THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case No:  75/07
REPORTABLE
In the matter between:

ABNER MNGQIBISA                                                       APPELLANT

v

THE STATE                                                                    RESPONDENT

Before:  Brand, Mlambo et Combrinck JJA

Heard:  6 September 2007

Delivered:  27 September 2007

Summary:
Criminal law – fraud – appellant making false representation to an employee of the
complainant – subsequently he stated correct facts to another employee – initial statement calculated to
prejudice complainant.

Neutral citation: This judgment may be referred to as Mngqibisa v The State
[2007] SCA 119 (RSA)

MLAMBO JA
[1] The appellant was the insured under a short term motor vehicle
insurance policy underwritten by Auto and General (Pty) Ltd in respect of
his Fiat Uno. In terms of the policy the appellant and his then fiancée, Aura
Thandeka Magagula (now his wife), were the designated drivers of the Uno
even though his wife was at the time the holder of a learner driver’s
license.  The policy provided that additional excess was payable, in the
event of a claim, where the driver at the time was in possession of a learner
driver’s licence. As fate would have it, the Uno, driven at the time by the
appellant’s wife, was involved in a collision with a truck on the N4
motorway between Ngodwana and Waterval Boven, Mpumalanga
Province.

[2] After lodging a claim the appellant, during a telephone conversation
with Derek Fabian Jefta, an employee of Hotline Administrative Services
(Pty) Ltd, informed Jefta that he was driving the Uno at the time of the
collision. Hotline Administrative Services (Pty) Ltd was contracted by
Auto and General to manage and administer claims, on its behalf and
Jefta’s responsibility was to receive and process claims from policy
holders. In a subsequent telephone discussion with Hendrik van Staden, a
claims assessor also employed by Hotline Administrative Services, the
appellant informed the latter that his wife was in fact the driver at the time
of the collision.

[3] The claim, assessed at R37 000 was never paid out, after it was
verified that the appellant’s wife was the driver and that she was in
possession of a learner driver’s licence. Moreover, as a consequence of his
misstatement to Jefta the appellant was charged on one count of fraud.
According to the charge sheet the indictment was that he made the false

representation to Jefta, well knowing that it was false and he thereby
caused potential prejudice to Hotline Administrative Services and/or Auto
and General, in that the latter may have been induced to pay out under the
policy on the basis that the statement was true.

[4] In the ensuing trial in the Pretoria Specialized Commercial Crimes
Court the appellant was convicted but the imposition of sentence was
postponed for a period of five years in terms of s 297(1)(a)(ii) of the
Criminal Procedure Act 51 of 1977, as amended. An appeal against the
conviction was dismissed by the Pretoria High Court (Mabesele and Van
Zyl AJJ). The high court however granted him leave to pursue the current
appeal in this court.

[5] In convicting the appellant the trial court found that the appellant,
despite his denial, had in fact misrepresented to Jefta that he was the driver
whilst he was well aware that he was not. The trial court also found that
Hotline Services and/or Auto and General had been exposed to potential
prejudice in that they could have received a lesser excess. This resulted
from the provision in the policy that in the event of the driver being in
possession of a learner driver’s licence only, the excess would be greater.

[6] It is prudent to consider the origins and development of potential
prejudice as an element of the offence of fraud. An examination of the
early authorities reveals that the concept of potential prejudice was by no
means unanimous. Judicial opinion favoured an approach that required
proof of actual prejudice to found a conviction. In R v Poley (1878) 1
Buchanan 49 at 50 the following is stated:

‘In this case, that there was criminal intention, there appears to me to be little doubt; but

there is a further requisite, namely, an actual prejudice occasioned to a third person.
Simple lies, when the foregoing requisites are wanting, are not within the cognizance of
the criminal law.’

See also Queen v Brandford (1889) 7 S.C. 169 at 173-174 and Queen v
Ntshanga (17 CCJ) 280 at 281.

[7] The first authoritative judicial espousal of potential prejudice is found
in R v Moolchund (1902) 23 NLR 76. There, Mason J, after an examination
of the early authorities formulated the concept in the following terms:

‘We are therefore satisfied that where all the requisites of the crime are present, except
the actual happening of the contemplated or intended injury or prejudice the falsifier is
liable to be punished for the crimen falsi. It would be monstrous, we think, if because a
person’s wicked machinations have been defeated, or unsuccessful, on account of the
intervention of some third person, or the occurrence of some event beyond his control,
or because his misrepresentations were not believed or were not acted upon, that he
should escape the penalty of the law.’ (at 81)

[8] This exposition of the law was embraced in subsequent cases such as
R v Jolosa 1903 TS 694 at 698 where the court stated:

‘It would be indeed monstrous that if a man forged a cheque and presented it at the
bank, and the bank did not cash it, he should not be guilty of the crime of falsity
because no one had been injured. All the elements of the crime of forgery would in such
a case be present. The act would be one calculated and intended to prejudice a third
person, and that, in my opinion, by Roman-Dutch law would be sufficient without proof
of actual prejudice to such person.’

[9] Further clarification regarding the nature of the false representation
came in R v Kruse 1946 AD 524 at 533 where the court stated that:

‘. . . if the false representation is of such a nature as, in the ordinary course of things, to
be likely to prejudice the complainant, the accused cannot successfully contend that the
crime of fraud is not established because the crown has failed to prove that the false
representation induced the complainant to part with his property.’

This approach has consistently been followed over the years. See R v
Dyonta 1935 AD 52 at 57; R v Heyne 1956 (3) SA 604 (A) at 622; S v
Kruger 1961 (4) SA 816 (A) at 832D-E and S v Friedman (1) 1996 (1)
SACR 181 (W). It is with this treatise of the law that I revert to the case
before us.

[10] Appellant’s counsel submitted that when the appellant informed Jefta
that he was the driver, he had no wilful intent to deceive. Counsel advanced
two bases for this submission. Relying on certain statements made by the
appellant in the course of lodging his claim with the insurance company, he
submitted, in the first place, that because the appellant was a passenger in
the Uno and was giving instructions to his wife, he considered himself to
be the driver. There is no merit in this submission. The appellant is an
educated person and could never have been under any illusion that he could
be described as the driver. Therefore, his statement that he was the driver
was, to his knowledge, misleading.

[11] The second basis advanced by counsel was that, according to the
appellant, as a fact it made no difference whether he or his wife was the
driver. This relates to the appellant’s version based on the policy that he
and his wife were the designated drivers and that in the event of the Uno
being damaged whilst being driven by either of them, Auto and General
would pay. This submission is also without merit. Even if Auto and

General was liable irrespective of who the driver was, the argument
flounders on the simple fact that a higher excess was payable if the driver
of the Uno at the time of the collision was in possession of a learner
driver’s licence only.

[12] I am therefore satisfied that potential prejudice was shown on the facts
before us which was neither too remote nor fanciful (see eg R v Seabe 1927
AD 28 at 34). It is of no assistance to the appellant that he subsequently
told the truth. Potential prejudice is occasioned at the time of making the
false representation and this must be determined on the facts of each case
(see eg S v Kruger supra at 828A-B). The appellant was therefore correctly
convicted of fraud.

[13] I must however point out that the reliance by the trial court and the
court a quo on the alleged second misrepresentation by the appellant that
he was present in the Uno at the time of the collision, was misdirected as
the charge sheet did not go that far. It was in fact not necessary to consider
that statement as the appellant was clearly guilty on the representation he
made to Jefta.

[14] The appeal therefore falls to be dismissed.

____________
D MLAMBO
JUDGE OF APPEAL

CONCUR:
BRAND JA

COMBRINCK JA

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal

Date:
27 September 2007

Status:
Immediate

Please note that the media summary is intended for the benefit of the media
and does not form part of the judgment of the Supreme Court of Appeal

ABNER MNGQIBISA  v  THE STATE

1.
The Supreme Court of Appeal today dismissed an appeal by the
appellant against his conviction for fraud. The appellant was convicted by
the Pretoria Specialized Commercial Crimes Court which was confirmed
by the Pretoria High Court.

2.
The appellant had made a false representation to an employee of the
complainant that he was driving his motor vehicle when it was involved in
an accident. He subsequently stated the correct facts to another
employee.

3.
The Supreme Court of Appeal found that the appellant’s version, that he
did not intend to defraud when he made the false representation, was
correctly rejected by the lower courts. In this regard the Supreme Court
of Appeal found that the false representation, considered as at the time it
was made, was clearly calculated to defraud in that it exposed the
complainant to the risk of recovering a lower access.