CASE NO CCC1/1/2014

IN THE REGIONAL COURT OF THE EASTERN CAPE HELD AT THE SPECIALISED COMMERCIAL CRIMES COURT: PORT ELIZABETH.

In the matter between

THE STATE

And

PETER ROBERT TWYNHAM

[Accused]

1. INTRODUCTION:

1.1. Before me is Peter Robert Twynham, he accused in this matter, he was represented at all relevant times by Adv. Van Rooyen on instructions of Danie Gouws Attorneys. The State was represented by Advocate Brink from the office of the Specialised Commercial Crimes Unit [SCCU]."

1.2. The accused is facing nine [9] counts to wit:

Count 1: THEFT

The Accused, during the period between the 02nd of March 2003 and the 27th of May 2012 misappropriated money belonging to the Church, to the total amount of R 1 398 588.56 to pay for his own private expenses and/or made private purchases without permission from the Church Leadership and/or the members of the Church.

COUNTS 2 - 9: FRAUD [main counts]

The accused is guilty of 8 counts of Fraud

In that on or about the dates listed in Column 2 of the Schedule and at or near Port Elizabeth, in the Regional Division of the Eastern Cape the accused unlawfully, falsely and with the intention to defraud (either directly or indirectly) gave out and pretended to the SARS that;

• the information contained in the income tax returns for the periods mentioned in column 3 of the schedule below were in all material aspects true and correct; and/or

· the amounts declared in column 4 of the schedule below were the only considerations received by the accused during the income tax periods set out in column 3 of the schedule below; and/or

• he was not liable for any other income tax payment to SARS except for the amounts set out in column 7 of the schedule below; and/or

OR having a legal duty to declare his total gross income

• failed to declare the amounts listed in column 5 of the schedule below as part of the total considerations for the income tax periods listed in column 3 of schedule below;

AND thereby induced the SARS, to their prejudice or loss, actual or potential, in the total amount of R375, 608.36, to process the income tax returns submitted and to accept that the accused was only liable to pay income tax in the amounts set out in column 7 of the schedule below and/or to be assessed only on the amounts set out in column 5 of the schedule below and/or not to assess the accused on the true or actual income earned by the accused, as set out in column 6 of the schedule below for the said tax years,

Whereas when the accused so gave out and pretended he well knew that:

• the information declared on the income tax returns for the periods set out in column 3 of the schedule were not true and correct in all material aspects; and/or

• the amounts of income declared in column 4 of the schedule below were not the only considerations received by the accused during the income tax periods set out in column 3 of the schedule below; and/or

• he received the additional amounts of income as set out in column 5 of the schedule below; and/or

• he under declared his income to SARS.

ALTERNATIVE TO COUNTS 2 TO 9:

THAT the accused is guilty of contravening the provisions of section 75(1)(c) of the Income Tax Act, Act 58 of 1962, (as amended) read with section 1 and 66 of the Income Tax Act 58 of 1962.

In that on or about the dates set out in Column 2 of the Schedule and at or near Port Elizabeth, in the Eastern Cape Regional Division, the accused wrongfully failed to show in the income tax returns made by him, as set out in column 3 of the schedule below, any portion of the gross income received by or accrued to or in favour of himself or failed to disclose to the Commissioner, when making such returns, any material facts which should have been disclosed, to wit, the accused misrepresented his gross income to SARS for the income tax periods listed in column 3 of the schedule below, by not declaring and including the amounts set out in column 5 of the schedule below to SARS as part of the income declared to SARS as set out in column 4 of the schedule below.

2^ND ALTERNATIVE TO COUNTS 2 TO 9:

THAT the accused is guilty of contravening the provisions of section 104(1)(a) of the Income Tax Act, Act 58 of 1962, (as amended) read with section 1 and 66 of the Income Tax Act 58 of 1962.

In that on or about the dates set out in Column 2 of the Schedule and at or near Port Elizabeth, in the Eastern Cape Regional Division, the accused unlawfully and with the intent to evade made or caused or allowed to be made false statements or entries in the said 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

To wit, the accused misrepresented his gross income to Cindy Pienaar and/or SARS for the income tax periods listed in column 3 of the schedule below, by not declaring and including the amounts set out in column 5 of the schedule below to SARS as part of the income declared to SARS as set out in column 4 of the schedule below.

SCHEDULE

1.3. The accused on the 5^th November 2014 pleaded not guilty to all main & alternative counts preferred against him.

1.4. The defence of the accused was not disclosed at the time of the plea and the accused elected to remain silent. [1]

2. THE FOLLOWING CONTENTS FROM THE PREAMBLE TO THE CHARGE SHEET APPEARS TO BE COMMON COURSE AND OR FORMALLY ADMITTED:

2.1. The Accused was at all times relevant to the charges the pastor at the End Time Light Christian Association trading as Port Elizabeth Assembly/Tabernacle (hereinafter referred to as "The Church").

2.2. In addition, the Accused was also a member of the Church Leadership Board, which comprised of Deacons, Elders, Ministers and Trustees.

2.3. The End Time Light Christian Association is a church based in the Eastern Cape.

2.4. The Church derives its usual income through donations, tithes and offerings received from the members of the church.

2.5. The Accused handled the Church's funds at all times relevant to the charges set out hereunder and was entrusted with most of the income received by the Church.

2.6. In addition, the Accused determined his remuneration and how it was made up without consultation by any other person.

2.7. The Accused however on occasion maintained a record of the expenditure of the Church funds in handwritten booklets. These booklets were for his record keeping.

2.8. These books were handed over to Quinton Isaacs on a weekly basis in 2003, 2004 and part of 2005 for capturing where after this duty became too much for him.

2.9. According to the constitution of the Church the pastor had "…to be solely responsible for the collection of tithes and offerings and to decide upon the use and distribution of such monies…"

2.10. The Accused is registered with SARS for personal Income Tax and was issued with Income Tax reference number 1336028079 with a liability date of 1 March 1992.

2.11. The Accused is required in terms section 66 of the Income Tax Act, Act 58 of 1962 to submit his income tax returns for the purposes of assessment to the SARS.

2.12. The Accused was required to declare his gross income as defined in terms of section 1 of the Income Tax Act, Act 58 of 1962.

2.13. The Accused had a legal obligation to complete and submit income tax returns to SARS, for each tax period after registration, and to pay the income tax over to SARS.

2.14. The disclosure is made on an ITR12 form.

2.15. In order for the Accused to submit his ITR12 form Quinton Isaacs would draft a letter indicating the salary earned by the accused for the year. This information was provided to Quinton Isaacs by the Accused and was done for every tax year.

2.16. The Accused approached a tax practitioner namely, Cindy Pienaar from Taxwise to assist him with the completion and submission of Income Tax Returns to SARS for the years between 2004 and 2011.

2.17. Cindy Pienaar completed and submitted the personal Income Tax returns of the Accused to SARS based on the information and documentation she received from the accused on the dates listed in column 2 of the schedule.

2.18. The information reflected on the ITR12 return stated that the Accused earned a total annual income in the amounts set out in Column 4 of the schedule during the tax years set out in Column 3 of the Schedule.

2.19. The Accused in fact earned a total income as set out in Column 6 of the Schedule for the said income tax periods.

2.20. The amount under declared is reflected in Column 5 of the Schedule.

2.21. The Accused duly paid the Income Tax listed in Column 7 of the Schedule for the said tax periods based on the income he originally declared.

2.22. The Accused was in fact liable to pay SARS the amounts set out in Column 8 of the Schedule for the said income tax periods.

2.23. It stand undisputed on the accused own evidence that there was an under declaration of income to SARS.

2.24. THE FOLLOWING ASPECTS APPEAR TO BE IN DISPUTE:

2.24.1. The facts in dispute is not very clear to the court. Mr. van Rooyen submitted heads of argument to the court in the amount of 28 typed pages, yet even in this volumous work there is no clear heading as to what exactly the accused defence is. Page 1-4 deal with the charges preferred against the accused. Page 4 - 14 deal with the substantive legal position pertaining to fraud and the required mens rea. Page 15 - 26 refer to the state evidence On page 26 paragraph 27 Mr. van Rooyen submitted that the state have failed to proof that the accused had the intention to deceive.

2.24.2. The court is alert to the fact that there is two mutually destructive versions of the events before the court. On the one hand the version of the state and on the other that of the accused.

It appears that the main question that begs an answer is one of credibility. It is patently clear that both versions cannot be true neither can it coexists next to each other.

2.24.3. Due to the fact that the accused elect to remain silent and not to furnish a plea explanation it led to the state calling several witnesses whose evidence ex post facto was not in dispute. The court does not intend to deal with those evidence in full as it is superfluous.

2.24.4. It is always a sad day when any court had to adjudicate between members of the same congregation. In the current matter the accused is the pastor to the church and spiritual leader. Half of the state witnesses were close friends of the accused as well as senior members of the congregation. It is not an enviable task that awaits the court.

3. THE STATE CASE:

The State proceed and called four (4) witnesses the accused testified in his own defence and did not call any witnesses

3.1. Cindy Pienaar:[2] testify that she is a tax practitioner. It appear to be common cause that Ms. Pienaar was responsible for the submission of the accused tax returns based on information supplied to her by the accused.

It is also common cause that the tax returns was compiled based on the information supplied by the accused to Mrs. Pienaar. Ms. Pienaar testify that the accused was a long term client and that TaxWise compile his tax returns at least back to 2001.

She testify that all files that predate 2001 were destroyed. There is no averment that she misdirect herself or that she completed the tax returns wrongly.

During Cross Examination the following transpired:

· The witness testify that she would see accused once a year when he dropped off the supporting documents needed to compile a tax return.

· The witness indicate that she have no knowledge of the books of the church or never did the books.

· The witness testify that she dealt with the documents she received on face value and did not questioned the validity or authenticity of the letters.

· The witness cannot recall if she ever consulted with the accused or bring it to his attention what taxable income was.

3.2. Richard Johannes[3] testifies that he is an accountant specializing in Taxation. He testify that he posses a B.Comm degree and that he was not a charted accountant. He testify that he have 12 years relevant experience in tax issues.[4] He currently is a Chief Financial Officer of a company. He know the accused who is his ex-pastor [for 20 years] prior to moving to Cape Town in 2001 [5].

He testify that he had a good relationship with the accused who often visit him in Cape Town and often had supper with him. He testify that in 2012 the accused approach him to assist with the book keeping of the church books [6].

He testify that until that time he had no contact with Mr. Isaacs. He testify that he could not assist as his firm was very busy. He come down to Port Elizabeth during April 2012. He was contacted and request to consult with the church on the issue of tax compliance.

He testify that he become the financial officer for the church free of charge and that his phone account was paid by the church.

He testify that he ascertain that the church was registered with SARS as a PBO. [7] He also found that the church was non-compliant as their financial statements and tax returns was outstanding from 2004 - 2011. He also found that the church constitution was non-compliant with section 30 of the PBO act. [8]

In order to submit tax returns it was necessary to compile financial statements first. The source documents used was the bank statements of the church and the notebooks of the accused.[9] He then request that the contents of the books be captured in spreadsheet format under certain headings. [10] They also request that the spreadsheet contents be transferred to a general ledger[11].

Since no income was noted he operate on the assumption that all the expenses plus money in the bank would be deemed the income of the church. [12]

One of the prerequisites of registration as a Public Benefit Organization is that its sole purpose is that it should be for public benefit. So internal controls was set up. Effectively the deacons would collect the money, the trustees would count the money and disclose that. Then the money would be banked in a cheque account and cheques issued need to be counter signed. All tasks were segregated as well.

As result of the above it transpired that Quinton Isaacs and himself went to the accused and go through the general ledger with him relating to all expenses and income that make up his remuneration.

The witness state that the amount an office bearer of a PBO earn per year need to be disclosed to SARS on a prescribed form. For that purpose he enquire from the accused what was declared.

He asked the accused if those amounts reflect the amounts that was declared to SARS. [13] The accused indicate that the amounts as per the ledger does not reflect the amounts that was declare to SARS.

He states that Quinton Isaacs indicated that the amount declare to SARS was based on what the accused told him he had earned during the year. The accused would on a weekly basis inform Isaacs what he earned based on that information Isaacs would draw a letter stating the remuneration of the accused. [14]

At the time the church was not registered for PAYE and he recommended that they register hence the accused would have an IRP 5 which could be reconciled with his income in accordance with the income tax act.

He testify that he offer to assist the accused free of charge to amend his tax declarations and sort out the non-payment of taxes in accordance with the general ledger. He testify that he reported the non-disclosure to the tax exempt unit of SARS and ask for an extension so that he could properly draw up financial statements from 2004 - 2011.

From the handwritten books it transpire that the accused was the only person who was paid any remuneration.

He testify that in February 2012 he and Isaacs had a meeting with the accused during which the accused admitted that he did not disclose his full income to SARS. The accused did not indicate why he did not disclose the full income.

He testify that he did not rectify the accused tax as the accused inform him that he had his own tax advisors who would assist him [15]

The witness gave a long list of items that was found to be the accused personal expenses which was listed in the handwritten notebooks for the period dating 2004 to 2011. Since this evidence is not in dispute the court don't deem it necessary to discuss it at this stage. [16]

He testify that he regarded the accused as the treausurer of the churh since he fullfill the roll since the previous treasurer left and the post was never filled again. The accused also confirm that he collect, count and bank the money of the church. He also kept the records of the expenses paid with the money. In that sense he was the treasurer of the church then.[17]

During Cross examination the following transpired:

è It is put to the witness that the accused denied that he contact him telephonically but that he instruct Quinton Isaacs to do so. - The witness denies this.[18]

è It is put to the witness that the accused can't recall that he discuss the church tax position with the witness during the visits to Cape Town. The witness is adamant that it happened in that fashion.

· The witness confirm that he and Isaacs confront the accused with the findings and ledger entries after it had been completed. [19]

è It is put to the witness that the accused will deny that he ever told him that he was the treasurer of the church - The witness denies this. [20]

· The witness confirm that he was aware that Isaacs issued a letter to the tax practitioners regarding the income of the accused. He do not know how Isaacs calculated this amount. He testify that he was told by Isaacs that the accused informed him as to how much he earned.

· The witness cannot explain why Isaacs would sign the letter as both chairman of the board of trustees and Treasurer as well.

· The witness testify that he was aware that Quinton Isaacs had access to certain accounts of the church as well as the internet banking. [21]

è It is put to the witness that the accused would deny that he was ever confronted by him and Isaacs and that he admitted that he had under declare his income. - The witness is adamant that the accused admit this in the presence of Isaacs.

· The witness denies that he captured any details from the handwritten notes. He testify that the board of trustees supplied him with a spreadsheet of the captured books which he use.[22]

· The witness testify that the Board of Trustees had to clarify each item whether it was a church expense of a private expense of the accused. He state that he was not part of this process.[23]

· The witness testify that the accused and Isaacs had a very close and trusting relationship from what he observe. [24] The witness concede that he was aware that there was some tension in the church. That the church was split into two groups.

· The witness confirm that he was also contacted by the accused own auditor who had certain questions he testify that he could not furnish him with any information prior to it being released by the board of trustees. [25] When it was released Mr. van der Waldt was put in possession of the information. The witness denies that Mr. Isaacs forbid him to release the information he state that he had to cover himself and could not merely release information to everyone who may request it.

· The witness testify that prior to the church becoming a PBO the contributions by the congregation was handled by the accused. When it become a PBO the constitution of the church had to be compliant with the act. The accused was no longer in charge of the money or a fiduciary officer. He testify that he had a one on one meeting with the accused where he explain all this.

è It is put to the witness that for the period 2004 - 2011 the accused handed his notebooks to Isaacs on a mothly basis. That the accused did not know what he did with it. - The witness cannot reply to this.

è It was put to the witness that Isaacs deal with the accused salary for tax purposes - the witness denies this and state that the accused informed him that Isaacs did not do his taxes. He also was not his tax advisor. The witness state that because of this he offer his services free of charge to the accused. - The accused however told him that he have his own tax advisors who dealt with his tax compliance. [26]

3.3. Liesl Wait[27] testify that she is criminal investigator and enforcement investigator at SARS. The gist of the evidence of Ms Wait is the methodology she employed to determine the compliance or non-compliance of the accused as well as the under declaration of the accused taxes for the period 2004 - 2011. It is not in dispute that under declaration took place. Neither is it in dispute that the amounts stated by Ms Wait was under declared. The court does not deem it necessary to discuss the testimony of Ms Wait at any lenth.

3.4. Quinton Isaacs[28] the testimony of this witness support the evidence of Mr. Johannes in all material respects. Due to the similarity in the evidence the court does not deem it necessary to summarise this evidence yet again. Due to the content of the accused own evidence that corroborate large parts of this witness testimony it also become superfluous to repeat the evidence at this juncture.

4. THE DEFENCE CASE:

4.1. Peter Robert Twynham:

The accused testify that he is 80 years old. He is a pastor in the End Time Line Christian Association since 1972.Prior to that he was employed by Armorplate Glass for a period of 17 years.

He testify that he only passed std. 5. He is not computer literate. He denied that he have defrauded SARS.

He confirm that he was the author of handwritten notebooks handed in to court as exhibit A5. He confirm that he hand this books to Mr. Isaacs on a monthly basis until 2011. He testify that Mr. Isaacs told him in 2011 that he was too busy and could not reconcile the books anymore. [29]

He testify that the entries into the booklets were his. Mr. Isaac use the books to determine his salary so that he could issue a "salary letter" to TaxWise. He denied that he furnish Mr. Isaacs with the amount of his salary but that Mr. Isaacs decide that on his own after he calculate the books. [30]

He testify that the amounts reflected as a biannual bonus in fact was noted by him as holiday pay. He denied that he ever had a discussion with Mr. Isaacs and it was decide that the "holiday pay" would be call a biannual bonus. [31] He testify that the holiday pay was a 13^th cheque.

He testify that he used TaxWise to compile his tax forms. He took the letter from Mr. Isaacs, his investment statements and old mutual documents to Cindy Pienaar so that she could compile his tax forms.

He was aware of the fact that he had to pay tax.

He denied that anyone at TaxWise ever explain to him what forms he had to submit to them for tax purposes.

The witness confirms that he request Mr. Isaacs to contact Mr. Johannes to assist the church in getting its books in order as it was in disarray. He confirm that he also visited Mr. Johannes in Cape Town himself.

He confirms that he hand all the hand written books to the Board of Trustees [The Board] during 2012. He don't know what the Board did with the books. He testify that he don't know what a spread sheet is but confirm that he hear Mr. Johannes compile a spread sheet.

The witness was shown exhibit "C" The witness indicate that he does not know what it was. The witness denies that Mr. Johannes discuss the document with him and that they discuss his salary.

The accused don't remember being confronted by either Isaacs or Johannes about whether the amounts reflected in the ledger was reported to SARS as income. He testify that he recall that they talk about a better medical aid for his wife. [32]

The accused confirm that Mr. Johannes offer to assist him to sort out his affairs with SARS. He testify that he did not accept this offer.

The witness denies that he ever admit to Mr. Isaacs that he under declare his income and said that SARS would never found out. [33] He testify that he pay tax on his salary not on all the church income.

The witness testify that Mr. Isaacs was the treasurer of the church. [34] The witness confirm that he did not use TaxWise to defraud SARS. He also denies that he defraud SARS himself. He testify that as far as he was concerned his affairs with SARS was in order. [35]

During cross examination the following transpired:

· The witness confirm that Mr. Isaacs was the treasurer of the church. That he had access to all accounts and was empowered to make payments related to the running expenses of the church.[36] He confirm that Mr. Isaacs was just in control of those monies that was actually deposited into the bank accounts. [37]

· He confirm that he bank money into a super save account. This account still work with a physical bank book. He testify that only him was in possession of the book and that he would make transfers from this account to the accounts Mr. Isaac had access to. [38]

· The accused confirm that he himself also made payments for certain expenses. He testify that he make payments for water, lights and the telephone. He also pay for the maintenance and cleaning of the building. The witness cannot recall what else he paid from the money at his disposal. [39]

· The court then adjourn to allow the accused the opportunity to peruse the handwritten note books he compiled of his expenses. Upon resumption:

· He confirm that he paid for transport, electricity, rates & taxes and the telephone.

· He confirm that he transfer R20 000 during 2009 from the Super Save Account to the accounts which Mr. Isaacs had access to. [40]

· The witness concede that he also noted the weekly receipts from the church in his notebook. He confirm that during 2009 he received an amount of R 468344 from the church contributions.[41] He concede that he only transfer R20 000 of this money to the accounts Mr. Isaacs had access to.

· It transpires that Mr. Isaacs was not in charge of all the money of the church but only money allocated for building a tabernacle in Paterson. [42]

· The witness concede that he as pastor according to the constitution of the church was responsible for the money of the church. The witness testify that in terms of the constitution he had the right to decide how the money was spend. [43]

· The witness confirm that he handed the handwritten books to Mr. Isaacs. He however did not discuss the entries in these books with him or point out to him which of these entries was church and which was private expenses. [44] He state that Mr. Isaacs should have known which is which.

· The witness concede that during 2008/2009 an amount of R153 000 was under declared - he however aver that Mr. Isaacs should have pick it up. [45]

· The witness failed to explain how Mr. Isaacs could pick up which expenses was private and which was official without being told and keep reverting back to " Mr. Isaacs know my salary."

· It is patently clear that according to the handwritten note books the amount of only R1500 per week was allocated to salary for the accused. [46]

è The witness cannot explain why he note in the note books his salary as only R1500 but then list all his personal expenses separately without referring to it as personal expenses.[47] - The witness retort that he did not know how to reflect it.

· The witness appear to be hesitant to answer several questions as to why he keep the note books. Eventually the witness aver that he keep the books so that Mr. Isaacs could do his tax.[48]

· The witness cannot explain why he did not kept the separate books for his personal and official church expenses. - he aver that he "don't know how to operate these things".[49] Later he state that he did not know how to do that.[50]

· The witness cannot explain that if he kept the books to reflect his expenses why he would add the church expenses as well [51]. The witness appears to be evasive.

· The witness concede that he could do calculations as its clear from the note books. [52]

· The witness states that he did not know his "holiday pay" was taxable. The witness concede that tax is payable on all monies earned. [53]

· The witness concede that he had a tax practitioner. He however aver that she never sat down and consult with him.

· The witness concede that he took R190 000 as holiday pay as he had many expenses. [54]

· The witness concede that he was not accountable to anyone for the money he spend. [55]

· The witness concede that the money received belong to the church and not to him in person. [56] He further concede that he determine his own salary.

· The witness concede that he make statements in Asset Forfeiture Unit Proceedings. [57] According to statements made by him he aver in that proceedings that the tithes received belong to the pastor. The witness yet again is reluctant to answer the question if this imply that all the tithes belong to him - later he aver that he did not take all the tithes.

· The witness yet again is reluctant to answer questions as to who the tithes belong to - the state had to repeat the question several times. [58] - Eventually the accused concede that the money belong to the church and that he administer it.

· The witness concede that he may have said that the money belongs to him. - the witness now allege that he is not educated and that he can't remember all these things.[59]

· The witness concede that a statement handed in exhibit J was made by him to his attorney Mr. Welderick. [60] According to paragraph 53.2 of the said statement accused declare that the tithes belong to him and that he can dealt with it as he see fit.

· In terms of paragraph 41.7 & 30.3 he states … the tithes belong to the pastor of the church. He also state that he is the spiritual and financial leader of the church.[61]

è the state put it to the witness that his testimony is in conflict with the statements hand in as exhibit J. - the witness yet again revert back to the position that he do not see the difference between his statements.

· The witness concede that Isaacs only had access to the money he chose to transfer to the accounts Isaacs had access to. [62]

· The witness concede that he and Isaacs and Johannes was also very good friends. [63]

· The witness concede that they offer to help him rectifying his tax problems for free.

· The witness aver that he can't remember if he was asked if his tax declaration of income coincide with the church books. [64]

· The witness states that he did not take up Mr. Johannes on his offer as he don't believe he had a degree.[In contradiction with his evidence in chief that he did not think he had a tax problem].

· The witness concede that he under declare his income but alleged that he did not do so wilfully. [65]

· The witness denies that he was part of the decision that the church should become a public benefit organization [PBO] he avers that this was the decision of Quinton Isaacs & Richard Johannes.[66]

· When the state point out to the witness that he signed as fiduciary officer of the PBO the witness retort that he was just sitting in the meeting but that he did not know what was going on.

· The witness state that he did not account to anybody regarding the financial position of the church at any stage. [67] The witness concede that Mr. Johannes did not have any issues with him and even offer to assist him.

· The witness concede that he did not pay Mr. Johannes for his services or gave Mr. Isaacs money to so. He however suspect that Isaacs could have pay him.[68]

· The witness concede that until 2011 Mr. Isaacs receive the note books so that he could use it for the tax purposes of the accused.

· The witness denies that he mislead the court.

5. At the closure of the state case Mr. van Rooyen unsuccessfully apply for the discharge of the accused in terms of section 174 act 51/1977. In the absence of any averment in the final heads of argument that the court's failure to grant the relieve sought was irregular the court don't deem it necessary to deal with the reasons for putting the accused on his defence. The court will therefore stand with its reasons as originally stated.

5.1. At the closure of the defence case the state and the defence was requested to submit written heads of argument. Both Advocates Brink and van Rooyen are thanked for their assistance to the court.

5.2. Without dealing with the heads in full at this stage the gist of it are that the state requests a conviction and that Mr. van Rooyen is of the option that the state failed to proof the guild of the accused beyond a reasonable doubt and that the accused should be acquitted on both main and alternative counts preferred against him.

6. THE LEGAL PRINCIPLES INVOLVED:

6.1. ONUS OF PROOF

6.1.1. It is trite law that the burden of proof in any criminal matter rest on the shoulders of the state. There is no duty on the accused to proof his/her innocence. The court keep in mind that if the version of the accused is reasonably possibly true the accused is entitled to acquittal. [69]

6.1.2. The court does not have to be convinced that every detail of an accused' version is true. If the accused' version is reasonably possibly true in substance the court must decide the matter on the acceptance of that version. Of course it is permissible to test the accused version against the inherent probabilities. But it cannot be rejected merely because it is improbable; it can only be rejected on the basis of inherent probabilities if it can be said to be so improbable that it cannot reasonably possibly be true[70]

6.1.3. In the current matter there are conflicting factual versions of the evidence on behalf of the State and the defence.

The technique generally employed by courts in resolving factual disputes of this nature may conveniently be summarized as follows [71]

"To come to a conclusion on the disputed issues a court must make findings on:

• THE CREDIBILITY OF THE VARIOUS WITNESSES :

The court's finding on the credibility of a particular witness will depend on its impression about the veracity of the witness.

· That in turn will depend on a variety of subsidiary factors, not necessarily in order of importance, such as:

• the witness' candour and demeanor in the witness-box,
• his bias, latent and blatant,
• internal contradictions in his evidence,

· external contradictions with what was pleaded or put on his behalf or with established of proof has succeeded in discharging it onus." fact or with his own extra curial statements or actions,

· the probability or improbability of particular aspects of his own version,

· the caliber and cogency of his performance compared to that of other witnesses testifying about the same incident or events

• THEIR RELIABILITY OF THE VARIOUS FACTUAL WITNESSES

A witness' reliability will depend, apart from the factors mentioned above, on:

(i) the opportunities he had to experience or observe the event in question and

(ii) the quality, integrity and independence of his recall thereof.

• THE PROBABILITIES.

This necessitates an analysis and evaluation of the probability or improbability of each party's version on each of the disputed issues.

6.2. SINGLE WITNESSES

6.2.1. The court keep in mind that the state called several witnesses. I keep however in mind that despite that fact most witnesses in practise testify as single witnesses regarding a specific matter. In the evaluation of the testimony of these witnesses the court therefore is awake to the fact that cautionary rules exist for the evidence of single witnesses.[72] The court keep in mind that the court can only accept the evidence if it is satisfactory in every material sense of the word.

6.2.2. In terms of s 208 of the Criminal Procedure Act, an accused can be convicted of any offence on the single evidence of a competent witness. It is, however, a well-established judicial principle that the evidence of a single witness should be approached with caution, his or her merits as a witness being weighed against factors which militate against his or her credibility [73]

6.2.3. The court is entitled to convict on the evidence of a single witness if it is satisfied beyond reasonable doubt that such evidence is true. The court maybe satisfied that the witness is speaking the truth notwithstanding that in some respects he is an unsatisfactory witness [74].

6.2.4. In evaluating the evidence of a single witness, a final evaluation can rarely be made without considering whether such evidence is consistent with the probabilities[75]

6.3. Circumstantial Evidence: The court is awake to the fact that the conviction the state sought is in certain circumstances based on direct evidence but most entail the inferences the State the sought the court to draw on the basis of circumstantial evidence [76].

The test to be applied can be formulated as follows :

"The evidence needs to be considered in its totality. It is only then that one can apply the often quoted dictum in of R v Blom 1939 AD 188 at 202-3, where reference is made to two cardinal rules of logic which cannot be ignored. These are, firstly, that the inference sought to be drawn must be consistent with all the proven facts and, secondly, the proved facts should be such 'that they exclude every reasonable inference from hem save the one sought to be drawn'

6.3.1. The court keep in mind that only proven facts can form the basis of any legitimate inferences the court may draw. [77]

6.3.2. It is trite law that the state do not have to close any conceivable avenue that speculation may suggest [78] It is sufficient for the State to produce evidence by means of which such a high degree of probability is raised that the ordinary reasonable man, after mature consideration, comes to the conclusion that there exists no reasonable doubt that an accused has committed the crime charged.

6.3.3. It is also important that the court is alert to the fact that witnesses sometimes may lie, because they harbour the subjective believe that should they speak the truth their version may not be believed.[79] The court keep in mind that there is also sometimes a tendency that witnesses may deny the truth out of fear that they may be implicated in a specific matter or that it may imply that they may be involved in the incident or crime in general. [80]

6.3.4. The court is awake to the fact that even if the court find that the witness is untruthful it does not automatically imply that he is guilty as well.

6.3.5. The court keeps in mind in the evaluation of the evidence the following factors that must be considered to wit:

6.3.5.1. The nature & the extend of the lies and or whether it is indicative of the acceptance of guilt;

6.3.5.2. The age, development level, background & cultural & social development of the witness

6.3.5.3. Possible reasons why the witness may want to lie

6.3.6. I also keep in mind that where the accused deliberately take a risk of giving false evidence in the hope of being convicted of a less serious offence or even perchance, escaping conviction altogether and if his evidence is to be declared false and irreconcilable with the proven facts, a court will, in suitable cases, be justified to reject and argument that, notwithstanding that the accused did not avail himself of the opportunity to mitigate the gravity of the offence he should nevertheless receive the same benefits as if he had done so[81][82] [83]

7. Evaluation of the evidence:

The State Case:

The court was suitably impress with all witnesses tendered by the state. None of them testify with any bias latent or blatant towards the accused.

As a point of departure the court is also alert to the fact as to how this matter come to light. The salient facts can be stated as follows:

· There was no bad blood between the parties as it often happens to be. In the current matter the accused is the pastor of a church. The church applied to become a Public Benefit Organisation for tax purposes.

· In order to qualify for registration as a PBO the church and its constitution needed to comply with the PBO act.

· In order to ensure compliance Mr. Johannes was contacted by Mr Isaacs at the insistence of the accused to assist them, it is common cause that Mr Johannes is a tax practitioner and an ex congregant of this church. It is common cause that Mr. Johannes perform his duties for free, he is also a mentee of the accused and see him as a father figure.

· In the process of reaching compliance it was found that the amount of money declared to SARS by the accused did not correspond with general ledger compiled by the Board of Trustees.

· Due to his professional obligations Mr. Johannes needed to report this under declaration to SARS. As a result Ms Wait become involved.

The state called four (4) witnesses :

Ms. Pienaar is an independent witness she does not incriminate the accused in any manner her testimony is formal in nature.

Mr. Richard Johannes testify that he regarded the accused as a father figure he had a close relationship with him. Even after leaving Port Elizabeth accused would visit and dine with him when he was in Cape Town.

Ms Liesl Wait is an independent witness her testimony is not in dispute she testify regarding the under declaration of the the accused income.

Mr. Quinton Isaacs testimony was attacked because he incriminate the accused. It stand undisputed that he and the accused had a close relationship. One of his children was even named after the accused. It also stand undisputed that at the time of his testimony he was terminally ill and stated that he had no axe to grind with the accused.

The court will deal with all the criticism levelled against the witnesses by the accused now separately :

7.1. Cindy Pienaar:

· The testimony of Ms Pienaar is not challenged by the defence. [84] Mr. van Rooyen in a very cursory fashion glanced over the testimony of Ms. Pienaar. No part of her evidence was attacked neither in content of the fashion in which she testified.

· It appear to be common cause that she completed the tax returns of the accused, based on information she received from the accused.

· The correctness of her submissions was not challenged. It is clear that the defence accept that she did not questioned the information supplied to her.

· Ms. Pienaar could not confirm or deny a discussion she had with the accused as to what constituted taxable income.

· The witness confirm that the accused know that he had to declare his income and what his sources of income would be.

· It stand undisputed that the tax submissions were based on information supplied to her by the accused. [85]

· It is common cause that the accused was a client of TaxWise for a long time from 2001 - 2011.

7.2. Richard Johannes:

· The version of this witness is not challenged by the defence in their heads of argument. [86]

· It appear to be common cause that this witness was initially approach to assist with the compilation of the church books.

· A large part of the testimony of this witness relates to the method he employed in bringing the church books in line with the requirements for a Public Benefit Organization. [PBO] This evidence was not challenged hence the court does not need to deal with the credibility of these evidence.

· The process to get the church compliant of the the PBO act set certain prerequisites to wit:

o The Church to be a PBO need to be accountable, for that purpose it need to compile financial statements and submit tax returns,

o The salary of any office bearer need to be disclosed to SARS

o Fiduciary officers need to control finances

o The process need to be transparent hence the different functions need to be segregated.

o In order to get the church compliant Mr. Johannes assisted the Board of Trustees to create financial statements

o It is common cause that prior to his involvement the church did not compile financial statements for the period 2004 - 2011.

o Prior to 2012 and Mr. Johannes involvement the accused received all tithes and contributions and decide mero moto how this money would be spend.

o Prior to 2012 the accused decide on his own salary.

o Prior to 2012 the accused also decide if and how much money he would pay into the bank accounts of the church,

o Prior to 2012 the accused was not accountable to anybody regard monies received and spend.

o All this change when the church become a PBO:

o With the separation of powers the accused was not a fiduciary officer anymore;

o The accused become accountable to the Board of Trustees

o It was proposed that the church register for PAYE in terms of the tax act.

o It was also proposed that the accused earn a fixed salary determined by the Board of Trustees.

· In order to complete the required financial statements and tax submissions a general ledger was compiled by the Board of Trustees. This ledger was compiled from the handwritten note books kept by the accused. Mr. Johannes had a team of accounting professionals draw up financial statements from this.

· It is common cause that in order to determine what expenses was private and what relate to the church Mr Johannes and Isaacs approach the accused

· It appear to be common cause that Mr. Johannes & Isaacs confronted the accused regarding the remuneration that was reflected in the General Ledger.

· It is common cause that they enquire from the accused if he had declare the income as reflected in the ledger to SARS. According to Johannes and Isaacs the accused indicated that he did not do so.[87]

7.3. Liesl Wait:

· It stand uncontested that she is a forensic auditor employed by SARS. The correctness of the contents of her testimony was never challenged.

· Mr. Van Rooyen however criticise her testimony because she was of the opinion that the under declaration of income remain an offence irrespective of the guild of the accused.[88] Even if this criticism was relevant it amounts to an opinion expressed by the witness. The court disregard this opinion in toto.

· It is common cause that the witness did not investigate the church but concentrated on the finances of the accused.

· That during her investigation she had no insight into the constitution of the church. - With the luxury of hind sight the court cannot see why she need to have be aware of the constitution of a church she did not investigate. The accused never aver that he did not commit any offence since he rely on the constitution of the church. It appears that the only point of dispute is that the accused allege that he did not wilfully under declare his income.

· Ms Wait testimony is challenged because she could not testify as to when in her opinion the accused form the intention to defraud SARS. - This criticism is neither here nor there. This is a question of fact on the one hand and on the other it requires the witness to form an opinion yet again.

7.4. Quintin Isaacs:

· As principal witness to the state case it come of no surprise that the evidence and demeanour of this witness was challenged by the defence [89].

· Mr. Isaacs confirm the version of Mr. Johannes in all material aspects and where it would be expected.

· Mr. Isaacs testify in a clear, precise and chronological manner on the matter at hand.

· Mr. Isaacs testify while morbidly ill;

• The version of Mr. Isaacs is criticized because:

• - he refer to himself as a treasurer in the "salary letters" whilst he was never elected to that position.

è This criticism is clearly unfounded since the accused himself testify that Mr. Isaacs was de facto the treasurer since he perform as such make EFT payments and could affect withdrawals.[90]

· It is common cause that Mr. Isaacs was the author of the letters in question since 1996.

· From the evidence of Mr. Johannes a treasurer must be seen as a person who deal with the church money, have access to its accounts, and even bank these monies.

· In this regard then on the accused own version both Mr. Isaacs and himself qualify de facto to be treasurers. From the version of the accused himself it is patently clear that he received contributions to the church, he count it, he deal with it as he deemed fit and if and when he decide he may bank some of these money in the bank accounts of the church to which Mr. Isaacs had access to.

· It is patently clear that Mr. Isaacs had access to a very small amount of money which was allocated to him for the sole purpose to make payments for a tabernacle that was being build.

· It is also patently clear that the bulk of the money was utilised and distribute by the accused in his sole discretion.

· The fact that the witness was never deliberately elected as a treasurer is of little consequence, clearly he was placed in that position at least tacitly by the accused and or the leadership of the church.

· Even if the argument that he was not elected was true, the fact that he refer to himself as a treasurer is of little consequence. If he misrepresent himself nobody were prejudiced by this alleged misrepresentation. It stand undisputed that he was the chairperson of the board of Trustees.

· The letters he wrote on behalf of the accused stating the income of the accused is neither here nor there, The court cannot find any prohibition that bar the witness from writing such a letter neither do I found any requirement that only a treasurer can write such a letter.

• That only the accused salary was reflected in the salary letters and not his total income. - The accused on his own version state that he hand over notebooks depicting payments to Isaacs.

· That he never informed Isaacs which was private payments and which was church payments, that Isaacs would "have known" what is what. In light then of the fact that Isaacs had to guess "what is what" it seems that he err on the side of caution and only reflect the entries that state the wages of the accused as his salary.

· Mr. Isaacs is criticized for the fact that the letters does not contain the whole income of the accused but merely the salary portion thereof. [91] Mr. Van Rooyen argue that the testimony of this witness is worthless. The court does not share the sentiments of Mr van Rooyen.

· Mr. Isaacs is also criticized that he simply accept the version of the accused on face value as his correct income. - yet again the criticism is very simplistic and naive in nature. It stand undisputed that the accused and Isaacs had a long and very close relationship.

· The accused was also the spiritual leader of the congregation that trust him to such an extent that his power is unlimited, he receive money and spend it at his sole discretion. The accused in terms of the church and the initial constitution was not accountable to anybody.

· In light of the de facto and undisputed position of accused and also confirmed by the accused own testimony there exists no reason why Mr. Isaac would not accept the version of the accused on face value.

· What exactly was required more from the witness? He was not at the time a fiduciary officer, neither did he determined the salary of the accused, he also did not have to check if the accused did not receive more than he was entitled to. Accused determine his own salary by his own yardstick. There was nothing to gainsay the version of the accused on face value or otherwise.

· The quality of Mr. Isaacs's tax advice to the accused is also criticized, as it appear to be incorrect regarding vehicles and maintenance claims. - It is patently clear that Mr Isaacs was not responsible for the accused taxes.

· It is also clear that Mr. Johannes try to support the accused free of charge to ensure his tax compliance. It is patently clear from the evidence of the accused that he did not make use of this at different times different reasons were advance, initialy he put it to Mr. Johannes that he have his own tax advisors who look after his tax compliance.

· During his evidence in chief he testify that he did not make use of Mr. Johannes offer of assistance as he did not think he had a tax problem.

· During cross examination he yet again contradict himself by stating that he did not take up the offer of Mr Johannes as he did not trust him and that he did not believe he possess a degree.

· Mr. Isaacs is criticized that he alleged to Mr. Johannes that neither he nor the church board had insight to information.

• Mr. Isaacs's version of the accused "admission" made at seniors function is labelled as confused and improbable [92] - The question regarding the admission is one of credibility - yet again the court does not share the sentiments of Mr van Rooyen there is nothing impossible or improbable about the version of Mr. Isaacs. The only question the court must answer is whether the court can rely on the version of the witness.

7.5. The Version of the Accused:

· Mr. Van Rooyen submitted that the version of the accused correspond with the statements made on his behalf in all material respects [93]. It appears that Mr. Van Rooyen seek to create corroboration for the credibility of the accused due to the fact that he did not contradict his instructions. This position is clearly untenable in law and fly in the face of the rule against self-corroboration.

· Mr. van Rooyen submit that the fact that the accused had a discretion as to how he spend tithing received by the church does not justify the inference the state seek the court to draw that that the accused must have known what taxable income would be.

· Mr. van Rooyen argued that accused should receive the benefit of the doubt on all counts and be acquitted since the state fail to proof the guilt of the accused beyond a reasonable doubt.[94]

• The accused did not impress the court at all as a credible witness for several reasons:

o The accused is evasive, the state had on several occasions had to repeat her questions to the accused in order to try and obtain an answer;

o The accused contradict himself and his instructions to his advocate, the example stated above as to the reasons why he did not make use of Mr. Johannes offer of assistance to ensure compliance is a prime example

o The accused every time he is caught out that he contradict himself fall back on his standard defence that he is basically illiterate and did not understand what he had to do;

o The defence/accused apportion blame to everybody except the accused. Ms Pienaar never sit the accused down and explain to him what taxable income was; Mr. Isaacs accept the evidence of the accused on face value and incorrectly gave him tax advise; Ms. Wait - during her investigation she had no insight into the constitution of the church.

o The accused however is an adult person who describe himself as a financial and spiritual leader of the church, he is not the helpless infant the defence wish to portray him.

o There is no evidence before the court that the accused ever seek clarification on his tax compliance from any person and that he was then incorrectly advice and or that he acted to his detriment because of this ill advice.

o The accused use the money, contributions and tithes from his congregation as his personal piggy bank.

o This mind set is patently clear from his statements he made during the AFU proceedings to wit:

§ The witness yet again is reluctant to answer questions as to who the tithes belong to - the state had to repeat the question several times. [95] - Eventually the accused concede that the money belong to the church and that he administer it.

§ The witness concede that he may have said that the money belongs to him. - The witness now allege that he is not educated and that he can't remember all these things.[96]

§ The witness concede that a statement handed in exhibit J was made by him to his attorney Mr. Welderick. [97] According to paragraph 53.2 of the said statement accused declare that the tithes belong to him and that he can dealt with it as he see fit.

§ In terms of paragraph 41.7 & 30.3 he states … the tithes belong to the pastor of the church. He also state that he is the spiritual and financial leader of the church.[98]

§ In his testimony in chief he avers that he as pastor is not accountable to anyone.

§ He can spend the money at his sole discretion and he did. This is clear from the fact that he took an amount of R190 000 as holiday pay since he had lots of expenses.

o Mr. van Rooyen's submission regarding the substantive law appear to be correct. The question the court needs to answer is whether on the basis of the credibility of the witnesses the version of the accused is reasonable possibly true

8. Finding of fact:

8.1. It is common cause that count 1 initially preferred against the accused was withdrawn by the state on 18/7/2014. This court therefore just have to deal with counts 2 - 9 and their alternatives

8.2. The commission of the offences stand undisputed. It is not in dispute that the accused under declare his income in the manner and in the amount averred in the charge sheet.

8.3. It is common cause that the accused knew that he was liable to pay tax - for that purpose he had even appointed a tax practitioner;

8.4. It is common cause that the practitioner compile the tax returns after the accused supply her with all the necessary source documents.

8.5. It is clear that the accused had sufficient knowledge as to what documents to supply or he had a consultation with an unknown source as to which source documents were necessary.

8.6. It is common cause that he supplied source documents pertaining to investments, interest earned, medical aid, dividends received etc. to the tax practitioner.

8.7. It is therefore an inescapable inference that the accused derived income from diverse sources, and that he was aware of the fact that this income was taxable.

8.8. It is therefore without hesitation that the court reject the version of the accused that he did not know what taxable income was and that his under declaration stems from ignorance and or negligence.

8.9. The court is satisfied that the accused did not lack the required mens rea hence I don't have to deal with issues raised by Mr. van Rooyen in this regard.

8.10. Accordingly accused is found guilty on counts 2 - 9 as charged.

Before me on this the 4^th December 2015 at the Specialised Commercial Crimes Court Port Elizabeth

_____________________________

REGIONAL MAGISTRATE: EASTERN CAPE

LH CLAASSEN