SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

CASE NO: 20616/2014
Not Reportable

In the matter between:

JOHANNA ANDRIETTE GRUNDLING                                                          APPELLANT

and

THE STATE                                                                                                 RESPONDENT

Neutral citation:   Grundling v The State (20616/14) [2015] ZASCA 129 (28 September
2015).

Coram:
Cachalia, Majiedt et Pillay JJA

Heard:
02 September 2015
Delivered:
28 September 2015

Summary: Sentence - imposition of - factors to be taken into account- importance of pre-
sentencing report - 30 counts of contravention of s 59(1)(a) of Value-Added Tax Act 89 of
1991 - eight years‟ imprisonment imposed by the court below set aside and replaced with
a three year prison sentence in terms of s 276(1)(i) of Criminal Procedure Act 51 of 1977.

ORDER

On appeal from:
Gauteng Division, Pretoria (Maumela J et Pillay AJ sitting as court of
appeal)
1 The appeal is upheld and the order of the court below is set aside and replaced with
the following:
„1 The appeal is upheld.
2 The sentence of the regional court is set aside and replaced with the following:
“The accused is sentenced to three years‟ imprisonment in terms of s 276(1)(i) of the
Criminal Procedure Act 51 of 1977 from which she may be placed under correctional
supervision in the discretion of the Commissioner of Correctional Services or a parole
board.”‟

JUDGMENT

Pillay JA (Cachalia and Majiedt JJA concurring)

[1] The appellant, Ms Johanna Andriette Grundling was charged in the Regional
Magistrates Court, Pretoria, with 30 counts of fraud, alternatively 30 counts of theft
of money and a second alternative of 30 counts of contravening s 59(1)(a) of the
Value-Added Tax Act 89 of 1991 (VAT Act) involving an amount of R33 671375.
She pleaded guilty to the second alternative and was sentenced to an effective
period 10 years‟ imprisonment, the State having decided not to pursue the main
counts of fraud and the first alternative counts of theft. She appealed to the
Gauteng Division of the High Court, Pretoria against the sentence. The appeal
was partially successful and the sentence was reduced to 8 years‟ imprisonment.
With the leave of that court, she now comes on appeal to this court.

[2] The appellant and her late husband, Mr Johannes Lodewikus Grundling, were the

only members of ASERA Landbouprodukte CC and Africa South Earth Research
Agricultural CC, which were registered Value Added Tax (VAT) vendors. In March
2010, they were arrested for submitting false VAT returns between April 2006 and
July 2008. During the arrest, her husband shot and killed himself.

[3] Section 59(1)(a) of the VAT Act reads as follows:

„59. Offences and penalties in regard to tax evasion
(1) Any person who with intent to evade the payment of tax levied under this Act or to
obtain any refund of tax under this Act to which such person is not entitled or with intent to
assist any other person to evade the payment of tax payable by such other person under
this Act or to obtain any refund of tax under this Act to which such other person is not
entitled –
(a) makes or causes or allows to be made any false statement or entry in any return
rendered in terms of this Act, or signs any statement or return so rendered without
reasonable grounds for believing the same to be true; or
. . .
Shall be guilty of an offence and liable on conviction to a fine or to imprisonment for a
period not exceeding 60 months.‟

[4] A brief synopsis of her written plea in terms of s 112 of the Criminal Procedure Act
51 of 1977 (CPA), which brought her conduct within the provisions of s 59(1)(a) of
the Act is the following:

During the period July 2006 to July 2008, the appellant and her husband were the
only members of the two close corporations. He was responsible for all the
operational activities while she helped with the administration of the business.
During this period monthly VAT returns (VAT 201 forms) were completed by her
late husband and he passed them on to her together with invoices and information
for her to sign. She did so, even though she foresaw the possibility that the
invoices and information were based on false figures, and had no reasonable
grounds for believing such entries to be true. This rendered the VAT returns false
as well. She nonetheless intentionally signed the returns after her husband had
falsified the contents of the returns so that they would obtain refunds to which they
were not entitled.

[5] The State accepted the plea whereupon the appellant was duly convicted. No
previous convictions were proved against her. After convicting the appellant, the
magistrate granted an order for her assets, to the value of R8 287 863 to be
attached by the Asset Forfeiture Unit. The trial was then postponed for the
purpose of obtaining a pre-sentencing report, and the attachment order duly
executed.

[6] When the trial resumed, a pre-sentencing report by Dr Eon Frederik Sonnekus, a
forensic criminologist, and a correctional supervision report in terms of s 276(1) of
the CPA were handed in by the appellant‟s representative. The latter report was
handed in without objection, but the report by Dr Sonnekus was not accepted by
the State and this resulted in Dr Sonnekus testifying and being subjected to
lengthy cross-examination.

[7] The report and evidence of Dr Sonnekus throws considerable light on the
appellant‟s personality as well as the circumstances under which the offences
were committed. It transpired that:

(a) The 65 year old former teacher was a first offender, and capable of
rehabilitation;

(b) She married at the age of 23 and over the next 35 years became a submissive
and obedient wife of a dominating and aggressive husband: this was his
explanation for why she carried out her husband‟s wishes in merely signing the
false documents;

(c) She had been a good person until the commission of these offences and had
an untainted professional career;

(d) She showed remorse by pleading guilty and genuinely appeared to have the
intention of not wanting to be in this situation (of transgressing the law) again.

[8] Dr Sonnekus concluded that she would benefit immensely from a program of
rehabilitation. He recommended that the court consider a non-custodial sentence
as punishment.

[9] The correctional services report confirmed that the appellant was regarded as a
suitable candidate for a sentence of correctional supervision in terms of
s 276(1)(h) of the CPA. The correctional officer who did the assessment
recommended that in imposing such a sentence on the appellant, she should be
exempted from house arrest and community service.

[10] That concluded the evidence that was led on behalf of the appellant. For its part,
the State submitted, by consent, an affidavit deposed to Ms Mantwese Fay Smith
who is a criminal investigator in the employ of SARS. She stated that she had
investigated these offences. She found that these offences were committed over a
period of two years. She explained that as a result of third party cross-referencing
she discovered that the invoices relied upon by the late Mr Grundling and the
appellant, in order to obtain refunds were fictitious and related to non-existent
transactions. Furthermore, in certain respects the false information contained
therein were in respect of items not offered by suppliers during that period. On a
number of occasions, the only amounts paid into the bank accounts of the closed
corporations were the VAT refunds. She further explained that of the R33 371 375
claimed as refunds, R27 068 197 was in fact paid to the appellant and her
husband. However the claims for the balance amounting to R6 603 177,49 were
withheld since by then, the scheme had been uncovered.

[11] The magistrate, in exercising his discretion in respect of sentence, took into
account that the appellant was 65 years old, pleaded guilty and that she was a first
offender. However, he appears to have attached no weight to the pre-sentencing
report of Dr Sonnekus. While he said he took into consideration what Dr Sonnekus
had said in his evidence, he did not specifically discuss any aspect thereof. Nor
did he consider the correctional services report and recommendations. He made
no mention of it.

[12] However, he had regard to a number of decisions in which sentences of direct
imprisonment were imposed for theft of money and for fraud respectively. He also
took all the counts together for purposes of sentence, and proceeded to impose a

period of ten years‟ imprisonment, which in my view was shockingly inappropriate
given the mitigating circumstances alluded to by Dr Sonnekus and the fact that the
statutory prescribed maximum sentence is only 60 months for a contravention of
s 59(1)(a) of the Act. These, in my view, constitute misdirections of sufficient
weight to justify interference on appeal.

[13] On appeal, the court below considered the effective period of ten years‟
imprisonment too harsh and sentenced the appellant to 48 months‟ imprisonment
on each count before ordering counts 3 to 30 to run concurrently with the
sentences imposed on counts 1 and 2, resulting in an effective 8 year term of
imprisonment. The court below also seems to have disregarded the pre-
sentencing report as well as the correctional services report. In my view, the
effective sentence of 8 years‟ imprisonment was a mere minor adjustment of the
punishment imposed by the magistrate. The court below did not accord sufficient
weight to the appellant‟s mitigating circumstances and the sentence it imposed
was shockingly out of kilter with the nature of the offences.

[14] Before us, it was contended on behalf of the appellant, that a term of imprisonment
for a person who is currently 68 years old and a first offender is too harsh. It was
submitted that the magistrate and the court below did not place sufficient weight
on the pre-sentencing report. It was further submitted that she was a productive
member of society, being a former teacher until her late husband persuaded her to
resign and join his business. It was thus argued that a non-custodial sentence
would be appropriate in the circumstances, specifically a sentence in terms of
s 276(1)(h) of the CPA.

[15] Counsel for the State, supported the sentence imposed by the court below. She
pointed out that much of the money that was lost through the scheme was not
recovered by the fiscus and that the appellant had not disclosed what had
happened to it or where the missing money was. She further argued that the
appellant benefitted substantially from their scheme and this was borne out by
paragraph 7 of her written plea which reads as follows:

„Ek erken dus dat ek die BTW 201 A opgawes vir die tydperk soos vermeld in kolom 1 van

Aanhangsel A en te Pretoria in die streekafdeling Gauteng, geteken het sonder dat ek
redelike gronde gehad het om te glo dat die inhoud daarvan waar is, ten einde
terugbelating van belasting ingevolge Wet 89 van 1991 te verkry, waarop ek en Johannes
Lodewikus Grundling nie op geregtig was nie.‟

She contended that all this constituted aggravating circumstances which justified
the sentence imposed by the court below.

[16] Whilst it can be accepted that the appellant benefitted with her late husband from
claiming VAT refunds to which they were not entitled, it does not necessarily follow
that she benefitted equally. There is simply no evidence to indicate to what extent
she benefitted personally nor does paragraph 7 of her plea clarify that aspect. In
regard to the submission that the appellant has not disclosed what had happened
to the unaccounted money, I accept that her failure to take the court into her
confidence is an aggravating factor that must have a bearing on the sentence that
must be imposed.

[17] There is however no evidence that she had concealed assets that may have been
acquired with the VAT funds. The assets of her estate, derived from the common
estate, have been attached. She has been left with almost nothing and earns a
living by selling pickles and jars of jam. The profits derived from these sales
supplement her pension of R5 000 per month. She is therefore not likely to be in a
position to commit these offences again and as she said, she has no intention to
do so.

[18] This does not mean that a wholly non-custodial sentence is appropriate. The
imposition of an appropriate sentence, should be approached with a „humane and
compassionate understanding for human frailties and the pressure‟ that
contributed
to
the
commission of
the
crimes.1
The offender‟s moral
blameworthiness is a factor that must also be considered. In considering her
actual role in the commission of the offences and the circumstances in which she
did so, she should not be made to bear the brunt of the punishment in the absence
of the primary perpetrator. There is certainly no justification to do so in this case. It

1 S v Rabie 1975 (4) SA 855 A at 866 B-C; [1975] 4 ALL SA 723 (A).

is probable that she would not have committed these offences but for the
pressures which was brought to bear on her to do so by her late husband. On the
other hand she nonetheless played a crucial role in the commission of these
crimes through which the fiscus suffered a huge loss.

[19] The court in S v R2 alluded to the fact that by introducing the sentencing option of
correctional supervision, the legislature clearly distinguished between two types of
offenders, those who ought to be removed from society by means of imprisonment
and those who should not, but should nonetheless be punished. (S v D3 and S v
Ingram4; S v Samuels 5 and S v Grobler 6. This does not mean that even if an
accused is regarded as a suitable candidate for correctional supervision, a non-
custodial sentence must be imposed. As pointed out by Nienaber JA in S v Lister7
„to focus on the well-being of the accused at the expense of the other aims of
sentencing and the interests of the community was to distort the process and to
produce, in all likelihood, a warped sentence.‟8

[20] It is clear that the appellant does not fall into the category of offenders who are a
danger to the community and she is not in a position to pose a threat to society. It
also seems she is not in a position to pay a suitable fine. I do not think that this is
an instance where a sentence of long term direct imprisonment is justified. At the
same time though, the sentence should also reflect an appropriate measure of
rebuke for her conduct.

[21] In considering all the factors mentioned above, to impose a non-custodial
sentence would in my view dilute the seriousness of the offences and indeed
disregard the impact of the actual loss of R 18 780 334 to the fiscus.9 A sterner
sentence other than a completely non-custodial sentence is called for and this

2 S v R 1993 (1) SA 476 (A) at 488G; [1993] 1 ALL SA 326 (A).
3 S v D 1995 (1) SACR 259 (A) at 266 c-d; [1995] 3 ALL SA 373 (C).
4 S v Ingram 1995 (1) SACR 1(A) at 9e; [1995] 3 ALL SA 121 (A).
5 S v Samuels 2011 (1) SACR 9 (SCA);(262/03) [2010] ZASCA 113.
6 S v Grobler 2015 (2) SACR 210 (SCA); (433/13) [2014] ZASCA 147 at para 6.
7 S v Lister 1993 (2) SACR 228 (A); [1993] 4 ALL SA 669 (A).
8 At 232 g-h.
9 The R33 671 375 less R6 603 177,49 in respect of unpaid claims and less a further less R8 287 863.

would reflect the seriousness of the crimes committed. In the circumstances I
would propose a sentence of 3 years‟ imprisonment in terms of s 276(1)(i) so that
while the mitigating factors have been taken into account the other objectives of
sentence are indeed also reflected.

[22] In the result the following order is made:

1 The appeal is upheld and the order of the court below is set aside and replaced
with the following:

„1 The appeal is upheld.

2 The sentence of the regional court is set aside and replaced with the following:

“The accused is sentenced to three years‟ imprisonment in terms of s 276(1)(i) of
the Criminal Procedure Act 51 of 1977 from which she may be placed under
correctional supervision in the discretion of the Commissioner of Correctional
Services or a parole board.”‟

R PILLAY

JUDGE OF APPEAL

Appearances:

For Appellant:

H F Klein

Instructed by:
Rianie Strijdom Attorneys, Pretoria

Symington & De Kok Attorneys , Bloemfontein

For Respondent:

C Wolmarans

Instructed by:
The Director of Public Prosecutions, Pretoria
The Director of Public Prosecutions, Bloemfontein
THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:
28 September  2015
Status:
Immediate

Please note that the media summary is intended for the benefit of the media and does not
form part of the judgment of the Supreme Court of Appeal.

Johanna Andriette Grundling v The State

The Supreme Court of Appeal (SCA) today upheld an appeal and set aside the sentence
of 8 years’ imprisonment imposed by the Gauteng High Court, Pretoria.

The 68 year old appellant, a first offender and former teacher, was convicted of 30 counts
of contravening s 59(1)(a) of the Value-Added Tax Act 89 of 1991 after pleading guilty.
She had married her husband some 35 years ago and became an obedient wife. They ran
two businesses related to agricultural activities. Her husband completed falsified VAT

returns and she signed off on them during the period 2006 to 2008. As a result an amount
in excess of R33 million was claimed from the South African Revenue Services and an
amount of more than R28 million was paid back to them as vat refunds. The claims were
based on fictitious invoices and non-existent transactions. Her husband shot and killed
himself during their arrest for these offences.

Evidence disclosed that he was a dominating and aggressive person who controlled the
appellant during their marriage and she would not have committed these offences but for
the pressures brought to bear on her by her late husband. All her assets have been
attached by the Asset Forfeiture Unit and she now sells pickles and jams to supplement
her pension.

In the circumstances a 3 year term of imprisonment in terms of s 276(1)(i) of the Criminal
Procedure Act 51 of 1977 was imposed.