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[2010] ZASCA 159
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Sewela v S (731/10) [2010] ZASCA 159 (1 December 2010)
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THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 731/10
No precedential
significance
In
the matter between
FJ SEWELA
......................................................................................................
Appellant
and
THE STATE
..................................................................................................
Respondent
Neutral
citation:
FJ Sewela v The State
(731/10)
[2010] ZASCA 159
(01
December 2010)
Coram:
Cloete, Ponnan and Bosielo JJA
Heard: 25
November 2010
Delivered: 01
December 2010
Summary:
Bail
– Refusal of – Appeal against – onus in terms of
s
60
(11) (b) of the
Criminal Procedure Act 51 of 1977
– failure
by the appellant to prove that the interests of justice permit his
release on bail –
s 65
(4) of the CPA.
ORDER
On appeal from
:
South Gauteng High Court (Johannesburg), (Mabesele AJ sitting as a
court of appeal).
The appeal is
dismissed.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
BOSIELO JA (Cloete
and Ponnan JJA concurring):
[1] This is an
appeal against a judgment of the South Gauteng High Court (Mabesele
AJ), in which the court dismissed an appeal by
the appellant against
the refusal by the regional magistrate sitting at Wynberg to grant
him bail pending his trial.
[2] The appellant
was arrested on 24 October 2009. There are three co-accused in this
matter, one of whom is the customary wife
of the appellant (accused
3). They are charged with five counts of fraud and the appellant will
be charged with money laundering
in contravention of s 5 of the
Prevention of Organised Crime Act, 121 of 1998 (‘POCA’).
In essence, the state alleges
that all the accused, acting in concert
changed bank account numbers of other people or entities and created
fictitious bank accounts
into which they diverted large sums of money
from the South African Revenue Services (SARS). The five accounts
involve a total
amount exceeding R77 million.
[3] It is not in
dispute that, given the nature of the charges against the appellant,
his bail application falls to be dealt with
in terms of s 60 (11) (b)
of the Criminal Procedure Act 51 of 1977 (CPA). This section
provides:
‘
S
60 (11) Notwithstanding any provision of this Act, where an accused
is charged with an offence referred to —
(b) in Schedule 5,
but not in Schedule 6, the court shall order that the accused be
detained in custody until he or she is dealt
with in accordance with
the law, unless the accused, having been given a reasonable
opportunity to do so, adduces evidence which
satisfies the court that
the interests of justice permit his or her release.’
This section
therefore saddles the appellant with the onus to prove, on a balance
of probabilities, that it is in the interests
of justice that he be
released on bail, failing which he must be detained in custody.
[4] At the bail
hearing before the regional magistrate, the appellant elected to
present his evidence in the form of an affidavit.
In opposing the
bail application, the state also relied on affidavits, amongst others
by the investigating officer, Mr Mahlangu
and Mr Schoeman, a manager
in the Anti-Corruption and Security Special: Project Unit at SARS.
[5] The following
important facts emerged from the appellant’s affidavit:
5.1 the appellant
was born on 23 July 1965;
5.2 the appellant
has been staying with his wife at his wife’s home at 53 Wandel
Street, Woodmead, Sandton for the past five
years;
5.3 the appellant
owns property at 15 Conway Street, Kelvin, Sandton, which is fully
paid for. The estimated value thereof is R3,5m;
5.4 the appellant is
married and has four children aged 17, 12, 9 and 6 respectively;
5.5 the appellant
has movables to the value of R300,000,00;
5.6 the appellant is
the registered owner of an Audi Q7 motor vehicle which is fully paid
up;
5.7 the appellant
has a B.SC degree;
5.8 the appellant is
a shareholder in a number of companies;
5.9 the appellant is
the sole member of Oxy Trading 847 CC;
5.10 the appellant
has a pending case of fraud at Phokeng Magistrate Court, Rustenburg
involving approximately R1,3m;
5.11 although the
appellant admitted payment of R8m into Oxy Trading’s account,
he denied any involvement in the fraudulent
activities forming part
of the charges;
5.12 the appellant
has no previous convictions;
5.13 the appellant
undertook, should he be granted bail, to attend court at all times,
comply with all bail conditions, not to communicate
with or try to
influence or intimidate state witnesses, not to conceal or destroy
any evidence and not to undermine or prejudice
the objectives or
proper functioning of the criminal justice system, including the bail
system.
[6] The salient
features which I have gleaned from the affidavits filed on behalf of
the respondent which are directly relevant
to the bail proceedings
are:
6.1 that the
appellant is allegedly involved in a crime syndicate which has
targeted SARS and which has committed substantial frauds;
6.2 the modus
operandi involved the identification of a duly registered company
which was due to receive a refund; the syndicate
registered a
fictitious duplicate company at the Companies and Intellectual
Property Registration Office; the bank details of a
legitimate
company were altered to those of the fictitious company; the refunds
due by SARS were then fraudulently diverted from
the legitimate
company and channelled into the bank account of the fictitious
company; various bank accounts were used to distribute
the money;
6.3 there were five
such transactions involving the actual loss to SARS of some R50, 949,
743, 80 and a potential loss of R26 798
102, 13 which form the
subject matter of the charges against appellant;
6.4 members of the
South African Police Service are in possession of exhibits which
directly link the appellant, and his wife (accused
3) to a fictitious
company SBC International Management Service (Pty) Ltd, which
fraudulently received a refund of R31 600 946,
89 from SARS which was
destined for SBC International Management Service Inc.;
6.5 during a prior
search and seizure at the appellant’s home at 15 Conway Street,
Kelvin, some electronic equipment allegedly
used in the commission of
these offences was found and confiscated by SAPS;
6.6 further exhibits
which appear to link the appellant to the frauds including SBC blank
letterheads, copies of an SBC audit file,
bank statements of the
fictitious SBC and enquiries on SBC letterheads about payments of
refunds were also found at 53 Wandel Avenue,
Woodmead, the house
occupied by the appellant and his wife;
6.7 the police are
in possession of documents proving that appellant used R498 000, 00
from the fictitious bank account of SBC International
Management
Service (Pty) Ltd to pay for a BMW X5 at Lyndhurst Auto;
6.8 SBC
International Management Service Inc lost R31 600 946,89 which was
fraudulently diverted into the fictitious bank account
of SBC
International Management Service (Pty) Ltd over which the appellant
had control.
[7] It was contended
on behalf of the appellant that his personal circumstances are such
that the interests of justice permit his
release on bail,
particularly the fact that he is a South African citizen, married
with children and that he has valuable assets
both movable and
immovable inside the country. Furthermore, it was submitted that his
consistent attendance of his trial at Phokeng
Magistrates’
Court which has been pending since April 2008 is clear and
irrefutable testimony that, should he be released
on bail, he will
honour his bail conditions and attend trial. Although Mr Grovè,
who appeared for the appellant, conceded
that the respondent has a
prima facie case against the appellant in the current case as well as
the one pending in Phokeng, he
urged us to remain mindful of the
presumption of innocence operating in favour of the appellant.
[8] On the other
hand, it was submitted on behalf of the respondent that this is a
very serious matter and that the respondent has
a strong prima facie
case against the appellant which in the event of conviction, exposes
the appellant to the possibility of a
very long term of imprisonment.
Mr Simpson, who are appeared for the respondent, submitted that the
strength of the state’s
case required an answer from the
appellant. He referred in particular to two transactions involving
the purchase of the BMW X5
and the house at Kelvin by the appellant.
Concerning the explanation by the appellant that the R8m which he
admitted to have received,
Mr Simpson submitted that the contract of
service on which the appellant relied was vague in its terms and did
not avail him. Relying
on
S v Mathebula
2010 (1) SACR 55
(SCA)
he argued that even though the present appeal falls to be decided in
terms of s 60 (11) (b) it involving a Schedule 5 offence,
the
evidence incriminating the appellant is so strong that he should have
said more to show that the interests of justice permit
his release on
bail. He submitted further that except for the contract of service
between Tiespro and Tiffany Trading, there are
no other documents
such as receipts or tax invoices which evidence the receipt by the
appellant’s close corporation of R8m
for services rendered
under this contract.
[9] This State
alleges that this case involves a syndicate or enterprise acting in
the furtherance of a common purpose with the
primary objective of
defrauding SARS by unlawfully diverting huge sums of money to be paid
by SARS as refunds to legitimate tax
payers to the accounts
controlled by the syndicates. Importantly, the appellant admits that
some R8m of this tainted money was
paid into the account of his close
corporation, OXY Trading 847, from Tiespro 102 (Pty) Ltd. However, he
alleges that he did not
know that the R8m was the proceeds of crime.
According to the appellant these were legitimate payments lawfully
made to Tiffany
Trading for services rendered by his close
corporation. The appellant has however not furnished any documentary
proof in the form
of either a valid contract, tax invoices or
receipts to prove this alleged transaction. In essence there is no
acceptable proof
that appellant’s close corporation (Tiffany)
rendered any services to Tiespro 102 (Pty) Ltd which justified the
payment of
R8m into his account. The failure by the appellant to
produce supporting documents casts grave doubt on his explanation. We
are
aware that documents were seized when the police raided the
appellant’s offices but that should not have prevented him from
making the simple statement that such documents exist.
[10] On the other
hand there is evidence that some documents pertaining to SBC
International Management Services (Pty) Ltd which,
as I have said was
a company used in this fraud, were found at the appellant’s
home which he shares with his wife. Coincidentally
there is also
evidence that the appellant’s wife (accused 3) also received
some R4,2m from fraudulent transactions involving
SBC International
Management Services (Pty) Ltd. Importantly, the State alleges that
there is evidence that appellant received
through OXY Trading 847 an
amount of approximately R6,5m not from Tiespro but through an
electronic transfer from SBC and Sun Micro
System. This evidence
called for an explanation by the appellant. He failed to provide any
acceptable explanation.
[11] One other
important fact which, in my view, militates strongly against the
appellant being granted bail is the fact, which
he admits, that he
has a pending case of fraud involving approximately R1,3m in the
magistrates’ court, Phokeng. It is worth
noting that the same
modus operandi was used in the Phokeng case to divert money destined
for a legitimate account to a fictitious
one. A s 204 witness
implicates the appellant as the kingpin of this scheme. The fact that
the current offences were allegedly
committed whilst the fraud case
in Phokeng was pending suggests that the appellant either has a
propensity to commit fraud or is
disrespectful of law and order. In
determining whether an applicant for bail, may, if released on bail
commit further offences,
a court, not being blessed with some
prophetic foresight, can legitimately rely on the past alleged
conduct of such an applicant.
The appellant’s alleged conduct
points to a possibility which cannot be said to be remote or fanciful
that he is likely to
continue to commit further crimes should he be
released on bail. To release the appellant on bail under these
circumstances would,
to my mind, not be in the interests of justice
as it is likely to seriously undermine the criminal justice system
including the
bail system itself. I have no doubt that it will
seriously undermine and erode the confidence of the right thinking
members of
society in our criminal justice system. See s 60 (4) (d)
of the CPA.
[12] Both the
regional magistrate and the high court found that the appellant had
failed to prove, on a preponderance of probabilities,
as is required
by s 60 (11) (b), that the interests of justice permit his release on
bail. I cannot find any fault with this conclusion.
It is trite that
the powers of an appeal court to interfere with the decision by
another court to refuse bail are circumscribed
by s 65 (4) of the
CPA. It is not as if the court of appeal has carte blanche. A court
of appeal can only set aside such a decision
if it is satisfied that
it is wrong.
S v Barber
1979 (4) SA 218
(D) and
S v Faye
2009 (2) SACR 210
(TK).
[13] When all the
evidence is considered and weighed against the appellant’s
personal circumstances, I am satisfied that the
appellant failed to
prove that the interests of justice permit his release on bail,
S
v Botha en `n ander
2002 (1) SACR 222
(SCA) para 20. In fact the
contrary is true. Accordingly, I am of the view that the court a quo
was correct in upholding the magistrate’s
decision to refuse to
grant the appellant bail.
[14] The appeal is
dismissed.
________________
L O Bosielo
Judge of Appeal
APPEARANCES:
For
Appellant: N Potgieter
N
Grovè
Instructed
by:
Nardus
Grovè Attorneys: Johannesburg
Symington
& De Kok: Bloemfontein
For
Respondent: A Simpson
Instructed
by:
Director
Public Prosecutions: Pretoria
Director Public
Prosecutions: Bloemfontein