S v Katsikaris

• Jurisdiction: South Africa
• Judge: Trollip JA, Van Winsen AJA and Botha AJA
• Judgment Date: 08 May 1980
• Citation: 1980 (3) SA 580 (A)
• Hearing Date: 07 March 1980
• Court: Appellate Division

Trollip, JA.:

This appeal concerns the appellant's alleged contraventions of regs 2 (1) and 3 (1) (a) of the Exchange Control Regulations promulgated in Government Notice R1111, dated 1 December 1961, under s 9 of the Currency and Exchanges Act 9 of 1933. He was convicted of

Trollip JA

both contraventions by the Cape of Good Hope Provincial Division (VIVIER J). Both counts were taken together for the purpose of sentence. He was A sentenced on them to a fine of R18 839,58 or one year's imprisonment and also to one year's imprisonment suspended for five years on appropriate conditions. He has duly appealed to this Court against those convictions.

He originally appeared in the magistrate's court where he was not B represented. He there pleaded guilty to both charges. The magistrate, after questioning him about his plea, was satisfied that he had admitted the allegations in the charges and stopped the proceedings (see s 121 (1) and (2) (a) of the Criminal Procedure Act 51 of 1977). Thereafter he was arraigned for sentence in the Court a quo. There he was represented by C counsel. The latter sought to satisfy the Court a quo that, despite appellant's plea of guilty, he was not guilty of the alleged offences and that his plea should be altered to one of not guilty in terms of s 121 (6) of the Act. The record of the proceedings in the magistrate's court was handed in. An agreed statement of facts was also handed in by consent. The State then adduced the evidence of two witnesses. After hearing argument D the Court a quo, following s 121 (5) (b), held that the appellant had no valid defence to the charges and that his plea of guilty should therefore stand. Hence it convicted him of both offences, and ultimately imposed the aforementioned sentence.

E The background to the alleged offences appears from the agreed statement of facts, it reads:

"Agreed statement of facts.

1.

During the period March 1970 to August 1976 one Raymond Andrew Kets, a shipping clerk, fraudulently misrepresented to American Express International Incorporated (Pty) Ltd, Greenmarket Square, Cape Town, on 391 different occasions, that he was entitled to purchase American Express travellers cheques payable in foreign currency in order to F meet expenses of certain foreign vessels, the owners of which he alleged were clients of his employers.

2.

Kets, however, was not entitled to buy the travellers cheques on this basis, and was, in fact, commissioned by various persons (middlemen) to obtain the travellers cheques from Amexco for the sole purpose of resale thereof to would-be currency smugglers throughout the Republic.

3.

During the above period over R8 million worth of foreign currency, 99 G per cent of it United States dollars, was illegally channelled out of South Africa through the machinations of Kets.

4.

The accused was desirous of illegally taking or despatching foreign currency from the Republic; and with this purpose unlawfully received travellers cheques on seven different occasions during the period set out in the indictment from one Pericles Kapsias as well as from one John Vlachostergios, both of whom were operating as middlemen.

5.

H The accused paid in rand the full exchange rate value then reigning vis-à-vis the American dollar, and, in addition, a 6 per cent commission, to the middleman.

6.

The travellers cheques were signed top and bottom on the fact of the cheque by the accused in Caledon, and, on divers occasions during the period set out in the indictment, (he) despatched them from Caledon to Greece. All these cheques were presented by and/or on behalf of the accused to an Athens bank and duly honoured by the latter, who, in turn, were reimbursed by Amexco, New York, on clearance of the cheques.

7.

The cheques so obtained by the accused originally were received by Kets as follows:

Trollip JA

5 January 1973	$1 300
27 March 1973	$1 200
16 May 1973	$3 020
A 18 July 1975	$2 760
3 December 1975	$5 680
13 January 1976	$6 810
22 April 1976	$2 270

These cheques are before the Court.

The equivalent rand value of the above totalled R18 839,58 ($23040).

8.

The accused did not have the lawful authority of the Treasury or a person authorised by the Treasury in terms of the regulations to B purchase foreign currency as set out above or take or send it out of South Africa, as set out supra.

9.

Kapsias and Vlachostergios were not authorised dealers in terms of the regulations.

10.

The accused did not know Kets personally."

C The American Express Co will also be referred to as "Amexco" hereinafter.

Reg 2 (1) says:

"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 being an authorised dealer."

D The gravamen of the offence alleged in court 1 was that appellant, without the required Treasury permission, did "buy... foreign currency" amounting to the $23 040 from the two persons mentioned in para 4 of the agreed statement ("the middlemen"), who were not authorised dealers.

E For appellant it was contended that he merely bought travellers' cheques and not "foreign currency" and therefore did not breach reg 2 (1). "Foreign currency" is defined in reg 1 as meaning

"unless the context otherwise indicates... any currency other than currency which is legal tender in the Republic".

The contention was that the travellers' cheques in question did not F themselves constitute "currency" at all. Sustenance for this argument was sought to be derived from reg 3. Sub-reg (9) thereof provides:

"For the purposes of this regulation, any bills of exchange or promissory notes payable otherwise than in the currency which is legal tender in the Republic shall be deemed to be foreign currency..."

Hence, the argument proceeded, the conspicuous absence of any similar G deeming provision applicable to reg 2 indicated clearly that instruments like bills of exchange and promissory notes payable in a foreign currency were not intended to be foreign currency for the purpose of reg 2 (1). That argument appealed to and was accepted by the Court in S v Pamensky 1978 (3) SA 932 (E) at 934H - 935C.

H For reasons given later when dealing with count 2 I do not think that the travellers' cheques did constitute or were proved to constitute "foreign currency" within the meaning of that expression as used in reg 2 (1) or as defined in reg 1. But, as will now appear, that conclusion does not assist the appellant on count 1. What reg 2 (1) forbids is that a person should, without the necessary permission etc, "buy" or "sell" any foreign currency. That pre-supposes the entering into of an agreement to buy or sell foreign currency. The provision hits at the entering into of such an agreement with someone who is not an authorised dealer without

Trollip JA

Treasury permission. Its purpose is to enable the Treasury to exercise proper control, directly or through authorised dealers, over all such A transactions in order to protect the Republic's reserves of foreign currency. Consequently, as soon as such an agreement is entered into without its permission, and with someone other than an authorised dealer, reg 2 (1) is contravened, irrespective of where or when the foreign currency, as the merx of the agreement, is to be received or delivered in B pursuance thereof. Thus, for example, if A without the necessary permission agrees to buy $10 000 from B, not being an authorised dealer, in terms of which agreement that foreign currency is to be received by or delivered to A somewhere abroad when he goes there, then reg 2 (1) is, without more, contravened. That in terms of the agreement some article (like a key to the safe where $10 000 is being kept abroad) or some C document (like a letter or cheque) evidencing A's right to receive that foreign currency is simultaneously given by B to A in order to facilitate his getting the $10 000 when abroad, must not be allowed to obscure the true nature of the agreement. It still is ordinarily one of buying or selling, not the article or document, but the foreign currency. See S v D Amojee 1971 (1) SA 795 (D) at 796G - 797A. There the accused was alleged to have contravened reg 2 (4) (a) by having used "foreign currency... acquired from an authorised dealer" in the form of bank drafts, expressed in sterling, for a purpose other than the one mentioned in his application therefor. Counsel contended that the accused merely acquired the bank drafts and not foreign currency and therefore did not contravene the E regulation. The dicta of JAMES JP in rejecting that contention are very apposite to the present case.

The question here, therefore, is simply whether the appellant, by agreement with the middlemen, did buy foreign currency, ie the $23 040, from them. The indictment alleged that he did. In the magistrate's court F he pleaded guilty to the charge. In answer to the questioning by the magistrate he clearly admitted having bought such currency - he did not say that he had merely bought travellers' cheques or any other rights. True, the agreed statement of facts mentions his acquiring the travellers' cheques for the $23 040 from the middlemen and paying them therefor. And in ordinary parlance one often speaks of buying travellers' cheques. G Moreover, it was also contended for appellant that in fact all he acquired by purchase and cession from the middlemen were their rights against Amexco as represented by the travellers' cheques. But having regard to his above admissions and the agreed statement of facts read as a whole, I think that in truth...