REPUBLIC OF SOUTH AFRICA

IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA

Case number:
452/02
Reportable

In the matter between:

DAVID ASHLEY PRICE
FIRST APPELLANT
CHRISTIAAN MAURITZ LABUSCHAGNE
SECOND APPELLANT

and

THE STATE
Respondent

CORAM:

HOWIE P, FARLAM et BRAND JJA

HEARD:

20 MAY 2003

DELIVERED:
5 SEPTEMBER 2003

SUMMARY: Prescribed minimum sentence – proceeds of stolen cheques laundered
through attorneys’ trust accounts – whether substantial and compelling circumstances prevent
justifying imposition of lesser sentences than those prescribed.
___________________________________________________________

JUDGMENT
___________________________________________________________

FARLAM JA

INTRODUCTION
[1] The two appellants in this matter together with one Gerrit Nel (to
whom I shall hereinafter refer as ‘Nel’ were indicted in the South Eastern
Cape Division of the High Court on two counts of fraud. When the trial
began Nel was absent and the trial continued without him. The first
appellant was convicted on both counts and the second appellant was
acquitted on the first count and convicted on the second. Thereafter, on
the 11th October 2000 the first appellant was sentenced to fifteen years
imprisonment on each of the two counts and it was ordered that the
sentences be served concurrently. In addition he was ordered in terms of
section 300 of the Criminal Procedure Act 51 of 1977 in respect of count
1 to pay R326 140-10 as compensation to the Standard Bank of South
Africa Ltd. The second appellant was sentenced to fifteen years
imprisonment on count 2.
[2] In respect of both appellants the sentences imposed were the
minimum sentences prescribed in terms of section 51(2)(a)(i) of the
Criminal Law Amendment Act 105 of 1997, read with Part II of the
second schedule to that Act, in view of the fact that the trial judge held
that he was not satisfied that there were ‘substantial or compelling
circumstances’, as contemplated by sub-section (3)(a) of the section,
which would have justified the imposition of a lesser sentence than the
sentence prescribed in sub-section (2)(a)(i).

[3] At the time of the trial this Court had not yet delivered its judgment
in S v Malgas, 2001(2) SA 1222(SCA), in which section 51 of Act 105 of
1997 (to which I shall hereinafter refer as ‘the Act’) was fully considered.
Prior to the Malgas case a number of decisions had been delivered by
various judges of the High Court and widely diverging views on the
correct interpretation of the section had been expressed. In the result the
view which commended itself to the trial judge was in broad outline the
same as that upheld by this Court in the Malgas decision except for the
fact that the trial judge was of the view that the fact that the first appellant
had no previous convictions could not be taken into account when the
question of substantial and compelling circumstances was considered.
Counsel were agreed that the trial court’s failure to take the first
appellant’s clean record into account when considering whether
substantial and compelling circumstances were present constituted a
misdirection with the result that this Court is at large in considering
whether the minimum sentence prescribed by the Act should have been
imposed on the first appellant.
FACTS
[4] The counts on which the appellants were indicted related to two
cheques drawn by Mercantile Registrars Limited which were stolen and
subsequently deposited into the trust accounts of two Port Elizabeth
attorneys.

[5] The first cheque, which was drawn on the 9th November 1998 in
favour of the trustees of the EM Gorton Trust in an amount of R325 000,
was issued pursuant to the provisions of a scheme of arrangement under
section 311 of the Companies Act 61 of 1973, whereby certain
shareholders (among them the trustees of the EM Gorton Trust) sold their
shares in Alpha Limited. At some stage between the 9th and 20th
November 1998 this cheque was stolen. It was deposited on the 2nd
December 1998 at the Braamfontein branch of the Standard Bank of
South Africa Ltd for the credit of first appellant’s trust account at the
North End branch of the Standard Bank.
[6] On the 3rd December 1998 Nel faxed a copy of the cheque and the
deposit slip recording the deposit to the first appellant’s trust account to
him. On the 12th December 1998 the first appellant drew a cheque on his
trust account in an amount of R323 632 in favour of Tjeriktik
Eiendomsbeleggings Bpk and handed it to Nel. The amount for which the
cheque was drawn represented the amount of R325 000 less a fee of R1
200-00 and 14% VAT. The first appellant’s trust cheque for R323 632
was in turn deposited by Nel into a bank account in the name of the payee
from which various amounts were withdrawn until a balance of R8 964-
01 remained.
[7] The first appellant opened a file in which he made false entries
indicating that one of the trustees of the EM Gorton Trust deposited the

stolen cheque into his trust account for the purposes of a property
transaction which did not materialise and that he had thereafter, at the
request of the trustee, paid the amount deposited, minus his fee amd
VAT, by means of the cheque drawn in favour of Tjeriktik Eiendoms
Bpk.
The first appellant was to have received an amount of R100 000 for his
participation in the obtaining of the proceeds of the cheque but eventually
he received nothing apart from the fee of R1 200.
[8] The first appellant knew that the cheque was stolen, that it had
been deposited into his trust account and subsequently cleared for
payment to his account by someone in the bank who was involved in the
conspiracy. When the paid stolen cheque was returned to the drawer it
was intercepted by someone who was also involved in the conspiracy and
destroyed.
[9] As a result of the actions of the first appellant and his accomplices
the Standard Bank suffered financial loss in the amount of R326 140-10.
[10] The second stolen cheque was drawn by Mercantile Registrars Ltd
on the 23rd December 1998 on behalf of Samancor Ltd in an amount of
R1 620 000-00 in favour of the trustees of the C Cardases Testamentary
Trust. It was drawn following the delisting of Samancor Ltd and the
amount for which it was drawn represented the value of Samancor shares
owned by the trust. The cheque was stolen between the 23rd December

1998 and the 22nd January 1999  and it was deposited on the 29th January
1999 at the Braamfontein branch of the Standard Bank to the credit of the
trust account of one Stephen Wille Martin, a young attorney practising for
his own account as Martin’s Attorneys at Port Elizabeth. Martin’s name
had been provided by the first appellant to his co-conspirators in Gauteng
after he had persuaded Martin to help him to realise the proceeds of the
cheque and had offered him R25 000-00 remuneration for his assistance.
In terms of his arrangement with the first appellant Martin had to deposit
the money into an interest bearing account for the credit of the second
appellant.
[11] The first appellant originally told Martin that the second appellant,
who he said was a client of his, wanted to hide the proceeds of the cheque
from his wife, from whom he was in the process of being divorced. The
proposal was that Martin would receive the proceeds of the cheque into
his trust account as if it was a business transaction and would later repay
the money on the basis that the transaction had fallen through. Martin was
to draw an uncrossed trust cheque in favour of the second appellant who
would then take the cheque to the bank and have the proceeds of the
cheque paid out to him in cash.
[12] This proposal was not implemented because Martin had second
thoughts and told the first appellant that he was unwilling to issue an

uncrossed cheque in favour of the alleged client. Without telling the first
appellant, he reported the matter to the police.
[13] The first appellant secured the co-operation of a client of his, one
Eric Julian Smith, who was the owner of a cash loan business and
operated a trust account with a cheque account in the name of Good Hope
Financial Services Trust. The first appellant obtained Smith’s co-
operation by asking him if he would be willing to assist a client to hide an
amount of R1 620 000-00, which, he said, had been obtained from the
sale of shares, from his wife who had instituted a divorce action against
him. In return for the promise of remuneration of R25 000-00 Smith
agreed to pay the amount concerned (in respect of which an attorney’s
trust account cheque was to be drawn in favour of his business) into his
account  and then issue a cash cheque for the amount paid in, less his
remuneration.
[14] The first appellant, together with the second appellant and Nel,
both of whom had travelled specially to Port Elizabeth for the purposes of
the transaction, then arranged for Martin to receive a fax instructing him
to issue a cheque in favour of Good Hope Financial Services Trust for the
amount deposited into Martin’s trust account and the interest earned
thereon. Martin, however, kept the police informed of what was
happening and after the first appellant had gone to Martin’s office to fetch
the cheque, he, the second appellant and Nel were arrested.

[15] According to what the first appellant had told Martin he was to
receive 10% of the amount concerned for his involvement in the
realisation of the stolen cheque.
[16] The trial court found that the second appellant was what was
described as a ‘stooge’ or foot soldier. He had learned some months
beforehand of the scheme to realise the proceeds of a stolen cheque in
which he and Nel were to be involved. He knew that the Samancor
cheque had been stolen and deposited in a bank account and that he was
to be responsible for withdrawing the amount so deposited. He allowed a
copy of his identity document to be faxed to Martin so as to set up the
realisation transaction and was well aware that the stolen money would
eventually pass through his hands into those of his fellow conspirators
and that he himself would derive a financial benefit, viz an amount of R50
000-00, for his participation. Although, as the trial court found, he played
a smaller role than those who planned the scheme his role was a
necessary element in its successful execution.
[17] The relevant personal circumstances of the first appellant may be
summarised as follows:
(a)
he was at the time a 49 year old married man, with two children
from his first marriage, who were no longer dependant upon
him, and three children from his second marriage who were
dependent on him and who were still in primary school.

(b)
He had practised as an attorney since 1976, except for a period
when he worked as an insurance broker and an investment
adviser. As a result of the negative publicity which resulted
from the court case his practice had at the time of the trial
virtually come to an end.
(c)
As a result of his conviction on the two counts of fraud in the
present case his career in the legal profession had effectively
terminated;
(d)
he was financially ruined as a result of this matter;
(e)
since his arrest he had experienced considerable strain and he
was, as it was put by the trial judge, on sick leave;
(f)
he had personally derived no financial advantage from his
fraudulent conduct;
(g)
he was, as has already been stated, a first offender: he had an
impeccable record as an attorney and had never been guilty of
any conduct which could reflect adversely on the profession of
which he was a member.
[18] As far as the circumstances relating to the crimes are concerned I
have already pointed out that the Standard Bank sustained damages in an
amount of R326 140-10 in respect of count one. No loss was in fact
occasioned to anyone in respect of count 2.

[19] The relevant personal circumstances of the second appellant may
be summarised as follows:
(a)
he was 34 years old at the time when sentence was imposed;
(b)
the highest standard he passed at school was Standard Eight;
(c)
he was self supporting and did, inter alia,  security work;
(d)
he was divorced and had a young daughter who was two years
old when sentence was passed;
(e)
he supported his daughter and his mother with whom his
daughter was staying;
(f)
he had previous convictions for fraud (for which he was
sentenced to a fine of R1 000 or six months plus eighteen
months imprisonment suspended for three years) and theft (for
which he was sentenced to a fine of R300 or three months
imprisonment);
(g)
he had been in custody as an awaiting trial prisoner for
approximately nine months pending the conclusion of the trial.
[20] As appears from what I have said as regards the first appellant no
one suffered any financial loss in respect of the count on which the
second appellant was convicted.

RELEVANT STATUTORY PROVISIONS
[21] As far as is material, section 51 of the Act reads as follows:

‘…
(2)
Notwithstanding any other law but subject to ss (3) …, … a High Court shall –
(a)
if it has convicted a person of an offence referred to in Part II of
Schedule 2, sentence the person in the case of –

(i)
a first offender, to imprisonment for a period not less than 15
years;

(ii)
a second offender of any such offence, to imprisonment for a
period not less than twenty years; and
(iii)
a third or subsequent offender of any such offence, to
imprisonment for a period not less than 25 years;
…
(3)
(a)
If any Court referred to in ss …(2) is satisfied that substantial and
compelling circumstances exist which justify the imposition of a lesser
sentence than the sentence prescribed in [that subsection], it shall enter
those circumstances on the record of the proceedings and may
thereupon impose such lesser sentence.
…
(4)
Any sentence contemplated in this section shall be calculated from the date of
sentence.’
Part II of Schedule 2, as far as is material, reads as follows:
‘

Part II
…
Any offence relating to exchange control, corruption, extortion, fraud, forgery,
uttering or theft –
(a)
involving amounts of more than R500 000

(b)
involving amounts of more than R100 000, if it is proved that the
offence was committed by a person, group of persons, syndicate or any
enterprise acting in the execution or furtherance of a common purpose
or conspiracy …’
SUMMARY IN S V MALGAS
[22] Marais JA summarised the views of this Court on the correct
interpretation of s 51 in S v Malgas, supra, at 1235F - 1236E, as follows:
‘A.
Section 51 has limited but not eliminated the courts’ discretion in imposing
sentence in respect of offences referred to in Part I of Schedule 2 (or
imprisonment for other specified periods for offences listed in other parts of
Schedule 2).
B. Courts are required to approach the imposition of sentence conscious that the
Legislature has ordained life imprisonment (or the particular prescribed period
of imprisonment) as the sentence that should ordinarily and in the absence of
weighty justification be imposed for the listed crimes in the specified
circumstances.
C. Unless there are, and can be seen to be, truly convincing reasons for a different
response, the crimes in question are therefore required to elicit a severe,
standardised and consistent response from the courts.
D. The specified sentences are not to be departed from lightly and for flimsy
reasons. Speculative hypotheses favourable to the offender, undue sympathy,
aversion to imprisoning first offenders, personal doubts as to the efficacy of
the policy underlying the legislation and marginal differences in personal
circumstances or degrees of participation between co-offenders are to be
excluded.

E. The Legislature has, however, deliberately left it to the courts to decide
whether the circumstances of any particular case call for a departure from the
prescribed sentence. While the emphasis has shifted to the objective gravity of
the type of crime and the need for effective sanctions against it, this does not
mean that all other considerations are to be ignored.
F. All factors (other than those set out in D above) traditionally taken into
account in sentencing (whether or not they diminish moral guilt) thus continue
to play a role; none is excluded at the outset from consideration in the
sentencing process.
G. The ultimate impact of all the circumstances relevant to sentencing must be
measured against the composite yardstick (“substantial and compelling”) and
must be such as cumulatively justify a departure from the standardised
response that the Legislature has ordained.
H. In applying the statutory provisions, it is inappropriately constricting to use the
concepts developed in dealing with appeals against sentence as the sole
criterion.
I. 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.
J. In so doing, account must be taken of the fact that crime of that particular kind
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 bench mark which the Legislature has provided.’

JUDGMENT OF TRIAL COURT
[23] In his judgment on sentence the learned trial judge, after setting out
the personal circumstances of the first appellant and stating that the first
appellant’s counsel in the trial court had drawn attention to the fact that
no one suffered any financial loss as far as the activities of the first
appellant on count 2 were concerned and that he had received no personal
gain from the crime committed, said:
‘On the other hand, the crimes committed by accused No 1, an attorney of this court,
were well planned, He was part of a syndicate. He knew exactly how the crimes were
to be committed. He related to Attorney Martin that a person would steal a cheque and
that the cheque would then be deposited into a trust account, ant the further steps
thereafter to be taken. On one occasion accused No. 1 made his trust account available
for the stolen cheque. He wrote out a cheque and handed it to a co-conspirator. He
would have received, on his story to Martin, an amount of approximately R100 00 had
he not been done in by his co-conspirators.
On the second occasion accused No. 1 involved a friend who happened to be a junior
attorney. When Martin wanted to get out of the scheme, accused No. 1 at first tried to
persuade him to continue with the criminal act. Telling him that if he withdraws he
would be the weak link in the scheme. When accused No. 1 realised that there would
be certain difficulties to retain the co-operation of Martin, he, still in the furtherance
of the criminal objectives, involved another person, Mr Smith, and his trust account.
All these factors are in my view aggravating facts against accused No. 1. His
profession as an attorney required of him the utmost honesty. A breach thereof puts
the crime committed in even a more serious light.

If I look at the aggravating circumstances, and to the facts mentioned by Mr De Jager
that I should take into account in favour of the accused, I have no doubt at all that
there are no substantial and compelling circumstances as required by the Act.’
[24] The portions of the trial court’s judgment dealing with the second
appellant were in Afrikaans. After setting out the personal circumstances
of the second appellant and referring to the submission advanced by his
counsel that he played a lesser role in the commission of the crime, was
what was described as a ‘stooge’ and a foot soldier and had gained no
advantage from the commission of the crime covered by count 2 of the
indictment and that no financial harm was suffered by anyone as a result
of the crime, the trial judge said:
‘Dit is inderdaad so dat beskuldigde nr. 2 die “stooge” of voetsoldaat was. Dit is egter
heeltemal tereg deur mnr Roberts, namens die Staat, uitgewys dat in elke een van
hierdie skemas daar inderdaad ’n voetsoldaat moet wees. Beskuldigde nr. 2 was
bewus daarvan. Hy het op sy weergawe reeds maande voor die gebeure in die
gevangenis van Nel verneem van die skema waarmee hulle betrokke sou raak. Hy het
presies geweet watter rol hy sou speel in die skema. Hy  het presies geweet dat ’n tjek
gesteel is en in ’n bankrekening gedeponeer is en dat hy verantwoordelik sou wees vir
die trekking daarvan . Hy het toegelaat dat sy identiteitsdokument gebruik word, wel
wetend dat gesteelde geld uiteindelik via sy hande in dié van sy mede-samesweerders
sou beland en dat hy self geldelike voordeel daaruit sou trek. Hy het inderdaad ’n
kleiner rol gespeel as die beplanners, maar sy rol was ’n noodsaaklike element in die
suksesvolle uitvoering van die skema. Alhoewel hy nie die finale brief met die
instruksie aan Martin opgestel het nie, het hy geweet waarmee hy besig was en het

gegaan na ’n plek waar hy so min as moontlik spore sou laat om die instruksie om die
tjek te kry aan Martin deur te faks.
Slegs sy weergawe, wat aanvaar moet word, ten aansien van die vergoeding wat hy
sou ontvang het, is voor my geplaas. Die feit dat dit relatief klein is en die feit dat hy
’n mindere rol gespeel het as byvoorbeeld beskuldigde nr. 1 en Nel, tesame met sy
persoonlike omstandighede, kan egter, na my oordeel, ook nie dwingende
omstandighede daarstel wat ’n mindere vonnis regverdig ingevolge die terme van die
bepalings van die Wet nie.’
In the course of his judgment the trial judge said that had it not been for
the Act he would ‘most probably’ not have imposed the prescribed
minimum sentence on either of the appellants. In his judgment granting
the appellants leave to appeal the trial judge said:
‘Ek kan op hierdie stadium meld dat ek met oorweging van vonnis behoorlik aandag
aan die saak gegee het, en ek het uiteindelik tot die gevolgtrekking gekom dat indien
ek nie verplig was deur die Wet om die statutêre minimum van 15 jaar
gevangenisstraf op te lê nie, ek waarskynlik in die geval van die eerste applikant ’n
vonnis in die omgewing van 10 jaar gevangenisstraf sou opgelê het en ten aansien van
die tweede applicant, in die lig van sy vorige veroordelings, maar ook in die lig van
die mindere rol wat hy gespeel het, ’n vonnis in die omgewing van agt jaar
gevangenisstraf. Ek sou waarskynlik ten aansien van beide ’n gedeelte van die vonnis
opgeskort het.’
SUBMISSIONS ON BEHALF OF FIRST APPELLANT
[25] Mr Van Zyl, who appeared on behalf of the first appellant laid great
stress in his submissions on behalf of his client on the factors that the first

appellant derived no financial benefit from the offences, that no-one
suffered financial loss in respect of the fraud forming the subject matter
of the second count and that the first appellant’s career has been
destroyed and he is financially ruined as a result of the convictions.
[26] He also contended that the first appellant had played a much
smaller role than Nel, whom he described as the main protagonist. He
also drew attention to the fact that the first appellant was, as he put it,
financially vulnerable at the time because he had had to repay an amount
of R450 000 which he had borrowed to lend on to someone who had
since died without repaying him the debt. He contended in this regard that
it was probable that the first appellant had succumbed to the temptation to
participate in the two offences as a result thereof.
[27] Mr Van Zyl then proceeded to refer to a number of decisions all
decided before the Act came into operation, in which substantially lesser
sentences were imposed on persons convicted of crimes broadly similar
to those presently under consideration.
SUBMISSIONS ON BEHALF OF THE SECOND APPELLANT
[28] Mr Pretorius, the attorney who appeared on behalf of the second
appellant before this Court, contended that, in the light of the personal
circumstances of the second appellant, his substantially lesser role in the
commission of the offence of which he was convicted, the fact that he
was only to receive R50 000 for his part in the crime and in fact received

nothing, and the fact that no financial loss was in the result suffered by
anyone, the prescribed sentence was unjust with the result that an
injustice would be done if the sentence imposed on the second appellant
would have to be served.
DISCUSSION
[29] As far as the first appellant is concerned I shall consider the
sentence imposed on each count separately, although I agree with the trial
judge that nothing in section 51 of the Act prevented him from ordering
that the sentences should run concurrently and that in the circumstances
of this case it was appropriate so to order.
[30] I agree with the trial judge that had it not been for the Act a lesser
sentence in the region of ten years imprisonment, part of which would be
suspended, would have been appropriate. The cases to which Mr Van Zyl
referred confirm that that is so. One cannot ignore, however, that, as
Marais JA put it in Malgas, supra, at 1230 D-E, after the Act came into
operation ‘it was no longer to be “business as usual” when sentencing for
the commission of the specified crimes’ and that the Legislature has
provided a new ‘bench mark’ against which the sentence to be imposed
must be assessed.
[31] The first offence involved a significant amount of money, which
the bank has lost. In the light of the fact that the first appellant is, as the

Court was told, financially ruined it does not seem as if the compensation
order made in its favour will do much to reduce that loss.
[32] The crime was carefully planned. Its execution involved the co-
operation of a number of accomplices. In addition, the use of an
attorney’s trust account for what amounts to the laundering of the
proceeds of crime is an important aggravating factor. Conduct of this kind
by a practising attorney is reprehensible and cannot be tolerated.
[33] I do not think that the mitigating factors to which reference was
made and the fact that the first appellant was a first offender are
sufficiently
powerful
to
constitute
substantial
and
compelling
circumstances so as to justify a departure from the bench mark laid down
by the Legislature.
[34] Similar considerations apply in respect of the second fraud. It is
true that in respect of that offence no loss was suffered. On the other hand
the amount was substantially greater and there were the aggravating
factors that the first appellant not only involved a much younger
practitioner in the offence but also tried to persuade him to continue when
he had second thoughts. Moreover he took great care to see to it that the
fact that the paper trail relating to the transaction did not lead in any way
to him so that if the police discovered that the proceeds of the stolen
cheque had been paid into Martin’s trust account the suspicion would
have fallen on Martin and not on him.

[35] In all the circumstances I am not satisfied that there are substantial
and compelling circumstances justifying the imposition of lesser
sentences than those prescribed in the case of the first appellant and his
appeal against the sentences imposed upon him must fail.
[36] I turn now to deal with the sentence imposed upon the second
appellant. In my view the trial judge overemphasised the fact that his
participation was a necessary element in the successful implementation of
the scheme. The fact is that he was a relatively unimportant cog in the
criminal engine which produced the offence in the present case. There is
nothing to suggest that he was in any way involved in the planning of the
crime or the recruitment of the other accomplices. He did not benefit in
any way and in fact spent nine months in custody before the trial
concluded: it will be remembered in this regard that in terms of s 51(4)
prescribed sentences run from the date of imposition. It is true that, as his
list of previous convictions indicates, he is a pretty criminal. But that is
no reason for him to receive the same sentence on count 2 as the first
appellant, whose role and culpability were substantially greater.
[37] In my view the imposition of the prescribed sentence in the case of
the second appellant would cause an injustice to be done and that a lesser
sentence should be imposed. Regard being had to the benchmark
provided by the legislature, the question to be considered is what sentence
falling short of 15 years is appropriate.

[38] The crime was, as I have said when considering the first
appellant’s appeal, very serious even though no financial loss to anyone
in fact resulted. In my view a sentence of ten years’ imprisonment will be
appropriate in the circumstances.
[39] The following order is made:
1.
The appeal by the first appellant is dismissed.
2.
The appeal by the second appellant succeeds: The sentence of
15 years’ imprisonment imposed upon him is set aside and there
is substituted for it a sentence of imprisonment for ten years.
Insofar as it may be necessary to do so, the sentence so imposed
is antedated to 11th September 2000 being the date upon which
the sentence of 15 years’ imprisonment was imposed.
……………..
IG FARLAM
JUDGE OF APPEAL
CONCURRING:
HOWIE P
BRAND  JA