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[2014] ZAGPJHC 436
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Hack v S (A397/2009) [2014] ZAGPJHC 436 (10 October 2014)
/LVS
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
DATE:
25 September 2014
CASE
NO: A397/2009
(1)
Reportable:
YES
(2)
Of
interest to other Judges: NO
(3)
REVISED
.............................
..............................................
DATE
SIGNATURE
In
the matter between:
HERBERT
HACK
APPELLANT
vs
THE
STATE
RESPONDENT
JUDGMENT
RANCHOD
J:
[1]
This is an appeal against conviction and sentence of the appellant in
the Magistrate’s Court, (Regional Court, Johannesburg).
[2]
The appellant was charged with 51 counts of fraud, allegedly
committed during the period 1993 to 1995. Although
the matter
had been on the roll of the Regional Court since 7 October, 1996 the
appellant eventually pleaded to the charges only
on 22 January 2001,
some four and a half years after his arrest. He pleaded not
guilty but was eventually convicted on all
counts on 30 May 2005 –
nearly a decade later. It took almost another three years
before sentence was eventually imposed
on 8 February 2008 when the
appellant was sentenced to five years’ imprisonment. An
application for leave to appeal
was filed on 25 February 2008.
Appellant was admitted to bail on the same day that sentence was
imposed, i.e. 8 February
2008.
[3]
State counsel explained in the heads of argument that the reasons for
the delay in finalising the trial was primarily
due to the conduct of
the appellant. The matter was postponed on three occasions for
the appellant to apply for further particulars,
two further occasions
for the appellant to apply for tax amnesty, on three occasions
because his legal representative was unavailable
and on no less than
twelve occasions the appellant was absent. The
trial was also postponed on the 5
th
July 2001, during the evidence of the second State witness (Denise
Richardson), for a review application that appellant launched
in the
High Court and the trial only continued on the 5
th
of November 2002. The review application was subsequently
withdrawn by the appellant and nothing further needs to be said
about
it for purposes of this appeal.
[4]
Appellant’s counsel submitted in their heads of argument dated
30 April 2014 that the record was materially defective
in that some
eighty pages were missing including three consecutive pages of the
judgment of the court
a
quo
on the merits and the entire judgment on sentence. It is to be
noted that the appeal was scheduled to be heard on 30 May
2014 and it
was only a month before the hearing that the issue of a defective
record was raised by appellant’s counsel, Mr
Vermeulen SC.
Mr Vermeulen correctly states that both the State and the appellant
have a duty to try and reconstruct the
record from secondary sources,
and if it is impossible to do so and the missing portion contains
evidence that is of material
importance in the adjudication of
an appeal, the appeal ought to succeed and the conviction and
sentence set aside. (S v
Collier 1976(2) SA 378 (c); S v Marais
1966(2) SA 514 (T) at 517 A-B). It was submitted that if it was found
that the record was
materially defective (it was submitted that it
was) then the appellant was entitled to an acquittal.
[5]
It is the duty of an appellant to ensure that a proper record is
timeously filed for the hearing of the appeal.
In this matter
appellant’s attorneys filed an affidavit on 28 May 2014 (two
days before the hearing) attempting to explain
why a proper record
had not been filed earlier and sought condonation “to the
extent necessary” for the non-compliance
with the Rules by the
appellant. It was explained that appellant’s attorneys
commenced seeking the record of the proceedings
in the trial court
for purposes of pursuing the present appeal only on 7 March 2014.
My colleague Maluleke J and I received
the defective copy of the
record and it was only a few days before the hearing that we
inexplicably received a complete record
save for the judgment on
sentence. This caused a considerable degree of inconvenience to
us. The explanation for furnishing
a defective record in the
affidavit by a candidate attorney of the appellant’s attorneys
was, in my view, not adequate.
Firstly, it was not attached to
a properly prepared application for condonation on motion.
Secondly, from the affidavit it
appears that appellant’s
attorneys attempted to contact Ms Coetzee of the Director of Public
Prosecutions (‘the DPP’)
only on 22 May 2014 to determine
if the DPP had a full copy of the record. On 26 May 2014 a
comparison of the State’s
copy of the record with that of the
appellant showed that Ms Coetzee had a complete record save for the
judgment on sentence.
The belated approach to the State seems
to have taken place only after Maluleke J made it clear to the
appellant’s attorneys
that we were of the view that we were
able to deal with the appeal with the incomplete or defective record
as it stood.
[6]
The appellant’s attorney’s lengthy explanation of the
efforts they made to trace a complete record is in my
view not
adequate. They could have approached the DPP much earlier,
given that the State was the other party in the trial.
As I
said, we were considerably inconvenienced in receiving the complete
record (but for the sentencing judgment) a mere few days
before the
appeal hearing in a matter comprising almost 1500 pages of the
record. The distinct impression one has is that
the appellant
was in no hurry to prosecute the appeal. He has been on bail
since 8 February 2008 pending the appeal hearing.
[7]
Condonation for the late filing of the complete record (save the
sentence judgment) was granted at the hearing as we were
of the view
that in spite of the inadequate reasons furnished the appeal had
already been delayed considerably and finality had
to be brought to
it.
[8] The facts leading to the
charges against the appellant may briefly be set out as follows.
There are two groups of
charges. Counts 1 – 45 relate to
submission of Value Added Tax (VAT) returns by or on behalf of a
business entity called
Allied Elevators (Pty) Ltd (“Allied
Elevators”). Counts 46 – 51 relate to VAT returns
of 66 Lymm Street
Glenhazel CC.
[9]
It appears to be common cause or not in dispute that the appellant
had a 66% and a Mr Barry Bloch 34% member’s interest
respectively in Elite Bookkeeping CC which conducted its practice
from the premises at 66 Lymm Street,Glenhazel that in turn belonged
to the close corporation by the same name. From the record it
appears that the appellant resided as well on the premises
with his
wife and children.
Re: COUNTS 1 – 45
[10]
Mr Arthur Churchill Fischer was a 100% shareholder in and managing
director of Allied Elevators. The company was
engaged in the
business of installing and maintaining elevators in South Africa.
Its principal place of business was in Johannesburg
and it was
registered with the South African Revenue Services (‘SARS’)
as a vendor for VAT purposes in terms of the
Value Added Tax Act 89
of 1991 (‘the VAT Act’). It had to submit regular
VAT returns to SARS. Input and
output figures were to be
provided by a vendor in the VAT return. The difference between
the two figures would result in
either the vendor having to pay SARS
VAT or claim a refund, as the case may be.
[11]
In December 1995 Mr Fischer decided to terminate the services of
Allied Elevators’ then auditors as he perceived
them to be
incompetent. He engaged the services of, as he put it, “Hack
& Bloch”. It is not in dispute
that “Hack”
is the appellant and “Bloch” was Mr Barry Kevin Bloch,
the other member together with the appellant
in Elite Bookkeeping
CC. Mr Bloch initially was a co-accused with the appellant but
later turned State witness.
[12]
Fischer instructed – and paid - Elite Bookkeeping CC to submit
‘amended’ VAT returns for the period
April 1993 to
November 1995 on behalf of Allied Elevators. Fischer, together
with his erstwhile auditors had uncovered that
Allied Elevators’
internal bookkeeper had rendered incorrect VAT returns which resulted
in Allied Elevators having a substantial
liability for VAT due to
understating its VAT liability when the bookkeeper rendered the
bi-monthly VAT returns. Fischer
was of the view that his
auditors should have discovered this problem earlier. As they
did not, he terminated their mandate.
But before that, on their
advice, he went to SARS and made a clean breast of it. Mr Fischer
then approached Elite Bookkeeping.
[13]
The allegation against the appellant was that when preparing the
so-called amended returns the appellant (and Mr Bloch)
prepared false
invoices ostensibly originating from a company called Zaigor South
Africa, another called Economic Wholesalers and
one called Anglo
Swiss Watch Co. (Pty) Ltd. The invoices purported to show that
Allied Elevators had paid VAT to these entities,
the net effect of
which would be to reduce its liability to SARS substantially.
According to Ms Denise Richardson of SARS,
who conducted an audit of
Allied Elevators’ books (as well as those of 66 Lymm Street
Glenhazel CC) SARS was to have paid
Allied Elevators the supposed
refund that it claimed. The subsequent audit and a search and
seizure operation conducted at
the offices of Elite Bookkeeping led
to the charges against the appellant and his subsequent conviction
and sentence.
[14]
The primary contention of the appellant on appeal is that the
evidence adduced by the State did not establish the crime
of fraud,
for which the appellant was convicted and that the learned magistrate
materially misdirected himself in this regard.
It is contended
that the misrepresentations as alleged in the charge sheet were not
established. Further, that the evidence
of Ms Richardson, which
was accepted by the Magistrate, does not establish a
misrepresentation as found by him. Counsel for
appellant
emphasized that these submissions were made on the basis of an
acceptance of the entire State case. During the
appeal hearing
Mr Vermeulen re-iterated that the appellant accepts all the evidence
led by the State. The question was whether
the State proved the
charges and whether the evidence indicated the crime of fraud.
[15]
The following facts are common cause:
15.1
The appellant was a 66% and Barry Bloch a 34% member of Elite
Bookkeeping which traded from 66 Lymm Street, Glenhazel
at all
relevant times.
15.2
Mr Arthur Fischer was the sole shareholder of Allied Elevators (Pty)
Ltd (Allied Elevators) which was registered for
VAT at all relevant
times.
15.3
Mr Fischer, the first State witness, instructed and paid Elite
Bookkeeping to submit amended VAT returns for the period April
1993
to November 1995 on behalf of Allied Elevators to SARS.
15.4
Exhibit “B”, and Exhibits “D” to “F”
were working papers and source documents received
by Ms Denise
Richardson (‘Richardson’) in her capacity as an employee
of SARS, from Elite Bookkeeping to do an audit
of the VAT returns
submitted on behalf of Allied Elevators.
15.5
Richardson commenced with an audit of the VAT returns of Allied
Elevators (Pty) Ltd on the 10
th
of June 1996 at the
premises of Elite Bookkeeping, namely 66 Lymm Street, Glenhazel.
15.6
The premises at 66 Lymm Street Glenhazel were owned by 66 Lymm Street
Glenhazel CC of which Mr Bloch was the sole member.
15.7
Denise Richardson and other SARS officials searched the offices of
Elite Bookkeeping situated at 66 Lymm Street, Glenhazel
on Tuesday,
the 23
rd
of July 1996 and seized certain documents,
inter
alia,
the original invoices where the labels of “Unipaper
CC” were stuck on.
15.8
The VAT payments falsely portrayed in Exhibits “B”, “D”,
“E” and “F” decreased
the VAT liability of
Allied Elevators to SARS substantially or would have resulted in a
refund.
15.9
The VAT claims submitted by 66 Lymm Street CC resulted in a VAT
refund of R137 969.58 from SARS.
[16]
The charge sheet stated in respect of counts 1- 45 that the appellant
was guilty of the crime of fraud in that during
the period (the exact
dates of the invoices are listed in Schedule 1 to Annexure “A”
of the charge sheet) April 1993
to Nov, 1995 he (and his co-accused
at the time – Mr Barry Bloch who later turned State witness):
“
Unlawfully,
falsely, with the intent to defraud and to the prejudice or potential
prejudice of the South African Revenue Services
and/or Denise
Richardson, pretend to Denise Richardson and/or the South African
Revenue Services that:…”
by
means of the falsified invoices listed in Schedule 1 to the charge
sheet it was sought to fraudulently represent that the invoices
represented goods delivered to Allied Elevators and/or that Allied
Elevators effected payments to the entities referred to in the
invoices and/or such payments included payment of VAT and/or that
Allied Elevators was entitled to a refund from SARS of the amounts
stated in Schedule 1 when in fact such representations were not true.
[17]
The charge in respect of counts 46 – 51 is couched in similar
terms save that the schedule (schedule 2) refers
to another set of
falsified invoices in respect of a claim for refund of VAT by 66 Lymm
Street Glenhazel CC.
[18]
Appellant’s contention is,
inter
alia
,
that Richardson joined SARS only in 1996 hence the representations
could not have been made to her in the period 1993 to 1995.
The
Magistrate, however, found that the representation was made to
Richardson.
The
learned Magistrate says in his judgment:
“
It
is clear from the evidence that this misrepresentation was in fact
made by documents that were handed to Denise Richardson when
these
documents were handed to her by Dick Moloto in the presence of the
accused.”
Mr
Dick Moloto was an employee of Elite Bookkeeping. From the
record it is apparent that the documents were handed over to
Richardson by Moloto on 10 June 1996 when she was conducting the
audit.
[1]
[19]
Appellant says this a different date than those alleged in the charge
sheet, namely 1993 to 1995. Furthermore,
says appellant, the
court
a
quo
refers to a single representation to Richardson whereas the charge
sheet alleges multiple representations. That is why, said
counsel, appellant did not testify because he felt he had no charge
to answer to. I am not persuaded by that submission.
The
appellant could not have known during the proceedings what the
magistrate’s findings would be at the end of the trial.
[20]
Counsel for the State, Ms Coetzee, conceded in her heads of argument
that the dates in counts 1-45 are incorrect and
should have been 10
June 1996 which is when exhibits “B”, “D”,
“E” and “F” were
submitted to Richardson by
Moloto for an audit of the VAT returns submitted on behalf of Allied
Elevators. Ms Coetzee contends
that this is not a fatal mistake
and can be cured by the evidence. We were referred to S v Nixon
2000(2) SACR 79 (W) where
it was held:
“
The
Court, on appeal or review, can rectify a defective charge sheet as
long as the amendment will not prejudice the accused in
his
defence”.
In
S v Hugo 1976(4) 536(A) at 540 it was held:
“
An
accused person is entitled to require that he be informed by the
charge with precision, or at least with a reasonable degree
of
clarity, what the case is that he has to meet and this is especially
true of an indictment in which fraud by misrepresentation
is
alleged.”
[21]
We were also
referred to S v Coetzer & Another 1976(2) SA 769(A):
“
First
appellant had been convicted on a charge of dealing in dagga, to wit
16,75 grams of dagga, in contravention of section 2(a)
of Act 41 of
1971, and the compulsory sentence of five years’ imprisonment
had been imposed on him. His appeal to the
South-West Africa
Provincial Division failed. In a further appeal it appeared
that he had been convicted of dealing in dagga
in that he had
performed acts in connection with the delivery of two dagga
cigarettes, the weight whereof had not been included
in the alleged
16,75 grams.
Held,
as in the circumstances the first appellant had not been misled into
conducting his case in any other way than he would have
done if the
charge had been absolutely correctly worded, that there had been no
prejudice and the invocation by the magistrate
and the Supreme Court
of section 156(4) or Ordinance 34 of 1963 (S.W.A.) had been fully
justified.”
[22]
It was submitted that the appellant will not be prejudiced in his
defence by the amendment at the appeal stage –
of the date of
the offence as the appellant’s defence has not changed on
appeal. It was argued that the incorrect dates
are not
relevant. As I understand Ms Coetzee’s submission, the
inaccuracies with regard to the date on which the misrepresentations
were made are minor. We were referred to Botha v S [2009] ZASCA
(29 September, 2009) where it was held that minor inaccuracies
in the
charge were not sufficient to find that the accused did not know what
case he had to meet.
[23]
The question before us is whether a reference in the charge sheet to
incorrect dates on which the misrepresentation were
made by reference
to the dates on the false invoices when in fact it should have been
the date on which the false invoices were
handed to Denise Richardson
can be regarded as minor and therefore irrelevant. The
corollary to this is whether an amendment
to the charge sheet should
in any event be granted during this appeal.
[24]
The appellant knew that erroneous VAT returns had been submitted by
Allied
Elevators’ erstwhile internal bookkeeper. He was provided
with numerous documents by Fischer in order to rectify
the problem as
he (Fischer) had already approached SARS and admitted that Allied
Elevators’ VAT and PAYE returns were not
correct. It is
then that he sought the assistance of the appellant and Bloch.
Bloch testified that he played a role
in the creation of false
invoices by the appellant in order to support the so-called amended
VAT returns.
[25]
It would be apposite at this stage to explain the reference to the
“so-called” amended VAT returns.
A form VAT 201 is
completed by a vendor when submitting the VAT return. Ms
Richardson explained that when an amendment to
the original VAT 201
is sought to be made after submission it is not done by submitting
another VAT 201 form. Rather, it
is done by way of supplying
(supporting) documentation to SARS to show what the correct position
is.
[26]
In the present case it is not in dispute that the original VAT 201
returns were incorrect. The appellant sought
to provide amended
particulars relating to those returns. For this purpose he
prepared false invoices and asked Fischer to
agree to their
submission. Fischer did not react i.e. he neither agreed nor
disagreed. He said he was taken aback at
the suggestion.
In the interim the VAT audit by Ms Richardson commenced at the
offices of Elite Bookkeeping. In the
course of the audit the
false invoices were handed to her by Mr Moloto. When the
appellant was charged he could have been
under no illusion as to the
precise nature of the charges in that even if the dates were
incorrect in the charge sheet, the schedule
to the charge sheet
clearly referred to the very same false invoices and that the dates
on the invoices were false. Counsel
for the appellant referred
us to the fair trial provisions of Section 35(3) of the Constitution
of the Republic of South Africa
1996 which provides, inter alia:
“
Every
accused person has the right to a fair trial, which includes the
right –
(a)
to
be informed of the charge with sufficient detail to answer it…”.
It
is to be noted that the subsection provides that “sufficient
detail” be provided not all or every single detail.
Here,
as I said, the amendment is sought at the appeal stage. The
question is whether the appellant is prejudiced thereby.
In my
view, in the circumstances of this matter an amendment of the charge
sheet at the appeal stage cannot be prejudicial to the
appellant.
I would grant the amendment sought by the State.
[27]
A further contention of the appellant is that the learned magistrate
referred to a single mispresentation not mispresentations
(plural)
which, says appellant, is correct because he should not have
been convicted on individual counts or charges.
The submission
is without merit. Nowhere in the magistrate’s judgment
does he say that the representation was a single
misrepresentation
and that for that reasons it was wrong of the State to frame
individual counts in respect of the invoices.
Each false
invoice is a separate misrepresentation.
[28]
It was also appellant’s submission that the false invoices had
not yet been submitted to SARS. They had been
seized by
Richardson hence, at that stage there was no prejudice to SARS.
This too is without merit. The documents
were handed over to
Richardson by Moloto during the course of an audit. It is not
only actual prejudice that must take place;
potential prejudice
suffices.
[29]
Finally, it was submitted that the misrepresentation was made to Ms
Richardson and not SARS. During the evidence-in-chief
of Mr
Bloch the following transpired:
[2]
“
Can
you identify these exhibits? – Yes I can.
Can
you tell the Court how these exhibits came about, where are they
from? How did they come, in what manner do you identify
them in
other words? – These are invoices that we prepared in order to
justify each different VAT period for Allied Elevators
Company.
To
who did you want to justify the VAT periods? – To the VAT
department.
Of
the South African … (intervenes) – Of the Receiver of
Revenue.
If
you say that these are invoices we prepared, who do you refer to when
you refer to we? – Myself and Mr Hack.
And
how did you prepare these? – We had blank invoice books and we
filled them in.
Where
did the blank invoice books come from? -- They were given to Mr Hack
by a friend of his.
Do
you know who the friend was? – His name was Michael Shenker.
And
do you know under what circumstances or for what reason they were
given to Mr Hack? – No, I do not.
And
you say that these invoices were filled in to justify the VAT period
for Allied Elevators. So was that VAT returns, refunds?
–
No they were not refunds. They were returns prepared and, with
certain amounts on them and we needed to prepare schedules
for an
audit and these were part of the different periods for the audit.
Audit
by SARS? – Yes.
By
filling in these invoices, and I refer at this stage to EXHIBIT D,
Zaigor, what did you want to portray to the Receiver of Revenue?
–
We wanted to justify the VAT returns that were handed in, that the
figures would agree.
What
did you want them to believe? – That the schedules that we had
prepared and the VAT returns were correct. These
were
supporting documentation.”
[30]
Ms Richardson
testified
[3]
:
“
Okay
– Received Value Added Tax figures from Thompson Spiers for
Allied Elevator Company for a period of April 1993 to November
1995
with the outstanding VAT assessment of 82, R820 006.64 liability
to SARS.
And
you are now referring to EXHIBIT A? – That is right.
Thompson
Spiers, ja? – Due to the figures that we received here, the
outstanding amount, Mr Fisher was contacted for the collection
of
this amount and he actually referred us to Elite Bookkeeping
Services, specifically to Mr Herbert Hack because according to
Mr
Fisher Mr Hack has actually explained to him the figures supplied by
Thompson Spiers were the incorrect figures.
Did
you contact Mr Hack as referred to by Mr Fisher? – Yes, I did.
You
have testified about that. – That is right.
If
you look at EXHIBIT B, where did you receive EXHIBIT B and what do
they portray to be? – After numerous cancellations of
my
appointment to do the VAT audit, due to the fact that they have told
me that the figures are not the correct figures supplied
by Thompson
Spiers these …(intervenes).
Who
told you? – Mr Hack told me the figures were not correct.
[Inaudible]
– And they had the proof that it is not correct. Then on
10 June they actually, when, finally when I got
the audit they
supplied me with EXHIBITS B which are the working papers because once
you have got figures you do not have to submit
a revised return.
You just can give us the working papers according to which we then
revise the figures.
Further:
Why
did you go to the premises on 10 June? – Because all the, all
the working papers and the source documents were kept at
Elite
Bookkeeping Services at 66 Lymm Street.
For
the VAT input of Allied Elevators? -- For all the input as well
as the output for Allied Elevator company.
Did
you have an appointment or did you just turn up? – No, no, I
had an appointment which was cancelled on numerous occasions
and on
the 10
th
I actually managed to do this, to start this
audit.
With
whom did you have this appointment? – I had it with Mr Hack and
Mr Bloch who were present at that day and … (intervenes).
Were
they present at Elite Bookkeeping? – At Elite Bookkeeping
Services at 66 Lymm Street as well as Mrs Hack as well as Dick
Moloto.
And
the source documents? – Mr Dick Moloto in the presence of Mr
Hack, Mr Bloch and Sharon Hack.”
[31]
I turn then to counts 46-51. These charges relate to submission
of incorrect VAT 201 forms supported by false invoices
in order to
claim a VAT refund. Ms Richardson testified that during her
investigation of Elite Bookkeeping, she accessed
the VAT returns of
66 Lymm Street Glenhazel CC, trading as Tax Manager and Accountant,
since this was also the business address
of Elite Bookkeeping.
Mr Barry Bloch was the only member of 66 Lymm Street Glenhazel CC and
Mr Herbert Hack’s personal
bank details were initially supplied
to SARS for the value-added tax refund. Mr Bloch confirmed the
above evidence.
The forged copies of supporting documents
(invoices) accompanied the VAT return on behalf of 66 Lymm Street,
Glenhazel CC whose
bookkeepers were Elite Bookkeeping. The
return reflected that,
inter
alia,
certain entities, namely, Unipaper CC, J&L Carpeting and Tiling
and William Louw & Son supplied goods to 66 Lymm Street
Glenhazel
CC resulting in a refund from SARS of R137 969.58 to the latter.
[32]
Richardson and other officials from SARS conducted a search and
seizure operation on 23 July 1996 at 66 Lymm Street,
Glenhazel and
seized the originals of the service documents (invoices) that were
faxed to SARS to motivate the VAT claim submitted
on behalf of 66
Lymm Street Glenhazel CC.
[33]
Appellant’s counsel’s submissions in this regard were not
so much that the invoices were not false.
The thrust of
counsel’s arguments was that the State relied solely on the
evidence of Richardson and Bloch. Neither
witness, it was
argued, could link the appellant to these charges except Bloch’s
evidence regarding the falsified Unipaper
invoice to the effect that
he (Bloch) had falsified this invoice on instructions by the
appellant.
[34]
Mr Bloch testified that 66 Lymm Street Glenhazel CC was a property
owning close corporation in which he held a 100% member’s
interest. The corporation owned the property situated at 66
Lymm street, Glenhazel. VAT returns and schedules of VAT
payments for March and April, 1996 were submitted to SARS.
Invoices were also submitted to support the VAT claim. He
testified that the invoices of William Louw & Son were altered,
namely R6 600.00 to R16 600.00; R1 458.50 to
R9 458.50; R3 087.40 to R13 087.40 and R4 160.00
to R14 160.00. He did not know who altered the
figures.
Richardson corroborated Bloch’s evidence. He testified
further that it was the appellant who completed
the VAT 201 returns
for Unipaper CC and J&L Carpentry and Tiling indicating in the
returns that these entities had no income
for the period covered by
the VAT returns. Bloch testified that the appellant had
instructed him to manufacture the Unipaper
CC invoices.
[35]
In my view, the only reasonable inference to be drawn from the
evidence of Richardson and Bloch is that the invoices
allegedly
issued by Unipaper CC, J&L Carpentry and Tiling and William Louw
& Son were manufactured with the full knowledge
of the appellant
to obtain a VAT refund that would have benefitted the appellant
personally. Appellant had furnished his
personal bank account
details to SARS instead of that of 66 Lymm Street Glenhazel CC for
the purposes of receiving any refund.
The invoices had been
submitted to SARS on behalf of 66 Lymm Street Glenhazel CC by Elite
Bookkeeping to substantiate the VAT 201
return.
[36]
In my view the State proved beyond reasonable doubt that the
appellant made a misrepresentation or pretended to Richardson
and
SARS that the amounts on the invoices allegedly paid to the three
entities represented the value of the goods delivered to
66 Lymm
Street Glenhazel CC for which the latter paid VAT. This false
representation caused SARS to refund 66 Lymm Street
the amount of
R137 969.58 to the prejudice of SARS.
[37]
I would dismiss the appeal in respect of counts 46-51 as well.
Sentence
[38]
I turn then to the sentence of five years’ imprisonment imposed
by the trial court. As I said, the judgment
on sentence cannot
be traced. Hence we do not have the reasons for the sentence
that the court
a
quo
imposed. Without the magistrate’s reasons for sentence it
is difficult to evaluate it on appeal. Mr Vermeulen
stressed
that in the circumstances this court was at large to consider
sentence afresh. I agree with counsel’s submissions
in
this regard but bearing in mind the facts and circumstances as they
were when appellant was sentenced in 2008.
[39]
The appellant stood as a first offender when he was sentenced.
A pre-sentence report was compiled by criminologist
Dr Irma
Labuschagne at the behest of the defence. She was called to
testify on the salient parts of her report.
[40]
The personal circumstances of the appellant were recounted by Dr
Labuschagne when she testified. The appellant
was married and
had four children, the oldest 23 years and the youngest 10 years
old. The eldest was still studying at university.
All the
children, it was said, were financially dependent on the appellant.
[41]
Dr Labuschagne was tasked specifically to see whether the appellant
was a suitable candidate for an alternative to direct
imprisonment.
She testified that she would not have looked at an alternative
to imprisonment if she believed that the motive
behind the crime was
pure greed or due to inherent evil. She opined that the
appellant was a suitable candidate for punishment
within the
community rather than direct imprisonment. If he was imprisoned
he would lose his job and seven employees would
lose their jobs.
Dr Labuschagne was also concerned, she said, that the interests of
the community would also be affected
because the appellant ran a
“sizeable synagogue” and fed many destitute families from
his own pocket. She did
not elaborate further. She did not find
“an inherent greed” in his personality. It was also
submitted that a
substantial fine was also a good alternative to
imprisonment. That was in examination-in-chief.
[42]
Under cross-examination Dr Labuschagne conceded that a large part of
her report was concerned with motive but in the
wider sense.
She did not find appellant’s motive evil but negligent.
Dr Labuschagne was (I am told she has since
passed away) a well-known
criminologist with an impressive list of qualifications as an
expert. Yet she saw the appellant’s
conduct as negligent
knowing full well that he had been convicted on numerous counts of
fraud, which is the intentional rather
than negligent commission of
an offence. Dr Labuschagne went on to say that she did not know
what appellant’s motive
was but nevertheless felt it was not
evil. She said she did not pertinently ask him what his motive
was for committing the
offences because she would distrust the answer
she would get. One would have thought she would first elicit an
answer to
the question and then evaluate it together with the rest of
the information before deciding whether the answer is to be
distrusted.
Under further cross-examination she testified again
that she did not see a real greed in the appellant’s case
which, she
said, is often the underlying motive for a so-called white
collar crime. She drew this conclusion despite not having
enquired
about his motive.
[43]
Dr Labuschagne conceded that the appellant did not admit guilt.
He gave her the impression that it was the people
who he had
appointed to do work for him that were the culprits, not him.
The appellant did not tell her that it was he who
had instructed some
of his employees and partner or co-member of Elite Bookkeeping, Mr
Bloch, to manufacture the false invoices.
She was also of the
view that the appellant was not in need of rehabilitation.
[44]
An officer in the employ of Correctional Services, Mr Nhlapo was
called by the defence to testify in support of the view
that
appellant was a suitable candidate for correctional supervision as a
sentence in terms of
Section 276(1)(h)
of the
Criminal Procedure Act
51 of 1977
. The learned Magistrate was singularly unimpressed
with Mr Nhlapo’s report and he cross-examined Mr Nhlapo at
length.
It would appear that the Magistrate took umbrage at the
fact that Mr Nhlapo, who held no legal qualification, nor a social
science
degree, sought to place himself in the position of the
Court. Defence counsel placed him at the disposal of the court
after
handing up his report but without leading any evidence from the
witness. The State then proceeded to question Mr Nhlapo.
In essence he conceded that his report was based on the facts as
given to him by the appellant and his family only and not on the
facts on which appellant was convicted. He said he had
unsuccessfully tried on several occasions to get the version of SARS,
but was unable to do so. It did not occur to him to contact the
prosecutor to ascertain the facts or obtain the judgment
regarding
the appellant’s conviction. He conceded that if those
facts were substantially different from those furnished
by the
appellant and his family he would not have made the recommendations
that he did.
[45]
In answer to questions from the court, Mr Nhlapo said the appellant
had presented himself to him as an innocent person.
Mr Nhlapo
then contradicted himself and said appellant did verbalise that he
did something wrong. This no doubt raised the
ire of the
Magistrate further in view of the further questioning that followed
of the hapless Nhlapo.
[46]
I need not dwell any further on his report as it, like that of Dr
Labuschagne is of little value to this court in considering
a
suitable sentence afresh. Neither appellant’s counsel nor
the State dealt with a NICRO (National Institute for Crime
Prevention
and the Re-Integration of Offenders) report (which was obtained at a
later stage) when addressing us on sentence.
It is accordingly
not dealt with here.
[47]
As I said, in determining an appropriate sentence some 11 years after
the appellant’s conviction, this court would
have to deal with
the facts as they were then.
[48]
The appellant’s personal circumstances as gleaned from Dr
Labuschagne’s report is that the appellant was
50 years old
when he was convicted and 53 years old when he was sentenced.
He was married and, as I said, had four children
at the time.
The eldest was at university while the other three were presumably in
school. Neither Dr Labuschagne’s
nor Mr Nhlapo’s
reports provide any further detail in this regard. The
appellant is an accountant who ran a tax consultancy.
He is a
prominent member of his synagogue where he leads the services and
speaks to congregants, about 100 in number, about religion
and
current affairs. The appellant’s wife was a practising
optometrist. The appellant was a first offender.
[49]
In S v Sadler 2000(1) SACR 331 (SCA) at 335g-336a, Marais J said:
“
So
called 'white-collar' crime has, I regret to have to say, often been
visited in South African courts with penalties which are
calculated
to make the game seem worth the candle. Justifications often advanced
for such inadequate penalties are the classification
of
'white-collar' crime as non-violent crime and its perpetrators
(where
they are first offenders) as not truly being 'criminals' or 'prison
material' by reason of their often ostensibly respectable
histories
and backgrounds. Empty generalisations of that kind are of no help in
assessing appropriate sentences for 'white-collar'
crime. Their
premise is that prison is only a place for those who commit crimes
of violence and that it is not a place for
people from 'respectable'
backgrounds even if their dishonesty has caused substantial loss, was
resorted to for no other reason
than self-enrichment, and entailed
gross breaches of trust.
These
are heresies. Nothing will be gained by lending credence to them.
Quite the contrary. The impression that crime of that kind
is not
regarded by the courts as seriously beyond the pale and will probably
not be visited with rigorous punishment will be fostered
and more
will be tempted to indulge in it.”
[50]
In the following cases a term of direct imprisonment was imposed.
In S v M 1998(1) SACR 162 (WLD) the appellant,
an attorney in his
early fifties, was convicted on 33 counts of theft involving R2.5
million, being monies given to him by clients
for investment
purposes, and trust funds. He was married and had five children
one of whom was an invalid. He was sentenced
by the trial court
to eight years’ imprisonment which was confirmed on appeal.
Du Plessis J said:
“
The
personal circumstances of the appellant do evoke considerable
sympathy. One always has sympathy for a person who has led
an
exemplary life and then falls. However, one must bear in mind that
that is true in many cases of so-called 'white collar crime'.
The
perpetrators are in many such cases people who have risen in
society.”
Further:
“
It
is clear that there are cases in which the gravity of the offence is
such that despite considerable personal factors indicating
a
community based sentence, imprisonment remains the only feasible
option. The learned magistrate concluded that this is such a
case.
With that conclusion I find no fault.”
Finally:
“
It
was submitted that every enlightened person who knows the personal
circumstances of the appellant will not find a community-based
sentence too lenient. I disagree. The sentence in question is
inter
alia
aimed at warning members of the attorneys' profession that theft of
trust money is and remains a serious offence, which will not
be dealt
with lightly. [I would say the same applies to the accounting
profession]. Those people are enlightened members
of the
community no doubt. In most cases their personal circumstances will
be similar to that of the appellant. It is important
to send the
message that such personal circumstances will not have the
automatic effect that the courts do not adequately
punish the
offence. It is true that the plight of the appellant's one son is a
feature peculiar to this case, but then in many
cases there will be
some peculiar feature. I might add that this judgment was reserved
for the very reason that the personal circumstances
of the
appellant evoked considerable sympathy. I have come to the conclusion
that the learned magistrate had due regard thereto
and that this
Court is not entitled to interfere on the basis submitted. In fact,
this Court would fail in its duty if it does
interfere on that
ground.”
[51]
In S v Sinden 1995(2) SACR 704(A) the appellant, a first offender,
was sentenced in the regional court to an effective
term of four
years’ imprisonment for stealing approximately R138 000.00
from the employer over a period of 14 months.
She was married
and had minor children. The contention on appeal, that a
sentence of correctional supervision was more appropriate,
was
rejected by the Appellate Division. The court noted that the
accused had shown little remorse and was unwilling to pay
back the
money stolen from her employer. It was evident that she had
stolen out of greed and not from need. The court
held that
although the interests of the accused and her family called out for a
sentence of correctional supervision, the interests
of society
outweighed her own. The offence was serious and the sentence,
as such, did more than deal with the particular
offender: it
constituted a message to the society in which the offence occurred.
The court then confirmed the sentence.
[52]
In S v Botha 1998(2) SACR 228 (A) the appellant was convicted
in a regional court
on 12 counts of theft, 10 counts of forgery and four counts of fraud.
The offences were committed over
a period of six months, and the
complainants were all persons who reposed trust in the appellant (her
employer, business associates,
or friends). The total amounts
involved in the theft charges were R4 814.04, stolen from her
employer, and R5 511.23,
stolen from a business associate. The
forgery charges related to cheques which she had drawn on the bank
account of her business
associate. The fourth fraud charge
related to a further amount of R20 000, which was not, however, paid
over to the appellant,
because her misdeeds came to light before the
payment could be effected. The fraud evidenced great ingenuity, and
were well planned
and thought out. The appeal was dismissed.
[53]
In the present appeal the appellant had steadfastly refused at the
sentencing stage to acknowledge that he had done anything
wrong.
He lays the blame on others. Mr Nhlapo says:
“
The
accused regrets ever committing the offence in question stating that
he finds it difficulty (sic) in accepting that his so trusted
friend
could let (sic) him to such trouble.”
I
have earlier referred to this aspect, and the appellant’s
attitude, when dealing with Dr Labuschagne’s testimony in
mitigation of sentence. The appellant seemed to lack insight
in, or would not acknowledge his own role in the perpetration
of
fraud on SARS (the fiscus). He shows no remorse. In S v
Matyityi 2011(1) SACR 40 (SCA) (a case subsequent to the
sentencing
of the appellant in this appeal before us but the learned Judge’s
description of remorse is instructive) it was
said at 47a-d:
“
There
is, moreover, a chasm between regret and remorse.
Many
accused persons might well regret their conduct, but that does not
without more translate to genuine remorse.
Remorse
is a gnawing pain of conscience for the plight of another. Thus
genuine contrition can only come from an appreciation and
acknowledgement of the extent of one's error.
Whether
the offender is sincerely remorseful, and not simply feeling
sorry for himself or herself at having been caught, is
a factual
question. It is to the surrounding actions of the accused, rather
than what he says in court, that one should rather
look.
In
order for the remorse to be a valid consideration, the penitence must
be sincere and the accused must take the court fully into
his or her
confidence.
Until
and unless that happens, the genuineness of the contrition alleged to
exist cannot be determined. After all, before a court
can find that
an accused person is genuinely remorseful, it needs to have a proper
appreciation of,
inter
alia
:
what motivated the accused to commit the deed; what has since
provoked his or her change of heart; and whether he or she
does
indeed have a true appreciation of the consequences of those
actions.”
[54]
In
the matter of S v Malgas and Others
2013 (2) SACR 343
SCA (para 20)
the appellants were sentenced to prison terms of between 8 and 10
years on 06 March 2003 and the appeal against sentence
was heard 10
years later on 22 May 2013. It was contended that this lengthy
period is, in itself, an exceptional circumstance
that should be
taken into account in the evaluation of their sentence by the appeal
court. Willis AJA pertinently observed
at paragraphs 20-22:
“
[20]
There can be no automatic alleviation of sentence merely because of
the long interval of time between the imposition
of sentence and the
hearing of the appeal for those persons fortunate enough to have been
granted bail, pending appeal. The
phenomenon whereby inertia
descends upon appeal, like a cloud from the heavens, once bail has
been granted to an accused after
conviction and sentence, has been
recurring with increasing frequency, especially in certain parts of
the land.
[21]
The appellants have adopted a supine attitude to the hearing of their
appeal. Their attitude to this case throughout
has been to
adopt the attitude of a nightjar in the veld; do as little as
possible, hope that nobody will notice and expect that
the problem
will go away. Fortunately for the administration of justice,
the appellants do not enjoy a nightjar’s camouflage.
They
may have hidden, but they have not been invisible.
[22]
It will be hard on the appellants and their families that, 10 years
after their sentencing by the magistrate, they should
now have to
report to jail to commence serving their sentences. We have
anxiously reflected upon the needs of justice in
this case, including
the requirement that this court should show mercy to and compassion
for our fellow human beings. Having
done so, the conclusion
remains inescapable that, if this court were to regard this case as
yet another ‘exception’,
it would undermine the
administration of justice. The appellants are to blame for the
long delay in bringing this matter
to finality. The predicament
in which the appellants find themselves is largely of their own
making.”
[55]
The situation in the present appeal is typical. The appellant
had been on bail awaiting trial from 7 October 1996
and from 8
February 2008 he has been on bail pending appeal which is altogether
18 years. The delay in the prosecution of
the appeal has
largely been due to the “supine attitude of the hearing of
[his] appeal” (Malgas
supra
)
although the State is not entirely blameless. The attitude can
be gleaned from the way in which it was sought to have a
further
postponement (or even an acquittal) by the appellant on the basis
that the record was incomplete and which I have referred
to earlier.
[56]
Again, to borrow from Malgas (
supra
),
the predicament in which the appellant finds himself is largely due
to his own making.
[57]
In my view taking
all factors into account, a sentence of five years’
imprisonment as imposed by the learned Magistrate was
an appropriate
one. I would impose the same sentence if I were to impose
sentence afresh. I would dismiss the appeal on sentence.
[58]
The appellant has been on bail since sentence was imposed by the
court a quo. It should be revoked.
[58]
In the result the following order shall ensue:
58.1
The appeal on conviction and sentence is dismissed.
58.2
The appellant is to present himself to the Registrar of the High
Court, Gauteng Local Division, Johannesburg within 72
hours of the
making of this order to commence serving his sentence.
_________________________
N.
RANCHOD
JUDGE
OF THE HIGH COURT
I
agree,
________________________
G.S.S
MALULEKE
JUDGE
OF THE HIGH COURT
Appearances:
Counsel
on behalf of Appellant
: Adv Vermeulen SC
Adv
Eia
Instructed
by
: Werksmans Attorneys
(Mr Burger)
Counsel
on behalf of Respondent
: Adv Coetzee
Instructed
by
: State Attorney
Dates
heard
: 30 May 2014; 6 June 2014
Date
delivered
: 10 October 2014
[1]
Transcribed record page 841 line 23 to page 842
line 1.
[2]
Record: vol 9 page 718 line 12 to page 719 line
16.
[3]
Record page 494 lines 2-23; page 495 lines 16 –
page 496 line 5.