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[2011] ZASCA 68
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Engelbrecht v S (446/10) [2011] ZASCA 68; 2011 (2) SACR 540 (SCA); 74 SATC 161 (17 May 2011)
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THE SUPREME COURT
OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case no: 446/10
In
the matter between:
IZAK JACOBUS NEL
ENGELBRECHT
….................................................
Appellant
and
THE STATE
…..............................................................................................
Respondent
Neutral citation:
Engelbrecht v The State
(446/10)
[2011] ZASCA 068
(17 May 2011)
Coram:
Mpati P, Bosielo JA and Plasket AJA
Heard: 07 March
2011
Delivered: 17 May
2011
Summary:
Criminal
law – Appeal against conviction on 157 counts of fraud and the
sentence imposed on all the counts of fraud and one
of corruption –
Conviction – accomplices’ evidence found to be
satisfactory – Sentence – Disparity
in the sentences
imposed on different accused convicted of the same offences by two
different courts – sentencing discretionary
– no
misdirection.
ORDER
On appeal from
:
Western Cape High Court (Cape Town) (Le Roux AJ and Oosthuizen AJ
sitting as a court of appeal):
1. The appeal
against conviction on the 157 counts of fraud is dismissed.
2. The sentences
imposed on the appellant in respect of the counts of fraud and one of
corruption are confirmed, but it is ordered
that the sentence imposed
in respect of 157 counts of fraud run concurrently with the sentence
imposed in respect of the corruption
charges.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
BOSIELO JA (Mpati P
and Plasket AJA concurring)
[1] The appellant
was convicted of 157 counts of fraud and one of corruption in the
Regional Court, Bellville. He was sentenced
to six (6) years’
imprisonment with two (2) years suspended for five (5) years on
certain conditions in respect of the fraud
counts, which were taken
together as one for purposes of sentence, and three (3) years’
imprisonment in respect of the count
of corruption. His appeal to the
Western Cape High Court, Cape Town failed and leave to appeal to this
court was refused. This
appeal, which is against his convictions in
respect of the fraud charges and the sentences imposed on him, is
with leave of this
court.
[2] Although the
facts of this case are convoluted, I shall extract from them what I
consider to be essential and largely common
cause. This matter
involves fraud against the South African Revenue Service (SARS). The
three key protagonists are the appellant,
Mr Ian Wiid (Wiid) and Mr
Frederick Carstens Geldenhuys (Geldenhuys). The appellant worked as
the sales manager of Reeds Motors,
a motor dealer in Observatory,
Cape Town. He was responsible for the purchase and sale of motor
vehicles. Wiid was the sole owner
of two motor dealerships, known as
Quattro Trade and Wholesalers (Quattro) and Auto Haven Motors CC
(Auto Haven), whilst Geldenhuys
was the manager of both Quattro and
Auto Haven.
[3] Although there
is some conflict between the appellant’s version and that of
Wiid and Geldenhuys regarding how they started
to do business
together, it is not in dispute that between October 1997 and December
1998 the appellant, purporting to act on behalf
of Reeds Delta,
supplied vehicles to Quattro. The appellant explained that as he was
eager to expand Reeds Delta’s business
of exporting vehicles to
Namibia, he telephoned a dealer in Namibia, Mr Lewellyn Anthony
(Anthony) and offered him a vehicle for
sale. As Anthony did not know
the appellant he was reluctant to do business with him. Instead, he
recommended that he take the
vehicle to Wiid who would inspect it on
his (Anthony’s) behalf and advise him about its condition.
Since Anthony was satisfied
with the condition of the vehicle as
advised by Wiid, he agreed to purchase it through Wiid who was better
known to him. It appears
that Wiid felt that the appellant was
interfering with his market in Namibia and expressed his displeasure
to the appellant. Although
the evidence is not clear as to when this
occurred, it is not in dispute that an arrangement was then put in
place in terms of
which Reeds Delta would use Quattro for all its
vehicle exports to Namibia. It was agreed that Reeds Delta would be
responsible
for completion of all invoices and the necessary
documentation whilst Quattro would act as sales agent for Reeds
Delta.
[4] Purporting to
act in terms of the agreement the appellant prepared offers to
purchase and invoices which he sent with the vehicles
to Quattro. In
addition, the appellant also furnished Quattro with Common Customs
Area forms (CCA1) duly completed and reflecting
the names of the
purchasers in Namibia. The invoices were all written for ‘export
to Namibia only’ and reflected the
particulars of the
purchasers in Namibia. According to the appellant Quattro was
supposed to export these vehicles to the consignees
mentioned in the
invoices and offers to purchase.
[5] It is common
cause that by exporting the vehicles to Namibia, Reeds Delta would be
able to have them zero-rated for purposes
of Value Added Tax (VAT).
In other words Reeds Delta would not be obliged to pay any output VAT
on such vehicles to the Receiver
of Revenue (SARS) whereas, if it
sold them locally, there would have been a legal obligation to pay
output VAT. The appellant testified
that he was under the impression
that the vehicles which he delivered to Quattro were exported as per
the invoices and the CCA1
forms to the consignees in Namibia.
However, the appellant conceded that he did not, on his own, verify
if the vehicles were exported
to the purchasers in Namibia as he
believed that Quattro would export them. According to the appellant,
he only discovered much
later that not all the vehicles which he had
delivered to Quattro were exported, but, on his own admission, did
nothing to correct
the situation.
[6] The appellant’s
version conflicts directly with that of the respondent as deposed to
by Wiid, Geldenhuys and Ms Jeanette
Riley (Riley). The combined
version of both Wiid and Geldenhuys is that it is the appellant who
came up with the scheme to sell
vehicles to Quattro which would be
disguised as exports so that Quattro would not have to pay output VAT
on them. In order to facilitate
the scheme, the appellant would
prepare all the necessary documentation which included an offer to
purchase and an invoice accompanied
by a CCA1 form. The CCA1 form is
essential proof that a particular vehicle whose details are reflected
on it has in fact been taken
across the border as an export to the
consignee in Namibia. It is then submitted to SARS as proof that
output VAT is not payable
on the transaction.
[7] The CCA1 form
must contain all the correct details of the vehicle to be exported,
and the particulars of the person to whom
it is to be delivered to.
It must be signed at the border post by the relevant customs
official. It is common cause that the CCA1
forms relevant to the
various counts were initially completed by the appellant and later by
Geldenhuys until Wiid stopped him.
[8] It is common
cause that at some stage during February 1998 the appellant and his
brother, together with Wiid and Geldenhuys,
went on a fishing
expedition to Namibia. Whilst at Swakopmund they visited Anthony. It
was during this trip that a bundle of blank
CCA1 forms were produced
and stamped with a fake Namibian border post stamp made available by
Anthony. Although the appellant denied
having participated in the
stamping of the blank CCA1 forms, Wiid and Geldenhuys insisted that
he stamped them with Geldenhuys
and that they returned to South
Africa with them. These forms were subsequently used to facilitate
the scheme.
[9] Riley was the
administrative clerk at Quattro. She worked closely with Geldenhuys.
Her job entailed receiving vehicles into
stock, preparing sales
invoices, maintaining the floor plan and attending to the cash book
and the writing of cheques. She testified
that she was aware of the
scheme that involved the purchase and sale of vehicles between Reeds
Delta and Quattro. According to
her, Auto Haven purchased vehicles
from Reeds Delta. Auto Haven would in turn book the vehicles out to
Quattro. The appellant would
bring the invoices to her so that she
could receive the vehicles into their stock. Upon receiving the
vehicles she added a certain
amount to the original price. According
to Riley the invoices in respect of these vehicles were addressed to
Sirkel Motors in Namibia.
Notwithstanding this, Auto Haven received
them into their stock. The invoices would show the commission which
was payable to the
appellant. Once the vehicle had been received,
Geldenhuys would issue his personal cheque to pay Reeds Delta. He
would, in turn,
issue a cheque for the equivalent amount from
Quattro’s account to repay himself. As Riley was also
responsible for preparing
cheques for the commission payable to the
appellant, she would prepare a cheque and give it to Mr Sam Linders,
the messenger, to
cash at the bank. Once the cheque was cashed, she
would hand the money over to Geldenhuys who would give it to the
appellant. She
testified that the appellant, from time to time
telephoned her to check if the money was available and he would then
fetch it.
Importantly, Riley testified that the appellant knew that
the vehicles which he had brought to Quattro and which were
purportedly
exported to Namibia were not exported as he saw them on
the shop floor at Quattro where he used to visit regularly. Riley
also
testified about an amount of R30 000 which she once had to send
to the appellant in an envelope when the latter was with Wiid at
the
Cape Town airport. This money represented commission in respect of a
number of vehicles which the appellant had delivered to
Quattro.
[10] Mr P J Cronje
(Cronje) was an investigator contracted by SARS. To a large extent
his evidence was not disputed. He was personally
involved in the
investigation of this matter. In the course of his investigation he
discovered that the CCA1 forms in respect of
the vehicles which form
the subject of the various charges herein had on them a stamp
purporting to be from the Noordoewer border
post. However, he was
unable to trace the actual stamp. He concluded that the stamp used on
the forms was not an official one.
He also discovered that Geldenhuys
had in each case completed documents indicating that Quattro had
taken the relevant vehicles
into stock, whereas in the books of Reeds
Delta the invoices were made out to some particular Namibian
purchasers. Furthermore,
in Quattro’s books the amount
reflected in the relevant invoice in each case was more than the
zero-rated amount actually
invoiced and paid to Reeds Delta. On the
other hand, Geldenhuys calculated the deemed VAT on the increased
amount reflected on
the invoices which he then entered into Quattro’s
documents, thus reflecting the vehicle as part of Quattro’s
stock.
[11] A prominent
feature in the documents which Cronje handed in consisted of some
offers to purchase and corresponding invoices
from Reeds Delta in
respect of each vehicle. These documents reflected either Sirkel
Motors or Auto Angling in Windhoek, Namibia,
as the purchaser. The
offers to purchase in each case were signed by the appellant on
behalf of the supposed purchasers in Namibia.
On both the purchase
order and invoice from Reeds Delta, VAT was shown as zero in each
case. According to Cronje each CCA1 document
contained a Customs and
Excise stamp which was subsequently established to be false. In turn
Mr Roy Marcus (Marcus) Reeds Delta’s
Financial Director at the
time, relied on the invoices generated at Reeds Delta and the CCA1
forms to prepare Reeds Delta’s
tax returns, the so-called VAT
201 forms. Marcus testified that because the information reflected on
the CCA1 forms corresponded
with the one in the schedule of sales in
their computer, he believed that the vehicles were indeed exported to
Namibia. Relying
on this information he ensured that Reeds Delta did
not pay output VAT on these transactions.
[12] In further
pursuit of his investigations, Cronje went to Namibia where he
interviewed all the dealers who were reflected as
purchasers on the
Reeds Delta invoices and CCA1 forms. All of them indicated that they
had never purchased, or received, the vehicles
in question. He
established further that these vehicles were instead delivered to
Quattro and Auto Haven in South Africa. Cronje
discovered that no
output VAT was paid on these transactions when the vehicles were sold
to Quattro and Auto Haven by Reeds Delta.
This resulted in Quattro
and Auto Haven unlawfully increasing their profits. Cronje also
discovered that the appellant constantly
received commission in
respect of each of the vehicles he delivered to Quattro. A history of
these vehicles showed the previous
owner to be Quattro and not Reeds
Delta. It is worth noting that although the appellant denied
receiving cash cheques from Geldenhuys
or Quattro, he admitted that
he received a small commission for his involvement in these various
transactions.
[13] As against the
state’s version, the appellant denied any participation in any
fraudulent scheme involving the sale of
vehicles. He admitted that he
delivered the vehicles in issue to Quattro. He maintained that the
vehicles which Reeds Delta delivered
to Quattro were intended to be
exported to the Namibian dealers mentioned in the documents. He
confirmed that he completed the
offers to purchase in the name of the
dealers in Namibia to whom the vehicles had to be delivered. He knew
that the tax invoices
for these vehicles would show that they were
destined for export to some specific purchasers in Namibia. This
would all be used
as a legal basis for the transactions to be
zero-rated for VAT purposes. He only discovered much later that the
vehicles were never
exported. The appellant denied ever having
stamped any CCA1 forms whilst on a fishing trip with Wiid and
Geldenhuys in Namibia.
He also denied that he received any commission
by way of cheque payments. He maintained that the deals which were
made between
Reeds Delta and Quattro were legitimate. According to
the appellant, this arrangement was agreed upon at a meeting where
his manager,
Mr John Danks (Danks) was present thus implying that
Danks approved it. He testified that he met Wiid at a time when he
wanted
to expand his market into Namibia. As Wiid complained that he
was stealing his market after he had contacted Anthony in an attempt
to sell a vehicle to him, they agreed that he would use Quattro as
Reeds Delta’s agent. For all intents and purposes he believed
that the vehicles which he had delivered to Quattro were subsequently
exported to Namibia in accordance with the invoices and CCA1
forms
which he had prepared. He denied having received any commissions as
testified to by Geldenhuys and Riley and testified that
he only
received meagre payments for facilitating the sales. He pertinently
denied that he received R30 000 as commission for the
sale of
vehicles to Quattro. He conceded that he knew that it was against
Reeds Delta’s policy for him to receive any secret
commission
for any work done by him on behalf of Reeds Delta.
[14] It is common
cause that both Wiid and Geldenhuys testified as accomplices. They
had already been convicted of charges relating
to the same scheme
following a plea-bargaining agreement with the state in terms of s
105A of the Criminal Procedure Act 51 of
1977 (CPA). Riley was duly
warned by the Regional Court Magistrate in terms of s 204 of the CPA
because of her role in the scheme.
[15] Counsel for the
appellant was critical of the magistrate’s acceptance of their
evidence. He submitted that Wiid and Geldenhuys
were neither honest
nor truthful witnesses as they tried to minimise their respective
roles in this saga. Regarding Riley it was
argued that she had been
intimately involved in this elaborate fraud scheme and that she
failed to testify truthfully and honestly.
The main contention is
that their versions should have been rejected as unreliable.
[16] Stripped of any
unnecessary frills it appears to me that the only real issue is
whether and to what extent the appellant had
knowledge of, and was
involved in, this fraudulent scheme. That this was a scheme intended
to defraud SARS of money in respect
of VAT admits of no doubt. It is
clear from the evidence as a whole that, although the vehicles in
issue were supposed to be exported
to Namibia and thus qualified to
be zero-rated, they were never exported to the purchasers identified
in the relevant documents
in Namibia. Instead, they were delivered to
Auto Haven or Quattro where they were taken into their stock.
Contrary to the invoices
and offers to purchase, the vehicles were
then sold locally. It is also common cause that false CCA1 forms were
used to facilitate
this fraudulent scheme. This is confirmed by Mr
Vuzo Ngcobo (Ngcobo) who was the Branch Manager at Vioolsdrift border
post. Mr
Edwin van Rooy (Van Rooy), who was a Senior Customs Officer
in Namibia, testified that for a proper import of vehicles into
Namibia
from South Africa, a CCA1 form had to be submitted together
with a NA500 form from Namibia which has been in use since 1 June
1995.
He stated further that the stamp of Noordoewer 061 which was
used on the CCA1 forms was false and did not emanate from their
offices.
This is so as the Namibian authorities did not use
Noordoewer 061 but Noordoewer 06I, the ‘I’ standing for
‘import.’
Importantly Van Rooy confirmed that the
vehicles involved herein could not be found either in the computers
at Noordoewer border
post or their main computer at their head
office. This is crucial as all vehicles imported from South Africa or
anywhere outside
Namibia have to be registered on their computer for
purposes of registration.
[17] It was argued
on behalf of the appellant that the evidence of Wiid and Geldenhuys
should have been rejected as unreliable.
The main argument is that
their versions were littered with serious contradictions and further
that they did not testify truthfully
and honestly, in particular
about their involvement in the scheme. It is clear that the trial
court was aware of the contradictions
in the versions of both Wiid
and Geldenhuys. Having observed the two witnesses whilst testifying,
the trial court acknowledged
that it could not be said that they were
perfect witnesses. However, the trial court, despite some
imperfections in their evidence
and having applied the necessary
caution, found that their evidence was the truth, more so that it was
amply corroborated by other
evidence, including circumstantial
evidence. It is not required of accomplices that they be perfect
witnesses. In
S v Francis
1991(1)
SACR 198 (A) at 205f-g, this court set out the position thus:
‘
It is
not necessarily expected of an accomplice, before his evidence can be
accepted, that he should be wholly consistent and wholly
reliable, or
even wholly truthful, in all that he says. The ultimate test is
whether, after due consideration of the accomplice’s
evidence
with the caution which the law enjoins, the Court is satisfied beyond
all reasonable doubt that in its essential features
the story that he
tells is a true one.’
[18] Having read the
transcript I am unable to find any fault with the assessment of these
witnesses by the trial court, which had
the advantage of seeing them
testify and observing their reactions to questions during
cross-examination. This gave the trial court
an advantage which this
court does not have as a court of appeal. In the absence of any
misdirection by the trial court, I decline
to interfere with such a
finding. See
R v Dhlumayo & another
1948 (2) SA 677
(A);
S v Francis
,
above at 204c-e
[19] Central to the
resolution of this appeal is the interpretation of s 11(1)(a) of the
Value-Added Tax Act 89 of 1991 (the VAT
Act) which provides:
‘
Zero
rating
(1) Where, but for this section,
a supply of goods would be charged with tax at the rate referred to
in section 7 (1), such supply
of goods shall, subject to compliance
with subsection (3) of this section, be charged with tax at the rate
of zero per cent where
–
(a) the supplier has supplied the
goods (being movable goods) in terms of a sale or instalment credit
agreement and –
(i) the supplier has exported the
goods in the circumstances contemplated in paragraph (a), (b) or (c)
of the definition of ‘exported’
in section (1); or
(ii) the goods have been exported
by the recipient and the supplier has elected to supply the goods at
the zero rate as contemplated
in Part 2 of an export incentive scheme
referred to in paragraph (d) of the definition of ‘exported’
in section 1:
Provided that –
(aa) where a supplier has
supplied the goods to the recipient in the Republic otherwise than in
terms of this subparagraph, such
supply shall not be charged with tax
at the rate of zero per cent; and
(bb) where the goods have been
removed from the Republic by the recipient in accordance with the
provisions of an export incentive
scheme referred to in paragraph (d)
of the definition of ‘exported’ in section 1, such tax
shall be refunded to the
recipient in accordance with the provisions
of section 44 (9).’
[20] Section 7(1)(a)
provides that ‘there shall be levied and paid for the benefit
of the National Revenue Fund a tax, to
be known as the value-added
tax – (a) on the supply by any vendor of goods or services
supplied by him on or after the commencement
date in the course or
furtherance of any enterprise carried on by him’. Equally
relevant is s 28(1), which prescribes that
any vendor shall, within
the period ending on the twenty-fifth of the first month commencing
after the end of a tax period relating
to such vendor, furnish the
Commissioner with a return and calculate the amount of such tax
accordingly and pay the tax payable
to the Commissioner. Section
16(3)(a)(i) prescribes how the amount of the tax payable should be
calculated by deducting the ‘output
tax’ from the ‘input
tax’.
[21] It is common
cause that Reeds Delta, as a registered vendor, had the legal
obligation to comply with the provisions of the
VAT Act. As a
registered vendor it was obliged to pay ‘output tax’ in
respect of all vehicles it sold in South Africa.
It was only when it
sold its vehicles outside the country ie exported them, that it was
exempted from paying ‘output tax’
in terms of s 11(1)(a)
of the VAT Act. In other words it would be entitled to charge tax on
the vehicles at the rate of zero per
cent.
[22] It is clear
from a reading of the VAT Act that it is essentially a system of
self-assessment, in that the responsibility to
calculate, deduct and
pay over the correct value-added tax lies solely with the vendor.
Invariably, SARS is bound to rely on the
honesty and integrity of
vendors to calculate and pay the correct amount for VAT. It will not
be feasible or cost-effective for
SARS on its own to try and verify
each and every transaction by each and every vendor. It is therefore
of critical importance that
all relevant documentation be properly
completed.
[23] Counsel for the
appellant submitted that no fraud has been proved in this case. The
thrust of his submission was that, even
accepting that the vehicles
concerned were not delivered to the purchasers shown in the invoices
and CCA1 forms, which were prepared
by the appellant, there was
evidence that some of the vehicles were ultimately sold and delivered
to certain purchasers in Namibia.
Based on this, he contended that
the appellant was entitled to sell those vehicles at zero-rated VAT.
He submitted that what was
essential for compliance with s 11(1)(a)
was that the vehicles were ultimately exported to Namibia. He
contended that it was irrelevant
as to when or to whom they were
exported. He argued further that by having the vehicles eventually
exported to Namibia, albeit
to different purchasers and at dates
different to those reflected on the invoices and CCA1 forms, the
appellant did not cause SARS
to suffer any prejudice, be it actual or
potential and hence no fraud was proved.
[24] On the other
hand, counsel for the respondent submitted that s 11(1)(a) requires
strict compliance. This is so because the
CCA1 forms and the tax
invoices are intended to serve as essential proof that the goods
reflected on them have in fact left South
Africa for export to
another country, this being the basis for a legitimate reason for the
zero-rated VAT. Counsel submitted that
for the appellant to have
complied with the section, he had to ensure that the vehicles which
were recorded in the offers to purchase,
invoices and CCA1 forms were
indeed taken over the South African border and sold and delivered to
the purchasers in Namibia as
reflected on the forms. She contended
further that the fact that some of the vehicles which were delivered
to Quattro by the appellant
were subsequently exported to Namibia by
Quattro and delivered to purchasers different to those reflected in
the forms was not
sufficient to purge these transactions of their
illegality. Counsel’s contention was that the evidence
demonstrated clearly
that the scheme between the appellant, Wiid and
Geldenhuys was that the appellant sold the vehicles to Wiid at
zero-rated VAT on
the pretext that the vehicles were destined for
export to specific customers in Namibia. She submitted that all three
of them knew
that the vehicles were not to be exported but would be
sold by Quattro locally. This is further bolstered by the admitted
fact
that it is Geldenhuys and not Namibian purchasers who paid Reeds
Delta for the vehicles sold. She submitted that the fact that Reeds
Delta unlawfully avoided paying ‘output VAT’ in respect
of vehicles which were never exported constituted actual prejudice
to
SARS.
[25] The appellant’s
main submission raises the rather philosophical question of when is
fraud a real fraud. Does the mere
fact that some of the vehicles sold
by Reeds Delta to Quattro were ultimately sold by Quattro to
different purchasers in Namibia
purge these transactions of their
illegality? I think not. The appellant did not dispute the fact that,
whilst employed by Reeds
Delta, he sent vehicles from Reeds Delta to
Quattro which were accompanied by offers to purchase, tax invoices
and CCA1 forms,
all of which reflected that the vehicles were
destined for export to identified purchasers in Namibia. However,
contrary to what
was contained in these documents, the state has
proved beyond a reasonable doubt, in my view, that the vehicles in
issue were in
fact never exported to the named purchasers in Namibia.
Instead, they were delivered to Quattro which in turn took them into
its
stock and sold most of them locally. There is also uncontradicted
evidence that the CCA1 forms used in these transactions were false.
The appellant admitted to facilitating these sales, for which Quattro
would pay him a small commission. I accordingly find the
submission
by appellant’s counsel to be without merit.
[26] The word
‘export’ in terms of the general scheme of the VAT Act
has a special meaning. In terms of the VAT Act
‘exported’,
in relation to any movable goods supplied by any vendor under a sale
or an instalment credit agreement
means amongst others–
‘
(a)
consigned or delivered by the vendor to the recipient at an address
in an export country as evidenced by documentary proof acceptable
to
the Commissioner….’
It is clear from the
evidence that the vehicles which appeared on the invoices and CCA1
forms from Reeds Delta were never delivered
to the recipients at the
addresses in Namibia reflected on the invoices and CCA1 forms and
were not intended to be delivered to
them. Undoubtedly, the appellant
acted in contravention of the VAT Act.
[27] In his book,
the
South African Criminal Law and Procedure
3ed (1996) Vol.
II at p702, JRL Milton defines fraud as the unlawful making, with
intent to defraud of a misrepresentation which
causes actual
prejudice or which is potentially prejudicial to another. The
essential elements of fraud are therefore (a) unlawfully;
(b) making
a misrepresentation; (c) causing; (d) prejudice or potential
prejudice; (e) intent to defraud (at p707). It is clear
from the
evidence that by pretending that the vehicles concerned were destined
for export to certain specified purchasers in Namibia
when in truth
they were sold locally the appellant misrepresented the facts. The
fact that the appellant knowingly falsified the
offers to purchase
and the tax invoices and used false CCA1 forms is clear proof that
the appellant acted unlawfully and with clear
intent to defraud. It
is common cause that the appellant is an experienced seller of
vehicles. Importantly, he conceded that he
knew what the correct
procedures and legal requirements for exports of vehicles were as, on
his own admission, he had been exporting
vehicles to Namibia prior to
his involvement with Wiid and Geldenhuys. Evidently, the appellant’s
conduct resulted in SARS
losing approximately R1,6 million in respect
of the output VAT which Reeds Delta should have paid in respect of
the vehicles as
they were not exported but sold locally. To my mind,
the appellant’s conduct meets the definition of fraud. The fact
that
the appellant consistently received payments from Quattro, no
matter how big or small, for these fraudulent transactions,
constitutes
proof that he was a willing participant in this elaborate
fraudulent scheme. It follows that his convictions for fraud on all
the
157 counts were correct and must stand.
[28] I now proceed
to deal with the appeal against the sentences imposed. The main
submission advanced on the appellant’s
behalf was that the
sentences imposed on him are startlingly disparate to the sentences
imposed on Wiid and Geldenhuys, his former
co-accused who were both
convicted on all the counts of fraud following their plea-bargains
with the respondent. It was submitted
that a comparison of the
respective sentences induces a sense of shock. Great emphasis was
placed on the principle of parity ie
that people who commit the same
offence(s) must, absent compelling reasons, be sentenced alike. It
was submitted that the fact
that both Wiid and Geldenhuys pleaded
guilty to all the charges in terms of s 105A of the CPA cannot
justify such disturbing disparities
in their sentences. I do not
agree.
[29] There are two
important factors which distinguish the two scenarios. First, the
appellant’s two former co-accused entered
into a
plea-bargaining agreement with the state in terms of s 105A of CPA
and were sentenced in accordance therewith. Secondly,
and quite
importantly because of the fact that the appellant pleaded not guilty
with the result that evidence was led against him,
the trial court
had sufficient evidence about how the frauds were carefully planned
and executed, including the crucial role played
by the appellant. To
my mind, the trial court was justified in taking such evidence into
account in deciding on an appropriate
sentence for the appellant.
This is so as each court had a discretion to decide on an appropriate
sentence based on the facts adduced
before each court. It is trite
that sentencing is pre-eminently a matter falling within the
discretion of the sentencing court.
Accordingly, I fail to see how,
assuming the sentences imposed on the appellant’s erstwhile
co-accused were unduly lenient,
the appellant could be entitled to
benefit from any such alleged undue leniency committed by the court
which sentenced them. Such
an approach to sentencing would lead to a
travesty of the principles underlying sentencing.
[30] I am not
persuaded that the sentences imposed on the appellant, given the
scale and circumstances under which these offences
were committed,
are shockingly inappropriate. It is clear from the evidence that this
elaborate fraudulent scheme was well thought
out and planned. The
scheme was executed from October 1997 to December 1998. In the
process 157 vehicles were fraudulently sold
without any ‘output
VAT’ being paid. This resulted in SARS being defrauded of
approximately R1,6 million. The evidence
proves clearly that the
appellant played a pivotal role in this scheme. He prepared the false
offers to purchase, which were used
to generate false tax invoices as
well as the CCA1 forms. All these documents were indispensable to the
success of the fraud. And
for every fraudulent transaction, the
appellant benefited unlawfully by receiving a commission from
Quattro. This is notwithstanding
the fact that in terms of his
contract with his employer, Reeds Delta, he was not supposed to
receive any remuneration or commission
privately. It is clear that
the appellant was motivated by nothing other than greed and
self-aggrandisement. He unashamedly abused
the position of trust in
which he stood vis-à-vis his employer.
[31] I agree that
there is a need to impose appropriate sentences with a deterrent
effect, particularly in matters involving fraud
which is so endemic
in our society. However, I am of the view that the court below did
not give proper consideration to the cumulative
effect of the
sentences imposed on the appellant. What is clear is that the various
counts of fraud and the one of corruption all
emanate from the same
transactions. I regard it as fair that the sentences be ordered to
run concurrently to ameliorate the severity
thereof.
[32] In the result I
make the following order–
1. The appeal
against conviction on the 157 counts of fraud is dismissed.
2. The sentences
imposed on the appellant in respect of the counts of fraud and one of
corruption are confirmed, but it is ordered
that the sentence imposed
in respect of 157 counts of fraud run concurrently with the sentence
imposed in respect of the corruption
charges.
______________
L O Bosielo
Judge of Appeal
APPEARANCES:
APPELLANT: D A J
Uijs SC
Instructed by:
Craig Schneider &
Associates, Stellenbosch;
McIntyre & Van
der Post, Bloemfontein
RESPONDENT: B Hendry
Instructed by:
Director Public
Prosecutions, Cape Town;
Director Public
Prosecutions, Bloemfontein