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[2015] ZASCA 129
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Grundling v The State (20616/2014) [2015] ZASCA 129 (28 September 2015)
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SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
CASE
NO: 20616/2014
Not
Reportable
In
the matter between:
JOHANNA
ANDRIETTE GRUNDLING
APPELLANT
and
THE
STATE
RESPONDENT
Neutral
citation:
Grundling
v The State
(20616/14)
[2015] ZASCA 129
(28
September 2015).
Coram:
Cachalia, Majiedt et Pillay JJA
Heard:
02 September 2015
Delivered:
28 September 2015
Summary:
Sentence -
imposition of - factors to be taken into account- importance of
pre-sentencing report - 30 counts of contravention of
s 59(1)
(a)
of Value-Added Tax Act 89 of 1991 - eight years’ imprisonment
imposed by the court below set aside and replaced with a three
year
prison sentence in terms of s 276(1)
(i)
of
Criminal Procedure Act 51 of 1977
.
ORDER
On appeal from:
Gauteng
Division
,
Pretoria (Maumela J et Pillay AJ sitting as court of appeal)
1
The appeal is upheld and the order of the court below is set aside
and replaced with the following:
‘
1
The appeal is upheld.
2
The sentence of the regional court is set aside and replaced with the
following:
“
The
accused is sentenced to three years’ imprisonment in terms of
s
276(1)
(i)
of the
Criminal Procedure Act 51 of 1977
from which she may be placed under
correctional supervision in the discretion of the Commissioner of
Correctional Services or a
parole board.”’
JUDGMENT
Pillay
JA (Cachalia and Majiedt JJA concurring)
[1]
The appellant, Ms Johanna Andriette Grundling was charged in the
Regional Magistrates Court, Pretoria, with 30 counts of fraud,
alternatively 30 counts of theft of money and a second alternative of
30 counts of contravening
s 59(1)(
a)
of the Value-Added Tax Act 89 of 1991 (VAT Act) involving an amount
of R33 671375. She pleaded guilty to the second alternative
and was
sentenced to an effective period 10 years’ imprisonment, the
State having decided not to pursue the main counts of
fraud and the
first alternative counts of theft. She appealed to the Gauteng
Division of the High Court, Pretoria against the sentence.
The appeal
was partially successful and the sentence was reduced to 8 years’
imprisonment. With the leave of that court,
she now comes on appeal
to this court.
[2]
The appellant and her late husband, Mr Johannes Lodewikus Grundling,
were the only members of ASERA Landbouprodukte CC and Africa
South
Earth Research Agricultural CC, which were registered Value Added Tax
(VAT) vendors. In March 2010, they were arrested for
submitting false
VAT returns between April 2006 and July 2008. During the arrest, her
husband shot and killed himself.
[3]
Section 59(1)
(a)
of the VAT Act reads as follows:
‘
59.
Offences and penalties in regard to tax evasion
(1)
Any person who with intent to evade the payment of tax levied under
this Act or to obtain any refund of tax under this Act to
which such
person is not entitled or with intent to assist any other person to
evade the payment of tax payable by such other person
under this Act
or to obtain any refund of tax under this Act to which such other
person is not entitled –
(a)
makes or causes or allows to be made any false statement or entry in
any return rendered in terms of this Act, or signs any statement
or
return so rendered without reasonable grounds for believing the same
to be true; or
.
. .
Shall
be guilty of an offence and liable on conviction to a fine or to
imprisonment for a period not exceeding 60 months.’
[4] A brief
synopsis of her written plea in terms of s 112 of the Criminal
Procedure Act 51 of 1977 (CPA), which brought her conduct
within the
provisions of s 59(1)
(a)
of the Act is the following:
During the
period July 2006 to July 2008, the appellant and her husband were the
only members of the two close corporations. He
was responsible for
all the operational activities while she helped with the
administration of the business. During this period
monthly VAT
returns (VAT 201 forms) were completed by her late husband and he
passed them on to her together with invoices and
information for her
to sign. She did so, even though she foresaw the possibility that the
invoices and information were based on
false figures, and had no
reasonable grounds for believing such entries to be true. This
rendered the VAT returns false as well.
She nonetheless intentionally
signed the returns after her husband had falsified the contents of
the returns so that they would
obtain refunds to which they were not
entitled.
[5]
The State accepted the plea whereupon the appellant was duly
convicted. No previous convictions were proved against her. After
convicting the appellant, the magistrate granted an order for her
assets, to the value of R8 287 863 to be attached by the
Asset
Forfeiture Unit. The trial was then postponed for the purpose of
obtaining a pre-sentencing report, and the attachment order
duly
executed.
[6]
When the trial resumed, a pre-sentencing report by Dr Eon Frederik
Sonnekus, a forensic criminologist, and a correctional supervision
report in terms of s 276(1) of the CPA were handed in by the
appellant’s representative. The latter report was handed in
without objection, but the report by Dr Sonnekus was not accepted by
the State and this resulted in Dr Sonnekus testifying and
being
subjected to lengthy cross-examination.
[7] The report and evidence
of Dr Sonnekus throws considerable light on the appellant’s
personality as well as the circumstances
under which the offences
were committed. It transpired that:
(a) The 65 year old former
teacher was a first offender, and capable of rehabilitation;
(b) She married at the age
of 23 and over the next 35 years became a submissive and obedient
wife of a dominating and aggressive
husband: this was his explanation
for why she carried out her husband’s wishes in merely signing
the false documents;
(c) She had been a good
person until the commission of these offences and had an untainted
professional career;
(d) She
showed remorse by pleading guilty and genuinely appeared to have the
intention of not wanting to be in this situation (of
transgressing
the law) again.
[8]
Dr Sonnekus concluded that she would benefit immensely from a program
of rehabilitation. He recommended that the court consider
a
non-custodial sentence as punishment.
[9]
The correctional services report confirmed that the appellant was
regarded as a suitable candidate for a sentence of correctional
supervision in terms of 276(1)
(h)
of the CPA. The correctional officer who did the assessment
recommended that in imposing such a sentence on the appellant, she
should be exempted from house arrest and community service.
[10]
That concluded the evidence that was led on behalf of the appellant.
For its part, the State submitted, by consent, an affidavit
deposed
to Ms Mantwese Fay Smith who is a criminal investigator in the employ
of SARS. She stated that she had investigated these
offences. She
found that these offences were committed over a period of two years.
She explained that as a result of third party
cross-referencing she
discovered that the invoices relied upon by the late Mr Grundling and
the appellant, in order to obtain refunds
were fictitious and related
to non-existent transactions. Furthermore, in certain respects the
false information contained therein
were in respect of items not
offered by suppliers during that period. On a number of occasions,
the only amounts paid into the
bank accounts of the closed
corporations were the VAT refunds. She further explained that of the
R33 371 375 claimed
as refunds, R27 068 197 was
in fact paid to the appellant and her husband. However the claims for
the balance amounting
to R6 603 177,49 were withheld since
by then, the scheme had been uncovered.
[11]
The magistrate, in exercising his discretion in respect of sentence,
took into account that the appellant was 65 years old,
pleaded guilty
and that she was a first offender. However, he appears to have
attached no weight to the pre-sentencing report of
Dr Sonnekus. While
he said he took into consideration what Dr Sonnekus had said in his
evidence, he did not specifically discuss
any aspect thereof. Nor did
he consider the correctional services report and recommendations. He
made no mention of it.
[12]
However, he had regard to a number of decisions in which sentences of
direct imprisonment were imposed for theft of money and
for fraud
respectively. He also took all the counts together for purposes of
sentence, and proceeded to impose a period of ten
years’
imprisonment, which in my view was shockingly inappropriate given the
mitigating circumstances alluded to by Dr Sonnekus
and the fact that
the statutory prescribed maximum sentence is only 60 months for a
contravention of s 59(1)
(a)
of the Act. These, in my view, constitute misdirections of sufficient
weight to justify interference on appeal.
[13]
On appeal, the court below considered the effective period of ten
years’ imprisonment too harsh and sentenced the appellant
to 48
months’ imprisonment on each count before ordering counts 3 to
30 to run concurrently with the sentences imposed on
counts 1 and 2,
resulting in an effective 8 year term of imprisonment. The court
below also seems to have disregarded the pre-sentencing
report as
well as the correctional services report. In my view, the effective
sentence of 8 years’ imprisonment was a mere
minor adjustment
of the punishment imposed by the magistrate. The court below did not
accord sufficient weight to the appellant’s
mitigating
circumstances and the sentence it imposed was shockingly out of
kilter with the nature of the offences.
[14]
Before us, it was contended on behalf of the appellant, that a term
of imprisonment for a person who is currently 68 years
old and a
first offender is too harsh. It was submitted that the magistrate and
the court below did not place sufficient weight
on the pre-sentencing
report. It was further submitted that she was a productive member of
society, being a former teacher until
her late husband persuaded her
to resign and join his business. It was thus argued that a
non-custodial sentence would be appropriate
in the circumstances,
specifically a sentence in terms of s 276(1)
(h)
of the CPA.
[15] Counsel
for the State, supported the sentence imposed by the court below. She
pointed out that much of the money that was lost
through the scheme
was not recovered by the fiscus and that the appellant had not
disclosed what had happened to it or where the
missing money was. She
further argued that the appellant benefitted substantially from their
scheme and this was borne out by paragraph
7 of her written plea
which reads as follows:
‘
Ek
erken dus dat ek die BTW 201 A opgawes vir die tydperk soos vermeld
in kolom 1 van Aanhangsel A en te Pretoria in die streekafdeling
Gauteng, geteken het sonder dat ek redelike gronde gehad het om te
glo dat die inhoud daarvan waar is, ten einde terugbelating
van
belasting ingevolge Wet 89 van 1991 te verkry, waarop ek en Johannes
Lodewikus Grundling nie op geregtig was nie.’
She contended
that all this constituted aggravating circumstances which justified
the sentence imposed by the court below.
[16]
Whilst it can be accepted that the appellant benefitted with her late
husband from claiming VAT refunds to which they were
not entitled, it
does not necessarily follow that she benefitted equally. There is
simply no evidence to indicate to what extent
she benefitted
personally nor does paragraph 7 of her plea clarify that aspect. In
regard to the submission that the appellant
has not disclosed what
had happened to the unaccounted money, I accept that her failure to
take the court into her confidence is
an aggravating factor that must
have a bearing on the sentence that must be imposed.
[17]
There is however no evidence that she had concealed assets that may
have been acquired with the VAT funds. The assets of her
estate,
derived from the common estate, have been attached. She has been left
with almost nothing and earns a living by selling
pickles and jars of
jam. The profits derived from these sales supplement her pension of
R5 000 per month. She is therefore not
likely to be in a position to
commit these offences again and as she said, she has no intention to
do so.
[18]
This does not mean that a wholly non-custodial sentence is
appropriate. The imposition of an appropriate sentence, should be
approached with a ‘humane and compassionate understanding for
human frailties and the pressure’ that contributed to
the
commission of the crimes.
[1]
The offender’s moral blameworthiness is a factor that must also
be considered. In considering her actual role in the commission
of
the offences and the circumstances in which she did so, she should
not be made to bear the brunt of the punishment in the absence
of the
primary perpetrator. There is certainly no justification to do so in
this case. It is probable that she would not have committed
these
offences but for the pressures which was brought to bear on her to do
so by her late husband. On the other hand she nonetheless
played a
crucial role in the commission of these crimes through which the
fiscus suffered a huge loss.
[19]
The court in
S v R
[2]
alluded to the fact that by introducing the sentencing option of
correctional supervision, the legislature clearly distinguished
between two types of offenders, those who ought to be removed from
society by means of imprisonment and those who should not, but
should
nonetheless be punished. (
S v D
[3]
and S v Ingram
[4]
;
S v Samuels
[5]
and
S v Grobler
[6]
.
This does not mean that even if an accused is regarded as a suitable
candidate for correctional supervision, a non-custodial sentence
must
be imposed. As pointed out by Nienaber JA in
S
v Lister
[7]
‘to focus on the well-being of the accused at the expense of
the other aims of sentencing and the interests of the community
was
to distort the process and to produce, in all likelihood, a warped
sentence.’
[8]
[20]
It is clear that the appellant does not fall into the category of
offenders who are a danger to the community and she is not
in a
position to pose a threat to society. It also seems she is not in a
position to pay a suitable fine. I do not think that this
is an
instance where a sentence of long term direct imprisonment is
justified. At the same time though, the sentence should also
reflect
an appropriate measure of rebuke for her conduct.
[21]
In considering all the factors mentioned above, to impose a
non-custodial sentence would in my view dilute the seriousness
of the
offences and indeed disregard the impact of the actual loss of R
18 780 334 to the fiscus.
[9]
A sterner sentence other than a completely non-custodial sentence is
called for and this would reflect the seriousness of the crimes
committed. In the circumstances I would propose a sentence of 3
years’ imprisonment in terms of s 276(1)
(i)
so that while the mitigating factors have been taken into account the
other objectives of sentence are indeed also reflected.
[22]
In the result the following order is made:
1
The appeal is upheld and the order of the court below is set aside
and replaced with the following:
‘
1
The appeal is upheld.
2
The sentence of the regional court is set aside and replaced with the
following:
“
The
accused is sentenced to three years’ imprisonment in terms of
s
276(1)
(i)
of the
Criminal Procedure Act 51 of 1977
from which she may be placed under
correctional supervision in the discretion of the Commissioner of
Correctional Services or a
parole board.”’
R PILLAY
JUDGE OF APPEAL
Appearances:
For
Appellant:
H F Klein
Instructed by:
Rianie
Strijdom Attorneys, Pretoria
Symington & De Kok Attorneys , Bloemfontein
For
Respondent:
C
Wolmarans
Instructed by:
The Director
of Public Prosecutions, Pretoria
The Director
of Public Prosecutions, Bloemfontein
[1]
S v Rabie
1975
(4) SA 855
A at 866 B-C;
[1975] 4 ALL SA 723 (A).
[2]
S v R
1993 (1) SA 476
(A) at 488G; [1993] 1 ALL
SA 326 (A).
[3]
S v D
1995 (1) SACR 259
(A) at 266 c-d; [1995] 3 ALL SA 373 (C).
[4]
S v Ingram
1995 (1) SACR 1(A)
at 9e; [1995] 3 ALL SA 121 (A).
[5]
S v Samuels
2011 (1) SACR 9
(SCA);(262/03) [2010] ZASCA 113.
[6]
S v Grobler
2015 (2) SACR 210
(SCA); (433/13)
[2014] ZASCA
147
at para 6.
[7]
S v Lister
1993 (2) SACR 228 (A); [1993] 4 ALL SA 669 (A).
[8]
At 232 g-h.
[9]
The R33 671 375 less R6 603 177,49
in respect of unpaid claims and less a further less
R8 287 863.