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[1995] ZASCA 103
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S v Philip (96/94) [1995] ZASCA 103 (19 September 1995)
CO CASE NUMBER: 96/94
IN THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
In the matter between:
EDWARD DURANT PHILIP Appellant
and
THE STATE Respondent
CORAM:
E M GROSSKOPF, F H GROSSKOPF et
VAN DEN HEEVER JJA
HEARD ON:
1 SEPTEMBER 1995
DELIVERED ON:
19 SEPTEMBER 1995
JUDGMENT VAN DEN HEEVER JA
2
Appellant was charged in the Regional Court with 20 counts some of which were
withdrawn before he pleaded guilty to the remainder:
three counts of theft and
twelve counts of fraud. The trial court was satisfied of his guilt by his
statement tendered in terms of
section 112(2)
of the
Criminal Procedure Act No
51 of 1977
, and convicted him. He was a first offender. Evidence was given by
i.a. a psychologist and a criminologist urging that appellant
be sentenced to
community service or correctional supervision rather than imprisonment, on the
grounds of appellant's personal circumstances
and psychological make-up. The
regional magistrate set out the facts admitted and evidence tendered, and
concluded that direct imprisonment
was the only appropriate sentence in the
circumstances of the case. He grouped the theft counts together and imposed a
sentence of
3 years for those. He imposed sentences of 10, 10 and 4 years
imprisonment respectively (to be served concurrently) on fraud counts
8, 9-18
taken as one, and 20; thus, a total of 13 years.
On appeal to the Witwatersrand Local Division of the Supreme
3
Court, appellant's counsel urged that the sentences should be set aside
and replaced by one of correctional supervision; alternatively, that
the
total of those imposed was startlingly severe. The court a quo held
as
follows:
"In my view whatever else can be said about sentence, correctional
supervision for a period of three years is wholly inadequate or
inappropriate in
the circumstances of this case ... In my view it cannot be said that the trial
court erred or misdirected itself
in that regard ... I am further of the view
that the sentence imposed is not so startlingly severe or inappropriate that I
would
be prepared to interfere with it."
It accordingly dismissed the appeal but, surprisingly, granted leave to
appeal on the grounds that
"there is a reasonable prospect that another court may take a different view
of the matter especially concerning the operation of
the section of the
Criminal
Procedure Act dealing
with correctional supervision, the section being a
relatively new one".
The main thrust of the argument before us, was that appellant (on bail
pending the outcome of these proceedings) is presently, instead
of
4
being a burden on the taxpayer, supporting his family, being gainfully
employed where his services are highly regarded. Overcrowded
prisons
should house only those whom it would be dangerous to society not
to
remove from its midst. Appellant, by reason of his personality
or
temperament, would be destroyed, not rehabilitated, within our
prison
system.
The provisions of
section 276(l)(h)
and to a lesser extent (i) of
the
Criminal Procedure Act 51 of 1977
, have ushered in a new
phase in the
South African criminal justice system (S v R,
1993 (1) SA 476
(A), 487
D-E). The statement in that judgment at p 488 G that
"Die Wetgewer het ... duidelik onderskei tussen twee soorte misdadigers,
naamlik die wat deur gevangesetting van die gemeenskap afgesonder
moet word en
did wat strafwaardig is maar nie uit die gemeenskap verwyder hoef te word
nie"
should not be taken too literally. It is qualified by what follows.
Courts
are rightly encouraged to make use of the sentencing options now afforded
them, to avoid where feasible the imposition of short term
5
imprisonment (p 488 I-J). Sub-sections 276 (1)(h) and (i) however have their
limitations, arising i.a. from the restrictions imposed
by sub-sections 276 A
(l)(b) and (2)(a). There was, and could be, no suggestion that correctional
supervision, up to the full term
permitted - three years - is the option that
should always be taken, where a term in prison as our prisons presently are will
probably
do the offender himself more harm than good. No judicial officer worthy
of a seat on the bench but must regret ordering a person's
incarceration in a
"correctional institution" knowing not only that it will be nothing of the kind
for the particular person to be
sentenced, but also that his incarceration is
probably not necessary to protect society against his future activities.
However, the
nature and consequences of the offences in respect of which
sentence is to be determined and the interests of society may demand
that such
an order nevertheless be made. One of the aims of both bench and correctional
services is to give content to the adage,
wearing thin of late, that crime does
not pay. Others tempted to follow along paths similar
6
to those trodden by appellant, as well as appellant himself, should receive
an unequivocal message that that adage is not yet obsolete.
The obligation to
provide a milieu where prisoners guilty of serious crimes, yet not thugs by
nature, will be uncontaminated and
unharmed by thuggery, burdens the Department
of Correctional Services. It cannot be relieved of that obligation by courts
undermining
respect for law and order through imposing quite inadequate
sentences.
Appellant was at the relevant time a man in his early forties, married to a
qualified community nurse who had no need to and did not
work outside their
home. Two daughters were born of their marriage, aged 10 and 12 at the time of
the trial. Appellant qualified
as a chartered accountant. Two years after
starting his career as such appellant in 1980 joined his brother-in-law Hawes
who effectively
owned a company dealing in tyres. When appellant was invited to
join Hawes (later also joined by O'Ehley) in the business, it was
because
control was inadequate, financial records were not up to date, and the bank
was
7
unhappy with the way the business conducted its overdraft facilities.
Hawes was portrayed at the trial as a forceful man, intent upon expanding the
scope and quality of his business and relying on appellant
to manage the
financial side of things to enable this to be done. In the process of satisfying
both Hawes and the bank - and its
successors; the overdraft was moved on a
number of times as it increased - appellant indulged in creative bookkeeping.
Funds were
also raised by a JSE listing of a holding company of two operational
companies, and the issue of shares of which a not inconsiderable
number were
allocated to trusts created for the families of the three directors.
We do not know when appellant's tinkering with company accounts started; but
the conduct constituting the offences to which he pleaded
guilty continued for
almost two years. It is unnecessary for present purposes to be precise about the
relationship of the companies
controlled by the three men to one another. I
refer to them globularly and imprecisely as Hawes's companies. Of importance is
merely
that in the
8
period April 1988 to March 1989, the merger of Hawes's now listed holding
company with two others, one being Malbak Limited, was mooted.
The merger was
effected as the result of a series of misrepresentations made by appellant
portraying their over-borrowed business
as financially sound. This conduct
resulted in the first of the fraud charges against appellant, count 8. The
eventual financial
prejudice suffered by shareholders of the companies that had
merged with Hawes's holding company, upon liquidation of the latter,
amounted to
approximately R18 000 000.
The three theft charges arose out of large rebates certain suppliers were
prepared to give the Hawes group; which were to be concealed
from the staff and
the public at large. To this purpose suppliers were asked to send rebate cheques
to a new, different, post box,
the idea being that the money in question would
somehow be filtered into and so benefit the Hawes companies. When O'Ehley
complained
of being short of cash, appellant and he made out a cheque for R250
000 in favour of
9
O'Ehley, which was followed later by a further R30 000. According to
appellant Hawes also refurbished his northern Transvaal farm
out of company
funds. Feeling that he himself was not being recompensed to the same extent as
his co-directors, appellant misappropriated
three rebate cheques, on 30 January,
2 May and 22 August 1989 respectively. The total amount involved was R141
176,27.
Fraud counts 9-18 arose from misrepresentations made to various
financial institutions, also over a lengthy period, which induced
them to give
credit to Hawes's companies. The total of the monies advanced by these
institutions on the strength of appellant's dishonest
portrayal of the financial
position of the Hawes companies, amounted to R29 500 000, of which approximately
R14 000 000 proved irrecoverable.
During his association with the Hawes companies, appellant and his family
lived well. He drove a BMW, his wife a Toyota, and the girls
attended a private
school. The entire family went overseas to visit relatives of appellant's wife.
On business trips management including
10
appellant always travelled in the first class. Though appellant originally
denied receiving any benefit as a result of the shares
transferred to the trust
created for his family, it was ultimately agreed that he had indeed benefitted
in a total amount of R43
369 by way of dividends from these shares. Obviously he
also benefitted indirectly in that his creative bookkeeping was propping
up the
structures which provided his salary and perks with the assistance of borrowed
money that would otherwise not have been available.
Appellant found himself unable to substantiate to the auditors profits of
about R6 000 000 allegedly made by the companies which employed
him. He
therefore presented the auditors with four false invoices, which purported to
record purchases of stock by the said companies,
and three forged letters
purporting to come from various banks reflecting payment of the invoiced amounts
by the banks to the suppliers.
The auditors were misled by these cleverly
created documents and accepted them as correct for the purposes of the audit
they were
11
conducting. These facts constituted the material on which the last fraud
count, number 20, was based.
Appellant left the employ of the companies,
sought refuge in alcohol, was arrested and also sequestrated. The trial being
postponed
for a considerable time, he was treated in a private clinic and was no
longer dependent on alcohol at the time of the trial. He found
employment with
another firm of tyre dealers which knows of his lapses but is eager to retain
his services. It pays him a handsome
salary which enables him to stay on in the
family home which is his wife's property, and is prepared to advance him an
interest-free
loan of R30 000 to make some restitution for losses suffered as a
result of his conduct. There is no suggestion that the trustee
in his insolvent
estate has had any say in this suggestion.
Appellant's counsel concedes that aggravating factors exist: 1. The offences
involved a breach of trust
vis-a-vis
the companies which employed
appellant, the complainants, and the companies' auditors.
12
2. The amounts lost by the various complainants are very large and
the
appellant is in no position to recompense them.
3.
The various offences were
committed over a lengthy period, commencing in April 1988 and ending in December
1989.
4.
The offences were committed after
premeditation and careful planning.
5.
The offences of fraud and
theft are prevalent. 1 add to these -
6.
that
appellant corrupted others in the process of his own dishonest dealings. A
certain Luden was virtually totally dependent on Hawes's
companies for his
business, and was persuaded to assist appellant in creating false invoices;
and
7.
that the record evinces no sign of
genuine remorse on appellant's part, as opposed to regret at having been brought
to book. The late
offer of R30 000 towards compensation, is a hollow gesture;
appellant gave various versions at various times of what motivated him
in
falling into
13
error as he did, and admitted lying to the psychologist who was called in to
report to the court in his favour. The facts in her report
were in turn accepted
by the criminologist. All three the expert witnesses, psychiatrist,
criminologist and officer in the Department
of Correctional Services stationed
at Johannesburg prison dealing with correctional supervision sentences, were
quite unaware when
they drew up their respective reports, of the extent of
appellant's dishonesty and the damage caused thereby within the community.
This court in S v BLANK
1996 (1) SACR 62
, reiterated that an appellate court
is not at liberty to substitute its own views regarding sentence for those of
the trial court,
unless the discretion of the latter has not been properly
exercised. There is nothing in the record to suggest that the regional
magistrate did not give full weight to all relevant factors in determining what
he regarded as a proper sentence for the extremely
serious offences perpetrated
by appellant. The total of the sentences imposed constitute a severe sentence.
So it should. Although
little
14
purpose is served by comparing the sentence imposed in one case, with the
sentence under review, since the personalities and circumstances
concerned are
never identical, comparison with similar cases reveals at least that this
sentence is not out of line. For example,
a bank official who participated in a
R47 000 000 scam from which he personally benefitted only to the tune of about
R30 000, the
ultimate loss to the bank however being some R33 500 000, was
sentenced to a total of 14 years imprisonment. (S v GUNTENHöNER
1990 (1)
SACR 642
(WLD).) That appellant did not enrich himself to the same extent as he
harmed others is not necessarily a mitigating factor, as was
suggested on
appellant's behalf. Some may even regard it as an aggravating factor: that one
could cause so much damage to so many
others for so little personal gain -
somewhat like the murderer who robs a man of his life to misappropriate the
bottle of wine in
his hand.
The court a quo was correct in holding itself in law powerless to interfere
with the sentence imposed by the trial court by reason
of its
15
having been properly and judicially determined. So accordingly are we. The
appeal is dismissed.
L VAN DEN HEEVER JA CONCUR:
E M GROSSKOPF JA) F H GROSSKOPF JA)