Simelane v R (01/10) [2011] SZSC 34 (30 November 2011);

 

IN THE SUPREME COURT OF SWAZILAND

 

 

HELD AT MBABANE                                  CRIM. APPEAL NO. 01/2010

 

 

In the appeal between:

 

 

THEMBELA ANDREW SIMELANE             APPELLANT

                  

And

 

 

THE KING                                                  RESPONDENT

 

 

 

 

 

 

 

FARLAM, JA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

 

 

[1]    The appellant in this matter was convicted by Agyemang J, sitting in the High Court, on six counts of theft and sentenced on 22 February 2011 to five years imprisonment on each count it being ordered that the sentences on each count were to run concurrently.  In addition he was sentenced to a fine of E50, 000 ‘on all counts or in default twelve months imprisonment on all six counts.   These sentences were also ordered to run concurrently’. The judge failed to backdate the sentence to allow for a period of ten days which the appellant had already spent in custody.

 

[2]    The appellant appealed to this court against both the convictions and sentences imposed upon him but when the appeal was argued Mr. M. Mabila, who appeared on behalf of the appellant, indicated that the appellant was not proceeding with the appeal against the convictions, but was only seeking to persuade the court to interfere with the sentences imposed.

 

[3]    At the time the offences were committed the appellant, who was an attorney, was practising as what the learned judge in the trial court called ‘a de facto partner’ in the firm of Bheki G. Simelane and Company.  He received instructions from each of the complainants to claim damages from the Motor Vehicle Accident Fund in claims they had for personal injuries suffered by them in road accidents or as the dependants of deceased persons whose deaths were caused by motor accidents.  The Accident Fund duly processed the claims and the cheques it sent to Bheki G. Simelane and Company in settlement of the claims were paid into the trust account of the said firm.  They were not paid out in due course to the complainants because the firm’s trust account at all relevant times had a shortfall.  A report prepared by Mr. Kobla Quashie, a chartered accountant, who was appointed as curator bonis to control and administer the firm’s trust account, reveals that during the period from 1 July 2000 to 31 May 2002, the period covered by the indictment, E9 511 747-79 was deposited to the trust account and E5 303 147-89 was paid to trust creditors.   E4 052 851, of the balance, which should have remained in the bank account, was used for sundry expenses, such as cash payments totalling E245 306 to the appellant and further cash payments totalling E633 936 to his brother,  Bheki G. Simelane, the other partner  in the firm, as well as other cash payments totalling E869-534.  There were also payments in respect of water and electricity and telephone and fax bills, motor vehicle expenses, and insurance and bank charges. The shortfall on the trust account for the period covered by the curator’s report was E4 728 554.

 

[4]    The trial Judge found, correctly in my view, that though at the time the six cheques forming the subject matter of the counts in the indictment were sent to the firm the appellant knew of the shortfall, he permitted the cheques to be deposited in the trust account and that his reason for doing this was so that the sums paid to his firm for the benefit of the complainants ‘would go to decrease the shortfall and supply funds for the firm to meet other expenses’.  The appellant testified that he built what was described as ‘a pack of cards’ based on the system of ‘robbing Peter to pay Paul’ and said he hoped that at some future date there would be enough money in the trust account to pay the complainants.  The appellant’s answer to the charges against him was that he did not have the intention permanently to deprive the complainants of their money.  Apart from the facts that he was clearly reckless as to whether they would be paid and that the prospect of their ever being paid became more and more remote and unrealistic as time went on, this was of course no defence to the charges of theft.

 [5]   The appellant’s contracts with the complainants required him to hold the moneys in trust, not to pay them into what amounted to the firm’s business account from which the partners’ drawings were taken and sundry expenses were paid.   Money is a fungible which is ‘consumed by its use’ (Hunt, South African CriminalLaw and Procedure, Volume II, Common-Law Crimes, 2 ed, 1982, p 618): the fact that a person who ‘borrows’ money without the owner’s permission intends to repay what he has taken to no answer to a charge of theft.  The reason for this was explained by Fagan CJ in Rv Herholdt and Others 1957 (3) SA 236 (A.D.) at 257 E to 258 A as follows:  

 

‘In order to establish the charge that the two payments constituted a theft the Crown had to discharge the onus of showing, firstly, that the appellant did not have authority to make the payments, and, secondly, that they did not bona fide believe themselves to be entitled to make them.  These were the requirements indicated by the Court in Rex v. Milne and Erleigh (7), 1951 (1) S.A. 791 (A.D.).

 

 If these two elements are proved, the charge of theft is not refuted by evidence of an intention to repay the amounts that have been appropriated.  Mr. Trollip referred us to the case of R v Sibiya, 1955 (4) S.A. 247 (A.D.)), for support of the submission that a mere borrowing cannot be theft.  There is, however, this material distinction between the case now before us and that of Sibiya:  that the intention to return which was discussed in Sibiya’s case and which, it was held, had to be refuted by the Crown, was that of preserving and returning the identical article taken without at any time destroying the owner’s dominium.  Here we are dealing with money, the owner’s real right in which is lost when it is used.  The alleged intention can merely be to return a similar amount, i.e. to regard oneself as being under an obligation which gives the owner a right in personam in substitution for the right in rem which he had and which he could have asserted against any interference with his ownership.  If I deprive the owner of that real right, and the other elements of theft are present, it is no defence to say that I intended to put my personal obligation in its place; and the theft is complete as soon as the deprivation has taken place, whether or not I thereafter make restoration.’    

 

[6]      See also R v Milne and Erleigh (7) 1951(A.D.) (1) SA  791 (A.D.) at 865E-H, whereSchreiner JA said:

 

‘It seems to me … that in the case of things consumed by use the view taken in Rex v. Albertyn 1931 O.P.D.  178 and Rex v. Jones  1934 N.P.D. 45 is correct, and that the intention to deprive permanently is proved when it is shown that the taker meant to consume what he took even if he intended later to return other money or similar goods.  The distinction is not only technically valid, the taker having no intention to return what he plans to consume; it is also a sensible one for the consumption increases the risk that the taker, even if he intends to replace, may not be able to do so, and the difficulty of proving what has happened to consumables that have been taken makes it harder than in the case of other goods to test any statement by the accused that he intended to replace.  Where, therefore, a person takes another’s money without authority to do so and intending to consume it (actual consumption is, I think, only important as evidence of intention) he commits theft, even if he intends to return other money, if it is proved that he did not, when he took it, believe that he had the right to take it or that the owner, had he been consulted, would have consented to the taking.’   

 

[7]    In the present case it is clear that the appellant did not have the authority to take the complainants’ money as he did and that he did not believe that he had the right to take it or that the complainants would have consented to the taking.

 

[8]    I have dealt with this point at some length because it appears to have been assumed even by the trial judge that if the Crown had not established an intention on the appellant’s part to have deprived the complainants permanently of their money this would have been a defence to the charges.

 

[9]    As I have said, the appellant does not persist in his appeal against the convictions but has concentrated his efforts on seeking to persuade this Court to interfere with the sentences imposed.

 

[10]  As the appellant’s estate had already been sequestrated the trial judge, after convicting the appellant, ordered the appellant’s trustee, Mr. Lucky Howe, and the curator bonis, Mr. Kobla Quashie, to inform the Court as to the funds available for payment to compensate the losses of the complainants.

 

[11]  In his evidence Mr. Quashie stated that when he finished his assignment he handed over everything to Mr. Howe and that he did not have any moneys to pay to the complainants.

 

[12] Mr. Howe testified that there was E32 875-06 left in the estate and he asked that the amount of E30-000 which was the bail money paid on behalf of the appellant, be paid to him so that it could be included in his next liquidation and distribution account.  He stated further that he had given his permission to the appellant to seek and obtain employment in South Africa and said that he would support an application by the appellant to obtain a loan.  It is clear that the proceeds of the loan to which he referred were to be used to compensate the complainants.  Mr. Howe also testified that he would allow a deduction from appellant’s monthly income to be used to settle what was outstanding to the complainants.

 

[13]  The appellant then testified.  He said that he intended with Mr. Howe’s permission to raise a loan in an amount of E686 327-80 (which was accepted as the total of the outstanding amounts owed to the complainants), to be paid over to the complainants and to make monthly payments of E4, 000.

 

[14]  On 2 July 2010, after hearing this evidence, the trial court Judge said that she was ‘minded to permit the [appellant] to pay the sum due to the complainants within a period of six  months’.  She added:

‘I believe that the society’s and the complainants’ interest will be better served if the [appellant] is made to pay what he stole and applied for his firm’s benefit, and in the process, gets rehabilitated, than if he is subjected to other forms of punishment.

…

The sums found to be due to the complainants should … be paid to the six complainants herein.

 

At the end of six months ending January 2, 2011, the entire amount appropriated by the [appellant] should be paid up and duly paid to the complainants.’

 

[15]  She stated that after the amount appropriated had been paid the appellant would be sentenced and that the sentence to be imposed would take into the account the period already spent by the appellant in custody.  (It is common cause that that period was ten days, from 19 January 2010 to 29 January 2010.  As I have said when the judge eventually sentenced the appellant she failed to backdate the sentence to give the appellant the benefit of the period he had previously spent in custody.) The appellant was then released on his own recognisance and ordered to present himself before the court on the first day of court sitting in the 2011 legal year in order to be sentenced.  The appellant did not present himself to be sentenced on 1 February 2011, the first day of the court sitting in the 2011 legal year.

 

[16] On 22 February 2011, however, the appellant did appear before the trial Judge. It was stated that the appellant had not obtained the loan he had said he would raise nor had he made the monthly payments he said he intended to make.  What he had done was the following: he paid E24, 000 to his trustee on 17 February 2011 and a further amount of E6, 000 on 21 February 2011.  On the day he appeared in court he produced E25 000.   He also presented a letter of guarantee for the whole sum, which purported to come from a mining company in South Africa.  The judge noted that it was ‘neither notarised [nor] otherwise authenticated as coming from a reputable foreign company.  On the showing of defence counsel, the said company is not a financial house.’

 

[17]  She added that he had ‘failed to comply with what hehad undertaken under oath to fulfil.’   She then imposed the sentences set out in para [1] above.

 

[18]  When the appeal in this court was heard the appellant’s attorney handed up an agreement signed by himself, the appellant and the Director of Public Prosecutions.  It sets out the terms of the draft order which the court was asked to approve and adopt as the order of this Court.

 

                It reads as follows:

‘Without necessarily creating a precedent and having regard to the destitute position of the complainants, Appellant undertakes to do the following: 

 

1.       ‘Pay the sum of E50 000.00 today, 7^thNovember, 2011 as fine imposed by the court a quo on 22^ndFebruary, 2011;

 

2.       Pay the sum of E686 377.80 in the following manner:

 

2.1     E50 000 on 31^stNovember, 2011

 

2.2     E31 850.00 every month end commencing January, 2012 for the next 20 months until the full sum of E687 377.80 [scil. is paid]

 

1. The Appellant will pay the amounts referred to in  

       paragraph 2 above into the following account;

 

SWAZILANDGOVERNMENT-ACCOUNT NO. 1000016206593, CENTRAL BANK OF SWAZILAND

 

4.   The Central Bank is hereby ordered and directed   to monitor the said payments and report to the Director of Public Prosecutions.    

 

1.   Should Appellant fail to abide or default in any way

      whatsoever, the custodial sentence imposed by the     

  Court a quo shall automatically apply.

 

1.    Service of process shall be effected upon Appellant’s    

     Attorney, being Mabila Attorneys, who undertakes   to ensure the Appellant’s appearance in court whenever so required.’

 

[19] I can fully understand what prompted the Director of Public Prosecutions to agree to what the appellant and his attorney proposed as she was clearly anxious that the complainants should be compensated.

 

[20]  After careful consideration, however, I have come to the conclusion that it would not be appropriate for this Court to go along with what is proposed.

 

[21]  I have two reasons for saying this.  First it is not possible for this Court to make an order of this kind without creating a precedent.  If the proposed order is made it will undoubtedly be relied on as a precedent in the future whenever a dishonest attorney who has stolen trust funds seeks to escape the punishment he deserves by undertaking to compensate his victims.

 

[22]  Second, making the order would involve interfering with and disturbing the statutory distribution of the insolvent estate of the appellant contrary to the provisions of the Insolvency Act 81 of 1955, as amended.     The Court was given copies of the trustee’s first distribution account and his reconciliation statement from which it appears that the complainants are not the only concurrent creditors and there is a substantial shortfall.

 

[23]  The effect of making the order sought would be convert the complainants from concurrent to preferred creditors, something for which no legal basis exists.  Apart from that, the Court was told by the appellant’s attorney that the six complainants were specially chosen by the Director of Public Prosecutions from a group of creditors because she had evidence of direct involvement of the appellant with regard to their losses.  No basis exists for elevating the complainants into a stronger position    than that enjoyed by other concurrent creditors.

 

[24]  It was not suggested in argument that if the Court was unwilling to approve the draft order it should substitute any other sentences for those imposed by the trial judge.  In my view the sentences imposed, regard being had to the fact that it was ordered that they should run concurrently, are relatively light if one considers the seriousness of the offences committed by the appellant.  No basis exists therefore for interfering save as regards  the fine (with an alternative of imprisonment) imposed on all six counts, in respect of which it was ordered that the sentences would also run concurrently, and as regards the need to take into account the period the appellant spent in custody before he was sentenced.

 

[25]  In Swaziland and South Africa it has been held that it is not permitted to order that a sentence of a fine should run concurrently with a sentence of imprisonment even where the fine is combined with alternative imprisonment:  R v Dlamini, Masinda 1981- 1995 (3) SLR 301(HC), R v Kubheka 1944 NPD 57 at 57-8 andS v Majola 1973 (4) SA 58 (0).    See also Swift, The Law of Criminal Procedure, 2 ed, p 603,and R v Beyers 1956 (2) SA 91(SR).  This is in accord with section 300 of our Criminal Procedure and Evidence Act 67 of 1938, as amended, which reads as follows:

 

‘(1)    If a person is convicted at one trial of two or more different offences, or if a person under sentence or undergoing punishment for one offence is convicted of another offence, the court may sentence him to such several punishments for such offences or for such last offence, as the case may be, as it is competent to impose.

 

(2)     If such punishment consists of imprisonment the Court shall direct whether each sentence shall be served consecutively with the remaining sentence.’

 

[26]  I think it can safely be accepted that the trial judge intended the appellant on the counts taken together, to pay a fine of E50 000.00 (with an alternative of twelve months imprisonment) and to undergo a further five years imprisonment.

 

[27] An accused convicted on several counts should as a general rule be sentenced separately on each count but, as Beadle J pointed out in R v Beyers supra, at 92C, this is a general rule which may be departed from in a proper case.  This, in my view, is such a case.  The problems created by the form in which the sentences were expressed by the court a quo and the fact that the period spend in custody before the appellant ws sentenced was not taken into account can and should be solved by replacing the sentences imposed with the following:

 

‘The accused is sentenced on all six counts taken together to:

1.  a fine of E50,000.00 (Fifty Thousand  

Emalangeni) and in default of payment of such fine to twelve months imprisonment;

 

1.  5 (Five) years imprisonment.

 

The sentence is backdated to 12 February 2011 to allow for a period already spent by the accused in custody to be taken into account.’

 

 

[28]  This does not mean that the complainants may not receive compensation for the losses they suffered as a result of the thefts committed by the appellant.

 

[29]  If the appellant, when he is released from prison after serving on his sentence, succeeds in obtaining employment and earns more in the opinion of the Master than is necessary for his support and the support of those dependant upon him, his trustee will be entitled to have such surplus paid over to him for distribution among the creditors, including the complainants.  The trustee will also be entitled to be kept informed, if he requires this, on a monthly basis of what the appellant has earned or acquired and all disbursements made by him.   This is in terms of section 23 (5) and (6) of the Insolvency Act.

 

[30]  Furthermore, as the Court was informed from the bar during the hearing of the appeal, the complainants have lodged claims against the Law Society Fidelity Fund established by the legislature in 1988, when Part X  was added to the Legal Practitioners Act 15 of 1964, as amended.  This part of the Act came into operation on 1 April 1990:    see Legal Notice 26 of 1989 published in Swaziland Government Gazette No. 649 of 17 March 1989.

 

[31] In terms of section 43 (2) of that Act (which I shall call in what follows ‘the Act’) the Fund is administered, maintained and managed by or on behalf of the Law Society, inter alia,to enable it to make disbursements which in the opinion of the Society are necessary to pay for losses sustained by persons (such as the complainants) as a result of acts of dishonesty by legal practitioners (such as the appellant).   The money in the Fund (prior to investment or application in terms of the Act) has to be paid into an account with a recognised financial institution to the credit of an account to be known as ‘The Law Society Fidelity Fund’ : section 43 (3).

 

[32]  Every member of the Society, other than full-time employees in the public service (or such other service as the Society may specify), is  obliged to pay contributions annually to the fund, the accounts being as determined by the Society:  Section 43 (8).

 

[33]  Practitioners who have, inter alia, paid their contributions are entitled to have Fidelity Fund certificates issued to them and those who are not in possession of such certificates are not permitted to practise or act as legal practitioners on their own or in partnership:  section 43 (9)(c) (i) and 10 (a).   A practitioner who practises or acts as a legal practitioner on his own or in partnership without a valid Fidelity Fund certificate is not entitled to any fee, reward or disbursement in respect of anything done by him while so practising or acting:  section 43 (10) and (10) (b). It is therefore clear that a powerful sanction enforcing payment of Fidelity Fund contributions exists.

 

[34]  Section 44 (1) of the Act provides as follows:

       

‘(1)   Where it is proved to the satisfaction of the Council that any person has sustained loss in consequence of theft, fraud, forgery or otherdishonesty committedby a legal practitioner or by an employee of a legal practitioner in connection with ?

 

(a)      the practice by that legal practitioner of   his profession; or

 

(b)    any money or property entrusted to that    

legal practitioner or his    employee in the course of his   practice as a legal practitioner or  whilst he is acting as a executor or administrator in the estate of a  deceased person or as trustee in an  insolvent estate or in a similar capacity;    

         

the Council may, subject to the provisions of this Act, make a grant to that person out of the Fund for the purpose of relieving or mitigating that loss.

               

(2) Before considering an application for a grant in terms of this section the Council may require the applicant to exhaust all legal remedies available to him in respect of the loss to which the application relates.’

 

[35   The court was informed that despite the fact that the

         complainants have lodged claims for compensation with         

         the fund, they were unable to obtain anything from the       

         fund.

 

[36]  The Treasurer of the Law Society, Mr. M. Simelane, told the Court that the fund was apparently not being administered before 2003.  He said:

       

‘(In) fact we did not even have an office and it was the involvement of the minister who then provided an office which is here in the High Court, of the Law Society.  We did not even have the records prior to that time, my Lord.  There were those technicalities, my Lord, and the Fidelity Fund that we have is a fraction of what is being claimed by the complainants in this matter. It is way, way below.   Attorneys are paying E600 per year, which is subject to review, and we are working with the Attorney-General for compliance in that respect.  

…

We have about 150 Attorneys.  We are in the process of collecting.

…

[We started collecting] in 2003, my Lord.’

 

[37]  When asked how many times they had paid money to claimants he replied: ‘none so far.’     

 

[38]  When it was put to him that on the figures he had given the fund should have been receiving about E84 000 per year for eight years, i.e., a total of E672 000, he agreed that that was what they should be having but said later that the amount in the fund was only E200 000.

 

        He also said that the claims lodged by the complainants in this case were not the only claims and that there were others.

 

[39]  When asked why nothing was done when the fund was set up to get money from practitioners to pay into its account he replied:

 

‘That is what we were working on, my Lord.  As I have stated we did not have an office and the Treasurer was carrying the books on him and they would change after a year.’

 

When asked if they did not collect contributions he   replied: ‘I would not know prior to 2003.’

 

[40]  When the provisions of Section 43 (10) (a) and (b) ( which have been summarised above) were put to him, he said:

 

‘My Lord, I must admit it has been very slow.  In 2009 in the General Meeting of the Law Society I was mandated to go to the Chief Justice to report the defaulters so that they were not allowed to come to Court.  The Attorneys were given a chance to pay up.  Some paid and some did not.   We have been working with the defaulters and the Attorney-General has been [roped] in.’

 

[41]  When the provisions of Section 43 (10) (a) and (b) were again put to him he said: 

 

‘I must say the CJ had agreed and I was supposed to bring a list of Attorneys so that Attorneys who did not have the Compliance Certificate or Fidelity Fund Certificate are not allowed.  Then Chief Justice Sapire in 2004 actually worked with the Law Society and it proved to be a successful exercise.  After that in 2005, then people did not pay.’

 

[42]  When asked why they were not stopped from practising and claiming fees he replied:

 

‘I can never have a good answer to that, my Lord, but it is what is happening, and we are working on that.’

[43]  When asked why the complainants had not been paid anything at all if there was E200 000 in the Fund he said that was because they were not the only claimants. When asked for an indication as to when the complainants were likely to receive something from the fund he said, quite correctly, that he could not say because it would depend on the Council of the Law Society.

 

[44]  The facts stated by Mr. Simelane give cause for grave concern because they reveal that the statutory scheme set up by the legislature in 1988 in order to protect the people of Swaziland from losses sustained as a result of dishonest attorneys is still not functioning properly.

 

[45]  The Registrar is requested to forward a copy of this judgment to the Attorney-General and the Minister of Justice in order to  enable them to investigate what exactly has happened, who is responsible, and what must be done to rectify the situation and to see to it that a properly functioning fidelity fund is in place to provide the protection for the people of Swaziland that the legislature intended them to have.  The Registrar is also requested to forward a copy of this judgment to the Law Society so

that it can give consideration to what measures it can take to compensate the complainants in this matter and others who have suffered losses through the actions of dishonest attorneys.

 

[46]  The following order is made:

 

1. Subject to paragraph 2 hereof the appeal is dismissed.

 

1. The sentences imposed in the court a quo are set aside and replaced with the following:

 

‘The accused is sentenced on all six counts taken together to:

 

1.   a fine of E50 000 (Fifty Thousand Emalangeni) or in  

      default of payment thereof to twelve months  

      imprisonment; and

 

 

 

1.  5 (Five) years imprisonment.  The sentence is backdated to 12 February 2011 to allow for the period already spent by the accused in custody to be taken into account.’

 

___________________

I.G. FARLAM

JUDGE OF APPEAL

 

 

 

 

 

I agree                                                                   ___________________

                                                                             A.M. EBRAHIM

                                                                             JUDGE OF APPEAL

 

 

 

 

 

I agree                                                                   ____________________

                                                                             DR S. TWUM

                                                                             JUDGE OF APPEAL

 

 

    

DELIVERED 30^THNOVEMBER 2011