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[2010] ZAWCHC 594
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Hendricks v S (A 532/2009) [2010] ZAWCHC 594 (1 December 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
CASE
NO. A 532/2009
In
the matter between::
ANVER
HENDRICKS
….....................................................................................
Appellant
and
THE
STATE
…...............................................................................................
Respondent
JUDGMENT
DELIVERED ON 1 December 2010
W.H.
VAN STADEN, AJ
1.
The
Appellant appeared in the Regional Court, Cape Town, on a charge of
corruption in terns of Section 1(1)(b)(i) of the Corruption
Act No.
94 of 1992. He pleaded not guilty but was convicted on 15 January
2008. On 26 February 2008 he was sentenced to 3 years
imprisonment in
terms of Section 276(1 )(h) of the Criminal Procedure Act, Act 51 of
1977.
2.
The
relevant allegations contained in the charge sheet can be summarised
as follows:
2.1. Kwani (Pty) Ltd ("Kwani")
entered into a written agreement with Flemming Comp (Pty) Ltd doing
business as Afro Comp
International ("ACI") on 27 February
2000.
2.2.
The Appellant, the duly authorised agent of Kwani, signed the
agreement on behalf of Kwani. Joseph Clifford Flemming ("Flemming"),
the sole director of ACI, signed the agreement on behalf of ACI.
2.3.
By virtue of his employment as Maintenance and Support Manager as
well as Training Centre Manager with Portnet, the Appellant
had the
duty to avoid preferring any one third party above another, with
regard to Portnet business.
2.4.
The Appellant agreed to receive or attempted to obtain a
"benefit
of whatever nature which was not legally
due".
1
The
benefit would be received from Flemming and/or ACI by the Appellant
or anyone else. The nature of this benefit was not specified
with
more particularity in the charge sheet.
2.5.
The activities of the Appellant were wrongful in the sense of being
corrupt.
2.6.
The Appellant had the intention that he should commit or omit to do
any act in relation to his duties and power by virtue
of his
employment, to wit the preferment of ACI in its business relations
with Portnet. It is however immaterial whether Flemming
and/or ACI
had the intention to reward the Appellant for his corrupt actions.
BACKGROUND
FACTS
3.
ACI, the company of which Flemming was the effective owner, was a
small black-owned company supplying IT (information technology)
products and services. Portnet was one of ACI's biggest clients.
Best (Pty) Ltd ("Best") an established IT-business,
was
also a product and service provider of Portnet and had the sole
rights to distribute and implement a financial system called
Prophesy, which was utilised by Portnet. Best was a solely
white-owned company that needed a black empowerment entity to
partner
it in a skills-transfer process so that Best could continue
servicing the IT software at Portnet.
4.
At all relevant times blac< economic empowerment and skills
transfer to achieve transformation in the IT-sector was of great
importance to Transnet and more particularly its subsidiary Portnet.
5.
The Appellant was the acting Maintenance and Support Manager of
Portnet and was in charge of the maintenance and support of
all
systems at South African Ports, including the billing system, the
financial system, the maintenance management systems, the
property
management system and other smaller systems. Each of these systems
had a support team with a project manager. This is
how the Appellant
described his designation and the scope of his employment in his
evidence. In the charge sheet it is alleged
that the Appellant was
also the Training Centre Manager of Portnet. The state witnesses
were not certain about the exact job
description, except for Jonck
who was clearly wrong in this respect. There appears to be no reason
why the Appellant's evidence
about the nature of his employment
should not be accepted.
6.
The Appellant was mandated by the Executive Manager of IT & S of
Portnet, Mr Musala Mosogomi, to assist Best to participate
in the
transformation process a: Portnet. During his cross-examination the
Prosecutor asked Appellant why his evidence concerning
this mandate
was not put to the witness Jonck. The legal representative appearing
for the Appellant objected and explained that
Jonck was not a party
to the meeting when the mandate was given to the Appellant. The
Regional Magistrate then stated that, at
that time, it was the first
time that she had heard about the mandate. This is not correct. The
state witness Flemming specifically
referred to Appellant as
"the
policeman for Portnet",
sanctioned
by management to oversee that true empowerment takes place. The
state witnesses Levendal and Flemming as well as the
defence witness
Griesel, confirmed that black economic empowerment was a priority
for both Portnet and the Appellant. All the
witnesses in fact
confirmed that Appellant went out of his way to promote BEE. ACI for
example, was persuaded by Appellant to
promote empowerment by making
donations to institutions such as schools. In the c rcumstances I
accept that the Appellant was
not only mandated as set out above,
but was also seriously involved in promoting BEE within Portnet
2
.
7.
In attempting to fulfil this BEE-mandate, the Appellant was
convinced that a joint venture between Best and ACI was advisable.
Such a joint venture could benefit both Best and ACI. Best could
assist ACI to develop skills and a portion of Best's business
of
supplying financial services to Portnet could be transferred to ACI.
Best on the other hand could, by utilising ACI as a sub-contractor,
comply with BEE-requirements and retain some Portnet business.
8.
Appellant was seen by ACI as the key person to assist ACI to develop
skills and to obtain additional contracts. Levendal was
satisfied
that Appellant had influence and was able to ensure that invoices
are correctly processed and that payments would be
fast-forwarded.
The Appellant was therefore requested by ACI and Best to facilitate
a joint venture agreement betwesn ACI and
Best. Negotiations ensued
and Appellant mentioned to the parties involved in the negotiations
that the implementation of the
SAP (R3 system), an IT financial
system, was part of the future projections of Portnet and that a
tender process for the operation
of this system would be
implemented. Appellant's idea was that ACI should be developed to
such an extent that it would be able
to compete favourably in this
tender process. Apart form Appellant, Flemming, Mr Jaap Griesel
("Griesel") of Best and
ACI's auditor Mr Levendal, as a
representative of ACI, also took part in the negotiations.
9.
Griesel informed Levenda< that the shelf-company Kwani, of which
he was in effective control, rather than Best, should be
a party to
the agreement with ACI. Levendal was tasked to draft this
agreementwhich was finally entered into on 27 February 2000.
The
salient terms of this agreement are the following:
9.1.
Kwani is duly represented by Appellant (paragraph 2 of the
agreement).
9.2.
Appellant shall attend monthly (or fortnightly) progress meetings in
a non-executive capacity (paragraph 5).
9.3.
Kwani must provide adequate collateral security for ACI to obtain a
suitable overdraft facility, large enough to enable ACI
to continue
unrestricted with normal business operations and the envisaged
larger output and capacity. In the interim a facility
of R 200
000.00 will be established by ACI for Kwani (paragraph 6 to 9).
9.4.
For the duration of the joint venture between the parties all
cheques made out for an amount exceeding R 7 500.00, will require
prior notification to Appellant (paragraph 10).
9.5.
Kwani will receive a management fee of R 5 000.00 per month, payable
to a nominated management company (paragraph 12.1).
9.6.
As compensation for Kwani's services it would receive 30% of the
profit during the period from availing the overdraft facility
until
Kwani becomes a shareholder of ACI (paragraph 12.2).
9.7.
Kwani has the option to obtain 30%of the total issued shares of ACI
(paragraph 13). The agreement will commence upon the
successful
increase of the overdraft facility and will terminate upon the
restructuring of the ACI Group (paragraph 15).
10.
The Appellant, as was envisaged in paragraph 2
3
,
signed the agreement
"For
Kwani".
11.
The Appellant did not receive any direct financial benefits from
either ACI or Flemming.
12.
Neither of the state witnesses, Levendal or Flemming, or the defence
witness Griesel, appears to have perceived any of the
actions of the
Appellant as being corrupt. The auditor Levendal specifically stated
that he accepted the
bona
fides
of
the Appellant. The fact that he knew that the Appellant was
attempting to develop ACI as a BEE-compliant supplier of Portnet
was
one of the factors convincing him of such good faith.
13.
The changeover between Best and ACI actually took place and requests
for services were directed to ACI by Portnet and ACI
started
invoicing. Levendal had regular contact with Appellant mainly to
speed up payment of invoices. There can be little doubt
therefore
that the Appellant in the course of his employment did in fact use
his influence to favour ACI. As stated hereunder
that is of course
not necessarily enough to justify a conviction on a charge of
corruption.
14.
The suspensive condition of the contract requiring that Kwani
initially had the obligation to increase ACI's overdraft facility
by
R 200 000.00 was never fulfilled and the joint venture agreement
referred to in paragraph 8, above never came to fruition.
15.
At the trial the State tendered the evidence of three witnesses. The
Appellant gave evidence and Griesel was also called as
a defence
witness.
16.
The facts outlined above are facts which emerged during the trial
and which are either not in dispute or cannot reasonably
be
disputed.
CERTAIN
ASPECTS OF THE EVIDENCE FOR THE STATE
17.
The first state witness, the auditor of ACI, (Levendal) testified
that during the negotiations. Griesel made certain oral
statements
concerning the Appellant. Griesel informed him that he did not want
his or Best's name mentioned in the agreement.
He requested that
Kwani should be included as a contracting party rather than Best.
Griesel also told Levendal that he and Appellant
were joint owners
of Kwani, that Appellant was a director of Kwani and that Appellant
would be signatory to the bank account
of Kwani. He furthermore
stated that Appellant would be compensated for his services rendered
with a management fee.
18.
The second state witness, Flemming, was clearly upset and emotional
about the fact that the promises of ACI being developed
and favoured
by Portnet in its attempts to promote empowerment, were not kept.
Flemming confirmed that apart from the fact that
the Appellant
signed the agreement, he did not receive any benefit whatsoever from
Flemming or ACI. His evidence does not create
the impression at all
that he perceived his or ACI's actions as constituting bribery of
the Appellant.
19.
The third witness was Mr F H A Jonck, the assistant manager of
Transnet Group Audit Services ("Jonck"). He was requested
to investigate a complaint apparently lodged by Flemming. In many
respects his evidence appears to relate to the conclusions
that he
reached after interviews with interested parties.
20.
Jonck stated in his evidence that, on his interpretation of
paragraph 12 of the agreement, the interests of the Appellant
and
Kwani was identical and that the 30% profit realised during that
period would be due to the Appellant. According to Jonck
the
Appellant furthermore would have received the R 5 000.00
administration fee referred to in the contract. In his interview
with the Appellant Jonck confronted him with his interpretation that
the Appellant was not entitled to sign the agreement, as
he would
receive benefits in conflict with the terms of his employment.
21.
Jonck also said that Appellant told him that he never read the
contract and that he was under the impression that he had signed
the
contract as a witness and not as a representative of Kwani.
THE
DEFENCE CASE
22.
In
his evidence the Appellant maintained that it was his intention to
sign
the agreement as a witness only and not as a representative
of Kwani. In this respect he was supported by Griesel. Suffice to
say, the Regional Magistrate was clearly correct in rejecting this
evidence. Thefact that the Appellant's evidence was unacceptable
in
one respect, does not however mean that his evidence should be
rejected in totality. False evidence does not necessarily justify
an
inference of an accused person's guilt or that his evidence in other
respects are not acceptable. A possible reason for the
Appellant
untruthfully denying his involvement in the agreement as a
representative of Kwani, may be the fact that Jonck confronted
Appellant with his personal view that the Appellant had acted
unlawfully when signing the agreement on behalf of Kwani
4
.
THE
REGIONAL MAGISTRATE'S APPROACH
23.
The Regional Magistrate stated that the court was faced with two
conflicting versions as to how the Appellant came to sign
the
agreement and in what capacity he did so. The Magistrate accepted
the version of the state witnesses that the Appellant signed
as a
representative of Kwani and rejected the version of the Appellant
that he signed the contract as a witness. The Regional
Magistrate
was clearly correct to reject the evidence of the Appellant and
Griesel that the Appellant intended to merely sign
as a witness.
24.
The Regional Magistrate however went further and concluded that by
signing as a representative on behalf of Kwani the Appellant
became
a party to the contract
"and
as such he entered into a corrupt relationship".
As
I point out hereunder when dealing with the requirement that the
appellant must have acted corruptly, that is, unlawfully,
the
question is whether there is no justification for his conduct.
5
In my view, the evidence shows, as indicated hereunder,
6
that his conduct of entering into the agreement was probably
justified.
BENEFITS
25.
As stated above
7
,
according to Levendal, Griesel informed him about the nature of the
Appellant's involvement with ACI. When Levendal testified
about what
Griesel told him, the legal representative appearing for the
Appellant objected. Although the prosecutor specifically
indicated
that the state would call Griesel as a witness, the Regional
Magistrate made a finding that Levendal's evidence in
this respect
was not hearsay, because Appellant was, according to the witness,
present when Griesel made the said hearsay statements.
This finding
was wrong. In terms of
Section 3(4)
of the
Law of Evidence Amendment
Act 45 of 1988
,
"hearsay
evidence" "means evidence, whether oral or in writing, the
probative value of which depends on the credibility
of any person
other than the person giving such evidence";
The
evidence in question is clearly hearsay evidence
8
.
The Regional Magistrate was entitled to allow Levendal's evidence of
what Griesel told him on a provisional basis, since the
prosecutor
indicated that Griesel would be called as a witness. Levendal's
evidence is therefore not hearsay for the purposes
of this judgment,
since Griesel was called by the Appellant to give evidence for the
defence
9
.
In his evidence, however, Griesel disavowed the alleged remarks and
the evidence was therefore inadmissible
10
.
Although one cannot but agree with the Magistrate that Griesel was
not an impressive witness, the fact nevertheless remains
that
Griesel denied that he made the statements ascribed to him by
Levendal.
26.
The Regional Magistrate stated in her judgment that both Griesel and
Appellant indicated to Levendal that the agreement must
be entered
into with Kwani rather than with Best. Levendal limited the source
of this statement to Griesel only.
27.
As stated above
11
,
the state witness Jonck also testified that in his opinion the
Appellant improperly stood to gain some of the benefits accruing
to
Kwani in terms of the agreement and that he confronted the Appellant
with this view during their interview. The Regional Magistrate
adopted the same line of reasoning.
28.
Despite the fact that the Appellants' evidence that he signed the
contract as a witness must be rejected, there was a total
lack of
evidence to the effect that the Appellant would personally receive
any benefits from the agreement in question. In order
to justify a
conviction on a charge of corruption in terms of Section 1(1)(b)(1)
of the Corruption Act No. 94 of 1992, it is
however not necessary
for the accused to receive any benefit personally. The accused may
be guilty of the offence if a benefit
or a potential benefit accrues
to anotherperson
12
.
In terms of the agreement with ACI, Kwani stood to gain benefits.
The State therefore discharged the onus of proof in this respect.
THE
DUTY OF THE APPELL CONTRACT WITH PORTNET
29.
In the charge sheet it was alleged that by virtue of his employment
agreement with Portnet the Appellant had the duty to avoid
preferring any one third party above another with regard to Portnet
business
13
.
30.
The Appellant was not only mandated to assist Best to participate in
the transformation process at Portnet, but was specifically
and
actively involved in the promotion of BEE. The exact terms of the
Appellant's employment contract with Portnet is therefore
an
important issue.
31.
Jonck was the only witness called to prove the terms of Appellant's
employment contract with Portnet
14
.
Jonck's evidence of the terms of this employment agreement was vague
and unspecific. A reading of Levendal's evidence appears
to confirm
that the employment agreement in question was in writing. As a
general rule the contents thereof should therefore
be proved by
producing this contract
15
.
It is furthermore relevant to note that Jonck was under the
impression that Appellant was a Project Manager in the IT-division
of Portnet. The Appellant's evidence referred to above is clear in
this respect. He was the acting Maintenance and Support Manager
of
Portnet and a numberof Project Managers reported to him. Jonck was
therefore mistaken as to the exact job description of the
Appellant.
The question arises as to whether this mistaken perception (of
Appellant's job description) could have resulted in
Jonck reaching a
incorrect conclusions about the scope and nature of Appellant's
duties as an employee of Portnet.
32.
The Magistrate's finding :hat the Appellant
'In
his capacity as project manager of Portnet could not perform work
outside Portnet without authority as that would amount to
a conflict
of interest",
is
therefore not justified. This finding is based on the evidence of
Jonck which should not have been accepted ir respect of this
important issue.
33.
In the circumstances I conclude that the State has failed to prove
the nature and extent of the Appellant's duties in terms
of the
employment agreement, with Portnet, one of the elements of the
charge against the Appellant.
16
ACTING
CORRUPTLY
34.
Section 1(b)(i) of the Corruption Act, Act 94 of 1992, provides that
an accused person who agrees to receive or attempts to
obtain any
benefit, must act corruptly to be guilty of the offence
17
.
35.
As stated above it must be accepted that Appellant was mandated by
the management of Portnet to act as an intermediatory between
Best
and ACI and to promote black economic empowerment. All his actions,
including the signing of the agreement as a representative,
appears
tobe justifiable as the actions of an employee acting in the
interest of his employer by promoting black economic empowerment.
36.
The State witnesses Levendal and Flemming also do not appear to
regard their own actions or the actions of the Appellant,
as being
corrupt. The Appellant's circumstances and conduct stands on more or
less a similar footing as the facts in
S
v Palm
18
,
where the accused was a member of a Close Corporation involved in
the clandestine purchase of armaments for Krygkor during the
1980's.
37.
In my opinion the State has failed to prove that the Appellant's
activities were
"corrupt"
in
the sence of being unlawful, i.e. that beyond reasonable doubt there
has been no justification for his conduct. To the contrary,
the
evidence reveals a probability that his conduct was justified.
CONCLUSION
38.
In
all the circumstances I am of the view that the State has failed to
prove the Appellant's guilt. I would allow the appeal and
set aside
the conviction and sentence imposed.
W.H.
VAN STADEN
Acting
Judge of the High Court
I
agree and it is so ordered.
W
.J. LOUW
Judge
of the High Court
1
No
evidence was adduced to prove that the Appellant in fact received or
obtained any benefit.
2
In
S
v Boesak
2003
SA 381
SCA on 397 E it was stated that
"...it
is clear law that a cross-examiner should put his defence on each
and every aspect which he wishes to place an issue,
explicitly and
unambiguously, to the witness implicating his client."
Jonck
however, an investigator of Transnet, as correctly pcinted out by
the legal representative of the Appellant, was not present
at the
meeting where the Appellant was mandated.
3
Paragraph
9.1 (Supra).
4
See
S
v Mtsweni
1985
(1) SA 590
AA at 593 H to 594 D.
5
Paragraph
[34]
6
Paragraph
[35]
7
Paragraph
18 (Supra)
8
Schmidt;
Bewysreg (4
Ih
Edition)
paragraph B and C on page 476 and the definition of
"hearsay
evidence"
in
Section 3(4) of Act 45 of 1988, the
Law of Evidence Amendment Act.
In
terms of
Section 3(1
)(c) of Act 45 of 1988, the court has
discretion to allow hearsay evidence having regard to certain
prescribed factors.
9
Section
3(1 )(b) of Act 45 of 1988.
10
S
v Ndhlovu and Others
2002
(2) SACR 325
in para 292 and para 34 on pages 342 and 343;
Principles of Evidence (2
nd
Edition)
PJ Schwikkard and Others para 13.6 on page 258 to
260...
11
Paragraph
20.
12
See
paragraph 2.4.
13
Paragraph
2.3 above.
14
See
paragraph 2.3 above for the corresponding allegations in the charge
sheet.
15
Schmidt
op.cit page 344; Commentary on the Criminal Procedure Act,
Du
Toit and Others
page
24-87.
16
Paragraph
2.3 (Supra)
17
CR
Snyman - Strafreg (4de Uitgawe) paragraph 6(e) on page 398 and 399
and paragraph 8(e) on page 402
the
term corruptly refers to unlawfulness and not to intention, that is,
it refers to the requirement that there must be no justification
for
the conduct of the accused.
18
1997
(1) SACR 70
(T) at 79 c - h...