclamation No. 59 of 1938. That section in turn was based on the
provisions of section 384 of the Criminal Procedure and Evidence Act,
No. 31 of 1917, of the Union of South Africa.

The 1938
provisions repeated, practically verbatim, the 1917 provisions. The
1938 provisions read thus (I shall reproduce the marginal notes, as
headings, in all cases):-

Liability
to punishment in case of offences by corporate bodies, partnerships,
etc.

"322 (1) In any criminal proceedings under any statute or
statutory regulation or at common law against a company, the
Secretary and every director or manager or chairman thereof in the
Territory may, unless it is otherwise directed or provided.,

4

be charged with the offence and shall be liable to be punished
therefor, unless he proves that he was in no way a party thereto.

2. In
   any such proceedings against a local authority, the mayor, chairman,
   town clerk, secretary or other similar officer shall, unless it is
   otherwise directed or provided, be liable to be so charged, and in
   like circumstances punished for the offence.

   
   

3. In
   any such proceedings against a partnership, every member of such
   partnership who is in the Territory shall, unless it is otherwise
   directed or provided, be liable to be so charged, and in like
   circumstances punished for the offence.

   
   

4. In
   any such proceedings against any association of persons not
   specifically mentioned in this section, the president, chairman,
   secretary, and every other officer thereof in the Territory shall,
   unless it is otherwise directed or provided, be liable to be so
   charged, and in like circumstances punished for the offence.

   
   

5. Provided
   that nothing in this section contained shall be deemed to exempt
   from liability any other person guilty of the offence."

   
   

The 1917
legislation was repealed in the Republic of South Africa by the
Criminal Procedure Act No.56 of 1955, assented to on 22nd June, 1955.
Section 384 of the 1917 Act was replaced by section 381 in the new
Act, which introduced substantial change. On the 11th November 1955
the Basutoland Criminal Procedure and Evidence (Amendment)
Proclamation No. 91 of 1955 was promulgated, no doubt for the purpose
of adopting some of the new South African measures. As to section 322
of the 1938 Proclamation, it was amended in subsection (1) thereof to
place the additional onus upon the accused of proving that he could
not have prevented the commission of the offence. That measure was in
keeping with the new South African provisions, as were the following
four new subsections, which were added to section 322 (numbered
section 332 in the 1960 Edition of the Laws, Vol II at pp987/988):-

2. "In
   any criminal proceedings against a corporate body, any record which
   was made or kept by a director, servant or agent of the corporate
   body within the scope of his activities as such

   
   

5

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 within the scope of his activities as such director, servant or
agent, shall be admissible in evidence against the accused.

2. For
   the purposes of sub-section (6) any record made or kept by a
   director, servant or agent of a corporate body or any document which
   was at any time in his custody or control shall be presumed to have
   been made or kept by him or to have been in his custody or control
   within the scope of his activities as such director, servant or
   agent, unless the contrary is proved.

   
   

2. In
   any proceedings against a director or servant of a corporate body in
   respect of an offence, any evidence which would be or was admissible
   against that corporate body in a prosecution for that offence, shall
   be admissible against that director or servant.

   
   

2. In
   this section the word "director" in relation to a
   corporate body means any person who controls or governs that
   corporate body or who 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."

   
   

While
those subsections adhered to the South African 1955 provisions, it
cannot be said that there was any wholesale adoption of such
provisions. That did not take place until 1981, with the enactment of
the Code and the present section 338. It proves necessary to
carefully compare the provisions of section 338 with those of section
381 of the South African 1955 Act: For that purpose I propose to set
out the two sections hereunder:-

6

SECTION
338 OF THE CRIMINAL PROCEDURE AND EVIDENCE ACT, 1981

"Liability
for Corporate Bodies, Partnerships, etc.

338.

(1) In
any criminal proceedings against a company under any law or at common
law-

1. an
   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

   
   

2. the
   omission, with or without a particular intent, of any act which
   ought to have been but was not performed by or on instructions given
   by a director or servant of that Corporate body in the exercise of
   his powers or in the performance of his duties as such director or
   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.

   
   

SECTION
381 OF THE CRIMINAL PROCEDURE ACT, 1955, RSA

"Prosecution
of corporations and members of associations. –

381.

(1) For the purpose of imposing upon a corporate body criminal
liability for any offence, whether under any law or at common law –

1. any
   act performed, with or without a particular intent, by or on
   instructions or with permission, express or implied, given by a
   director or servant of that corporate body;and

   
   

2. the
   omission, with or without a particular intent, of any act which
   ought to have been but was not performed by or on instructions given
   by a director or servant of that corporate body,

   
   

in the exercise of his powers or in the performance of his duties as
such director or servant, or in furthering or endeavouring to further
the interests of that corporate body, shall be deemed to have been
performed (and with the same intent, if any) by that corporate body
or, as the case may be, to have been an omission ( and with the same
intent, if any) on the part of that corporate body.

7

2. In
   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: Provided
   that-

   
   

1. if
   that person pleads guilty, the plea shall not be valid unless the
   corporate body authorized him to plead guilty;

   
   

2. if
   at any stage of the proceedings that person ceases to be a director
   or servant of that corporate body or absconds or is unable to
   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.

   
   

3. if
   the 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 as [an] alternative,
   other than a fine, even if the relevant law makes no provision for
   the imposition of a fine in respect of the offence in question, and
   such fine shall be payable by the body corporate and may be
   recorded by attachment and sale of property of the corporate body.

   
   

(2) In any prosecution against a corporate body, a director or
servant of that corporate body shall be cited, as representative of
that corporate body, as the offender, and thereupon the person so
cited may, as such representative, be dealt with as if he were the
person accused of having committed the offence in question: Provided
that-

1. if
   the said person pleads guilty, the plea shall not be valid unless
   the corporate body authorized him to plead guilty;

   
   

2. if
   at any stage of the proceedings the said person ceases to be a
   director or servant of that corporate body or absconds or is unable
   to attend, the court or magistrate concerned may, at the request of
   the prosecutor, from time to time substitute for the said person,
   any other person who is a director or servant of the said corporate
   body at the time of the said substitution, and thereupon the
   proceedings shall continue as if no substitution had taken place;

   
   

3. if
   the said person, as representing the corporate body, is committed
   for trial, he shall not be committed to prison but shall be released
   on his own recognizance to stand his trial;

   
   

4. if
   the said person, as representing the corporate body, is convicted,
   the court convicting him shall not impose upon him in his
   representative capacity any punishment, whether direct or as an
   alternative, other than a fine, even if the relevant law makes no
   provision for the imposition of a fine in respect of the offence in
   question, and such fine shall be payable by the corporate body and

   
   

(d) the citation of the director or servant of a corporate body to
represent that corporate body in any criminal proceedings against it,
shall not exempt that director [or] servant from prosecution for that
offence under sub-section 5.

8

2. In
   any criminal proceedings against a company, any record which was
   made or kept by a director or servant or agent of that body
   corporate 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.

   
   

3. For
   the purposes of sub-section (3) any record made or kept by a
   director, servant or agent of a corporate body or any document which
   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 custody or under his control
   within the scope of his activities as director, servant or agent
   unless the contrary is proved. [Words in brackets constitute
   printer's error]

   
   

4. When
   an offence has been committed, whether by the performance of any act
   or by [the] 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 that corporate
   body, shall be guilty of that offence, unless it is proved that he
   did

   
   

may be
recovered by attachment and sale of any property of the corporate
body in terms of section three hundred and thirty-seven; (e) the
citation of a director or servant of a corporate body as aforesaid,
to represent that corporate body in any prosecution instituted
against it, shall not exempt that director or servant from
prosecution for that offence in terms of sub-section (5).

3. In
   any criminal proceedings against a corporate body, any record which
   was made or kept by a director, servant or agent of the corporate
   body within the scope of his activities as such 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 within the scope
   of his activities as such director, servant or agent, shall be
   admissible in evidence against the accused.

   
   

4. For
   the purposes of sub-section (3) any record made or kept by a
   director, servant or agent of a corporate body or any document which
   was at any time in his custody or control shall be presumed to have
   been made or kept by him or to have been in his custody or control
   within the scope of his activities as such director, servant or
   agent, unless the contrary is proved.

   
   

5. When
   an offence has been committed, whether by the performance of any act
   or by the failure to perform any act, for which any corporate body
   is or was liable to prosecution, any person who was, at the time of
   the commission of the offence, a director or servant of the
   corporate body, shall be deemed to be guilty of the said offence,
   unless it is proved that he did not

   
   

9

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.

3. In
   any criminal proceedings against a director or servant of a
   corporate body in respect of an offence –

   
   

1. any
   evidence which was or would be admissible against that company
   shall be admissible against the accused;

   
   

2. whether
   or not the corporate body is or was liable to prosecution for the
   offence, any document, memorandum, book or record which was drawn
   up, 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
   facie 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 [the] drawing up of such document, memorandum or the
   making of any relevant entries in such book or record.

   
   

take part
in the commission of the offence, and that he could not have
prevented it, and and shall be liable to prosecution therefor, either
jointly with the corporate body or apart therefrom, and shall on
conviction be personally liable to punishment therefore

(6) In any proceedings against a director or servant of a corporate
body, in respect of an offence-

1. any
   evidence which would be or was admissible against that corporate
   body in a prosecution for that offence, shall be admissible against
   the accused;

   
   

2. whether
   or not such corporate body is or was liable to prosecution for the
   said offence, any document, memorandum, book or record which was
   drawn up, entered up or kept in the ordinary course of that
   corporate body's business, or which was at any time in the custody
   or under the control of any director, servant, or agent of such
   corporate body, in his capacity as director, servant or agent, shall
   be prima facie evidence of its contents and admissible in evidence
   against the accused, unless and until he is able to prove that at
   all the material times he had no knowledge of the said document,
   memorandum, book or record, in so far as its contents are relevant
   to the offence charged, and was in no way party to the drawing up of
   such document or memorandum or making of any relevant entries in
   such book or record.

   
   

10

3. Where
   a member of an association, not being a corporate body has in
   carrying on the business or affairs of that association or in
   furthering or endeavouring to further its interests, committed an
   offence whether by the performance of any act or by failure to
   perform any act, any person who was, at [the] time of the commission
   of that offence, a member of that association shall be guilty of
   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.

   
   

Provided that if the business or affairs of the association are
[governed] or controlled by a committee or other similar governing
body this sub­section shall not apply to a person who was not at
the time of commission of the offence a member of that [c]ommittee or
other governing body.

8. In
   any criminal proceedings against a member of an association under
   sub­section (7) any record which was made or kept by any member
   or servant or agent of that association within the scope of his
   activities as such member, servant or agent, or any document which
   was at any time in the custody or under the control of such a
   member, servant or agent within the scope of his activities as such
   a member or servant or agent shall be admissible in evidence against
   the accused.

   
   

8. For
   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

   
   

7. When
   a member of an association of persons, other that a corporate body,
   has, in carrying on the business or affairs of that association or
   in furthering or in endeavouring to further its interests, committed
   an offence, whether by the performance of any act or by the failure
   to perform any act, any person who was, at the time of the
   commission of the offence, a member of that association, shall be
   deemed to be guilty of the said 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: Provided that if the business or
   affairs of the association are governed or controlled by a committee
   or other similar governing body the provisions of this sub-section
   shall not apply to a person who was not at the time of commission of
   the offence a member of that committee or other body.

   
   

8. In
   any proceedings against a member of an association of persons in
   respect of an offence mentioned in sub-section (7) any record which
   was made or kept by any member or servant or agent of the
   association within the scope of his activities as such member,
   servant or agent or any document which was at any time in the
   custody or under the control of any such member, servant or agent
   within the scope of his activities as such member, servant or agent,
   shall be admissible in evidence against the accused.

   
   

7. For
   the purposes of sub-section (8) any record made or kept by a member
   or servant or agent of an association or any document which was at
   any time in his custody or control shall be presumed to have been
   made or kept by him or to have been in his custody or control within
   the scope of his activities as such member or servant or

   
   

11

such a
member, servant or agent, unless the contrary is proved.

10. The
    provisions of this section are additional to and not in substitution
    for or in derogation from any other law which provides for the
    prosecution against companies or their directors or servants or
    against associations [of] persons or their members.

    
    

11. In
    this section the word "director" in relation to a
    corporate body means any person who controls or governs that
    corporate body or who 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."
    (Italics added)

    
    

agent,
unless the contrary is proved.

10. In
    this section the word "director" in relation to a
    corporate body means any person who controls or governs that
    corporate body or who 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.

    
    

11. The
    provisions of this section shall be additional to and not in
    substitution for any other law which provides for a prosecution
    against corporate bodies or their directors or servants or against
    associations of persons or their members." (Italics added)

    
    

12

Section
381 was re-enacted in the provisions of section 332 of the Criminal
Procedure Act, No.51 of 1977, R.S.A., but for present purposes it
suffices to consider the provisions of section 381. The scheme of
that section above is apparent. Sub-sections (1) to (6) and (10)
quite clearly deal with a "corporate body"; subsections (7)
to (9) deal with "an association of persons, other than a
corporate body", e.g. an unincorporated association such as a
partnership. Subsection (11) is an omnibus provision, stating that
the provisions of section 381 are additional to the existing law,
including, no doubt, the common law.

There is
a marked contrast between the provisions in the said grouping of the
sub­sections. Whereas a director or servant of a corporate body
may find himself personally liable (under subsections (5) and (6)) to
prosecution and punishment, subsections (1) and (6) clearly envisage
a prosecution against the corporate body itself as physically
represented in court by a director or servant thereof. On the other
hand, subsections (7) to (9) do not speak of a proceedings against
e.g. a partnership, but instead of "proceedings against a member
" of such partnership. That situation, as the learned Senior
Counsel for the applicant, Mr Farber, submits, is entirely in keeping
with the common law, at least in the Republic of South Afica, whereby
a partnership does not, in criminal law, as distinct from a corporate
body, possess a persona. The leading case on the point, which turned
on the provisions of section 384 of the 1917 Act, reproduced in
section 322 of the 1938 Proclamation, quoted above, is that of R v
Levy and Others (1) per Curlewis J (Wessels & Stratford JJ A
concurring): The learned Judge of Appeal observed at p322:

"Now under our common law a partnership is not a persona as
distinct from the individuals who constitute the partnership, it is
not a separate entity, and apart from the partners it can have no
mens rea and can therefore not commit a crime for which mens rea is
essential. And 1 do not think that the Legislature by section 384 (3)
intended to introduce any innovation contrary to this well recognised
doctrine of our common law. In my view the words in

13

sub-sec. (3) "and in like circumstances punished for the
offence" refer only to the last portion of sub-section (1) which
provides for the liability to punishment of the person charged unless
he proves that he was in no way a party thereto. And when the
Legislature used the words "In any such
(criminal)proceedings.....against a partnership," it
contemplated not proceedings against a partnership as a persona, but
proceedings in the form under which, by our common law, they can only
be brought against a partnership, namely, against the individuals in
their capacity as partners and as constituting the partnership. It is
a matter of procedure.

But the Legislature did by sub-sec. (3) introduce this innovation in
our law, namely, that whereas under our common law a partner is not
ordinarily liable for the criminal act of his co-partners, when
thenceforth a partner commits a criminal act in furtherance of the
interests of the partnership, each member of the partnership who is
in the Union, becomes liable, in proceedings against the partnership,
to be charged with the offence and to be punished for it unless he
proves that he was in no way a party thereto.

If this view of section 384 (3) be correct, then the indictment is -a
charge or criminal proceeding against the partnership in the only
form in which it can be brought against the partnership, that is
against the three accused as lately carrying on business in
partnership as Levy Brothers & Co., and the body of the
indictment alleges that the accused as partners aforesaid and on
behalf of the firm made the corrupt payments complained of."

Those
dicta were applied by Barry and Grindley - Ferris JJ in the Transvaal
in the case of Palmer and Anor. v The Attorney General and Anor. (2)
at p51 and confirmed by the Appellate Division in the case of Solomon
v Law Society of the Cape of Good Hope (3) per Wessels CJ (Curlewis &
Beyers JJ A concurring) at p410.

Mr Farber
submits that not alone should all the partners in a partnership be
joined in an indictment, but that also the indictment should contain
an averment specifying which partner or partners committed the
offence and that he or they did so in carrying on the

14

business
or affairs of the partnership, or were endeavouring to further its
interests: thereafter the statutory onus falls upon the other
partners under the legislation. This submission finds authority in
the case of R v Loebenstein (4) where Steyn J at p365 referred to the
decision in R v Ah Foo and Anor. (5). In that case Gardiner J (as he
then was) at p 171 referred to the case of R v Jasman (6) where
Wessels J (as he then was) said:

"If a person is in law criminally liable for the act of another,
the Crown must allege who that other person is and what that other
person did in order to make the person charged liable. It may not
always be possible to give the name of the agent but then the
circumstances must be set out with sufficient exactness to enable the
agent to be identified."

In Loebenstein (4) Steyn J observed at p365.

"If the Crown proposes to hold a partner liable for the acts of
his co-partner, then there must be a definite averment in the
indictment, in the body of the charge, that the one partner committed
the offence and that the other partner was liable, or committed the
offence through the act of his co-partner. If that is done, it is
brought home to the partner who is accused of the offence committed
by his co-partner, that he will be hit by this regulation, or by sec.
384 (7) of Act 31 of 1917, as amended by Act 23 of 1939, where this
section deals with an association of persons and provides that such
persons are liable for the acts of the others. It seems to me that
the partner must be charged with being guilty of the offence
committed by his co-partner, and that must be averred. This was not
done in this particular charge. It seems to me that my decision on
this point is covered by the decision in the case Rex v Ah Foo and
Another [5].

It seems to me also that, insofar as it purports to rely on sec. 384
(7), the Crown is faced with the decision in Rex v Palmer [2]. This
decision was before the section was amended, but the amendment was
not of such a nature that the decision cannot be still applied. The
head-note reads:

" A partnership as such cannot be charged with or convicted of a
criminal offence. If it is sought to charge the partners with an
offence committed by them in the course of their partnership
business, they should be charged individually and described as
carrying on business as the partnership in question." "

The case
of R v Van den Berg and Anor (7) was decided in 1955, before the
passing of the 1955 Act. It turned on the provisions of section 384
(7) of the 1917 Act, which as

15

I
observed above, was the forerunner of section 381 (7) of the 1955
Act. At that stage of development, the two subsections were
identical, with the exception that section 384 (7) did not contain
the proviso (concerning membership of a governing committee or other
body) introduced in section 381 (7). For our purposes, Van den Berg
(7) could well have been decided on the 1955 provisions, as the
aspect of a committee did not arise in that case. The indictment
simply alleged that the two appellants set fire to their garage in
order to defraud an insurance company. The indictment was amended,
after the Crown had closed its case, and after the evidence of one
witness for the defence, to aver that the appellants were in
partnership, seemingly because the evidence established that it was
the second appellant, and not both appellants, who had committed the
arson. In the Appellate Division Greenberg JA (Hoexter JA and Fagan
JA (as he then was) concurring) observed at pp341/342.

"The grounds on which the first appellant has been convicted are
that the second appellant was a member of an association of persons,
viz. a partnership, that he committed arson in furthering or
endeavouring to further the interests of the partnership, that at the
time of the commission of the offence the first appellant was a
member of the partnership and is therefore deemed to be guilty of the
offence. It may be that the amendment to which I have referred was
applied for in order to bring the sub-section into operation if the
need arose, but it alleged only one of the elements on which the
Crown had to rely in order to obtain a conviction under the
sub-section. In my opinion, the conviction was not competent as the
indictment did not set out the essentials of the crime on which the
conviction was based; the indictment alleged that the first appellant
was guilty of the crime of arson because he had set fire to the
premises, but on the facts found he could only have been convicted on
the ground that he was deemed to be guilty of that crime because his
partner had committed it in furthering the interests of the
partnership and he had not discharged the onus mentioned in the
sub-section. It is this allegation, that the arson was committed in
the interests of the partnership, which is missing. This defect in
the indictment could not be cured by evidence establishing the fact,
for that was not the charge which the first appellant was called on
to meet."

16

There are
then the general statements in the matter to be found in Gardiner and
Lansdown: South African Criminal Law and Procedure 6 Ed (1957) at
p81;

"In the case of a partnership, club or other unincorporate
association there is no artificial body capable of prosecution and
penalty. Subsections (7) to (9) of [section] 381, Act 56, 1955 deal
with the situation.."

There
follows a summary of the provisions of section 381 (7) and then the
following:

"Similar provisions to those applied to corporations.....are
made by subsection (8) in regard to the admissibility of records kept
or documents held by any member, servant or agent of the association;
and by subsection (9) as to the presumption attaching to any such
record or document.

These provisions do not contemplate proceedings against the
partnership or association as a persona, but proceedings in the form
under which at common law they can only be brought against a
partnership or association, namely against the individuals in their
capacity as partners of the partnership or officers of the
association - R v Levy and Ors [1], Palmer and Anor, v Attorney
General and Anor, [2]."

As to the
aspect of the reverse onus placed upon directors and servants of
corporate bodies, under section 332 (5) of the Criminal Procedure
Act, 1977 (formerly section 381 (5) of the 1955 Act), the
Constitutional Court of the Republic of South Africa held such onus
to be unconstitutional in the case of S v Coetzee (8). The aspect of
unconstitutionality (as it affects corporate or unincorporate bodies
- see section 338 (5) and (7) of the Code and section 381 (5) and (7)
of the 1955 Act, need not here concern us. The point is, the latter
aspect apart, the interpretation of the 1955 provisions are then not
in doubt. It is in the interpretation of the 1981 provisions,
obviously based on those of 1955, that the difficulty arises.

It will
be seen that the word "company" is used in the very first
line of section 338 (1); it is used again in subsections (3), (5),
(6) (a) and (10). The word "company", which

17

is not
defined in the 1955 Act, is defined thus in section 3 of the Code:

" "Company" means a company incorporated or registered
under any law generally governing companies, or under any special law
or under letters patent Royal Charter, and includes a partnership, a
firm, an association of persons, local government body, or any other
association of persons."

Learned
Senior Counsel Mr Penzhorn submits that the case of Levy (1) was
decided under the 1917 Act, the provisions of which were not carried
forward into the 1955 Act. It seems to me that the underlying
principles of such provisions were so carried forward. As late as
1955, Levy (1) was being still applied - see the Van den Berg (7 )
case at p339. As the above extract from Gardiner and Lansdown
indicates, it was being followed in 1957. Indeed, it is still applied
to the provisions of section 332 (7) of the 1977 Act - see Commentary
On The Criminal Procedure Act by Etienne Du Toit et al. 1996 (service
20, 1998 at p33-7).

Mr
Penzhorn submits that because of the wide definition of "company",
the legislature intended the provisions of subsections (1) to (6) of
section 338 to apply to partnerships, and accordingly that
subsections (7) to (9) deal with associations other than partnerships
and can thus, for our purposes, be ignored. Leaving aside the
introduction in 1981 of the word "company" for the moment,
the suggested interpretation is clearly contrary to the 1955 and 1977
provisions and indeed all authority in the matter: see Du Toit et
al., ibid., where it is said of section 332 (7):

"A partnership, although not a corporate entity, is an
association of persons for the purpose of this subsection R v Levy
and Ors [1], Solomon v Law Society of the Cape of Good Hope [3])"

To return
to the word "company", I have italicized in the provisions
of section 338 reproduced above, the repetition of the phrase "that
corporate body," or "corporate body"

18

or "body
corporate" (the latter juxtapositioning of the words serving but
to emphasise their meaning and the retention thereof by the draftsman
- see also section 133 (2) (e) of the Code). That of course is the
phraseology used in section 381, as no reference to a "company"
was there made, but instead to a "corporate body". The
words, "that corporate body", were quite clearly intended
to refer, and intrinsically refer, at least in subsection (1) and
(2), to the "corporate body" mentioned in the opening line
of section 381. No attempt whatever was made by the draftsman, having
introduced a wide definition in section 3, to accordingly tailor the
provisions of section 338.

Mr
Penzhorn submits that the correlation between the expressions,
"company" and "that corporate body", can only
mean that a partnership is included in the term "corporate
body". That interpretation is quite clearly contrary to the law
as we know it, common and statutory. Secondly, faced with such an
inherent contradiction, why did not draftsman remedy the situation?
More importantly, the definition of "company" is so wide as
to include "any other association of persons", which words
could embrace a society or a club. If we are to give the word
"company" in section 338 such wide meaning, why then, as
far as subsections (1) to (6) are concerned, should we in turn
restrict the definition to include only partnerships? Why not include
all forms of associations? To do so, of course, would be to render
completely nugatory the provisions of subsections (7) to (9). Those
subsections refer to "an association, not being a corporate
body". A corporate body is of course also an association. Thus
the words refer to an unincorporated association, which clearly
embraces a partnership.

As
indicated, the word "company" appears five times in section
338, that is, in subsection (1) and in subsection (3), where
reference is thereafter made to "that corporate body". In
subsections (5) and (6) however reference is first made to
a"corporate body",

19

thereafter
reference being made to "the company" or "that
company": surely the word "company" can there mean
only a corporate body? In subsection (10) the word "companies"
can only be construed as excluding "associations [of] persons."
More importantly, wherever the words, "corporate body", or
"company" appear they are invariably linked to the words,
"director or servant", and in subsections (3) and (5) to,
"director, servant or agent". Clearly the word "director"
applies to a corporate body and not a partnership. When it comes to
subsections (7) to (9) however, the word "director" gives
way, appropriately so, to "member", e.g. a partner, in the
case of a partnership.

Mr
Penzhorn submits that the Legislature must have intended that the
definition of "company" in section 3 should apply to
section 338, as apart from that section, it appears in only one other
section in the Code, namely in section 134. That section reads:

"134.
It shall be sufficient-

1. in
   every case in which it is necessary in any charge to name any
   company, firm or partnership, to state the name of the company or
   the style or title of the firm or partnership without naming any of
   the officers or shareholders of the company, or any of the partners
   in the firm or partnership, and one individual trading under the
   style or title of a firm may be described by the style or title;

   
   

2. where
   two or more persons not partners are joint owners of property, to
   name one of such persons adding the words "and another" or
   "and others", as the case may be, and to state that the
   property belonged to the person so named and another or others, as
   the case may be." (Italics added).

   
   

Those
provisions, incidentally, are procedural only, e.g. as to the naming
of a partnership, and are not authority for the proposition that a
partnership may be charged in the name of the partnership: see South
African Law of Criminal Procedure by Swift and Harcourt (General
Editor) 1957 at p466. Such provisions find their origin in section
133 of the 1917 Act, section 133 of the 1938 Proclamation and section
321 of the 1955 Act.

20

Mr
Penzhorn submits that the Court simply cannot ignore and must apply
the definition of "company" contained in section 3. Before
that definition was introduced, presumably that found in the
Companies' legislation prevailed; e.g. in section 2(1) of the
Companies Act, No.25 of 1967, "company" is defined as
meaning:

"a company limited by shares or a company limited by guarantee
as in section nine described, or an unlimited company or an existing
company" [one formed and registered under former legislation].

That
definition clearly envisages incorporation under Companies'
legislation. As the definition in section 3 of the Code envisages,
however, incorporation can also take place under a special enactment,
Letters Patent, or Royal Charter. The definition then embraces a
corporation or "corporate body" or "body corporate"
(see the Concise Oxford Dictionary 7 Ed under "corporate ").
The term "body corporate" is not defined in the Code. In
the case of Ngcwase and Ors v Terblanche N.O. and Ors (9), however,
Joubert AJA (as he then was) at p803 observed that a body corporate
was "a statutory juristic person {persona juris) .... an
abstract legal entity which exists as a juristic reality in the
contemplation of the law despite the fact that it lacks physical
existence."

The
definition of "company" in the Code, however, also
embraces, and this is where the difficulty lies, unincorporated
associations. In the case of Shillings CC v Cronje and Ors (10)
Nestadt AJA (as he then was) observed at p419:

"'Unincorporate' refers to an association 'which does not have a
legal persona separate from its constituent members' (per Ogilvie
Thompson JA in CIR v Witwatersrand Association of Racing Clubs [11]
at 302 A - B). 'Corporate' would have a correspondingly opposite
meaning."

How then
is the definition of "company" in section 3 of the Code,
embracing both corporate bodies and unincorporated associations, to
be applied to section 134 of the Code,

21

wherein
the word, "company", clearly excludes a "firm or
partnership", wherein a clear distinction is made between a
"company" with its "shareholders" and a "firm
or partnership" with its "partners", not to mention an
association of "two or more persons", joint owners of
property? The word, "company", appears, as indicated, in
only two sections of the Code. The definition of the word is clearly
inapplicable to one of those sections. That aspect does not engender
in me any confidence as to the draftsman's intentions - that it
should apply to the other section, section 338.

The main
thrust of Mr Penzhorn's submissions, in the face of the obvious
difficulties in applying the definition contained in section 3, is
that all such difficulties are resolved by the fact that the South
African decisions in the matter are largely irrelevant, due to the
separate course taken by legal developments in Lesotho. Mr Penzhorn
refers in particular to the Partnerships Proclamation No. 78 of 1957.
I observe however that the very definition of partnership"
contained in section 1 thereof "includes a limited partnership,
but does not include a company incorporated by law". Section 4
of the Proclamation reads thus:

4. "Nothing
   in this Proclamation contained shall confer upon any partnership the
   status of a body corporate: Provided that a partnership registered
   in terms of this Proclamation may under the style or firm name under
   which the business of such partnership is registered-

   
   

1. sue
   and be sued;

   
   

2. hold
   property or assets;

   
   

3. hold
   certificates of allotment of rights to occupy land;

   
   

4. hold
   deeds relating to immovable property; and

   
   

5. be
   dealt with as though it were an entity distinct from the identity
   of the individual partners in terms of, and for the purposes of any
   law requiring or authorising partnerships to be so dealt with."
   (Italics added)

   
   

I observe
that a partnership under its registered "style or firm name",
may "sue and be sued". Section 4 (a), however, clearly
contemplates civil and not criminal

22

proceedings.
Mr Penzhorn places reliance on section 4 (e), which provides that a
partnership may, under its registered "style or firm name"
be dealt with as though it were an entity distinct from the identity
of the individual partners,

"in terms of, and for the purposes of, any law requiring or
authorising partnerships to be so dealt with

I cannot
see that those provisions take the matter any further. Indeed I
cannot see that they are executory in nature. Everything depends on
the provisions of "any [other] law", in this case section
338 of the Code, and to that extent the debate is circular.

One is
then cast back on the provisions of the Code. Clearly the definition
of the word, "company", in section 3 is not accommodated in
the provisions of section 134. Thereafter it could be said that that
is a pointer to the construction of section 338, that is, a
construction ex visceribus actus.

It will
be seen that in the definition of "company", the word is
first given its ordinary meaning, namely that of a corporate body.
Thereafter the word is said to "include" unincorporated
associations, and so the meaning is extensive. The learned author of
Craies On Statute Law 7 Ed (1971) observes at p213 that:

"Interpretation clauses frequently fall under severe judicial
criticism from failure to observe the valuable rule never to enact
under the guise of definition."

In the
case of R v Commissioners under the Boilers Explosion Act 1882 (12)
at p716 Lord Esher M.R. observed that:

"This third section of the Act is a peculiarly bad specimen of
the method of drafting which enacts that a word shall mean something
which in fact it does not mean."

23

Ten years
before that, in the case of Bradley v Baylis (13) the same Judge had
observed:

"It seems to me that nothing could be more difficult, nothing
more involved, than these statutes, and that that difficulty arises
from the fact of Parliament insisting upon saying that things are
what they are not by saying that "a dwelling-house" shall
mean "a part of a part dwelling house".

Be that
as it may, the learned author of Craies observes at p214 that, "[a]n
interpretation clause which extends the meaning of a word does not
take away its ordinary meaning ." In the case of Robinson v
Barton Eccles Local Board (14) at p801 Lord Selborne observed:

"An interpretation clause of this kind is not meant to prevent
the word receiving its ordinary popular and natural sense whenever
that would be properly applicable, but to enable the word as used in
the Act, when there is nothing in the context or the subject matter
to the contrary, to be applied to some things to which it would not
ordinarily be applicable."

The
learned author of Craies observes at p216:

"Another important rule with regard to the effect of an
interpretation clause is, that an interpretation clause is not to be
taken as substituting one set of words for another, or as strictly
defining what the meaning of a term must be under all circumstances,
but rather as declaring what may be comprehended within the term
where the circumstances require that it should be so comprehended.
If, therefore, an interpretation clause gives an extended meaning to
a word, it does not follow as a matter of course that, if that word
is used more than once in the Act, it is on each occasion used in the
extended meaning, and it may be always a matter for argument whether
or not the interpretation clause is to apply to the word as used in
the particular clause of the Act which is under consideration."

The case
of London School Board v Jackson (15) per Coleridge J. at p504 is
cited as authority for the above observations. Of course, the
difficulty in the present case is that the extended definition is not
applicable to any section under consideration. In this respect, the
learned Editors of Halsbury's Laws of England 4 Ed Vol 44 observe at
para

24

845 p513
that,

"[i]f
a defined expression is used in a context which the definition will
not fit, it may be interpreted according to its ordinary meaning."

That
observation was quoted with approval by Watermeyer C.J in the case of
Commissioner for Inland Revenue v Simpson (16) at p692. In the case
of Brown v Cape Divisional Council and Anor (17) at pp600/601 Hofmeyr
JA observed:

"It is generally accepted that an interpretation section or
definition does not necessarily apply in all possible contexts in
which the word may be found in a statute. This qualification is
sometimes expressly so stated in the enactment. But in a clear case
this is not necessary. If a defined word or expression is used in a
context which the definition will not fit, it may be interpreted
according to its ordinary meaning" (Italics added).

In the
case of Canca v Mount Frere Municipality (18) Davies J at p832 held
that:

"The principle which emerges is that the statutory definition
should prevail unless it appears that the Legislature intended
otherwise and, and deciding whether the Legislature so intended, the
Court has generally asked itself whether the application of the
statutory definition would result in such injustice or incongruity or
absurdity as to lead to the conclusion that the Legislature could
never have intended the statutory definition to apply (Italics
added)"

In his
work Interpretation of Statutes (1996) Professor Devenish observes at
p116 that the Court in the Canca (17) case, after an examination of
the relevant case law (at p832) found that the above stated principle
applied, whether or not the qualifying words, "unless
inconsistent with the context", formed part of the definition
section. The learned author goes on to observe:

"This is a clear manifestation of unqualified contextual
interpretation, but it is indeed more than this since the formula
'injustice or incongruity or absurdity as to lead to a conclusion
that the Legislature could never have intended the statutory
definition to apply' adds a significant teleological or
value-coherent dimension to the interpretative process."

25

(See also
Craies at p101 and pp212/216, Maxwell on The Interpretation of
Statutes 12 Ed. at -pp 270/271, and Dr Cockram's work Interpretation
of Statutes 3 Ed at pp29/32.)

All of
which observations above must surely apply a fortiori to the present
case, where the Court is concerned, not so much with a statutory
definition in its entirety, as with the extended arm, thereof, the
definition itself containing, and giving prominence to, the ordinary
meaning of the word concerned.

To
summarise therefore, I find that the statutory definition, that is,
in its extended form, is inapplicable to section 338 and that any
attempt to apply it, if it does not result in injustice, clearly
results in incongruity, indeed absurdity.

Further,
the common law in the matter is beyond doubt. It is trite that the
common law can only be altered by express provision (and see section
338 (10)). I cannot imagine that the statutory definition in this
case, in its extended form, could ever be regarded as fulfilling that
requirement.

Further
again, while the provisions before the Court are contained in a
procedural enactment, they nonetheless contain measures impinging
upon the criminal liability of officers and members of corporate
bodies and associations, which are far reaching in effect, as
demonstrated by the case of Coetzee (8 ). I conclude therefore that
it is the Court's duty to construe such provisions strictly, that is,
in favorem libertatis.

Consequently
1 am satisfied that the Legislature could never have intended the
extended sense of the statutory definition to apply to section 338
and that the word "company" in that section should be given
its ordinary meaning, namely as meaning a

26

corporate
body. Accordingly I hold that the applicant has been irregularly
cited as an accused in these proceedings.

I see no
need to make the other orders sought. An irregular citation has its
inevitable consequence: the Court simply has no jurisdiction, in
these proceedings, over the applicant. The Director of Public
Prosecutions is dominus litis in criminal proceedings, however, at
least before plea, and it is now a matter for the Director as to what
course he proposes to take.

Delivered
this 12th Day of June 2000.

B.P.
CULLINAN

ACTING
JUDGE

Attorneys
for the Applicant:

Routledge - Modise, Johannesburg

M.T. Matsau & Co., Maseru.