Introduction
Businesses face the risk of fraud, theft or both from employees or third parties. If one reads stories under Crimes and Courts it is common to read about actual or alleged offences of fraud and theft. In this article I look at the law in Zimbabwe as it applies to these offences. At times the words “fraud” and “theft” are at times incorrectly used interchangeably by lay people. Even in staff disciplinary proceedings the two alleged offences may be confused.
Fraud
Section 136 of the Criminal Law (Codification and Reform) Act (Chapter 9:23), “the Codification Act” or “the Act” addresses the offence of fraud in Zimbabwe.
According to the section any person who makes a misrepresentation:
(a) intending to deceive another person or realising that there is a real risk or possibility of deceiving another person; and
(b) intending to cause another person to act upon the misrepresentation to his or her prejudice, or realising that there is a real risk or possibility that another person may act upon the misrepresentation to his or her prejudice;
shall be guilty of fraud if the misrepresentation causes prejudice to another person or creates a real risk or possibility that another person might be prejudiced.
In very simple terms, the key elements of the criminal offence of fraud are that there must be misrepresentation by the accused person with the intention to deceive another person, the other person acts on the basis of the misrepresentation and he or she suffers prejudice. Common prejudice is usually through loss of value such as losing money or property.
According to section 138 of the Act a person accused of fraud or any other crime involving the making of a misrepresentation may be found guilty of the crime notwithstanding (despite the fact) that¾
(a) the person to whom the misrepresentation was made is not identified; or
(b) the person whom the accused intended to deceive or prejudice, or whom the accused realised he or she might be deceiving or prejudicing, is not identified; or
(c) the person to whom prejudice or potential prejudice was or would have been caused is not identified.
Section 135 of the Codification Act defines key terms as they apply to the offence of fraud.
Misrepresentation
According to the Act “misrepresentation” means any act or omission of any kind whatsoever which wrongly or incorrectly represents any fact, law, character, circumstance, opinion or other thing whatsoever and, without limiting this definition in any way, includes¾
(a) a false statement of fact or law or a false expression of opinion.
(b) silence on the part of a person who has a duty to speak, knowing that another person has been or will be misled by the silence.
(c) a promise to do something in the future, when made by a person who knows that he or she will not be able to do that thing or who realises that there is a real risk or possibility that he or she may not be able to do it.
(d) a false statement by a person who wishes to borrow money or any other thing as to the purpose for which he or she requires the money or other thing.
(e) an exaggerated claim as to any quality of a thing that is being sold, where the person who makes the claim knows or realises that the person to whom he or she makes the claim is being or is likely to be deceived thereby.
(f) the use, publication or uttering of a document which contains a false statement, knowing that the document contains a false statement or realising that there is a real risk or possibility that it does so.
Prejudice
The Act defines “prejudice” to mean injury, harm, detriment or damage of any kind whatsoever, including material or financial prejudice, prejudice to reputation and prejudice to good administration. “Potentially prejudicial” means involving a risk, which is not too fanciful or remote, of causing prejudice;
Theft
Section 113 of the Codification Act covers theft. According to section 113(1) any person who takes property capable of being stolen¾
(a) knowing that another person is entitled to own, possess or control the property or realising that there is a real risk or possibility that another person may be so entitled; and
(b) intending to deprive the other person permanently of his or her ownership, possession or control, or realising that there is a real risk or possibility that he or she may so deprive the other person of his or her ownership, possession or control;
shall be guilty of theft.
Theft of trust property
According to section 113(2), subjection to section 113(3), a person shall also be guilty of theft if he or she holds trust property and, in breach of the terms under which it is so held, he or she intentionally¾
(a) omits to account or accounts incorrectly for the property; or
(b) hands the property or part of it over to a person other than the person to whom he or she is obliged to hand it over; or
(c) uses the property or part of it for a purpose other than the purpose for which he or she is obliged to use it; or
(d) converts the property or part of it to his or her own use.
It is important to note that section 113(2) shall not apply in situations where:
(a) the person holding or receiving the property has properly and transparently accounted for the property in accordance with the terms of the trust; or
(b) the person disposing of the property retains the equivalent value thereof for delivery to the person entitled thereto, unless the terms under which he or she holds or receives the property require him or her to hold and deliver back the specific property.
Permanently deprive
According to section 115, without limiting the expression in any way, a person shall be deemed for the purpose of sections 113 and 114 to intend to deprive another person permanently of that person’s ownership, possession or control of property if¾
(a) having taken possession or assumed control of the property, he or she abandons it without regard to whether or not it is restored to the other person or subjects it to a use which he or she realises will destroy it,
(b) he or she consumes the property, intending to return identical property to the other person; or
(c) the property being money, he or she spends it, intending to return the same amount to the other person.
Conclusion
Fraud and theft are common offences. The major difference is that fraud involves misrepresentation.
Disclaimer
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
Godknows (GK) Hofisi, LLB(UNISA), B.Acc(UZ), Hons B.Compt (UNISA), CA(Z), MBA(EBS, Heriot- Watt, UK) is the Managing Partner of Hofisi & Partners Commercial Attorneys, chartered accountant, insolvency practitioner, registered tax accountant and advises on deals and transactions. He writes in his personal capacity. He can be contacted on +263 772 246 900 or gohofisi@gmail.com
