S v Rosenthal
Jurisdiction | South Africa |
Judge | Trollip JA, Muller JA and Diemont JA |
Judgment Date | 20 September 1979 |
Citation | 1980 (1) SA 65 (A) |
Court | Appellate Division |
Trollip JA:
These proceedings embrace two appeals. In the first appeal the appellant, accused No 5 at the trial, has appealed against his conviction F for attempted fraud by the trial Court (KUMLEBEN J sitting with assessors in the Durban and Coast Local Division). In the other appeal the State has appealed on two questions of law arising out of the trial. They were reserved under s 366 (1) of the Criminal Procedure Act 56 of 1955 by the learned trial Judge for the consideration of this Court at the instance of the State. (It was common cause that that Act still applied to the present G proceedings despite its repeal and replacement by the current Act 51 of 1977.) The appellant has, through counsel, opposed this appeal by the State. The other accused (Nos 2,3 and 4) also have an interest in the outcome of this appeal. But they were not represented before us, having intimated through their attorneys that they abide this Court's decision.
H These appeals arise in the following way. Appellant and the other accused were tried on several counts. Only two of those counts are now relevant. They are count 1, which alleged fraud or alternatively a conspiracy to commit fraud, and count 2, which alleged a contravention of s 7 (1) of the Banks Act 23 of 1965 ("the Act"). The prosecution was an aftermath of the collapse and liquidation of certain companies in the Sidarel Group. The holding company was Sidarel Finance Corporation (Pty) Ltd ("SFC"). One of its important subsidiaries was Sidarel
Trollip JA
Investments (Pty) Ltd ("SI"). Accused Nos 1 to 4 were directors of these companies. The duly appointed auditors of these and other companies in the A Group were the Durban firm of Wolpert and Abrahams. Appellant was a partner of this firm. He became responsible for the audit of the books and accounts of these companies during the financial years ended 30 June 1970 and 1971. From about 1968 a substantial and flourishing part of SFC's busines was accepting deposits of moneys as investments from the general B public. Doubts then arose about whether or not SFC was thereby contravening s 7 (1) of the Act by conducting a general bank without being registered as such under the Act. On 19 September 1968 SFC therefore sought the advice of senior counsel in Durban. The substance of his advice was this. Since SFC was unwilling to register as a bank, it should, in order to avoid contravening the Act, conduct this business through several C associated companies in a particular way. This recommended way was that the number of depositors and the aggregate of the deposits with each company should not at any time exceed the limits prescribed by s 1 (2) (iii) of the Act, ie 20 depositors and R500 000 respectively. SFC D thereafter did form several subsidiary companies for the purpose. However, the gravamen of the State's case against the accused was that counsel's scheme was in fact never implemented by SFC; that it continued to carry on business in the same way, substantially exceeding the aforementioned limits and thereby contravening s 7 (1) of the Act (count 2); that the accused fraudulently misrepresented in SFC's and SI's annual accounts that those limits had not been exceeded (count 1); and that the accused were all party to that fraud.
E At the end of the State's case at the trial the defence applied for the discharge of all the accused (except No 1 who had fled the Republic) on both counts. The application failed on count 1 but succeeded on count 2 on which the accused were all acquitted. This judgment is reported - S v F Ostilly and Others 1977 (2) SA 104 (D). (It was in consequence of these acquittals that the Court a quo ultimately reserved the questions of law at the instance of the State.) The trial proceeded in respect of, inter alia, count 1. Ultimately accused No 4 was acquitted, but Nos 2, 3 and the appellant were convicted of attempted fraud on this count. This judgment is also reported under the same title in 1977 (4) SA 699 (D) at G 707 - 716. Appellant was sentenced to one year's imprisonment suspended on appropriate conditions - see 1977 (4) SA 738 (D) at 744 in fin. In view of the full reports of the comprehensive and closely-reasoned judgments of the learned trial Judge, it is unnecessary to repeat elaborately in this judgment all the facts relating to counts 1 and 2. Wherever necessary these judgments will be referred to.
Count 2 - the reserved questions of law
H It is appropriate and convenient to deal with this appeal first.
It was alleged in count 2 that the accused contravened s 7(1) of the Act in that during the period from 30 June 1969 to 18 January 1972 they were party to SFC's or SI's unlawfully carrying on business as a general bank without either of them being registered as such. The accused were acquitted at the end of the State case as a result of the learned trial Judge's interpretation of the relevant provisions of the Act. (I should here interpolate that this Act was subsequently amended, but it was common cause
Trollip JA
before us that the amendments were not applicable or relevant to the present problem.) After the trial two questions of law were reserved at the instance of the State concerning the proper interpretation of s 1 (2) A of the Act. I shall set them out and answer them at the end of this part of the judgment.
Now s 7 (1) says:
'No person shall carry on business as a banking institution of a particular class unless that person has been registered or provisionally registered as a banking institution of that class.'
B For the meaning of "a banking institution of a particular class" I look first at the definitions in s 1 (1). "A banking institution" is there defined as meaning
'a commercial bank... or a general bank or a hire-purchase bank or a merchant bank or a savings bank.'
C The sub-section then defines each of these banks. According to those definitions the fundamental postulate common to each of them is that it "carries on the business of accepting deposits". What differentiates them is the kind of additional activities each conducts. For example, a commercial bank also permits the withdrawal of the deposits by cheque; a D hire-purchase bank also finances hire-purchase transactions, etc. But a general bank, with which we are concerned, merely accepts deposits. It is defined as meaning -
'a person who carries on the business of accepting deposits, but does not include a commercial bank or a hire-purchase bank or a merchant bank or a savings bank'.
E I now turn to s 1 (2) - the provision that creates the present problem. It reads:
A person shall be deemed to be carrying on the business of accepting deposits for the purposes of this Act -
if in the opinion of the Registrar he accepts, as a regular feature of his business, deposits from the general public; or
if he solicits or advertises for such deposits."
F There then follows four provisos which will be dealt with presently. (I shall refer in this judgment to the above deeming as "the deeming provision" and to the above opinion of the Registrar as the "requisite opinion".)
The words "shall be deemed" ("word geag" in the signed, Afrikaans text) G are a familiar and useful expression often used in legislation in order to predicate that a certain subject-matter, eg a person, thing, situation, or matter, shall be regarded or accepted for the purposes of the statute in question as being of a particular, specified kind whether or not the subject-matter is ordinarily of that kind. The expression has no technical H or uniform connotation. Its precise meaning, and especially its effect, must be ascertained from its context and the ordinary canons of construction. Some of the usual meanings and effect it can have are the following. That which is deemed shall be regarded or accepted (i) as being exhaustive of the subject-matter in question and thus excluding what would or might otherwise have been included therein but for the deeming, or (ii) in contradistinction thereto, as being merely supplementary, ie, extending and not curtailing what the subject-matter includes, or (iii) as being conclusive or irrebuttable, or (iv) contrarily thereto, as being
Trollip JA
merely prima facie or rebuttable. I should add that, in the absence of any A indication in the statute to the contrary, a deeming that is exhaustive is also usually conclusive, and one which is merely prima facie or rebuttable is likely to be supplementary and not exhaustive.
An illustration of an exhaustive deeming is to be found in the oftquoted dicta of INNES J in Chotabhai v Union Government (Minister of Justice) and Another 1911 AD 13 at 33 - 4, and of a supplementary one in the judgment B of MAASDORP CJ at 58 - 60. An authoritative illustration of a supplementary and prima facie deeming is afforded by R v Haffejee and Another 1945 AD 345. I intend dealing with this decision in some detail, not only because of its appositeness to the present case, but also because it was misunderstood (as appellant's counsel candidly pointed out) by the C Court in Steel v Shanta Construction (Pty) Ltd and Others 1973 (2) SA 537 (T). Haffejee's case concerned an alleged contravention of a price control regulation. The relevant War Measure empowered the price controller to calculate and determine the cost, percentage of gross profit, price, or factor of any goods. Reg 14 (1) then provided that, D whenever it was necessary for the purposes of any proceedings to establish such cost, price, etc, then
the controller's determination could be "prima facie proved" by the production by any person of a statement in writing (certificate) purporting to have been issued by or on the authority of the controller and setting forth the determined cost, price, etc, and
such cost, price, etc "shall be deemed" to be the true cost, price...
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