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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

C.A. & R.:76/2014

DATE: 08 MAY 2015

In the matter between:

THE STATE...............................................................................................................................Appellant

And

SONJA KOERTZEN.............................................................................................................Respondent

JUDGMENT

Date Heard: 18 March 2015

Date Delivered: 8 May 2015

EKSTEEN J:

[1] The respondent was arraigned in the Commercial Crimes Court in Port Elizabeth on a charge of fraud in the amount of R538 364,89, being money which she had misappropriated from Kempston Investment (Pty) Ltd (herein referred to as the “Kempston Group”). She pleaded guilty and a statement in terms of the provisions of section 112(2) of the Criminal Procedure Act, 51 of 1977 (herein referred to as “the CPA”) was handed in. The respondent was convicted accordingly.

[2] Evidence in mitigation was received in the form of a pre-sentence report prepared by Mr Heilbron, a probation officer in the employ of the Eastern Cape Department of Social Development and a correctional services report prepared by Ms Kate. Evidence in aggravation was also received from the regional director of the Kempston Group. Having heard argument from both sides the presiding magistrate ordered that sentence be deferred for a period of five (5) years in terms of section 297(1)(a)(i)(aa) of the CPA on condition:

(1) That the accused repay the complainant, the Kempston Group, the amount of R538 364,89 in amounts of not less than R7 500 per month until the full amount has been paid to the complainant; and

(2) that the accused undergo three years correctional supervision in terms of section 297(1)(a)(i)(cc)(A) of Act 51 of 1977.

[3] The State sought leave to appeal in terms of the provisions of section 310A(3) of the CPA and was duly granted leave by this Court. The appeal was argued before us on 18 March 2015. Subsequently it was brought to our attention that the notice of appeal was not served on the magistrate. The notice of appeal was accordingly provided to the magistrate on 25 March 2015 to afford him the opportunity to respond and judgment was delayed. We were advised on 24 April 2015 that the magistrate did not wish to comment on the application for leave to appeal.

[4] The respondent was charged with fraud “read with Section 94 of Criminal Procedure Act 51 of 1977, and read with Section 51 of the Criminal Law Amendment Act 105 of 1997”. The provisions of section 51of the Criminal Law Amendment Act provides for a discretionary minimum sentence of 15 years imprisonment in respect of fraud in excess of R500 000, unless substantial and compelling circumstances are found to exist which justify the imposition of a lesser sentence. A presiding officer is accordingly obliged to impose a sentence of 15 years imprisonment upon a conviction on such an offence unless he is able to find, on the evidence before him that there are substantial and compelling circumstances which justify a lesser sentence. Moreover, section 297 of the CPA, in terms of which the magistrate purported to act, provides that where a court convicts a person of any offence, “other than an offence in respect of which any law prescribes a minimum punishment”, the court may, in its discretion, postpone the passing of sentence on certain conditions.

[5] In considering the matter of sentence the magistrate did not have due regard to the provisions of section 51 of the Criminal Law Amendment Act nor did he consider the wording of section 297 of the CPA. The parties are accordingly agreed in argument before us that the order which the magistrate made was incompetent and falls to be set aside.

[6] Section 297(2) of the CPA provides that where a court has “under paragraph (a)(i) of subsection (1) postponed the passing of sentence and the court … is at the expiration of the relevant period satisfied that the person concerned has observed the conditions imposed under that paragraph, the court shall discharge him without passing sentence, and such discharge shall have the effect of an acquittal, except that the conviction shall be recorded as a previous conviction”. The order which the magistrate made therefore, to my mind, effectively constitutes “sentence” in itself. If the terms thereof are complied with no further punishment will be imposed. As earlier recorded, the parties are in agreement that the sentence imposed by the magistrate should be set aside.

[7] Mr Price, on behalf of the respondent, has submitted that it would be appropriate to refer the matter back to the magistrate in order for the magistrate to comply with the provisions of section 51 of the Criminal Law Amendment Act and to investigate whether or not substantial and compelling circumstances exist for the imposition of a lesser sentence than that prescribed. He submits that the regional magistrate saw the respondent in front of him, heard the evidence first hand and is therefore in a better position than this court to determine the presence or otherwise of substantial and compelling circumstances. I do not agree. It is true that the magistrate had the benefit of being steeped in the trial which places him at a distinct advantage in assessing the credibility of witnesses and making factual findings. In the present matter the respondent pleaded guilty and the prosecution accepted the facts as set out in the written plea explanation. Pre-sentence reports to which I have referred earlier were obtained in writing and they were accepted in evidence. The facts set out therein are therefore not in dispute. The content of the evidence of the regional director of the Kempston Group is not seriously challenged. The facts are therefore not in dispute and no issues of credibility arise. I consider that this court is in as a good position as the trial court to assess whether substantial and compelling circumstances have been established on the undisputed facts and the findings made by the magistrate.

[8] In her explanation of plea the respondent states that she was at all material times employed as a payroll administrator at the Kempston Group in Port Elizabeth. Part of her duties involved the preparation of time sheets of employees, detailing their hours of work performed and calculating the amounts that had to be paid as salaries to the said employees on a weekly and monthly basis. She submitted the time sheets and the employees bank details to the head office of the Kempston Group in East London. During the period July 2009 to May 2011 she had payments effected in the total amount of R538 364,84 from the Kempston Group’s bank account to her own bank account. This she achieved in the following manner. She gave out in time sheets submitted to the head office of the Kempston Group that employees listed in the schedule to the charge sheet had performed the hours of work reflected therein and were accordingly owed remuneration. She listed her own banking details as the payment details of the said employees with the result that payment was made to her personal bank account.

[9] The respondent admitted that she was guilty of fraud in that she had unlawfully, falsely and with the intention to defraud given out and pretended to the Kempston Group that the employees mentioned in the schedule to the charge sheet had performed work as set out by herself on timesheets submitted and that they were entitled to be remunerated in the amounts set out in the schedule to the charge sheet. She admits further that when she did so she knew perfectly well that the employees mentioned had not performed such hours of work and were not owed the salaries in the amounts set out and that the bank account mentioned did not belong to the employees, but to herself. It is not in dispute that she was not entitled to such payments.

[10] In the report by Mr Heilbron he sets out the respondent’s childhood circumstances, the strained marriage relationship which existed between her parents and the verbal, psychological and physical abuse which her mother suffered at the hands of her father. The family was nevertheless a close knit family which sought to hide the difficulties between her parents from the public at large. The respondent’s parents provided the family with all their reasonable socio-economic needs. The magistrate considered this evidence and made a positive finding, correctly in my view, that the reason for the commission of the offence was not to be found in the upbringing of the respondent.

[11] The respondent entered into a co-habitant relationship with her current husband in 2008 and they were married in 2011. The marriage is an extremely happy one and Mr Heilbron sets out their contemporaneous financial position. Both were employed and earned a reasonable income and they lacked nothing. Both the respondent and her husband were reported to be actively involved in church activities and there is substantial testimony of valuable contributions which the respondent makes within the church community and the society in which she lives.

[12] Mr Heilbron sets out a relationship of trust which exists between her husband and herself, however, notwithstanding this she did not confide in him at the time that she was busy defrauding her employer, on the contrary, she misled him as to the source of her funds contending that she had inherited a substantial sum of money from her father, who died in 2007.

[13] The respondent was unable to provide any comprehensible reason for her fraud when interviewed by Mr Heilbron and conceded that it may have been motivated solely by greed. Heilbron records, however, that she admitted that she often felt that she was underpaid for the work she was doing and that she mentioned that this might have triggered the idea to defraud the company. She has nothing to show for the money which she has appropriated and has spent it all. She and her husband expressed the intention to repay the Kempston Group, however, only after they have repaid all other creditors.

[14] Finally, Mr Heilbron concluded that the respondent’s traumatic background does not warrant her behaviour and expressed the view that the respondent would never have come out with the truth had it not been for the fact that her colleague, who had taken over her position in the company, was investigated as a result of the irregularities which the respondent had performed.

[15] Ms Kate provides very little new information. She does, however, find that the respondent would be a suitable candidate for correctional supervision in the event that the court consider such a sentence to be appropriate.

[16] The evidence of Mr Murdock, the regional director of the Kempston Group, reveals that the Port Elizabeth branch of the Kempston Group in fact operated at a loss during the time that the fraud was committed. In 2009 it incurred a loss of R80 000. In 2010 it incurred a loss of R724 000. In 2011, however, it showed a profit of R42 000.

[17] It is on a consideration of these facts that we are called upon to consider whether there are substantial and compelling circumstances to deviate from the prescribed sentence set out in the Criminal Law Amendment Act.

[18] In assessing whether substantial and compelling circumstances exist in a particular case all factors traditionally taken into account in sentencing (whether or not they diminish moral guilty) continue to play a role; none is excluded at the outset from consideration in the sentencing process. (See S v Malgas 2001 (2) SA 1222 (SCA) at 1236A-B.) The nature and extent of the offence and the circumstances under which it was committed emerge from the facts which I have set out earlier. The personal circumstances of the respondent are not contentious. She was 27 years of age at the time of the offence and is a first offender. She grew up in a structured household, albeit unstable at times and her father committed suicide in 2007. These traumatic events, however, have little to do with the commission of the offence. She is married and has no children. She is gainfully employed as is her husband and, by all accounts, her current employer is perfectly satisfied with the performance of her obligations in the workplace. She pleaded guilty to the offence. For purposes hereof I am prepared to accept that this does reveal a measure of remorse. As emerges from the report of Mr Heilbron, however, the offence was committed primarily out of greed.

[19] On a consideration of all the evidence placed before the Court I consider that the magistrate was probably correct in his preliminary comment that he could find little wrong with the address on behalf of the prosecution that the prescribed sentence ought to have been imposed at the time of the trial. A number of events have, however, transpired since then. By virtue of the order which the magistrate has made the parties were in agreement at the time of argument of the appeal that the respondent had already repaid approximately R97 000 pursuant to the order made by the magistrate. She had also subjected herself to correctional supervision in terms of the order and she had served more than a year of her correctional supervision. Correctional supervision, to my mind, constitutes an effective form of punishment. The respondent has accordingly endured significant punishment prior to the appeal having been argued.

[20] In the Malgas case, supra, Marais JA held at p. 1236C-D that:

“If the sentencing court on consideration of the circumstances of the particular case is satisfied that they render the prescribed sentence unjust in that it would be disproportionate to the crime, the criminal and the needs of society, so that an injustice would be done by imposing that sentence, it is entitled to impose a lesser sentence.”

[21] On a careful consideration I consider that an injustice would be done if the prescribed sentence of 15 years were now to be imposed without regard to the punishment which the respondent has already endured and payments which she has already made to the Kempston Group. In these circumstances I am of the view that a lesser sentence would be justified.

[22] In assessing sentence in crimes for which prescribed minimum sentences have been legislated account must be taken of the fact that the particular crime has been singled out for severe punishment and that the sentence to be imposed in lieu of the prescribed sentence should be assessed paying due regard to the benchmark which the Legislature has provided (see S v Malgas supra p. 1236E.) The offence in issue is a serious offence, not only because the Legislature has declared it to be so, but the respondent was employed in a position of trust, she abused that trust in committing the fraud. She had ample time to reflect upon her conduct and persisted in a systematic course of conduct over an extended period. The amount with which she enriched herself is extensive.

[23] The nature and the circumstances pertaining to the offence in issue calls necessarily for a term of direct imprisonment. The provisions of section 276(3) precludes the imposition of a sentence of correctional supervision or of imprisonment in terms of the provisions of section 276(1)(i) which may be converted to correctional supervision in the discretion of the Commissioner.

[24] On a careful consideration therefore of the legal provisions which find application, the respondent’s personal circumstances, the nature of the offence and the manner in which it was committed and the interests of society, I consider that a period of seven years imprisonment represents fair punishment.

[25] In the result, the appeal succeeds and the order made by the magistrate is set aside and substituted by the following:

“The accused is sentenced to undergo seven (7) years imprisonment.”

J W EKSTEEN

JUDGE OF THE HIGH COURT

MAKAULA J:

I agree.

M MAKAULA

JUDGE OF THE HIGH COURT

Appearances:

For Appellant: Adv LA Pillay-Selahle

Instructed by the Director of Public Prosecutions, Port Elizabeth

For Respondent: Adv T N Price, SC

Instructed by Roelofse Meyer Attorneys, Port Elizabeth

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