Michele v S (477/08) [2009] ZASCA 116; 2010 (1) SACR 131 (SCA) ; [2010] 1 All SA 446 (SCA) (25 September 2009)

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[2009] ZASCA 116
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Michele v S (477/08) [2009] ZASCA 116; 2010 (1) SACR 131 (SCA) ; [2010] 1 All SA 446 (SCA) (25 September 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case No: 477/08
In
the matter between:
JOHN OUPA MICHELE
FIRST APPELLANT
KHAZAMULA JOSEPH MASHABANA
SECOND APPELLANT
v
THE
STATE
RESPONDENT
Neutral citation:
Michele
v S
(477/2008)
[2009] ZASCA 116
(
25
September 2009).
Coram: Lewis,
Mlambo JJA, Leach AJA
Heard: 8 September 2009
Delivered: 25 September 2009
Summary: Criminal procedure – appeal against sentence
– undue delay in dealing with an application for leave to appeal –
mental
anguish caused as a result taken into account by appeal court
in determining appropriate sentence – sentence reduced.
________________________________________________________________
ORDER
________________________________________________________________
On appeal from:
High Court,
Pretoria (Daniels J and Van Loggerenberg AJ sitting as a full bench).
The following order is made:
The appeal succeeds. The order of the high court is set
aside and substituted with the following:
‘
1 The appeal succeeds.
2 The sentence imposed by the regional magistrate on
each appellant is set aside and replaced with the following:
“
Four years’ imprisonment, two years of which are
suspended for three years on condition the accused is not convicted
of fraud
committed during the period of suspension.”’
________________________________________________________________
JUDGMENT
________________________________________________________________
LEACH AJA (LEWIS and MLAMBO JJA concurring)
[1] This is an appeal against the sentence imposed on
the appellants in the Regional Court at Polokwane in April 2002
pursuant to
their conviction on a charge of fraud to which they had
pleaded guilty. They were each sentenced to seven years’
imprisonment,
two years of which were conditionally suspended for
three years. Their appeal to the High Court, Pretoria, against this
sentence
was unsuccessful and was dismissed on 20 October 2003.
[2] A week later, on 27 October 2003, the appellants
proceeded to lodge an application for leave to appeal to this court.
However,
despite the Director of Public Prosecutions having addressed
a number of letters to the registrar of the high court asking for the

matter to be enrolled for hearing, almost five years passed before
the application was eventually heard on 25 August 2008. The

circumstances which gave rise to this undue delay are shrouded in
mystery with the application appearing in some way to have become

lost in an administrative morass in the office of the registrar. The
situation may have been exacerbated because the judge who
presided at
the appeal retired.
[3] Be that as it may, when the application was
ultimately heard the court expressed the view that the lengthy delay
was a factor
which this court might take into consideration in regard
to the question of sentence, and for that reason granted leave to
appeal.
In this way the matter has now reached this court more than
seven years after sentence was initially imposed. I shall return to

this aspect of the matter in due course.
[4] The subject matter of the charge against the
appellants was a fraud they perpetrated against Old Mutual Insurance
Company Limited.
On 8 October 1998 the appellants took out a life
policy with Old Mutual insuring the life of one Manaka who was
employed by the
first appellant. The first appellant was the
nominated beneficiary of the policy which came into effect in January
1999 and provided
for the sum of R377 520 to be paid on the death of
Manaka, including an initial amount of R20 000 to cover funeral
expenses.
[5] On 23 February 1999, the appellants submitted a
claim under the policy to Old Mutual, falsely stating that Manaka had
died on
14 February 1999 as a result of a head injury sustained in a
motor car accident. The claim was lodged with fraudulent intent as

the appellants knew that Manaka had not died. Unaware of the truth,
Old Mutual immediately paid the agreed funeral cover of R20
000 to
the first appellant by way of an electronic transfer of funds.
Fortunately, it later ascertained that the claim was fraudulent
and
refused to pay the balance of R357 520 claimed under the policy.
[6] Both appellants were businessmen who were in receipt
of an adequate, albeit not large, income. The first appellant owned
both
a filling station and a construction company and also carried on
business as an insurance broker. The second appellant conducted
both
a security business and a cleaning service. Both appellants were
first offenders and regular churchgoers. At the time sentence
was
imposed in the trial court the first appellant was 32 years of age,
unmarried but maintaining a minor child, while the second
appellant
was 42 years of age, married with six children between the ages of 17
and 7 years.
[7] On behalf of the appellants it was argued that they
had both shown remorse by pleading guilty and showing their
willingness
to repay to Old Mutual the money it had disbursed under
the policy, and that the trial court had misdirected itself by not
placing
sufficient emphasis on their remorse. Although it is indeed
so that during argument their legal representative suggested to the

trial court that the appellants should be ordered jointly and
severally to repay the amount, the clearest evidence of their remorse

would have been their immediate repayment of the embezzled money. If
the appellants were truly remorseful, it is surprising, to
say the
least, that they did not do so and it is not without significance
that in the heads of argument filed in this court it
is again
suggested on their behalf that a suspended period of imprisonment,
conditional upon them repaying the amount of R20 000,
would be
appropriate. This, too, hardly smacks of remorse. However, for
present purposes I am prepared to accept the suggestion
of
appellants’ counsel that the appellants had been ill advised by a
previous legal representative and that they had at all times
been
willing to repay. But that fact and their plea of guilty does not
necessarily mean that the appellants were truly remorseful,

particularly as their fraud, once discovered, would have been almost
impossible to deny. A guilty plea in an open and shut case
is often a
neutral factor.
[8] The trial magistrate nevertheless accepted a degree
of remorse on the part of the appellants, evidenced by their plea of
guilty
and their offer to repay, and in my view it has not been shown
that he in any way misdirected himself by not placing more emphasis

on this factor. I am also not persuaded by the appellants’ further
argument that the trial magistrate misdirected himself by
failing to
take into account the fact that their numerous employees would suffer
if they were to be incarcerated. This possibility
was specifically
mentioned by the magistrate in his judgment but was not considered as
being sufficient to justify a non-custodial
sentence.
[9] The severity of the appellants’ crime cannot be
gainsaid. They acted purely out of greed and their scheme was
carefully planned
and executed as is shown by their having lodged
false documents including police statements, a death certificate, a
post mortem
medical report, a police accident report and a
certificate from a local prosecutor relating to a police docket, in
support of their
claim. The severity of white-collar crime such as
this should not be underestimated. Evidence was led that the Old
Mutual alone
suffers loss of some R2m per annum from similar frauds.
Of course the result of this type of conduct is that innocent persons
have
to pay higher premiums to obtain insurance cover. And while the
actual loss suffered by Old Mutual was limited to the R20 000 paid

out for funeral expenses, had the fraud not been discovered its
potential loss amounted to a further R357 520.
[10] As was pointed out in this court in
S
v Sadler
1
‘white-collar’ crimes such as fraud have a corrosive effect on
society and even first offenders should expect rigorous punishment

including, where appropriate, incarceration. As was remarked by
Mlambo AJA in
S v Barnard
2
the decision in
Sadler
‘dispelled the notion that persons
convicted of this type of offence were not criminals and were
therefore entitled to be kept
out of prison’.
[11] As a general rule an appeal court may not interfere
with a sentence unless there is a material misdirection by the trial
court
or unless the sentence is startlingly inappropriate with there
being a striking disparity between it and the sentence the appeal

court would have imposed. The essential question to be addressed is
whether the sentencing court properly exercised its discretion

properly.
3
[12] I share the trial court’s view that imprisonment
was called for in this case. However, the trial court did not give
sufficient
weight to the fact that although the potential prejudice
to the complainant was substantial, the actual loss suffered was far
less
severe. Moreover, in my view, a sentence of no more than five
years’ imprisonment, two years suspended, should have been imposed.

There is sufficient disparity between that sentence and the sentence
imposed for this court to interfere. In the light of both
that
disparity and the trial court’s misdirection, I conclude that the
trial court did not exercise its sentencing discretion
properly and
that this court is entitled to interfere.
[13] In considering what would be an appropriate
sentence, it is necessary to return to the
lamentable
delay
which occurred after the application for
leave to appeal to this court was lodged in the high court.
While
an appeal court will generally only consider the facts and
circumstances known when sentence was initially imposed, this court

has recognized that in exceptional circumstances factors later coming
to light may be taken into account on appeal where it is
in the
interest of justice to do so.
4
In
S v Roberts
5
this court was called upon to increase a wholly suspended sentence
imposed on the respondent who had murdered his wife. In considering

what period of imprisonment would be appropriate, it remarked that it
would be ‘callous to leave out of account the mental anguish
the
respondent must have endured’ during a period of about two years
between the state setting the appeal process in train and
the appeal
being heard. In the present case, where the appellants have been
obliged to wait for a period of six years without clarity
as to their
future, there is all the more reason to do so. In my view, it is
a
factor
to which this court should have regard in
the assessment of an appropriate sentence.
[14] Taking it and all the other circumstances I have
mentioned into account, I am of the view that a sentence of four
years’
imprisonment, two years suspended, is the appropriate
sentence for each appellant. The sentence of the trial court must
therefore
be set aside.
[15] In the result, the appeal succeeds. The order of
the high court is set aside and substituted with the following:
‘
1 The appeal succeeds.
2 The sentence imposed by the regional magistrate on
each appellant is set aside and is replaced with the following:
“
Four years’ imprisonment, two years of which are
suspended for three years on condition the accused is not convicted
of fraud
committed during the period of suspension.”’
_____________________
L E LEACH
ACTING JUDGE OF APPEAL
APPEARANCES:
COUNSEL FOR APPELLANTS: S Joubert
INSTRUCTED BY: Macintosh Cross &
Farquharson; Pretoria
CORRESPONDENT: Naudes Inc; Bloemfontein
COUNSEL FOR RESPONDENT: L Pienaar
INSTRUCTED BY: Director of Public Prosecutions;
Pretoria
CORRESPONDENT: Director of Public Prosecutions;
Bloemfontein
1
2000 (1) SACR 331
(SCA) paras 11-13.
2
2004 (1) SACR 191
(SCA) para 15.
3
See eg
S v Pieters
1987 (3) SA 717
(A) and
S
v Sadler
above para 8.
4
See eg
S v Karolia
2006 (2) SA 75
(SCA) paras 36-38.
5
2000 (2) SACR 522
(SCA).