The State v Thabethe and Others

The respondents were charged with: (1) contravening s 86(1) of the Public Finance Management Act 1 of 1999 (PFMA); (2) fraud; (3) money laundering in contravention of s 4 of the Prevention of Organised Crime Act 121 of 1998 (POCA); and (4) a further count of fraud. The charges arose from an irregular appointment of Nulane Investments 204 (Pty) Ltd (Nulane) by the Free State Department of Agriculture and Rural Development (the Department) to conduct a feasibility study for the Mohoma Mobung Project at a cost of nearly R25 million. The appointment was made without following a tender process, based on a letter purportedly from Worlds Window Impex India PvT Ltd and a deviation request from the Department's procurement procedures. Nulane immediately subcontracted the work to Deloitte Consulting (Pty) Ltd for approximately R1.5 million but received payment of R24 984 240. Nearly R19 million of the funds paid to Nulane were transferred to Gateway Limited in the UAE through various companies linked to the Gupta family, including Islandsite, Pragat, Oakbay, Tegeta and Sahara, via a cash focus system. The trial Judge in the Free State High Court found the respondents not guilty at the close of the State's case in terms of s 174 of the CPA, essentially on the basis that the State failed to authenticate disputed documents and that the investigation was inept. The State applied to reserve questions of law under s 319(1) of the CPA, which the High Court refused.

• Whether the trial court committed errors of law in discharging the respondents at the close of the State's case in terms of s 174 of the CPA
• Whether the trial court misapplied the doctrine of common purpose
• Whether the trial court erred in its approach to the admission of documentary evidence and the best evidence rule
• Whether the trial court misinterpreted and misapplied s 204 of the CPA regarding the indemnification of a witness
• Whether the trial court correctly applied s 174 of the CPA in a case involving multiple accused who might incriminate each other
• Whether there was legal evidence on which a reasonable person might convict at the close of the State's case

The application for leave to appeal was granted. Questions of law 2, 3, 4, 5, 6 and 7 were decided in favour of the State. Questions 8 and 9 were not properly reserved for want of a factual foundation. The order of the Free State High Court dated 21 April 2023 acquitting the respondents was set aside. It was ordered that the respondents may be retried for the same offences before a different Judge, as if they had not previously been arraigned, tried and acquitted. The acquittal of the first respondent on Count 1 (contravening s 86(1) of the PFMA) was unaffected by the judgment.

The binding legal principles established are: (1) Common purpose can be established either through prior agreement (express or implied) or through active association and participation in a common criminal design with the requisite mens rea - a court errs in law by requiring proof only of prior agreement. (2) When a court admits documentary evidence as original and admissible, it commits an error of law by subsequently ruling the same documents inadmissible without proper basis. (3) Secondary evidence of documents may be admitted where originals cannot be located despite diligent search, and the weight to be attributed to such evidence depends on the circumstances of the case. (4) Section 204 of the CPA requires a witness to answer questions frankly and honestly but does not require the witness to admit to committing an offence - a court errs in law by refusing indemnification on the basis that the witness failed to admit guilt. (5) Under s 174 of the CPA, a court should not discharge an accused who might be incriminated by a co-accused where there is a prima facie case - to do so would be unfair to the State and compromise the proper administration of justice. (6) A court must consider the totality of the evidence when determining whether there is evidence on which a reasonable person might convict at the close of the State's case - a finding that the State's case is "stillborn" based solely on investigative failures, without considering all the evidence, constitutes an error of law. (7) The right to a fair trial requires fairness to the accused as well as fairness to the public as represented by the State.

The Court made several significant non-binding observations: (1) The judgment noted with concern that the trial represented "a failure of justice" which "erodes public confidence in the criminal justice system" - emphasizing the broader societal impact of acquittals based on errors of law in cases involving the misuse of public funds. (2) The Court observed that the case involved the "infamous Gupta family" whom the Zondo Commission found were involved in state capture "to help themselves to the money and assets of the people of SA" - contextualizing the case within the broader state capture narrative. (3) The Court noted that the scheme subverted the aims of the Mohoma Mobung Project "to generate income through farming and alleviate poverty, undermines the functionality of democratic institutions, and endangers the rule of law." (4) The minority judgment by Musi AJA contains important observations on the distinction between prior agreement common purpose and active association common purpose, noting that the former is broader because conspirators can be held liable even if not at the scene, while the latter is narrower as it requires presence at the scene. The minority also criticized the statement in Govender v S that active association is "wider" than prior agreement, noting this is contrary to established precedent and "clearly wrong." (5) The minority emphasized that "criminal liability cannot be based on the ex post facto (after the fact) ratification of another person's unlawful conduct" - an important principle regarding the timing requirements for common purpose liability.

This case is significant for clarifying the proper application of: (1) the doctrine of common purpose in complex fraud cases involving multiple accused, including that common purpose can be established through active association and not only prior agreement; (2) s 174 of the CPA regarding the discharge of accused at the close of the State's case, particularly in cases involving multiple accused who might incriminate each other; (3) the rules regarding admission of documentary evidence and the best evidence rule, particularly where original documents cannot be located; (4) s 204 of the CPA regarding the indemnification of witnesses, clarifying that a witness need not admit to committing an offence but must answer questions frankly and honestly; (5) the principle that a court must consider the totality of the evidence and not allow findings about investigative failures to overshadow an objective assessment of the evidence. The case reinforces that an unfair trial includes unfairness to the State and public, not only to the accused. It also demonstrates the courts' approach to cases involving state capture and the misuse of public funds. The dissenting judgment highlights important nuances in the application of common purpose, particularly regarding employees versus controlling minds of companies.