Rex v Jaspan and Another Appellants

• Jurisdiction: South Africa
• Judge: De Wet CJ, Watermeyer JA, Tindall JA, Centlivres JA and Feetham JA
• Judgment Date: 03 October 1939
• Hearing Date: 22 September 1939
• Court: Appellate Division

Tindall, J.A.:

This is an appeal from a decision of the Transvaal Provincial Division upholding a conviction by a magistrate in a prosecution in which the two appellants, who had traded in partnership, were found guilty of contravening sec 132 (d) of the Insolvency Act, 24 of 1936, read with provisos (ii) and (iii) of the said section, by making a disposition of assets of the partnership, to the prejudice of creditors, otherwise than in the ordinary course of business and with the intention to defraud The partnership estate and the private estates of the appellants had been sequestrated provisionally on 7th December and finally on 13th December, 1937, and the disposition was alleged to have been made between 1st July and 13th December, 1937 The Crown sought to prove the charge by establishing a general deficiency and the Provincial Division held that the evidence established a general deficiency of £2,098 16s 3d., that there was an absence of full explanation or account of the deficiency by either of the appellants and that, therefore, they were rightly convicted At the time of sequestration the appellants had two separate businesses, a retail and a wholesale business, the latter having been opened as late as August, 1937 The deficiency relied on by the Crown related to the wholesale business To establish the deficiency the Crown called a witness, Raphaely, the chief clerk of the trustee, and that witness put in six accounts, exhibits F to M Exhibit M purports to show the trading and profit and loss accounts for both businesses from 1st July to 7th December, 1937 of the other five of the said six exhibits Raphaely stated that he found F and G, without mentioning where be found them Presumably he meant that they were found among the documents relating to the business The record states that exhibit F was put in by consent Neither of the two counsel who appeared for the appellants at the trial made any objection to any of the said exhibits and the record justifies the inference that all six exhibits were put in by consent The books, which consisted of a new set of books opened on lot July, 1937, were before the Court The figures relied on by the Crown to prove the deficiency of £2,098 16s 3d are shown in exhibit M From the trading account shown in Exhibit M it appears that during the period 1st July to 7th December, 1937, goods brought up at £5,527 16s 5d were transferred from the retail to the wholesale business, that the latter business purchased stock for £1,031 14s 3d., that it sold stock for £2,881 1s 6d and that the stock on hand was valued at £1,579 12s 2d., the result being a gross

Tindall, J.A.

loss of £2,098 16s 3d The evidence shows that stock was taken on 8th December, 1937, by a representative of the trustee and the first appellant The inference is that Exhibit M was prepared by the trustee or someone acting on his behalf It appears, however, from the defence raised before the magistrate that the appellants did not dispute that the figures in Exhibit M, with the exception of the amount brought up for stock on hand, appeared in the books of the business, but challenged the inferences sought to be drawn by the Crown from those figures, and contended that the figure for goods transferred did not show whether it was arrived at on the basis of retail or wholesale price or value, that the figure for sales was consistent with sales at a loss or at cost, that the stock on hand may have depreciated in value below cost, that the stock-taking may have been taken at such depreciated value, and therefore that the figure of £2,098 16s 3d., purporting to show the gross loss, was unreliable.

In addition to Raphaely's evidence, and the said accounts and a statement of the affairs of the partnership lodged and signed by the first appellant in compliance with sec 16 of the Act, the Crown put in a record of the evidence given under oath by the first appellant at an examination held under sec 65 of the Act before a magistrate at a meeting of creditors held on 23rd February, 1938 At the trial neither of the appellants gave or led any evidence.

Before the Provincial...