S v Christodoulou; S v Savides; S v Temple; S v Zwyssig

• Jurisdiction: South Africa
• Judge: Rabie JA, Miller JA and Diemont JA
• Judgment Date: 23 March 1979
• Citation: 1979 (3) SA 523 (A)
• Hearing Date: 13 November 1978
• Court: Appellate Division

Rabie JA:

This judgment is concerned with four appeals against sentence. H The appeals were argued before us on the same day and they can conveniently be dealt with in one judgment. All four of the appellants pleaded guilty to, and were found guilty of, a contravention of reg 3 (1) (a), read with regs 1, 3 (a) and 22, of the Exchange Control Regulations 1961 (promulgated in terms of s 9 of the Currency and Exchanges Act 1933 by Government Notice R1111 of 1 December 1961, as amended), and in each of the cases the appellant was sentenced to a fine (or, in the event of the fine not being paid, to a term of imprisonment) and to a term of imprisonment. In three of the cases part of the imprisonment imposed was suspended on certain conditions. In each of the cases

Rabie JA

the appeal is directed at the sentence of imprisonment. In the case of S v Christodoulou the appellant was also found guilty of a contravention of A reg 2 (1) of the aforesaid regulations, but his offences were treated as one for the purposes of sentence. All four of the appellants were first offenders.

Reg 2 (1) of the regulations reads as follows:

"Except with permission granted by the Treasury, and in accordance with such conditions as the Treasury may impose no person other than an authorised dealer shall buy or borrow any foreign currency or any gold from, or sell or lend any foreign currency or any gold to any person not B being an authorised dealer."

"Authorised dealer" means, in respect of any transaction in respect of foreign exchange, "a person authorised by the Treasury to deal in foreign exchange" (reg 1), and "foreign currency" means"any currency other than currency which is legal tender in the Republic" (reg 1). Reg 3 (1) (a) provides as follows:

C "Subject to any exemption which may be granted by the Treasury or a person authorised by the Treasury, no person shall, without permission granted by the treasury or a person authorised by the Treasury and in accordance with such conditions as the Treasury or such authorised person may impose -

(a)

take or send out of the Republic any banknotes, gold, securities or foreign currency, or transfer any securities from the Republic elsewhere."

D Reg 22, in so far it is relevant for present purposes, reads as follows:

"Every person who contravenes or fails to comply with the provisions of any of these regulations... shall be guilty of an offence and liable upon conviction to a fine not exceeding ten thousand rand or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment; provided that where he is convicted of an offence against E any of these regulations in relation to any... foreign currency... the fine which may be imposed on him shall be a fine not exceeding ten thousand rand, or a sum equal to the value of the... foreign currency..., whichever shall be greater."

Before I discuss the individual appeals, it will be convenient to deal with a few matters that are relevant to the appeals generally.

F The first point that needs to be mentioned is that contraventions of the Exchange Control Regulations are regarded in a serious light by the Legislature. This is evident from reg 22, which (as indicated above) provides for a fine of R10 000, or an amount equal to the amount involved in the contravention concerned, whichever is the greater, or imprisonment of five years, or for both such fine and imprisonment. This is, of course, G the maximum penalty prescribed, which will no doubt only be imposed in very serious cases, but it nevertheless shows that the Legislature takes a serious view of contraventions of the regulations. The Courts have on more than one occasion stated that they consider contraventions of the regulations to be serious offences. In S v Pillay 1977 (4) SA 531 (A) at H 538D - E, the following was said by this Court (per TROLLIP JA) with regard to contraventions of the regulations:

"The economic interests of the State and general body of its citizens are prejudiced by offences of the present kind. As appears from the cases of S v Nichas, S v Thomatos (supra) and S v Casjoojie 1970 (4) SA 527 (T) at 529A - B the Courts rightly treat such contraventions, particularly in the present economic climate, as being very serious offences. Hence, in the assessment of the appropriate punishment to impose, the retributive and especially the deterrent elements must inevitably be the predominant considerations. This is particularly so since offenders and would-be offenders are generally persons of means to whom the payment of a fine, even the maximum fine, would not present great difficulty and serve as

Rabie JA

sufficient retribution or deterrence. Although each case must, of course, be adjudged in the light of its own particular circumstances, I think that the present is a case in which those two considerations should predominate."

A In S v Immelman 1978 (3) SA 726 (A) at 730A - B, it was again said by this Court (per CORBETT JA) that

"contraventions of the regulations are generally regarded as serious offences since they prejudice, or are calculated to prejudice, the economic interests of the State and the general body of its citizens."

B In all four of the appeals the head of the Investigation and Inspection Division of the South African Reserve Bank in Pretoria, Dr A R P Hamblin, gave evidence on behalf of the State in which he explained, inter alia, the necessity of preserving as far as possible the Republic's foreign currency reserves, and the need to prevent illegal transfers of foreign currency abroad. The Reserve Bank has been appointed to perform the C functions assigned to the Treasury by the Exchange Control Regulations (see Government Notice R1112 of 1 December 1961, as amended), and the regulations are intended to control the outflow of foreign currency. The witness, whose evidence was much to the same effect in all four of the cases, testified inter alia that, due to various factors, both economic and political, there has since the latter half of 1975 been a substantial D illegal outflow of currency and that this is harmful to the country. The nature of the evidence given by Dr Hamblin appears from the judgment of BOSHOFF AJP in the case of S v Temple, which has been reported in 1978 (3) SA 185 (W).

In three of the four cases with which we are concerned there was no E challenge of Dr Hamblin's evidence in the trial Court. The exception was the case of S v Savides in which counsel put it to the witness that the amount of foreign currency which leftt he country illegally was but "a drop in the ocean" as compared ith the amount which was transferred from the country legally, ie in payment of imports from abroad. The witness F readily agreed that the illegal outflow was very small as compared with the amount that left the country legally, but he contended that it was nevertheless of importance and that "the minor percentage becomes more significant when the balance of payments of South Africa are subject to stress." Counsel's argument with regard to Dr Hamblin's evidence was dealt with in the following terms by the learned trial Judge (GROSSKOPF J in the Cape Provincial Division):

G "It was contended by the defence that the amount taken out would, by itself, make no great dent in the foreign reserves. That is, of course, true inasmuch as the total foreign reserves of the country are obviously of such a magnitude that an amount of approximately R75 000 would not by itself make any great difference thereto. However, that does not seem to me to be a very str ong argument since, if this type of offence is not severely discouraged, the ultimate result, one can expect, is that the H foreign reserves would be seriously affected. It is so in all control measures that the unlawful operator must be curbed even though, relatively speaking, his activities might be slight compared to the total volume of lawful activity in that field. One cannot for instance argue that an illicit dealer in diamonds should not be punished appropriately or should receive only a light sentence, because his operations are small compared to that of the lawful dealers in diamonds. The amounts taken out should obviously be taken into account, but it must almost invariably be so, one would imagine, that amounts of foreign exchange unlawfully taken out would be small and even very small, compared to the total volume of foreign trade in which this country is engaged."

I respectfully agree with what the learned Judge said.

Rabie JA

With regard to the question of imposing sentences of imprisonment for contraventions of the Exchange Control Regulations, counsel in Savides' case contended in this Court that a Court should

A "even in severe cases..., even if the amount involved was relatively large, keep first offenders out of prison and use instead alternative punishment of a substantial fine."

A trial Court's discretion with regard to the question of sentence cannot, however, be fettered by the application of a rule as suggested by counsel B Each case must be decided in the light of its own circumstances. In making the aforesaid submission, counsel relied inter alia on a view that was expressed in the majority judgment in S v Scheepers 1977 (2) SA 154 (A) at 159A - C, but that view was rejected in a recent judgment of this Court (per RUMPFF CJ) in the case of Johan F Holder v Die Staat (delivered C on 30 November 1978, not yet reported). [*2] Dealing with an argument based on the view expressed in Scheepers' case, the CHIEF JUSTICE said:

"Die hele benadering dat gevangenisstraf slegs in sekere gevalle geregverdig is, kan nie aanvaar word nie en is 'n beperking wat nie by ons straftoemeting bestaan nie. Enige ernstige misdaad, van watter aard ook al, kan aanleiding gee tot gevangenisstraf en dikwels is gevangenisstraf die enigste gepaste straf wat opgelê...