S v Zinn

• Jurisdiction: South Africa
• Judge: Steyn CJ, Ogilvie Thompson JA and Rumpff JA
• Judgment Date: 31 March 1969
• Hearing Date: 21 March 1969
• Court: Appellate Division

F Rumpff, J.A.:

The appellant in this case was charged in the Cape of Good Hope Provincial Division with (1) 63 counts of fraud, (2) 291 counts of theft and (3) a contravention of sec. 135 (3) (a) of Act 24 of 1936 read with sec. 185 of Act 46 of 1926 (1 count). He appeared before G the learned JUDGE-PRESIDENT of that Division and pleaded guilty to, and was found guilty of, 14 counts of fraud, 221 counts of theft and the one count under Act 24 of 1936. He was sentenced to 15 years' imprisonment and he now appeals, with leave of the learned JUDGE-PRESIDENT, against the sentence imposed on him.

H No evidence was led as to the facts on which the various charges were based but counsel for the State, with the consent of counsel for the defence, read a short statement to the learned JUDGE-PRESIDENT containing particulars of the events which gave rise to the appellant's being charged.

It appears that in 1956 a furniture manufacturing company, Lola Zinn Furniture (Pty.) Ltd. (hereafter referred to as the company) was registered, with appellant and one Smith as equal shareholders and directors. One hundred shares of R2 each were issued to the shareholders.

Rumpff JA

Smith, an illiterate man, supervised labour and machinery. Sales and all financial matters were the responsibility of the appellant, who was also the secretary and public officer of the company. The company was A under-capitalised from the beginning and the appellant borrowed heavily and continuously from money-lending institutions, commonly known as 'shippers'. He started borrowing in 1958 from a company, later called Allied National Corporation (S.A.) (Pty.) Ltd. From 1961 he also borrowed from M. H. Goldschmidt (Pty.) Ltd. and in 1965 from Neville Griffin and Company. In the case of each of these firms the appellant B would present the annual balance sheet, the manufacturing account and the profit and loss account for the previous year, with, on the face of the balance sheet, the audit certificate and a signature purporting to be that of the company's auditor. These accounts were false and presented a completely wrong picture of the company's trading and C assets. In order to get the required loans the appellant had to satisfy the shippers that the money was being used for purchases of material and he was required to supply to them proof of genuine purchases which he purported to do by way of statements reflecting such purchases. For this he used paper containing the letter heads of various D firms and on these he typed, in his factory, false figures. These false invoices were then handed to the shippers by the appellant. The appellant also obtained overdraft facilities for the company at the Standard Bank by using the same false balance sheets, and in 1965 and 1966 the Bank also assisted the company by discounting bills and promissory notes from two furnishing companies. Not only was the Bank E not informed that these bills and notes were in fact accommodation bills, but the appellant fraudulently entered false invoice numbers on these instruments in order to present to the Bank evidence of the instruments' being genuine trade bills and notes, the Bank being prohibited, as is alleged, from discounting accommodation bills.

F Although the company in fact showed a small annual profit up to 1961, it thereafter was run at a loss which became progressively worse. In 1963 the loss was R28,017.52, and in 1964 R41,804.14. No balance sheet could be obtained for the year ending 1965 and in 1966 the company crashed and its factory literally went up in smoke.

G The money involved in respect of the counts to which the appellant pleaded guilty is set out hereunder. The actual losses incurred by the shippers are: Allied National Corporation, R64,509.77; M. H. Goldschmidt & Co., R242,110; Neville Griffin & Co., R63,766.17, the total being H R370,385.94. The amount obtained by way of overdraft facilities from the Standard Bank was R612,309, but the Bank was paid the amounts owing to it. Sureties, however, who signed in respect of the overdraft facilities from the Standard Bank lost R18,000. The furniture firms who...