About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 154
|
|
Macheka v S (A13/2019) [2019] ZAFSHC 154; 2020 (1) SACR 189 (FB) (29 August 2019)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number:
A13/2019
In
the matter between:
FS
MACHEKA
Applicant
and
THE
STATE
Respondent
CORAM:
MHLAMBI, J
et
CHESIWE, J
HEARD
ON:
06 MAY 2019
DELIVERED
ON:
29 AUGUST 2019
JUDGEMENT
BY:
CHESIWE, J
[1]
The appellant is a 50 year old male and was charged with two counts.
Count 1 of Theft and Count 2 of Money Laundering. The appellant
pleaded not guilty and was found guilty on Count 1 and acquitted on
Count 2. He was sentenced to an effective 30 months
imprisonment in terms of section 276 (1)(i) of the Criminal Procedure
Act 51 0f 1977.
[2]
The appellant was legally represented by Mr Swanepoel.
[3]
The trial court granted leave to appeal on conviction and sentence.
The appellant was represented by Adv. Van Rensburg
and the
respondent was represented by Adv. Ponye.
[4]
The appellant’s grounds of appeal are based on the following:
that the Presiding Officer erred by failing to make both
legal and
factual findings that required the appellant to be furnished with
full and proper details and the further particulars
to the charges
brought against him in order to prepare for the trial; and that the
Presiding Officer infringed on the appellant’s
rights to a fair
trial.
[5]
The appellant made several applications at the trial court which will
not be dealt with in this judgement as the trial court
dealt
thoroughly with the applications before it.
[6]
Background on this matter is briefly summarised as
follows
:
The appellant was an attorney practising
under the name and style of Fusi Macheka Attorneys in the Free State
area. The appellant
held a Trust Account at Standard Bank with
account number […] in the name of Fusi Macheka Incorporated.
The complainant
(Elizabeth Kimane) was involved in a motor vehicle
accident on or about June 2016. She made an appointment with the
appellant after
the accident in order to arrange a consultation to
claim from the Road Accident Fund (RAF). The appellant requested that
the complainant
to pay R300.00 in order for a file to be opened,
which payment was made and followed up by another amount of R200.00.
[7]
On 26 February 2016 the complainant was called by the RAF office and
informed that an amount of R49 702 .45 was paid into
the bank
account of Fusi Macheka Attorneys. She was told by the RAF official
to go to the RAF office at the Bongani Hospital, Welkom,
in order to
obtain proof of the payment. The complainant went back to the
appellant’s office to enquire about the payment
of R49 702.45.
She was informed that Mr Macheka was not at the office and she later
met the appellant at the office of the
investigating officer,
accompanied by her legal representative Mr Coetzer. In the presence
of the complainant with her legal representative
and the appellant,
an acknowledgement of debt was signed by the parties. The
complainant, after signing the acknowledgement of
debt, did not
receive any payment in terms of the said acknowledgement of
debt. The complainant was eventually paid
by the Attorneys Fidelity
Fund (as it then was).
[8]
I pause to mention that the appellant was struck off the roll of
Attorneys by this Honourable High Court on 23 June 2011. However,
this is not the issue before the appeal court and will therefore not
be dealt with.
[9]
Counsel on behalf of the appellant, in both oral argument and the
Heads of Argument, submitted that Fusi Macheka Inc. was liable
for
the loss suffered by the Complainant. He mentioned that the Law
Firm had more than one person who had access to the trust
accounts.
He submitted that theft in the trust accounts is looked at
differently than common theft. He submitted that the state
did not
prove beyond reasonable doubt that the appellant stole the money.
He submitted that the appellant may be guilty by
having being
reckless and mismanaged the trust funds, but cannot be held liable
for that recklessness and submitted that the appeal
on conviction and
sentence be upheld.
[10]
Counsel on behalf of the respondent submitted in oral agreement that
the appellant was the one who dealt with the complainant.
The money
in the trust account belonged to the complainant and the appellant
cannot transfer money on trust accounts without a
claimant’s
permission. He further submitted that it is improbable that the
appellant allowed people in the Law Firm to have
access to the PIN of
the electronic funds transfer of the Trust Accounts. He submitted
that the appellant failed to inform the
complainant that the money
from the Road Accident Fund had been paid. He further submitted that
the Trust Account had no liquid
funds to pay the complainant. It
therefore follows that the appellant used the Complaint’s money
for his own benefit and
interest.
[11]
Theft is defined as:
“
A person
commits theft if he unlawfully and intentionally appropriates
movable, corporeal
property which:
(a)
Belongs to, and is in the possession of
another;
(b)
Belongs to another but is in the
perpetrator’s own possession; or
(c)
Belongs to the perpetrator but is in
another possession and such other person has a right to possess it
which legally prevails against
the perpetrators over right to
possession;
Provided that the
intention to appropriate inducts an intention permanently to deprive
the person entitled to the possession of
such property.”
[12]
In
Hirschowitz
Flionis vs Bartlet and Another,
[1]
the SCA in considering whether or not there was a legal duty on an
attorney to deal with funds in their trust account without
negligence, stated that:
“
A Practising
Attorney has a legal duty when dealing with money in trust account
and insufficiently informed as to the identity of
the depositor or
the purpose of the deposit.”
[13]
In this instance the appellant, being a firm of practising attorneys,
proclaimed to the public that it possessed the expertise
and
trust-worthiness to deal with trust money reasonably and
responsibly. The complainant in this case relied on the fact
that the money would be safe in the appellant’s trust account,
until instructed otherwise. In
Hirschowitz
supra
the court
mentioned that even where an attorney discovered an anonymous and
unexplained deposit, it requires minimal management
to transfer the
money to a trust suspense account. Thus any unreasonable
conduct that might put the money at risk, would
as reasonable
foreseeability, cause loss for the depositor or beneficiary. The
legal conviction of the community would undoubtedly
clamour for
liability to exist in the circumstances. It simply means that
money in a trust account is not the attorney’s
property, and
any deposit must be dealt with in accordance with the trust
creditor’s instruction.
[14]
The issues raised by the appellant was that he was not furnished with
the further particulars, specifically with reference
to the missing
file of the complainant. The trial court dealt thoroughly with
that issue and this is noted in Ms Obbes’
testimony on page 323
of the transcribed record:
“
Did you know all
the offices of Mr. Macheka to confiscate files? …. Indeed so.
I can remember that I went to the office in
Welkom to confiscate or
to basically attach the files, further process were done by Mr.
Mohobo who is not in the employment of
the law society anymore. But
the process from the attachment of the files is that all the files
are written into an index book
that we received from the specific
practitioner and then it is indexed so that we can know which files
we have;
Ma’am there was an
issue about the file of Ms. Kimane, does it appear in the index book?
…………
No it did not, it does not appear in
the index book.
Copies of the index book
were made available and from that it is clear that it did not appear
in the index books. I cannot see any
reason why the person doing the
indexing would neglect to insert a specific file in the index books
because there is no benefit
to any person to do that. So I can, I can
say that I am very positive that if we have received the file from
Mr. Macheka then it
would be in the index books.”
[15]
Thus the application to compel by the Applicant for further
particulars, in this instance the Kimane file, was correctly
dismissed
by the Presiding Officer, as the state could not furnish
information it did not have in its possession. Ms. Obbes testified
that
the Law Society of the Free State (as it then was) had to bring
a second application to this Honourable Court for more files which
the appellant did not give to the Law Society after the first court
order was granted to strike him off the roll.
[16]
The application in terms of section 174 was properly dealt with by
the Presiding Officer. As the section provides that a court
‘may’
at the close of the case for the prosecution if it is of the opinion
that no other evidence of which the accused
be convicted of, return a
verdict of not guilty. It is trite that the term ‘no
evidence’ does not mean no evidence
at all. The trial
court applied the two stage enquiry. Firstly, whether there is
evidence upon which a reasonable man
acting carefully may convict and
secondly, whether there is a reasonable possibility that the defence
might supplement the state’s
case. In any view, the trial
court, in refusing the section 174 application, took into
consideration the evidence before it and
correctly denied the
application.
[17]
The appellant in order to pay back the complainant, signed an
acknowledgement of debt, which he did not honour. In spite
of
the writ of execution having been served on him, the sheriff’s
return was a
nulla bon
a.
The inference drawn is that the appellant was unable to pay the debt,
and as correctly stated by Adv. Ponye, the appellant
had no liquid
funds to cover the amount owing.
[18]
The transcribed record on page 70, volume one, shows that an amount
of R30 914. 87 was brought forward on the law firm’s
bank
statements. The Road Accident Fund deposited on 26 February 2010 an
amount of R49 702.45 which brought the balance
on the bank
statement to R80 617,32 ( i.e. R30 914, 87 + R49 702,45).
A cash cheque to the amount of R20 000
was drawn on 26 February
2010 which is on the same date that the RAF deposited the amount of
R49 702, 45. The balance
was R60 609, 18. On 27
February 2010 an amount of R30 000 was transferred and this
brought the balance to R31 291,
07. This is an indication
that the money in the bank at that stage was already insufficient to
pay the complainant. By 8
March 2010 the balance was R764.81 and this
was a further indication that the appellant could not have been able
to pay the complainant,
as the cash available was not enough to do
so.
[19]
Practising attorneys know that trust funds are a valuable asset of
any law practice and the trust funds do not belong to the
attorney or
any other person. Indeed it is a criminal offence to steal or
take trust funds. An attorney (Legal Practitioner
in terms of
the Legal Practice Act) has a duty of care in respect of trust funds
and this is well established in our law.
[20]
A claim will lie against the Legal Practitioner whether the loss is
caused by negligence or theft. Counsel on behalf
of the
appellant, submitted that the appellant may have acted recklessly or
negligently by allowing other staff members to have
access to the
trust fund’s bank account, and that he should not be convicted
for such reckless conduct. I disagree with this
view. The
appellant, as the owner of the law firm, had a duty of care in
respect of the trust funds entrusted to him or his
law firm. In the
matter of
Du
Preez and Others v Zwiegers
,
[2]
the court held that:
“
an attorney is
under a legal duty to deal with trust account money in such a way
that loss is not negligently caused, inter alia,
to the depositor.”
[21]
As early as in the 19th century, the courts were not lenient on
persons who involved themselves in trust monies. In
Rex
v Rorke
,
[3]
Innes CJ said:
“
These were trust
monies; they were neither deposited with nor received by the
appellant under the circumstances which constituted
him the mere
private debtor of the beneficiary. He could only deal with them
properly and legally by handling them in the
manner and them to the
purposes prescribed by law. And if he deliberately appropriated
them to his own use….. The
jury were fully justified in
concluding that such appropriation was fraudulent, and he committed
the crime of theft
.”
[22]
In the recent matter of
S
v Boesak,
[4]
the
SCA stated as follows
:
“
where a person has
been entrusted with money for purpose A uses such money for purpose
B, or appropriates it for his own use.
This presupposes that
purpose A and purpose B are unrelated, or that there does not exist a
sufficient nexus between them.
The underlying ratio is that by
using the money donated for purpose A for purpose B, the donor is
being denied his say over the
manner in which the money is dealt
with. In effect he is deprived of his control over the money.”
[23]
Section 78 of the Attorneys Act 53 of 1979, before it was repealed by
the
Legal Practice Act 28 of 2014
, had measures in place to ensure
and safeguard trust funds. The new
Legal Practice Act, Chapter
7 thereof, also has measures in place to safeguard trust funds.
Thus the Legislature had to put measures in place in order
to avoid
any attorney from abusing trust funds, for example, adequate internal
controls are implemented to ensure compliance with
the rules and to
ensure that trust funds are safeguarded; these being designed to
ensure that internal controls are appropriate
to address an
identified risk; that the effective operation of the internal
controls is monitored regularly by designated persons
in the firm.
[24]
The appellant by virtue of his profession as an attorney, is expected
to uphold the highest professional standards. It is unacceptable
that
a person who is to uphold these professional standards, is the person
who commits the offence of theft of trust money. When
an attorney is
charged with theft, it is important for the Law Society to show a
deficit in the trust account as well as conducting
a proper audit of
a law firm’s books. In my view, the state at the trial
court proved beyond reasonable doubt that
the trust account of the
appellant had a shortage, and the appellant could not give a proper
explanation as to how the deficit
and the trust shortfall arose. As
correctly pointed out by Ms Obbes, none of the staff of the Law
Society had any reason to implicate
the appellant, as none had any
interest in the matter nor any expected benefits.
[25]
It is trite law that a court of appeal will not tamper lightly with
the trial court’s credibility findings, considering
the
advantage which the trial court has of hearing and appraising the
witnesses. It will do so, if it is shown that the findings
made
by the trial court were clearly wrong. It has not been submitted that
the trial court committed any misdirection of fact.
Furthermore, when
consideration is paid to all inconsistencies, improbabilities and
contradictions in the appellant’s evidence,
there is no reason
to doubt the correctness of the credibility findings made by the
trial court.
[26]
As already mentioned above, the appellant had the highest
professional standards to maintain. He had no right to access
trust funds unlawfully. The problem of trust funds is so
prevalent in the legal fraternity that the courts, on several
occasions,
had to deal with applications to strike off attorneys from
the roll of practising attorneys. The Legislature enacted rules
in terms of the
Legal Practice Act 28 of 2014
, specifically dealing
with the handling of trust monies to ensure that there are internal
control measures in place to avoid trust
funds from being abused by
the Legal Practitioners in private practice.
[27]
I am satisfied that the state has proven its case beyond reasonable
doubt. Furthermore, the trial court correctly found the
appellant to
be an untruthful witness and correctly rejected his version as false
beyond reasonable doubt. There is therefore
no reason to tamper
with the trial court’s findings on the appellant’s
conviction.
[28]
Counsel on behalf of the appellant in oral argument submitted that in
view of the correctional report, the sentence proposed
of
correctional supervision would be more appropriate under the
circumstances, as the appellant has already being punished by being
struck off the Roll of Attorneys. He was also diagnosed with
diabetes, high blood and Tuberculosis. His spouse is sick and has
being diagnosed with cancer, even though this information was not
substantiated with evidence or the production of any medical
certificate at the trial court.
[29]
Counsel on behalf of the respondent submitted that the theft of trust
funds is a serious offence and the 30 months’ custodial
sentence handed down was actually too lenient. He submitted
that the sentence of the trial court should not be tampered with
as
under circumstances as it is the appropriate sentence.
[30]
As regards sentence, it is trite that a court with appellate
jurisdiction has limited powers to interfere with the sentence
imposed by the trial court. The sentencing discretion lies with the
trial court and its sentence will be interfered with on appeal
only
if the discretion in question was not exercised judicially and
properly
[5]
,
or if there is disparity between the sentence imposed and the one
that ought to be imposed. In
S
v Malgas
[6]
the court stated as follows:-
“
A
court exercising appellate jurisdiction cannot, in the absence of
material misdirection by the trial court, approach the question
of
sentence as if it were the trial court and then substitute the
sentence arrived at by it simply because it prefers it.
To do
so would be to usurp the sentencing discretion of the trial court.
Where material misdirection by the trial court vitiates
its exercise
of that discretion, an appellate court is of course entitled to
consider the question of sentence afresh. In
doing so, it
assesses sentence as if it were a court of first instance and the
sentence imposed by the trial court has no relevance.
As it is
said, an appellate court is at large. However, even in
the absence of material misdirection, an appellate
court may yet be
justified in interfering with the sentence imposed by the trial
court. It may do so when the disparity between
the sentence of
the trial court and the sentence which the appellate court would have
imposed had it been the trial court is so
marked that it can properly
be described as “shocking”, “startling” or
“disturbingly inappropriate”
It
must be emphasised that in the latter situation the appellate court
is not at large in the sense in which it is at large in the
former.
In the latter situation it may not substitute the sentence which it
thinks appropriate merely because it does not accord
with the
sentence imposed by the trial court or because it prefers it to that
sentence. It may do so only where the difference
is so substantial
that it attracts epithets of the kind I have mentioned.”
[31]
It is evident from the record that the trial court properly
considered the imposition of sentence. To the appellant’s
credit, the trial court took into consideration the correctional
report and sentenced the appellant to only 30 months’
imprisonment,
which, as correctly stated by Adv. Ponye , is a
very light sentence indeed. The trial court was actually
of the
view that the sentence should have been more than the 30
months’ imprisonment. However, the trial court took into
consideration
the prevalence of these offences of the theft of trust
money into account. The State, at the trial court, called a Mr
Letsholo
(employed at the Fidelity Fund in the Risk Division) as a
witness in respect of claims against the trust account of the
appellant.
This is noted on page 613, volume 4:
“
Can you please
tell this court. How many claims were laid against the trust
account?.... In totality the Fund received
49 claims amounting
to R1 765 269, 92. Okay, out of the 40
claims how many claims did the fund pay?....
25 claims of those
were paid were admitted and paid by the Fund to an amount of
R1 131 790,92”
[32]
It is further noted on page 615, volume 4 line 7, Mr Letsholo
testified that the Fund in 2010 paid to members of the
public an
amount R70 864 968,11 and in 2011 the Fund paid
R93 411 256,07 and in 2012 the Fund paid members
of the
public an amount R115 818 817,58. These are huge
amounts that are lost through theft by members of the profession
who
do not respect public funds deposited into their trust accounts.
Indeed this is unacceptable for such huge losses to
occur due to
greed, if I may put it so. It can be accepted that his deed was
motivated by greed and not need. Significantly, his
lack of remorse
for his actions impacts negatively on his chances of rehabilitation.
The aggravating factors far outweigh the mitigating
factors. Having
considered all these circumstances, I am satisfied that the trial
court did not err or misdirect itself in any
way. There is no reason
to tamper with the sentence imposed by the trial court.
ORDER
[33]
In the result, the following order is granted:
1.
The appeal against both conviction and sentence
is dismissed.
________________
S.
CHESIWE, J
I
concur
________________
JJ MHLAMB, J
On
behalf of the appellant: Mr D Swanepoel
Instructed
By: Messrs Du Randt and Louw
C/O
Bokwa Attorneys
BLOEMFONTEIN
On
behalf of the respondent: Adv. Ponye
Instructed
By: Director of Public Prosecution
BLOEMFONTEIN
[1]
2006 SCA 24 (RSA) at para 36.
[2]
2008
(4) SA627 (SCA) at para 19.
[3]
1915 AD 145
at 157.
[4]
[2000] ZASCA 112
;
2000
(1) SACR 633
SCA.
[5]
S
v Rabie
1975
(4) SA 875 (AD)
[6]
2001
(1) SACR 469
(SCA) at 478 d-h