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Ramasamy (Hiscox) v S (CA&R 26/09) [2009] ZAECGHC 48 (6 August 2009)

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FORM A





FILING SHEET FOR EASTERN CAPE HIGH COURT GRAHAMSTOWN





PARTIES:  Pavanie Padmani Ramasamy (Hiscox)  and The State                                             

            Case Number:              CA&R 26/09  

            High Court:                   Eastern Cape Division

            DATE HEARD:           24/06/09


           

DATE DELIVERED:               06/08/09



JUDGE(S):                   Froneman;  Schoeman



LEGAL REPRESENTATIVES –


Appearances:

            for the Applicant(s):      Adv Wessels

            for the Respondent(s):   Adv Kroon


Instructing attorneys:

             for the Applicant(s):     Burmeisters, de Lange Soni Inc

            for the Respondent(s):   State Attorneys



CASE INFORMATION –

            Nature of proceedings.

            Topic:

            Key Words:

           







IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE, GRAHAMSTOWN Case No: CA&R 26/09


In the matter between


PAVANIE PADMANI RAMASAMY (HISCOX) Appellant

and

THE STATE Respondent

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JUDGMENT

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Froneman J


[1] The appellant, a woman in her late thirties, was charged in the Regional Court, Port Elizabeth, with 111 counts of theft and 34 counts of fraud (alternatively theft), involving a total amount of R735,502.00. After the close of the State’s case she was discharged on seven counts and, after testifying in her own defence, she was acquitted on a further 18 counts. She was found guilty of three counts of attempted theft, and of theft on the remaining counts. The total amount involved in relation to the counts she was convicted of was R216,434.29. She was sentenced to five years’ imprisonment, subject to the provisions of s.276(1)(i) of the Criminal Procedure Act 51 of 1977 (‘the CPA’).


[2] The appellant sought, and was granted, leave to appeal against all the convictions bar one, namely count 128 - relating to theft of R40,000.00. On petition she was also granted leave to appeal against sentence.


[3] The offences were allegedly committed whilst the appellant was employed by a close corporation (‘Gauge Tools’). She worked at Gauge Tools from 1990 to 2003, initially as a receptionist and later as a bookkeeper. From 1995 onwards the appellant was responsible for virtually all of Gauge Tools’ financial matters, including the operation of the computerised accounting system, the processing of accounts, salaries and wages, the compilation of pay slips, the recording of transactions in the general ledgers, the general management of loans to staff and other resources of Gauge Tools. During 1997 she became a member of Gauge Tools on the same terms as the son of Mr. and Mrs. Heimann who were the effective owners of Gauge Tools. They were the only people who had signing powers on Gauge Tools’ cheque account. It is quite apparent from this brief history of the appellant’s involvement in Gauge Tools that not only was she an efficient and hardworking employee, but that she also gained the trust of the Heimanns in running the financial side of things for Gauge Tools.


[4] That relationship of trust came to an end when the Heimanns found out that she had appropriated some R40,000.00 from Gauge Tools’ bank account without permission in order to pay for an overseas trip with her brother – this formed the subject matter of count 128, on which the appellant was found guilty of theft and against which there is no appeal. On her return from the overseas trip the appellant lost her employment. Further investigation by the Heimanns brought to light the numerous other offences allegedly committed over a period of some years.


[5] On appeal Mr. Wessels, counsel for the appellant, structured his argument by first making certain submissions on the general approach the magistrate should have followed in his assessment of the charges against the appellant (‘the broader argument’, I will call it), before making specific submissions in relation to specific categories of charges against the appellant. Mr. Kroon, counsel for the State, generally followed suit. It appears to me to be a sensible, practical and convenient way of approaching the matter and in this judgment I will follow the same sequence. Although not always in accordance with counsels’ categorisation I will refer to five groups of specific offences: (1) ‘the Peoples Bank counts’; (2) ‘the extra dependants’ counts’; (3) ‘the double salary counts’; (4) ‘the conceded withdrawal counts’; and (5) ‘the disputed withdrawal counts’.


The broader argument

[6] It is common cause that all the witnesses, including the appellant, testified about events that took place many years ago. For reasons unexplained during the trial some documents went missing before the trial commenced. The appellant was not to blame for this. The documents that were available were, in the main, the bank statements of Gauge Tools and the appellant, cheques that were issued and their counterfoils, the general ledger entries, and schedules relating mainly to the Peoples Bank counts. No professional forensic audit was done and the State case relied heavily on the evidence of Mrs Heimann for an analysis of the entries relevant to the remaining counts.


[7] Against this background Mr. Wessels argued that one had to guard against the potential danger inherent in drawing the conclusions about the appellant’s guilt which was not based on the objective legal principles and rules applicable to a criminal trial. Moral certainty about her guilt was not enough. In this regard he referred to the dictum of Cameron JA (as he then was) in S v Mavinini 2009(1) SACR 523 (SCA) at 531, para. [26]:

It is sometimes said that proof beyond a reasonable doubt requires the decision-maker to have ‘moral certainty’ of the guilt of the accused. Though the notion of ‘moral certainty’ has been criticised as importing potential confusion in jury trials, it may be helpful in providing a contrast with mathematical or logical or ‘complete’ certainty. It comes down to this: even if there is some measure of doubt, the decision-maker must be prepared not only to take moral responsibility on the evidence and inferences for convicting the accused, but to vouch that the integrity of the system that has produced the conviction – in our case, the rules of evidence interpreted within the precepts of the Bill of Rights – remains intact. Differently put, subjective moral satisfaction of guilt is not enough: it must be subjective satisfaction attained through proper application of the rules of the system.”


[8] The potential danger in the present case - which the regional magistrate succumbed to, ran the submission - was that, because the appellant was clearly guilty on certain counts and her explanations suspicious in regard to others, adverse credibility findings were too readily made and adverse inferences were too easily drawn against the appellant by the magistrate.


[9] I will in due course deal with the fleshing out of this argument in respect of the specific categories of offences, but at the outset I wish to state that in my judgment this general criticism of the magistrate’s judgment is unfounded. The judgment is a careful and detailed one which clearly exhibits that the magistrate was fully aware of the general background and context summarised in para. [6] above. The caution and care with which he approached the matter is evidenced by the manner in which he dealt with those counts on which the appellant was acquitted. The appellant was discharged on some counts at the close of the state case, on others at the end of the trial because of concessions made by the state, and lastly on some counts where the magistrate considered the evidence insufficient despite no such concessions by the state. This is, of course, only proper and in itself quite unexceptional, but I mention it here because it belies any suggestion of an undifferentiated approach to all the counts on his part. The magistrate gave substantive reasons for finding the appellant guilty on the remaining counts. Those reasons do not in my view disclose any conscious or undisclosed bias against the appellant because of the fact that she was found guilty on other counts. Their correctness is to be judged on their own terms, not on an unjustified assumption that the magistrate harboured some improper mental attitude adverse to the appellant.


[10] Similarly, I can find no fault with the magistrate’s mostly adverse findings of credibility in respect of the appellant. A reading of the record in my judgment bears out that the appellant was generally an unsatisfactory and evasive witness, even when due allowance is made for the lapse of time and the fact that complete documentation was not available at the trail. With those general remarks I then turn to the more specific submissions in respect of the five categories of offences that I referred to earlier.


The Peoples Bank counts (counts 1 to 64, 66 to 68 and 120)

[11] Several employees of Gauge Tools obtained loans from Peoples Bank. The bank had an arrangement with Gauge Tools that the latter would deduct the monthly instalments from the employees’ salaries and then issue a single cheque as a total payment of all the instalments to the bank. The appellant had the duty to ensure that this reconciliation was done and that the deductions were reflected on the payslips of individual employees. The bank informed Gauge Tools when a loan had been granted and when deductions would commence. The appellant then entered this information into the accounting system and thereafter the deductions were made automatically until she was informed by the bank of any changes that had to be made to the contributions individual employees had to make in respect of their loans. The appellant herself obtained a loan from the bank in 1997 (and two further loans later on). From May 1997 to October 2002 these deductions were not reflected on her own payslips which, to repeat, she herself was responsible for. The total amount she benefitted from in the form of an increased salary in the end came to R38,726.60.


[12] The appellants defence was that she had no intention to steal the money and that she simply made the initial mistake of not entering the first notification of the loan on the system. Thereafter the ‘non-deductions’ simply continued automatically without any awareness of this on her part.


[13] The magistrate rejected this version as not reasonably true and found that she intentionally manipulated the system in her own favour right from the start. Mr. Wessels was hard-pressed to sustain an argument that the appellant’s version of being unaware of the fact that she was benefitting from her own mistake for a period of more than five years could reasonably possibly be true. He submitted, however, that it was a reasonable inference that she did initially make a mistake, and that the magistrate erred in finding otherwise. From this premise he then argued that it could not be established beyond reasonable doubt when in fact she became aware of her mistake. Because the appellant had not been charged with a single count for the non-deductions, but separately for each individual non-deduction, it could thus not be established beyond reasonable doubt on which individual counts she was guilty.


[14] It is an ingenious argument, but one which must in my view fail for the reason that it proceeds from piecemeal reasoning. It seeks to highlight one particular piece of the picture, namely the notionally reasonable possibility of an initial mistake, and then seeks to use that initial possibility as the cornerstone for further deductive reasoning, ignoring the other evidence and probabilities as a whole. The magistrate’s reasoning is based on an assessment of the evidence as a whole, not pieces thereof, and that is the correct approach. In my judgment he did not misdirect himself in any way in his approach to the evidence and the conclusion he came to is supported overwhelmingly by the probabilities.


[15] The appeal against the Peoples Bank convictions must thus fail. It is, however, common cause that certain technical corrections to the charges should be made. An amount of R 871.02 should be added to count 68, and the correct verdict on count 37 should be attempted theft and not theft.


The extra dependants counts (counts 69 to 102)

[16] One of the benefits accorded to the appellant as a member of Gauge Tools was that the medical aid contributions for herself would be paid by Gauge Tools. It is common cause that the appellant added her parents as dependants on her existing medical aid fund in October 1999 and that she then arranged for Gauge Tools to pay her increased monthly membership fees to the medical aid fund. It is also not in dispute that appellant added her parents as dependants after a conversation with Mrs. Heimann. According to Mrs. Heimann she had told the appellant that Gauge Tools had no problem with her parents being added to the scheme, but that she explicitly told the appellant that Gauge Tools would not pay for the added contribution in respect of the parents. Appellant agreed that Mrs. Heimann had told her that she could put her parents on the medical aid, but denied that she had been told that Gauge Tools would not pay for her parents.


[17] The regional magistrate accepted Mrs. Heimann’s version, on the basis that it was improbable that Gauge Tools would foot the bill for extra dependants where nobody else shared the same kind of benefit and where it would amount to extra expenses for the close corporation. He also found that even on appellant’s own version she had intention to steal, in the form of dolus eventualis.


[18] Mr. Wessels submitted that the magistrate’s assessment of the evidence was here tainted by a suspicion or assumption of moral guilt, which was not backed up by what Cameron JA described as the ‘integrity of the system’: the rules of the criminal justice process. In this regard he pointed out that the Mrs. Heimann had got it completely wrong when appellant became a member of Gauge Tools, which resulted in the basis for the charges against the appellant in respect of other medical aid and provident fund contributions being fatally undermined, and that the magistrate appeared not to have given that fact any or sufficient consideration in the assessment of her credibility. I am not convinced that the magistrate can be held to have misdirected himself on this basis. His finding in favour of Mrs Heimann’s version was not based on demeanour or a bias in favour of the Heimanns, but on the probabilities viewed as a whole. It is to these probabilities that one must look to determine whether his finding can be accepted or not.


[18] The appellant could not dispute that she never informed the Heimanns that she added her parents to the medical aid and that Gauge Tools would henceforth pay for the increased membership. But even though she signed the application forms herself, she never hid the fact in any documentation that her parents had been added as dependants. The Heimanns had access to the monthly returns from the medical aid fund showing the number of dependants. Mr. Heimann was the person who fetched and opened the post and he could easily have ascertained that the appellant had added her parents as dependants, to the close corporation’s cost. In view of this it does strike me as rather improbable that the appellant would go ahead and brazenly and openly add her parents as dependants in the face of an express prohibition from Mrs. Heimann not to do so. At least equally probable, and consistent with the fact that the appellant did not try to conceal the payments in other ways, is that the appellant was told that she could add her parents to the medical aid without any further discussion on whether Gauge Tools would be liable for the increased payments. That narrows the further enquiry down to whether the appellant is guilty on her own version.


[19] The regional magistrate found that she was, on her own version, guilty on the basis “that she displayed intention in the form of dolus eventualis by recklessly proceeding without enquiring from the Heimanns whether this would be in order, which clearly would not have been in order, if the evidence of Mrs Heimann is considered” (my underlining). The underlined portion illustrates that, with respect, the magistrate used a circular argument here: the appellant’s own version is said to demonstrate intention in the form of dolus eventualis when other evidence, not only her own version, is considered. To determine whether she had the necessary intention on her own version, only her own version (not a contradictory version of another witness) must be considered. On that version she was given permission to add her parents to her medical aid and there was no express prohibition not to arrange for payment of the increased contributions by Gauge Tools. On her own version there is thus a reasonable possibility that she had no intention to steal. There is no indication on record that she was thereafter made aware by way of admonition or documentation that she had acted unlawfully.


[20] It follows that the appeal against the convictions on counts 69 to 102 must succeed.


The double salary counts (counts 119, 121 and 122)

[21] These three counts relate to instances where the appellant was paid her salary twice. The appellant accepted that she was not entitled to the double payments but stated that she only became aware of these facts when consulting in preparation for the trial and that she never had the intention to steal when the payments were made to her. I do not think that I am doing Mr. Wessels any injustice by saying that he did not pursue this point with any great vigour during argument. The fact is that the appellant arranged the payments, accepted them and used the money. There can be no doubt that her employer would have objected to that if he knew what was happening (R v Milne and Erleigh (7) 1951 (1) SA 791 (A) at 865 H).


[22] The appeal against the convictions on counts 119, 121 and 122 must fail.


The conceded withdrawal counts (counts 125, 126 and 127)

[23] In respect of these three counts the appellant conceded that she took money without authorisation and banked it into her own account, but that she intended to repay the monies and did so, although she was unable to say how much was repaid without access to the missing loan register. In this case counsel was more forthright in accepting that the appeal against the convictions could not succeed, because of the authority of R v Milne and Erleigh (7), above.


The disputed withdrawal counts (counts 104, 105, 107, 108, 109, 111,113, 123, 124, 129 and 134

[24] On all these counts the regional magistrate carefully considered the circumstances of each instance and rejected the appellant’s exculpatory explanation for payments made to her without any apparent authorisation from Gauge Tools. It was submitted that he erred in doing so in at least three respects, namely (1) that he did not give sufficient recognition that even Mrs. Heimann had made numerous errors in her analysis of what had happened and that it was therefore unreasonable to expect of appellant to remember clearly what had happened in respect of each instance; (2) that he erred in having regard to a similar modus operandi by the appellant in other instances in rejecting the appellant’s version on some counts; and (3) that he erred in using information based on appellant’s bank accounts in rejecting her version on some counts.


[25] Earlier in this judgment (para. [10] above) I indicated that a reading of the record supports the generally adverse credibility findings made by the magistrate in respect of the appellant’s evidence. Her evidence in relation to the counts under discussion is no different: I consider the magistrate’s findings of vagueness, improbabilities and internal contradictions in relation to each of the different charges fully justified. The first, general, criticism is thus in my view not sufficient to justify interference with the convictions on these counts. The second criticism, namely that the magistrate impermissibly used similar fact evidence in convicting the appellant, is overstated. The magistrate only mentioned this in relation to count 123. I will accept, for the purposes of this judgment and without deciding the tricky question of admissibility and probative value of the similar fact evidence, that the appellant’s guilt on this count must be decided without having regard to what she was found to have done in relation to other counts. The third criticism, of using information based on appellant’s bank accounts without the appellant being given an opportunity in cross-examination or in questioning by the court to comment or explain the state of the accounts, is in my judgment a valid criticism (see President of the RSA v SARFU 2000(1) SA 1 (CC) at 36J-38B, paras. [61] to [65]). But the reach of this misdirection on the magistrate’s findings is not great - reference to the appellant’s bank statements were mostly made in reinforcing the conclusions he came to on other grounds, and not as the material or central reason for those conclusions. With these qualifications of the magistrate’s findings in mind, I now turn to the individual counts.


[26] In relation to each of counts 105, 106, 107, 108, 109, 111, 113, 123, 124, 129 and 134 the appellant arranged a payment to herself from Gauge Tools in one way or another which was not authorised by the general system in operation. In each of these cases the payments to the appellant were not reflected as payments to her in the general ledger, but as payments to someone else or for some other purpose. The appellant’s explanation for this damning evidence of unauthorised payments, accompanied by false ledger entries, varied from statements that she could not remember to speculation or assertions that they were for wages or gifts in respect of others. The magistrate considered each of these explanations and rejected them on the basis of contrary evidence presented by the prosecution, internal contradictions in the appellant’s own evidence and improbabilities in her version. In my view these reasons for his findings are cogent and they stand as sufficient on their own, even if the one instance of use of similar facts and the reference to appellant’s bank statements in some other instances are ignored or thought away, except for one count, namely count 124. On this count the appellant’s explanation was that she used the money to pay the wages of one Judd. Judd was available as a witness for the state, was consulted with by the prosecutor, but was nevertheless not called as a witness. Much suspicion remains around this count but the failure to call Judd as a witness left open a door of reasonable doubt.


[27] Count 104 is all that remains. In relation to this count the appellant paid herself R1000.00 extra on 31 May 1997, explaining that it was a refund of a contribution she earlier made towards wages for other employees. In this instance there does not appear to have been a false ledger entry and it is also the one count where the magistrate’s reference to her bank accounts, as well as to those of Gauge Tools, played a material role in the magistrate’s reasons for rejecting the appellant’s version. Suspicion remains, but there is, I think, some reasonable doubt here too.


[28] Save for counts 104 and 124, the appeal against the convictions on the other counts in this category thus fails too.


Sentence

[29] The appellant has won a pyrrhic victory. She has succeeded in her appeal against the convictions on counts 69 to 102, 104 and 124, but she remains rightly convicted on a number of other counts involving theft or attempted theft of about R158,000.00.

The successful appeal against some of the convictions leaves the door open to consider sentence afresh, but in my judgment the theft (and the few counts of attempted theft) of such a (remaining) large amount, over such a long period and in the particular employment relationship of trust the appellant found herself in, does not exclude consideration of imposing a similar sentence on the appellant as the one imposed by the magistrate.


[30] In his judgment the regional magistrate indicated that the offences committed by the appellant were serious and prevalent in the court’s area of jurisdiction. He also referred to the position of trust the appellant held in not only her employment relationship with the Heimanns, but also on a personal level. The offences were committed over a long period of time and were not the result of impulsive behaviour. All these factors remain unaffected to any material extent by the appellant’s limited success on appeal. Although the appellant was deemed a suitable candidate for correctional supervision I consider that correctional supervision under s. 276 (1)(h) of the CPA is not appropriate under the circumstances. Despite the fact that substantial repayments appear to have been made I nevertheless consider the magnitude of the offences, viewed together, to be too serious for consideration of that option. A custodial sentence of five years is called for, but her suitability for correctional supervision should be catered for by making the imprisonment subject to the possibility of correctional supervision under s. 276(1)(i).


Order

[31] The following order is made:

1. The appeal against the convictions on counts 69 to 102, count 104 and count 124 succeeds and the convictions in respect of these counts are set aside.

2. The appeal against the convictions on the other counts fails and the convictions in respect of these counts are confirmed. By agreement the conviction on count 68 is to be corrected by the addition of an amount of R 871.02 and the correct verdict on count 37 should be changed to one of attempted theft.

3. The appellant’s sentence, considered afresh on appeal, remains that of five (5) years imprisonment, subject to the provisions of s. 276 (1) (i) of the Criminal Procedure Act 51 of 1977. The sentence is to run from the date of imposition of sentence in the regional court, namely 1 October 2008.



J.C.Froneman

Judge of the High Court.


I agree.



I. Schoeman

Judge of the High Court