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1990
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[1990] ZASCA 137
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S v Koch and Others (670/89) [1990] ZASCA 137 (23 November 1990)
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION
)
In the matter between:
OTTO KOCH
First Appellant
ELIZABETH RAMSAY
Second
Appellant
IVAN NORMAN RAMSAY
. Third Appellant
AND
THE
STATE
Respondent
Coram
: E.M. GROSSKOPF, EKSTEEN et NIENABER, JJ A
Heard
: 1
November 1990
Delivered
: 23 November 1990
JUDGMENT
EKSTEEN,
J A :
The three appellants were charged before a regional court with 47
counts of fraud. Despite their pleas of not guilty they were all
convicted - the
first and the third appellants on all 47 counts and the se-cond appellant on 38.
The first appellant was there-upon
sentenced to 8 years' imprisonment of which 2
years was conditionally suspended. The second and third appellants were each
sentenced
to 5 years' imprisonment of which 2 years was again conditionally
suspended. Their appeal to the Witwatersrand Local Division was
unsuccessful.
That Court also refused to grant them leave to appeal to this Court. Their
petition to the Chief
../2
2
Justice was, however, successful, and they are now be-fore us in an appeal
both against their convictions and sentences.
From the evidence adduced at
the trial it appears that during 1980 the first appellant ("Koch") was employed
by a firm called "Work
Force" owned by one Ronnie Katz. This firm was engaged in
supplying labourers to various firms on an ad
hoc
basis. To-wards the end
of 1980 or the beginning of 1981 Koch dis-cussed the activities of this firm
with his sister, the second
appellant ("Mrs. Ramsay"), and the two of them
decided to start a similar business on their own. Mrs. Ramsay sold her house to
obtain
the initial capi-tal required to start the business, and the company
..../ 3
3
known as Ramsay's Artisan and Draft Hire (Pty.) Ltd. ("Ramsay's") was
established and registered as such on 28 February 1981. Mrs.
Ramsay held 51% of
the shares, and Koch 49%. Mrs. Ramsay, it appears, looked after the
administration side of the business while
Koch went out to recruit artisans and
to make contact with prospective firms that required artisans on a short term
basis as opposed
to becoming full time employers. Ramsay's would then supply
these artisans and pay them; at the same time charging the employer a
pre-specified wage rate on a weekly basis. Each week a time-sheet would be
submitted by the client-employer showing the number of
artisans employed and the
times worked. The client would then pay Ramsay's at the pre-arranged
.../4
4
rate.
Very soon Koch and Mrs. Ramsay began to ex-perience liquidity
problems by reason of having to wait for payments from their clients.
So in
April 1981 they approached a factoring firm in Cape Town known as Redfin Factors
("Redfin") and concluded an agreement with
them. In terms of this agreement
Ramsay's would continue to supply labour to their client employers, and would
present to Redfin
the invoices to the individual debtors, together with
time-sheets reflecting the hours worked by each arti-
san and the wage rate
agreed upon. Redfin would then pay cash against the invoices and collect the
debt directly from the client-employer.
It was
..../ 5
5
a term of the contract that Ramsay's would instruct their clients to pay
directly to Redfin and not to Ramsay's. On receipt of Ramsay's
invoices and
time-sheets Redfin would immediately pay 75% of the amount reflected and retain
25%, which would only be paid over once
the debt had been collected from the
client and after deduction of a factoring fee.
The factoring agreement was
signed by Koch on behalf of Ramsay's and at the same time he and Mrs. Ramsay
both signed an "Instrument
of Suretyship" by which they bound themselves as
sureties and co-prin-cipal debtors for the fulfilment by Ramsay's of all its
obligations
in terms of the factoring agreement.
At more or less the same time Koch sold 10
.... / 6
6
of his shares to Mr. Neil Gilmour for R10,000. This
sum, he says, he
"left" in Ramsay's account at the re-
quest of Mrs. Ramsay. This may well
have been another
attempt to overcome the firm's liquidity problem.
Mrs.
Ramsay also sold 10 of her shares to a Mrs.
Mantuchi and she too apparently
paid the proceeds
into Ramsay's account. Both Koch and Mrs. Ramsay
refer to these loans to
the company as "loan capital".
The injection of funds, together with the
effect of the factoring agreement on Ramsay's, appa-
rently cleared up all liquidity problems and the com-
pany seemed to be in a strong financial state. So
much so that during or
about June 1981 Mrs. Ramsay,
with Koch's concurrence, decided to withdraw
her
..../7
7
"loan capital" together with an additional unspecified amount in order to
táke a prolonged vacation of some three months "overseas".
Koch says this
vacation cost some R60,000 but Mrs. Ramsay says it was much less.
Koch, too,
decided to withdraw his "loan capi-tal" in order to do some renovations and
alterations to his house. This he says he did
by employing labour-ers and
telling Ramsay's to pay their wages. This likewise was done with the concurrence
of Mrs. Ramsay. It would
appear that the total wage bill in respect of these
alterations came to some R14,000. Instead of simply paying the labourers on
behalf
of Koch, as had been agreed upon, Ramsay's appears to have factored the
wage-bill to Redfin in the name of B & O Construc-
.../8
8
tion. B & 0 Construction was a company which had been formed by Koch but
which never seems to háve operated at all. At
the time this wage-bill was
factored to Redfin, B & 0 Construction was entirely dormant. Koch says that
the first intimation
he had that Ramsay's had factored the wage-bill to Red-fin,
was when Redfin forwarded payment from B & 0 Construction. He says
that he
immediately took the account to the third appellant ("Ivan Ramsay"), Mrs.
Ramsay's son, who was employed by Ramsay's as an
assistant to his mother, and
demanded an explanation, insisting at the same time that Ramsay's pay the
account. This seems to have
occurred towards the end of August 1981 just before
Mrs. Ramsay returned
.../9
9
from her trip overseas. She then suggested that a bank account be opened for
B & O Construction, and that Ramsay's pay R14,000
into that account so that
B & O could pay Redfin. Koch seems to have agreed to this suggestion, and it
would appear that the
mat-ter was settled in that way. This transaction did not
form the subject matter of any of the charges preferred against the
appellants.
The fraudulent dealings with which they were charged commenced on
8 December 1981 and continued until 7 December 1982. The gist of
the State's
allegations against the appellants was that on the dates set out in the charge
sheet they presented invoices and time
sheets purporting to emanate from
..../ 10
10
Ski Construction, B & O Construction and Electro-board to Redfin in terms
of the factoring agreement and thereby induced Redfin
to pay to Ramsay's
va-rious amounts totalling R336,181.37, whereas the appellants knew that Ski
Construction and Electro-board were
fictitious entities and that no labour had
been supplied by Ramsay's to either of these entities or to B & 0
Construction. Some
of these invoices were repaid by Ramsay's apparently in the
names of these entities mentioned above, but in the end Redfin suffered
a nett
loss of R190,887.87 which was not recovered at all.
At the trial it was common cause that the invoices listed in the charge sheet
for the amounts
.../ 11
11
alleged, together with the supporting time-sheets were indeed submitted to
Redfin by Ramsay's on the dates alleged, and that the information
reflected in
these invoices and time-sheets was false. It was also common cause that Ski
Construction and Electroboard were fictitious
firms and that B & O
Construction had not been supplied with any labour by Ramsay's. Koch denied all
knowledge of any of these
invoices or time-sheets, or that he had ever heard of
Ski Construction or Electroboard before January or Feb-ruary 1983 when he was
approached by Greyling, the then managing director of Redfin. Mrs. Ramsay
alleged that the whole fraudulent scheme had been conceived
and initiated by
Koch; that she ahd only become aware
..../ 12
12
of it about May or June 1982; and that thereafter she allowed it to continue
because of threats made by Kóch. Ivan Ramsay,
who it was common cause was
responsible for writing most, if not all of the false invoices and time sheets,
and for appending a variety
of signatures in order to give a verisimi-litude of
authenticity to them, contended that he had initially acted on the instructions
of Koch on the assumption that there was nothing wrong with what he was doing
until his mother told him that all this documentation
was fraudulent. Thereafter
he con-tinued to do so because of threats by Koch to his personal safety.
From the judgment of the regional magistrate
../13
13
it would seem.that he approached the evidence of the
appellants on a wrong basis. Initially he says that -
"The onus rests upon the State to prove beyond a reasonable doubt that the
accused had the ne-cessary intention to commit the offences
of fraud."
Immediately thereafter however he refers to section
332(5) of Act 51 of 1977 and concludes from this that -
"The onus therefore rests upon the accused to prove on a balance of
probabilities that they did not take part in the fictitious transactions;
secondly, that they could not have prevented it."
In the present case each of the appellants
was charged in his or her
individual capacity with
having committed fraud. Ramsay's was not charged
with
any of the offences. The charge sheet made no re-
ference to section
332(5), nor did it allege that
../14
14
Ramsay's had committed the offences with which the appellants were charged.
In these circumstances the Court a
quo
, relying on the decision in
S.
v
.
Deal Enterprises (Pty.) Ltd. and Others
1978 (3) SA 302
(W), held
that the section could find no appli-cation, and that no reliance could be
placed on the presumption therein contained.
This view was accept-ed in argument
before us. It follows therefore that the magistrate was wrong in seeking to
place any reliance
on the section, and, insofar as it affected his view of the
onus, which he held rested on the appellants, he clearly misdirected
himself.
The magistrate also misdirected himself in holding that -
../14
15
"The only element of the offence which is being placed in dispute by the
three accused is the element of
mens rea
."
It was quite clear from the evidence that insofar as Koch was concerned the
actus reus
on each count was very much in dispute. He denied
parti-cipating in any of the fraudulent activities and con-tended that he was
completely
unaware of the fact that they were taking place. Mrs. Ramsay also
alleged that she was unaware of the fraudulent transactions until
she was told
about them during May or June 1982. It was therefore not correct to say that
mens rea
was the only element of the offences that was in dispute.
These misdirections of the magistrate are
../16
16
of so fundamental a nature that the appeal must suc-ceed unless this Court
"considers on the evidence (and credibility findings if
any) unaffected by the
irregularity or defect, that there is proof of guilt beyond a reasonable doubt".
(Per Holmes J.A.in S.
v. Tuge
1966 (4) SA 565
A.D. at 568 F-G.) The
evi-dence of the appellants must be considered on the basis that the onus rested
throughout on the State to
prove their guilt beyond a reasonable doubt.
The
magistrate was not very impressed with Koch as a witness. He describes him as
being "very nervous in the witness box" and "very
evasive". It appears from the
record though, that Koch suffered from dyslexia and had considerable difficulty
in
.../17
17
reading and writing. He was not entirely illiterate but his writing, it
appears, was barely legible, and he did not readily read or
understand bank
statements or other documents. The record also tends to re-flect an inability to
express himself clearly and logically,
so that often his evidence does appear to
be somewhat confused. In her argument before us Miss
Borchers
, who
appeared for Koch, submitted that Koch was not the only one at the trial who
appeared to be confused at times. The prosecutor
too seems to have become
confused about certain aspects of the evidence and in his cross-examination,
based on mis-taken premises,
he tended to make Koch's apparent confusion worse
confounded. She also submitted
../18
18
that at times the prosecutor evinced a measure of
impatience to such an
extent that his cross-examina-
tion verged on rudeness. I do not propose
analysing
Koch's evidence in any detail, but suffice it to say
that these
submissions do not appear to be without
substance.
In weighing the probabilities the magistrate
devoted much of his judgment
to criticizing Koch for
allowing Ramsay's to pay the amount of R14,000
into
the bank account of B & 0 Construction before repay-
ing it to
Redfin. It must be borne in mind, however,
as I have indicated above, that
this transaction did
not form the subject of any of the charges
preferred
against Koch. Moreover on a careful reading of all
..../ 19
19
the evidence relating to this transaction I find it
difficult to see what
adverse inferences, if any,
can justifiably be drawn against him.
The magistrate also sought to draw an ad-
verse inference against Koch by
reason of his failure
to make enquiries from Ramsay's after he had
been
confronted with the fraudulent invoices and time-sheets
by Greyling.
This confrontation, however, occurred
during January or February 1983 some 3
or 4 months
after Koch had left Ramsay's. At that stage all the
fraudulent
transactions had already been exposed, and
there was not a great deal Koch could have done other
than to reproach his
erstwhile associates at Ramsay's.
The submission by counsel for the respondent
../20
20
that by reason of the familial relationship of most of those concerned in
Ramsay's, and the active part played by Koch in the company,
albeit in a sphere
removed from the administrative side of things, makes it improbable that he did
not know about the fraudulent
transactions which stretched over a con-siderable
period of time and generated a considerable amount of money for Ramsay's, is
equally
not without substance. More than a balance of probabilities, however, is
required to found guilt in a criminal trial. Nowhere in
his evidence does Koch
concede that he knew anything about the perpetration of these fraudulent
transactions until January or February
1983 when he was approached by Greyling,
nor can any
21 .... /
21
justifiable inference be drawn against him on his evidence taken alone, to
found a conviction.
In order to justify the conclusion to which he came the
magistrate relied on the evidence of Mrs. Ramsay and of Ivan Ramsay. He found
Mrs. Ramsay to be a credible witness and accepted her evidence that Koch had
initiated the whole fraudulent scheme and that she had
only become aware of it
during May or June 1982 when he himself had informed her about it. Thereafter
she was compelled to go along
with the scheme by reason of the dire threats
uttered to her by Koch. So too he accepted that Ivan Ramsay had been instructed
by
Koch from the start to draw up the false time sheets and to append false
signatures to
..../ 22
22
them. This evidence, he held, proved that Koch knew about the fictitious
invoices and knew that Ski. Con-struction and Electroboard
never existed.
Nowhere in his judgment does it appear that the magistrate warned himself
against the uncritical acceptance of the
evidence of these witnesses who were
not only accomplices but also co-accused. (Cf.
R. v. Ncanana
1948 (4) SA
399
(A.D.) at 405-6.) Their relationship with Koch was clearly acrimonious, and
they had a po-
werful motive to implïcate him in the way they did in order to minimise
their own guilt in the whole scheme. Neither the evidence
of Mrs. Ramsay nor
that of Ivan Ramsay was without blemish. Mrs. Ram-say's persistent allegation
that after her return
../23
23
from overseas in August 1981 and throughout 1982 she did practically nothing
at all in Ramsay's and had no responsibilities despite
being a director and the
major shareholder in the company sounds most impro-bable. So too does her
evidence of the exaggerated threats
by Koch which she says compelled her to
con-ceal and persist in the fraudulent scheme. A mere reading of Ivan Ramsay's
evidence does
likewise not impress one with its veracity. The magistrate's
failure, therefore, to approach this evidence with greater care and
to warn
himself of the dangers in-herent in its uncritical acceptance, taken together
with the misdirections to which I have already
refer-red leads me to the
conclusion that it would be
../24
24
dangerous to place,any reliance on the evidence of Mrs. Ramsay or of Ivan
Ramsay. On the magistrate's line of reasoning, therefore,
he ought not to have
been satisfied that the State had proved Koch's guilt beyond a reasonable doubt,
and he ought not to have convicted
him.
The Court a
quo
did not rely
on the evidence of Mrs. Ramsay or of Ivan Ramsay in dismissing Koch's appeal but
sought to do so with reference to the
evi-dence of Sive and Greyling - the only
two witnesses called by the prosecution. Sive appears to have been the managing
director
of Redfin at some stage or other. The evidence is not very clear about
this but he would seem to have held this office during
..../ 25
25
1981 when the factoring agreement between Redfin and Ramsay's was
conclúded. He conducted the negotia-tions with Koch and Mrs.
Ramsay and
signed the agree-ment on behalf of Redfin. He says that at these negotiations
Koch tookthe lead and appeared to him to
be running Rámsay's. He regarded
Koch as the mana-ging director.
Initially performance by Ramsay's of the
factoring agreement was entirely satisfactory. Then (if one has regard to the
charge-sheet
this must have been from December 1981)when invoices and
time-sheets from B & 0 Construction, Ski Construction and Electro-board
were
submitted the agreement was not strictly complied with, in that payments to
Redfin were not
..../ 26
26
made by the debtors, but by Ramsay's instead. The-se payments were made
promptly on due date ini-tially, but later on they began to
fall in arrear.
Attempts were then made to get in touch with the debtors without any success.
Eventually somebody gave Redfin a telephone
number in Zimbabwe purport-edly of
Electroboard and "they" spoke to a Mr. Gil-mour. This, Sive says, was "towards
the beginning of
December 1982". Subsequently during the same month Gilmour
presented himself at Redfin's offices in Cape Town and informed Sive that
he had
pur-chased shares in Ramsay's, and "that he had financial means to support the
company and any indebtedness owing by the company
to ourselves would be
sorted
../27
27
out in a very short,period of time." Greyling then drew up a deed of
suretyship which Gilmour signed.
At about this time Sive says there was "an
open admission of the fraudulent nature of these in-voices, the non-existence.of
these
debtors". These admissions were made by Gilmour and by Mrs. Ramsay. Mrs.
Ramsay alleged that she had collaborated in the scheme because
of "various
threats from her partner Mr. Koch".
On 17 February 1983 a meeting was held in the offices of Redfin's
Johannesburg attorneys, Saul and Weiner, attended by Sive, Gilmour,
Mrs. Ramsay
and Koch. At this meeting Koch "claimed that he had no hands on dealings day to
day with the company"
../28
28
and blamed Gilmour and Mrs. Ramsay "as being in collu-sion with these
invoices". Gilmour and Mrs. Ramsay, on the other hand, blamed
Koch and "claimed
that they had operated under various threats of one sort or another by Mr.
Koch". At this meeting, Sive says, there
was no dispute about the fact that
these in-voices were "fictitious invoices raised on non-exist-ing companies".
The upshot of the
meeting was that Gilmour and Koch "undertook to raise funds to
settle the indebtedness".
Referring to Sive's evidence the Court a
quo
says:
"According to the evidence of one Sive, an
../29
29
official of Redfin Factors, enquiries had been made by that company, or
rather members of the staff of that company, concerning the
background of the
three so-called debtor companies that I have mentioned (that is, Electroboard, B
& O and Ski Construction),
and the suspicion had been formed that they might
not exist and that the debts were in fact fictitious. So a meeting was called
with
the executives of the Ramsay company and the first and second appellants
were specifically challenged. Sive says that the fact that
fictitious invoices
were raised on non-existing companies was not disputed by these two persons.
That in itself postulates knowledge
on the part of the first appellant, although
only at the stage of the meeting. But the fact that he did not deny involvement
until
a subsequent meeting with Sive and his attorney when he blamed the other
two appellants for the fictitious in-voices suggests that
he must have known for
some time of the irregularities and his silence could be said to manifest guilt
on his part."
It is quite apparent from this passage that
the Court a
quo
misdirected itself on the facts.
..../30
30
Koch only attended one meeting with Sive and that was the meeting of 17
February 1983. The earlier meeting in December 1982 with Sive
was only attended
by Gil-mour in his capacity as a shareholder in Ramsay's, and not by Koch or
Mrs. Ramsay. Sive's evidence that
"the fact that fictitious invoices were raised
on non-existing companies was not disputed" relates -to the meeting of 17
February
1983 and not to his earlier meeting with Gilmour. The inference which
the Court a
guo
seeks to draw against Koch in this passage is therefore
unwarranted.
The Court a
quo
then goes on to consider the evidence of Greyling and
comes to the conclusion that the evidence points strongly to Koch's guilt.
..../31
31
It says:
"More important is that Greyling says that he started trying to contact the
three appellants in about September 1982 to ascertain
why the parti-cular
debtors, Ski Construction, B & O and Electro-board, were not paying their
debts. The excuse given by all
three appellants was that the debtors were in the
field and not easily 'contactable'. These were false answers for all three
appellants
knew that two of the companies did not exist and that the third (B
& 0) had not contracted any in-debtedness. A false answer
of this nature, in
my opinion, imports the irresistible conclusion that the first appellant knew
that the invoices were fictitious."
After referring specifically to certain passages in
Greyling's evidence,
the learned Judge a
quo
goes on
to say:
"Greyling said that he spoke to the first appellant on more than one occasion
about Electro-board and he says the first appellant
had under-taken to get
payment effected. This answer against
..../ 32
32
the knowledge that the company did not exist again postulates knowledge of
the falsity. The evidence disclosed that the first appellant
was the person who
went out into the field to drum up business, as it were, that is, to gain the
custom of particular contractors.
He must have known, by virtue of his position
in that connection and by virtue of his position gene-rally in the company, of
the
names of all the customers with whom the company dealt. When the name
'Electroboard' was specifically mentioned to him by Mr. Greyling,
his reaction
that he would obtain payment serves to show, in my opinion, that he recognised
that invoices of Electroboard had reached
the creditor company. His reaction
would have been otherwise if he had never heard of Electroboard and there would
have been no undertaking
on his part, as I see the matter, to get payment
effected."
Greyling also describes himself as the
managing director of Redfin but
says that he only
joined the firm in January 1982. He presumably
succeeded Sive as managing director at some un-
../33
33
disclosed time. He says that he only started to
get involved with Ramsay's
round about September
1982 in an attempt to recover the money owing by
Electroboard, Ski Construction and B & O Construction.
He says that he got in touch with Ramsay's by tele-
phone on various occasions and then the following
passages appear in the evidence.
"At that particular occasion, who did you
speak to? I cannot recall who I spoke to
first, but on various occasions I spoke to all three.
So all three of the accused had spoken to
you? Yes definitely.
All right, and can you tell the Court what reason they forwarded for the
nonpayment of their
clients as it were? Well initially they said
that they were .... the debtor was going to pay, but Mr. Koch was going to
visit them in the field, the one case I think near Witbank
somewhere and they
were not contactable by telephone. So
../34
34
he had to go and visit them himself. Mrs. Ramsay gave me a similar story as
did Ivan Ramsay, till eventually that was unacceptable
to us.
Right when you decided to get to the bottom of the matter when there was
nonpayment and you were not satisfied with the reason forwarded,
what did you do? Well I had spoken to all
three of the accused on prior occasions, and had been given reasons which
were no longer satisfactory, so everytime Mr. Koch was out
in the field and Ivan
was running around trying to get the money, eventually I confronted Mrs. Ramsay
on the telephone from Cape
Town and said I would like to know what the truth was
with these accounts, when she admitted that they had been fictitiously factored
invoices."
As a result of this confession by Mrs. Ram-
say Greyling flew to
Johannesburg early in December
1982 where he met Mrs. Ramsay and her son Ivan
Ram-
say. They conceded that they had "created" the
../35
35
fictitious invoices but alleged that they had done
so under duress from
Koch. Thereafter Gilmour flew
down to Cape Town, met with Sive, and signed a
deed
of suretyship. "Later on" Greyling says he and
his attorney met Koch.
Koch says this meeting took
place about the end of January 1983 or early in
Feb-
ruary when he started his "fast food outlet" called
Peter's Kitchen.
Greyling agrees that he met Koch
when he was busy opening his new
"restaurant".
Greyling says that this was the first time that he
had met
Koch. In cross-examining Greyling Koch
denied that he had ever spoken to
Greyling on the
telephone, and suggested to Greyling that he must
have spoken to someone else who may have pretended
../36
36
to be Koch. Greyling was emphatic:
"Mr. Koch I spoke to you and I recognized your voice."
Later on in cross-examination when Koch returned to
this point and put it
pertinently to Greyling that he
had never spoken to him and that he must have
spoken
to somebody else, Greyling reiterated that he had
recognized Koch's voice. This answer seems to me
to be very strange in the light of the fact that
Greyling did not know Koch at all at the time and
only met him in January or February 1983. In these
circumstances Greyling could not possibly have recog-
nized Koch's voice when speaking to Ramsay's on the
telephone.
../37
37
That Koch did not speak to Redfin on the
telephone seems to be borne out
by Mrs. Ramsay who
in her evidence in chief, referring to the
telephone
calls from Redfin to Ramsay's seeking information
about the
non-payment of the invoices, says:
"and every time they asked for Mr. Koch, Mr. Koch said he was not there. They
would speak to Ivan .... "
or to the bookkeeper, Mr. Fouche.
In my view the State, on Greyling's evi-
dence, has failed to show that Greyling ever spoke
to Koch on the telephone prior to Mrs. Ramsay's
confession to Redfin early in December 1982, and the
Court a
quo
was wrong in seeking to draw the conclu-
sions it did on this assumption.
.../ 38
38
Finally the Court a
quo
, like the trial court, drew adverse inferences
against Koch in respect of the R14,000 B & O Construction transaction which,
as
I have indicated, took place before the commencement of the fraudulent scheme
referred to in the charge sheet, and which did not
form the subject of any
charge against Koch. In any event I do not think that any adverse inferences can
justifiably be drawn against
him on this aspect.
Although therefore the probabilities may favour an inference that Koch must
have known about the whole fraudulent scheme which benefit
Ramsay's to such a
considerable extent, they are not, in my view, sufficiently strong to amount to
proof beyond
../39
39
a reasonable doubt. The State has therefore failed to make out a case against
Kóch and the appeal against his conviction must
succeed.
As far as Mrs. Ramsay is concerned she con-cedes that she knew about the
fraudulent scheme and allowed it to continue. She says she
only discovered this
during April or May 1982, and the magstrate, believing her, only convicted her
in respect of in-voices issued
after the end of May 1982. Greyling, as I have
pointed out deposed to Mrs. Ramsay's attempts to deceive Redfin as to the
fraudulent
nature of the invoices, and her subsequent confession that she and
Ivan Ramsay had "created" the fictitious invoices. At the end
of Greyling's
evidence Mrs. Ramsay indicated
..../ 40
39
a reasonable doubt. The State has therefore failed to make out a case against
Koch and the appeal against his conviction must succeed.
As far as Mrs. Ramsay is concerned she con-cedes that she knew about the
fraudulent scheme and allowed it to continue. She says she
only discovered this
during May or June 1982, and the magistrate, believing her, only convicted her
in respect of in-voices issued
after the end of May 1982. Greyling, as I have
pointed out deposed to Mrs. Ramsay's attempts to deceive Redfin as to the
fraudulent
nature of the invoices, and her subsequent confession that she and
Ivan Ramsay had "created" the fictitious invoices. At the end
of Greyling's
evidence Mrs. Ramsay indicated
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40
her acceptance of his evidence insofar as it referred to
her, and merely
sought to ameliorate her son's part
in the scheme. In her evidence, however, she set out
to deny that she had
made out any of these invoices
and contended that she was merely aware of the
fact
that they were false. When pressed in cross-examina- .
tion she alleged that after her return from overseas
in August 1981 she still came in to Ramsay's offices
but did hardly anything at all. Later on she con-
ceded, very reluctantly, that she might well have
compiled some of the invoices. She also concedes
that she participated in submitting the false in-
voices to Redfin after she knew that they were false.
These denials of hers sound most unconvincing.
.... / 41
41
Ultimately her sole defence was that of duress. The magistrate rejected this
defence. So did the Court a
quo
, pointing out that after she had, on her
own evidence, become aware of the fraudulent scheme during May or June 1982, she
allowed
it to continue until December of that year. The defence was not
strenuously pressed before us, and I see no reason to differ from
the conclusion
to which the trial Court and the Court a
quo
came to on this aspect. The
conviction of Mrs. Ramsay must therefore stand.
Ivan Ramsay conceded in his evidence that he made out the vast majority if
not all the false time-sheets, and that from "the very
beginning" he used to
"sign somebody else's name on the bottom of
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42
of a time-sheet" in order to deceive Redfin as to its authenticity. All this
he says he did at the re-quest of Koch, although he realized
that what he was
doing was wrong. When it was pertinently put to him that he must have known that
he was "busy with some-thing fraudulent"
and that it was possible for him to
have desisted at any stage if he had wanted to, his only reply was:
"I did not willingly take part in it."
His grandmother, Mrs. Irene Koch,
who was called as a witness by Koch, told the Court how Ivan Ramsay had told her
of his intention
of making out fictitious invoices in order to "make a lot of
money quite fast". She sought to dissaude him, and gained
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43
the impression that she had succeeded. She says
he also asked her whether
she couldn't find him a
post box for his private mail. she was unable
to
do so. Then he asked her to persuade her daughter,
Mrs. Nadig,to let
him share her post box. This was
corroborated by Mrs. Nadig, who was called by the
Court after Ivan Ramsay
had closed his case. She
says that she was not very keen on sharing her post
box, but eventually agreed to do so as "a temporary
arrangement". About two weeks later she says a
letter came addressed to Electroboard. She did not
know any such firm and returned it marked "address
unknown". Some 10 days later she says Ivan Ramsay
phoned her and reprimanded her for having sent his
..../ 44
44
post back. Thereafter she received "about a dozen"
further letters
addressed to Electroboard, all of
which she handed to her mother, Mrs. Irene
Koch,to
give to Ivan Ramsay. The magistrate accepted this
evidence.
Greyling's evidence also reflected Ivan
Ramsay's active participation in the
deceit practiced
on Redfin. There was therefore strong evidence to
prove his fraudulent conduct, and in the last resort
his defence was essentially also one of duress.
As in the case of his mother this defence could not
succeed and was, in my view, correctly rejected by
the magistrate.
The magistrate convicted Ivan Ramsay on all
counts. In argument before us it was suggested
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45
somewhat tentatively that he should only have been
convicted on those
counts on which Mrs. Ramsay had
been convicted on the basis that he only
realized
that the scheme in which he was participating was
a fraudulent
one, after his mother had told him so.
However the deceit in respect of
Electroboard in which,
on the evidence, he played a prominent role right
from the beginning,commenced as early as 19 April
1982 - i.e. at a time before his mother admitted
knowing about the scheme.
Moreover he conceded
making out practically all the false time-sheets
and
when it was pertinently put to him that he must have
known "at the
time" that he was busy with "something
fraudulent" he did not deny it but simply replied
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46
that he did not willingly take part in it. The ma-gistrate was therefore
entitled to have convicted him on all the counts and I am
not prepared to say
that he was wrong in doing so.
At the hearing of this appeal we also had
before us an application for leave to lead further evidence either before the
trial court
or before us. The application was not persisted in, and, in any
event had no prospect of succeeding. I need not refer to it any further.
I turn now to consider the appeals of Mrs.
Ramsay and Ivan Ramsay against
the sentences imposed
on them by the magistrate. Both appellants are
first offenders and both expressed extreme remorse
.../47
47
in respect of their offences. Mrs. Ramsay was 49 years old at the time of the
trial i.e. in 1987. Ivan Ramsay says he was 22 years
old at the time of the
commission of the offences in 1982. His employ-ment at Ramsay's was his first
job after leaving school. His
father and mother were divorced and he seems to
have lived with his uncle, Koch. In such circum-stances he would have been
particularly
susceptible to suggestions from both his mother and from Koch. In
considering an appropriate sentence in respect of these two appellants
it must
be borne in mind, as I have indicated, that on the probabilities Koch was the
originator and driving force behind the whole
fraudulent scheme. At the very
least this
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48
premise cannot be ruled out as not being reasonably possible. On their
evidence Koch seems to have been a somewhat domineering person
and certainly
overbore Mrs. Ramsay in their joint discussions with Redfin. He regarded himself
as the managing director of Ram-say's
and as running the company. In these
circum-stances there seems to be much to ameliorate the blame attaching to Mrs.
Ramsay and Ivan,
and the sentence imposed by the magistrate seems to me to be
unduly severe. On the other hand the offence is a serious one involving
a
considerable amount of money, and any sentence must reflect the serious-ness of
their transgression. Taking all the rele-vant circumstances
into consideration I
am of the
..../ 49
49
view that a fine of R25,000 each, coupled with a suspended period of
imprisonment would be a fair and appropriate sentence.
In the result:
(1)
the appeal of the first
appellant (Koch) against his conviction and sentence
succeeds;
(2)
the sentences imposed on the
second and third appellants by the magistrate are set aside and for them is
substituted in each case
a sentence of a fine of R25,000 or 2 years'
imprisonment, and a further 2 years' imprison-ment which is suspended for 3
years on
con-dition that they do not within that period commit the offence of
theft or fraud for which a sentence of imprisonment without
the op-tion of a
fine is imposed.
J.P.G. EKSTEEN, J A
E'.M. GROSSKOPF, J A )
concur NIENABER, J A )