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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO:     CA & R 22/2017

In the matter between

SOX SONGEZILE NKANJENI                                       First Appellant

NJAMISILE DYALA                                                        Second Appellant

TRADE LANE BROKERAGE CC                                   Third Appellant

versus

THE STATE                                                                                    Respondent

APPEAL JUDGMENT

HARTLE J

[1]          The first appellant, an erstwhile employee of the Nelson Mandela Bay Municipality (“the municipality”) employed in the capacity of Contracts Controller in its Supply Chain Management Sub-Directorate, and the third respondent, a corporate body cited in terms of section 332 of the Criminal Procedure Act (the “CPA”)[1] which had pitched a bid for a tender with it (represented in all dealings by the second appellant as its sole member) were convicted on a single charge of fraud in the Regional Court on the pretext that they, conspiring with one another and in the execution of a common purpose, intended to and in fact perpetrated a fraud against the municipality. Each pleaded not guilty but were convicted on the basis set forth in the charge sheet on the main count of fraud. The first and second appellants were sentenced to a deferred fine of R100 000.00 - or 3 years’ imprisonment, whilst the third appellant received a sentence which was suspended for a period of five years pursuant to the provisions of section 297 (1) (a) (i) of the CPA. The appellants appeal against their convictions with the leave of the trial court.

[2]          The alleged premise sought to be proven at the trial is that the first appellant abused his position with the municipality by unlawfully manipulating the tender process in order to favour and or attempt to favour the second and third appellants in the award of a tender to it, an objective which it is common cause was nipped in the bud when the tender process was halted before adjudication. This the first appellant was able to do (so it was asserted in the charge sheet) by virtue of his peculiar position - being responsible for checking that tenders adhered to the relevant specifications, evaluating them, making written recommendations to the Bid Evaluation and Adjudication Committees (“BEC and BAC” respectively), and presenting his reports to these committees. He was alleged to have done so inter alia by falsifying the third appellant’s pricing schedule attached to its formal tender documentation after the close of the tender and with the benefit of having had sight of the competitors’ pricing; overlooking the third appellant’s shortcomings with the tender specifications which per se rendered it non-responsive as a potential bidder or at least out of the running; under-awarding points to one of its competitors which deserved a higher score, and deliberately allocating incorrect scores to favour and recommend the third appellant for the tender award.  Other anomalies in the tender process were alleged to have been perpetrated by him as well all of which purportedly conduced to the manipulation and were symptomatic of foul play in the tender process. These irregularities were investigated by the Internal audit Division of the municipality, which proceedings were the precursor to the criminal prosecution.

[3]          The controversial tender, referred to in the trial as SCM30, was for the supply and erection of general fence material, with a value in excess of R200 000.00.  It is common cause that nine potential service providers responded once the tender was advertised and put forward their bids, including the third appellant. The first appellant was alleged in his official capacity to have “evaluated” the tenders and had asserted in a putative written report destined for the Bid Evaluation and Adjudication Committees that five of the nine tenders, including the third appellant’s, were compliant and that the latter scored the highest score amongst the remaining competitors and fell to be awarded the contract.  The other four tenders were purportedly correctly disregarded.

[4]          The three misrepresentations flowing from the manner in which the first appellant framed his official report which the State relied on cumulatively to prove this element of the offence of fraud were that the third appellant’s tender in fact complied with the specifications (whereas it did not and should have been omitted on the same bases as befell the four correctly disregarded tenders); that its pricing schedule was original, regular and had been attached to the third appellant’s tender documents (whereas after the close of the tender it had been amended or substituted by first appellant); and that all points and scores were correctly allocated to the tenders (whereas this was not the case).

[5]          Intent to defraud was generically asserted although emphasis was placed in the charge sheet on the first appellant having “intentionally failed” to disregard the third appellant’s tender on the same grounds as applied to the other four tenders which had properly been disregarded and that he had “deliberately” awarded, under-awarded and allocated (incorrect) scores in his evaluation. Intention also appears to have been imputed in the charge sheet by the allegation that he twice submitted his written report to the Bid Adjudication Committee without the required signature of the relevant proxy of the Chief Financial Officer (one of the anomalies referred to above) wherein he awarded the highest points to the third appellant and recommended that the tender be awarded to it.

[6]          The prejudice alleged was to the municipality and or the competing tenderers whose tenders in fact complied with the specifications for the tender. As an aside it needs be said that, assuming the truth of the misrepresentations purportedly made, it should follow ineluctably that prejudice or potential prejudice would ensue to other competitors in a competitive bidding process, whether the tender was awarded to the tenderer who could not have properly won it or not, and even if the adjudication process was cut short in the manner attested to.[2]

[7]          The state called nineteen witnesses in support of its case.  The first appellant testified in his own defence but the second appellant (in both his personal and representative capacities) failed to adduce any testimony, more significantly it failed to explain how the second appellant could have brought his original signature to bear on the tainted pricing schedule forming part of the third appellant’s bid which, on the state’s evidence, must have been substituted after the close of the tender and have come from an unofficial source.

[8]          Although a lot of time was spent at the trial outlining the applicable procedure that ensues upon the advertising of a tender such as SCM30, the formal process to be followed by the municipality including the first appellant role to be played in his peculiar position and the threshold requirements for the tender were not really in contention.[3] It is also not in contention that an annexure to the tender documentation submitted by the third appellant (Annexure B), which is an ownership declaration, had not been signed nor commissioned which ought on its own to have rendered the third appellant’s tender non-responsive, although the first appellant did not believe it to be a nonstarter for this reason.[4]  It was also obvious that the competing tenderer who had been under-scored ought to have been awarded more points than it was given the weighting criteria for women owned entities, but this oversight the first appellant brushed aside as innocent and a scoring mistake made by the computer.[5]

[9]          Evidence was also adduced to explain the relevance of the official stamps brought to bear on tender documentation (both at the time when a tender bid document is purchased and at the stage when the box is later opened at the close of tenders) [6] and how in this particular instance the stamps’ appearance on the third appellant’s tender documentation belied that it could have been submitted in this form originally.[7] Explanations were advanced about how similarities between the third appellant’s pricing schedule and those of its competitors had convinced those tasked with the internal audit and investigation of the “irregularities” that the figures of two of the competitors had been copied and carefully manipulated to show the lowest price ultimately so that the third appellant would score the highest points on the pricing criteria. [8]  The falsification of the schedule (and or later insertion of it into the bundle of original tender documentation), which the witnesses were at pains to explain must have taken place after the close of the tender and at the hand of the first appellant who it is common cause had had access to the documents,[9] was denied by the first appellant.[10]  Although he conceded that a template resembling the pricing schedule inserted or replaced was found on his work allocated laptop during the audit, he denied that he was the originator of this.[11]  He further suggested that the pricing was virtually in the public domain and no secret, as if to justify that it was no mean feat on the part of the third appellant to have come up with an offer fairly representing the figures and quantities offered by its competitors.[12] As for the “anomaly” of him having twice submitted his official report regarding the tender for consideration to the Bid Adjudication Committee without the required signature of the proxy of the Chief Financial Officer, one Ms. De Scande,[13] the Director of Expenditure Management and Financial Control, he downplayed any misconduct and alluded to a number of other times this had happened in practice for reasons of expedience and in the name of service delivery without any concerns being raised before.[14] Evidence adduced concerning the internal investigation revealed that he had apologized for doing so and had ascribed it to a mistake on his part, albeit he said in his testimony that he was only trying to appease her by the apology. He also promised that it would not happen again that his report would be submitted without the sign-off of the Chief Financial Officer’s proxy as required, but he did this again, evidently defiantly so.

[10]       The state also sought to highlight in its evidence what the municipality regarded as unacceptable telephonic communication - recorded as SMSs and cell phone calls made by the first appellant to the second appellant on his work issued cell phone  and the landline used in his office between the appellants before and during the tender process and even at the stage of the audit, underpinning the pleaded conspiracy, but the first appellant denied any improper contact concerning the tender and certainly denounced any collusion with the second and third appellants. Instead he passed off his contact with the second appellant as being merely co-incidental and of a general business nature.[15] Rather than concede that it was improper, policy wise, to have had dealings with the second appellant whilst evaluating a tender submitted by him ostensibly in a conflict of interest scenario, he instead distanced himself from any proximate relationship with the second appellant.

[11]       Two witnesses, Messrs Bezuidenhout and Lavin, testified regarding the investigation by the Internal Audit Division of the municipality after a complaint initiated by a colleague of the first appellant, one Ms. Balie concerning SCM30. Their evidence was largely anecdotal although very nuanced.[16]  They gave a context to what had led to the prosecution and sought to justify their findings based on interviews conducted with municipal employees and parties related to the contentious tender, the perusal of source documentation both hard and electronic copies and, significantly, referred to their interaction with the appellants themselves.  In this respect the second and third appellants refuted that anything improper was afoot between themselves and the first appellant, a disavowal which in the opinion of Mr Lavin appeared to be genuine.  The first appellant elected not to provide an explanation or be privy to a search and seizure operation conducted by the auditors.  His election, so he explained, had its origin in a deep-seated mistrust of the investigation. He claimed to be the victim of a conspiracy against him by certain individuals in the municipality because he had in the past deigned to question the integrity of appointments made through procurement processes. He verily (and ostensibly painfully) believed that this had singled him out for victimization.[17]

[12]       The trial court recognized the conundrum it faced, after summarizing all the relevant evidence and legal principles it considered to be of application, noting that there was no direct evidence to connect any of the appellants “with the commission of the offence” or to a conspiracy to commit fraud.  No doubt being prescient that another court might reasonably find that the state had not met its burden of proof, and because he considered  there was “unease” in the mind of the first appellant as to the correctness of the court’s findings “based on the fact that (it) for the majority of its decisions (relied) on circumstantial evidence”, readily granted him the requisite leave to appeal against his conviction. Leave was granted separately to the second and third appellants at a later stage.

[13]       After a lengthy synopsis of the evidence (which runs to more than a hundred pages), a general vote of confidence in the testimony of the state witnesses which he considered impressive, an assertion of the state’s case being without any breach in its consistency as a whole in his considered view and the absence of any bias detected by him on the part of any of the witnesses, a general rejection of the first appellant’s defence that he was the target of victimization by the internal investigation especially in the absence of any supporting evidence to give flesh to his  theory that he was been unfairly persecuted, a condemnation of the first appellant’s election during that investigation not to give an explanation or account for his conduct, an expressed rejection of the first appellant’s candour concerning his claimed innocent communication with the second respondent whilst the formal tender process was underway, a review of the “incriminating evidence” stemming from the documentation (which he noted as “critical evidence which speaks for itself”) against the background of the common cause anomalies which had been highlighted in the internal investigation and the effect of the Public Finance Act regulations which govern the supply chain management processes (the significance of which appears to have been lost on the first appellant), the magistrate came to the conclusion that “(o)n the totality of all the facts the inference is inescapable that (the first appellant) deliberately assisted the (second appellant) to obtain the tender. This evidently led him to the further and final conclusion that no other inference could be drawn other than that he, acting in common purpose with the second and third appellants, committed the crime of fraud with the requisite intention to defraud by giving out and pretending to the municipality, to its prejudice and or the prejudice of the other tenderers whose tenders were specification compliant, that the three misconceptions relied upon in the charge sheet existed.

[14]       The challenge in this appeal, in the absence of any direct evidence against the appellant (I would suppose concerning the alleged falsification rather than wrongly asserting that the third appellant was specification compliant and had properly scored the highest tally because there is direct evidence concerning these supposed distortions of the truth) is that the magistrate determined their guilt (and involvement or collusion in the case of the second and third appellants) by incorrect inferential reasoning. The state conversely supported the conviction.

[15]       At first blush it appears that the magistrate made a quantum leap to his conclusion that the guilt of the appellants had been established beyond reasonable doubt because in his concluding paragraphs he merely repeats as if found what is stated in the charge sheet word for word, but an unhurried perusal of his lengthy judgment (read in conjunction with the very voluminous appeal record) demonstrates that he  carefully analysed  the weight of each person’s testimony and the documentary evidence and earlier in the judgment rendered his comments of how in his view every bit of it logically related to the whole plexus to warrant the several inferences drawn which in turn led to his ultimate conclusion.

[16]       It is sadly in this respect however that he appears to have erred and assumed the existence of at least one critical fact which had not been proved and could not legitimately have been inferred from the evidence holistically considered.

[17]       Of the elements of the offence of fraud, he appeared also to have been of the view, in respect of the first appellant, that only intention was in issue without mindfully examining whether the first essential element, which is the making of a misrepresentation, was found proven.

[18]       The offence of fraud is constituted by the unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another.

[19]       The elements of the crime are the following: (a) a misrepresentation; (b) prejudice or potential prejudice; (c) unlawfulness and (d) intention.

[20]       I have commented above about the element of prejudice and nothing further needs to be said in this respect.  The element of unlawfulness by the pleaded misconduct was also never placed in contention.

[21]       The manipulation of a tender processes to favour a pre-selected bidder is one of the classic ways of orchestrating corruption in a public tendering process and would usually be charged under the myriad statutory provisions catering for this brand of criminal conduct, assuming all the elements of the specific offence can be proven.  I can only assume in this instance that the state could not provide proof of the finer mechanisms of corruption to warrant bringing the charge on any basis other than pleaded.  Indeed,  the trial court was not asked to convict the appellants of the alternative offence of contravening section 118 (b) of the Municipal Finance Management Act[18] with which they had been charged on the basis that they purportedly unlawfully amended or tampered with the tender, quotations, contracts and/or bids after their submission  because direct evidence of such misconduct did not avail it. The resort to the charge of fraud was therefore already somewhat tenuous in the circumstances.

[22]       In the context of the charge of fraud as framed in this instance it would constitute a perversion or distortion of the truth which meets the conduct requirement of the crime especially where it can be established that the pre-selected bidder does not, for good reason, deserve to win the award or even be in the running for a competitive tender and the accused misrepresents the situation to the contrary whether by word or conduct.

[23]       In this instance the first appellant concedes that no HDI points should have been award to the third appellant.  There is also no question that Gana Steelworks was under-scored, and that this ultimately affected the end score, but to say in his report that the bids were strictly evaluated in terms of the municipality’s Supply Chain Management Policy applying the 90/10 preference formula; that the third appellant’s tender was a responsive one; and that it scored the highest points based on a fair comparison of the prices which had been offered by each of the five competitors, all of which the evidence comfortably established was not the truth or certainly incorrect, might not cut the first requirement for fraud.  On its own the two minor representations relied upon, if I may refer to them as such, might not be indicative of anything sinister on the part of the first appellant given his seemingly reasonable excuses offered in the whole scheme of things, but a falsification of the pricing schedule to give weight to those assertions would obviously amount to the clearest of misrepresentations (especially if the evidence confirmed that the first appellant was privy thereto or in the loop of the wrongdoing) and meet the conduct requirement of the crime.

[24]       There is a vast difference between a mere suspicion and allegations of corruption.  Procedural irregularities in public tender processes might be just that, deviations from standard procedures or policy.  They may be small aberrations on their own, but committed together, especially without good reason or under peculiar circumstances, might be strongly indicative of corruption and symptomatic of huger concerns in the public tender process.  The evidence in this instance confirms in my view how wide open, unsupervised, and haphazard  the procurement process is (or hopefully was), lending itself to corruptible practices by almost anyone, from the person who pushes the trolley with the tender documentation to the billing section for the issue of the necessary clearance certificate, to the secretary who might scan or copy documents randomly required for anyone’s purposes.  The most bizarre explanation which emerged from the internal audit is how it can happen that the paid stamp on an original set of tender documents might be initialled by two different officials in the range. As was relayed to the investigator Mr Lavin during an interview with one of the employees responsible in this respect and reported by him:

“Normally the tender document is stamped by only the official dealing with the tenderer (who is buying a tender document) and in his/her presence. In exceptional circumstances the tender document can be pre-stamped with the paid stamp e.g. when an incorrect tender is taken off the shelf and stamped and the tenderer requests the correct tender.  The pre-stamped tender is then issued to another tenderer on proof of payment.

(Name of employee being interviewed) further stated that the paid stamp is kept at the front desk and anybody has access to the stamp. In the majority of instances (other named employee) uses the stamp but it is available to anybody.” (Emphasis added)

[25]       The magistrate appeared to be aware that proof of the falsification of the pricing schedule was really at the core of a successful prosecution for the crime of fraud as indicted and found, evidently as a proven fact, that the prices reflected in the pricing schedule attached to the tender of the third appellant were amended and/or substituted by the first appellant  (and no one else therefore) after the closing of the tender.  This assumption is no doubt what convinced him to find as an ultimate fact that the discrepancies in the tender process (including the falsification or substitution of the pricing schedule attached to the third appellant’s tender documents) justified the inference and it being  “the only reasonable inference that (he) manipulated the tender process in favour of (the second and third appellants).” The further assumption that the first appellant had the requisite intention to defraud follows almost inexorably upon the fallacious assumption that the first appellant falsified the pricing schedule or was involved in the sleight of hand substitution thereof that was potentially destined to put the third appellant in the pound seats by unfairly winning the award.

[26]       Although reminding himself of the cardinal rules of logic in engaging in inferential reasoning as set out in R v Blom,[19] and despite the care he took to consider the evidence in its totality in applying the Blom rules, it appears that he may have too readily closed his mind to the proven facts that cumulatively support the opposite (reasonable) conclusion that, although lacking in integrity, the tender process was not compromised by a deliberate act of manipulation on the part of the first appellant with the requisite intent to defraud.

[27]       The proper role of the Blom rules is to test the logical soundness of an inference sought to be drawn as a distinct enquiry from the legal one which looks at whether the criminal standard of proof has been established on all the evidence in its totality.  Admittedly it is a difficult enquiry to undertake, especially when there is a cascading line involving more than a single tier of inferential reasoning, where the proof of one or more facts rests upon the proof of yet another anterior fact.  In this instance that fact was the one he facilely accepted as proven, namely that there was a conscious manipulation of the tender documentation which then presented the lie that the tender should have been awarded to the third appellant and that it deserved to win the competitive bid.  That fact was however a primary or intermediate fact central to the proof of the ultimate fact in question, namely that the manipulation was carried out with criminal intent, and well as the tangential fact that a conspiracy between the appellants was at the heart of the manipulation, which was cleared required to be established beyond a reasonable doubt.  

[28]       The “two cardinal rules of logic” postulated by Watermeyer JA in R v Blom are said to be vital when it comes to reasoning by inference and provide the necessary safeguard against the acceptance of circumstantial evidence which for obvious reasons can be a source of potential error. The oft quoted dictum warns that:

“In reasoning by inference there are two cardinal rules of logic which cannot be ignored:

(1)  The inference sought to be drawn must be consistent with all the proved facts.  If it is not, the inference cannot be drawn.

(2)  The proved facts should be such that they exclude each reasonable inference from them save the ones sought to be drawn.  If they do not exclude other reasonable inferences, then there must be doubt whether the inference sought to be drawn is correct.”

[29]       Inasmuch as “evidence” is defined to mean nothing more than a fact or set of facts produced in order to prove or disprove a fact in issue, circumstantial evidence is but a species of “facts or set of facts”.

[30]       Circumstantial evidence is the primary or intermediate facts from which this circumstantial evidence is drawn.  The inference is an inferential or secondary fact.  Direct evidence is evidence which supports or are foundational to the circumstantial evidence.  Despite the layered complexity the rules appear to require no more than that the inference that one ultimately draws must be both reasonable and the only (the others being excluded by the proven facts) reasonable one.

[31]       Concerning the question whether the inference that the first appellant was behind the falsification, privy to it, or had himself orchestrated it in addition to or in conjunction with the other two factually wrong assertions that he promoted in his evaluation report, can reasonably be drawn from the evidence in its entirety, there are several factors that in my view tilt the balance in favour of the first appellant’s defence of innocence. The evidence reveals firstly that the handwriting on the pricing schedule could not have been his and no direct evidence exists that he colluded with the second and third appellants in this respect.  A plausible explanation was put forward concerning how he came to have a template similar to the pricing schedule on his work lap top which possibility was not conclusively disavowed by the state witnesses. Indeed, it is not even certain that the pricing schedule was in fact tampered with although there are strong indicators that it must have been, warranting the State’s call for that inference to have been reasonably drawn. No evidence was adduced concerning the opening of the tender box although minutes and opening registers were supposed to have been kept at this critical juncture. The reading out of prices would also have been undertaken.  This evidence if adduced would surely have settled once and for all at what point the tampering supposedly happened, if in fact it happened at all, whether before or after the close of the tenders.

[32]       Although the evidence reveals that the first appellant had access to the third appellant’s tender documents and, by his own admission was involved in the tender process and responsible to present a realistic evaluation report after properly applying his mind (and thus had the opportunity to have made himself guilty of the falsification, or at least promoting what on the face of it must have appeared to be a compromised pricing schedule), there were huge gaps as I have stated above where supervision over the integrity of the procurement process was absent. Several other parties had equal access to the documentation and insight into the confidential pricing.  There were layers of people involved with the tender process at different levels scanning the documents or making photocopies thereof.  The evidence about the stamps is also perplexing for the reasons I have already stated and raises the very real possibility that the anomalies evident in the third appellant’s documentation was just a product of maladministration plain and simple.   One wonders how it could have happened that the several (equally responsible) officials through whose hands the tender documents passed after the tender closed including the BEC (assuming there is some merit in finding that the anomalies evident on the third appellant’s pricing schedule were perpetrated after the close of the tenders and not before) didn’t earlier raise the alarm of impropriety on the face of the third appellant’s tender documents especially bearing in mind that it was the absence of a proxy signature and not the “glaring discrepancy” on the pricing schedule that resulted in the internal audit in the first place.

[33]       I raise the further oddity that it only arose during the course of the trial that Gana Steelworks, who had also passed through the narrow gate to be considered for the award, had similarly not met the threshold of being specification compliant for want of its ownership declaration being commissioned, yet no one noticed this from the tender documentation even though it was equally as obvious as some of the shortcoming the first appellant was expected to be  mindful of. There was also the unchallenged evidence that the staff worked under stressful and hurried circumstances often resulting in mistakes, that there was a lack of uniformity in the tender process and that the rules were often bent or not necessarily adhered to.

[34]       There was also the suggestion that the first appellant could not trust the authenticity of the exhibit which ultimately served before court as representing the compromised tender document.  Towards this end it does not conduce to the state’s case that the first appellant was unaware until much later in the course of the internal investigation that he was under suspicion and had not been asked for an explanation, by which time the exhibit had passed through many hands.

[35]       Several probabilities also serve in the first appellant’s favour to demonstrate that he rather innocently promoted the conclusion that the third appellant should be awarded the tender than that he conspired to confound the competition with criminal intent.  If he had access to the official stamps and had wanted to railroad the third appellant’s tender through the channels it had to go through with the remotest prospects of the tender being awarded to it, why wouldn’t he rather have made the tender documents appear regular on the face of it by using the official stamps on the alleged falsified or supplemented pages rather than running the risk of an earlier elimination of it from the competition which would thwart his well laid plans? As poor as the oversight processes appeared to be, the supposed checks and balances and the protocols and policies in place would almost certainly have called attention to the discrepancies (one would certainly have expected this at the level of the BEC) and have stopped him in his tracks at some point. Also, why not get the signature that he knew was required if this would have promoted rather than hindered his prospects of getting the desired audience before the BAC? Why would he be so assertive in getting the items placed on the BAC’s agenda without the requisite signature, defiantly so, if this was a consistent line that no one dare cross, not only in the case of the contentious tender but in respect of other items as well unless, as he claims, the absence of such a signature did not feature as an issue before and exigency prevailed?

[36]         It is when all of these features are taken into account that the doubt criteria of reasonableness and the exclusion of all other (reasonable inferences) expected in the logical enquiry come to the fore.  The State has to satisfy the court not that every single fact is inconsistent with his innocence, but that the evidence as a whole is beyond reasonable doubt consistent with such innocence. Once there is doubt that he engineered the lie or was privy to it by falsifying the pricing schedule, it is hard to justify the further inferences, flowing from this assumed proved fact, that he had the requisite intention to defraud and that a conspiracy had to be at play for it to have been possible for the second and third appellants to have lodged the suspected amended or substituted pricing schedule after the close of the tender.

[37]       Of course, the question whether intention in the form of dolus eventualis was established once the falsification is reckoned out of the picture as the only reasonable inference to be drawn is a different kettle of fish.  It certainly appeared from the evidence that the first appellant ought to have been aware, especially if he was as pedantic as he proclaimed to be, that the five HDI points should not have been allocated to the third appellant and that Gana Steelworks should not have been underscored if he was properly applying his mind to the process.  It is also inconceivable that he did not notice that on the face of it the pricing schedule to the third appellant’s tender documents could not have been or rather was not original in form or that there was a problem with the stamps, but then neither did a whole raft of responsible people cry foul.  The first appellant appeared to waiver between defending an awareness of the anomalies on the one hand in order to distance himself from any criminal intent, but on the other hand readily conceded that all was not in order yet these “glaring discrepancies”, as the trial court referred to them, somehow escaped his attention. Intention is established if the accused knew the report to be false, or had no honest belief in its truth, or acted recklessly, careless as to whether it is the truth or false. In this instance not only did the first appellant disavow that he was aware that it was not “the truth”, but it is difficult to make anything more out of what he ought to have been aware of or to judge him against a standard, the bar of which was hardly clear from all the evidence. In this respect he must be given the benefit of the doubt.

[38]       It is so too as was submitted by Mr Price who appeared on behalf of the appellants that the first appellant’s version (and defence of innocence) was corroborated by objective and neutral facts presented to the court ironically by the evidence of the state witnesses. For example, he was vindicated in the disciplinary enquiry arising from the internal investigation (albeit some witnesses did not testify against him).  There were certainly undertones in the investigation against him which appeared to justify his lack of trust in those initiating the complaint as well as those leading the investigation. Even his own director was not kept in the loop about the investigation and undermined in her position.  She appeared to support his concerns about the manner in which the investigation against him was undertaken. In the whole scheme of things the alleged discrimination against him does not provide proof of his innocence of the crime of fraud, but it does serve to confirm his credibility on this score and the inconsistency on the part of the municipality in implementing its procurement processes uniformly and acting unswervingly against those who have fallen short of the rules and standards such as they exist.

[39]       Mr. Price argued on behalf of the first appellant that the trial court fell to be criticised in finding that he was a poor witness.  In my opinion the magistrate’s criticism of the witness was however spot on and appeared to be well placed. However, despite his poor performance as a witness, and the abiding suspicions that remain that the promotion of the third appellant as the best placed tenderer must have been (almost perfectly) engineered, the facts cumulatively support the possibility of an innocent conclusion, rather than that he had manipulated the tender process to deliberately favour the third appellant. In this respect as well, he must enjoy the benefit of the doubt.

[40]       As for the second and third appellants, absent any clear finding that the first appellant falsified the pricing schedule, the premise of a conspiracy becomes more remote.  Even though the second appellant ought to have explained the seemingly obvious anomaly appearing from the third appellant’s tender documentation, the fact that he did not cannot on its own support the conspiracy theory.  In the result he, and the third appellant represented by him, should enjoy the benefit of the doubt. 

[41]       In the result the appeal succeeds.

[42]       I issue the following order:

1.    The appeal is upheld.

2.    The convictions and sentences are set aside.

________________

B  HARTLE

JUDGE OF THE HIGH COURT

I AGREE

_________________

P N JAJI

JUDGE OF THE HIGH COURT

DATE OF APPEAL:          20 November 2018

DATE OF JUDGMENT:     12 February 2019

Appearances:

For the appellants: Mr. T N Price SC instructed by Messrs Netteltons, Grahamstown.  

For the respondent: Ms. U L De Klerk, Director of Public Prosecutions, Grahamstown.

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