The Supreme Court of Appeal upheld the appeal of the State against the sentence imposed on Arthur Brown by the Western Cape High Court. Here follows extractions from the appeal judgement.
JOSEPH ARTHUR WALTER BROWN.…………………………………………………………………Respondent
Neutral Citation: S v Brown (681/2013)  ZASCA 217 (1 December 2014)
Coram: Navsa ADP, Brand, Ponnan, Theron and Zondi JJA
Heard: 5 November 2014
Delivered: 1 December 2014
Summary: Appropriate sentence in respect of two counts of fraud – on first count, misrepresentations by asset manager to investor that assets were being managed in accordance with mandate – assets in excess of R200 million – on second count misrepresentation to shareholders of an entity that administered pension funds and the underlying assets that purchase price would be paid from purchaser’s own cash resources – in truth balance of purchase price amounting to tens of millions of rands paid for with funds under administration by seller – non-custodial sentence imposed by high court on basis that plea of guilty on the two counts was limited and was based on dolus eventualis and potential rather than actual prejudice – high court reasoned that minimum sentence provisions inapplicable – erred in that regard – discussion of acceptance of plea of guilty in medias res – appeal by State upheld – sentences set aside and substituted by a sentence of 15 years’ imprisonment – white-collar crimes in question deserving of harsher sentence.
 In deciding on an appropriate sentence, the court below ought not to have restricted itself to the bare facts contained in the plea. The tendered plea does not provide context nor does it present enough of a picture for the court to properly fulfil its sentencing function. I will, however, accept in favour of Brown that, in considering the evidence adduced up until the acceptance of the plea and presented in mitigation and aggravation of sentence, no regard can be paid to evidence inconsistent with the plea. More particularly, evidence tending toward dolus directus and actual loss on the part of investors has to be discounted. It is also necessary to remind ourselves that Brown pleaded guilty on the basis that he foresaw potential rather than actual prejudice.
 Fraud is defined by Snyman as follows:
‘Fraud is the unlawful and intentional making of a misrepresentation which causes actual prejudice or which is potentially prejudicial to another.’
The unlawful and intentional making of a misrepresentation does not have to cause actual loss for it to constitute fraud. That fact eluded the court below. In respect of each of the transactions in question Brown committed fraud involving tens of millions of rands, way beyond the R500 000 threshold, which is the jurisdictional fact that triggers the minimum sentence provisions. Those assets were at risk and the potential prejudice has to be viewed from that perspective. Thus, in concluding that the minimum sentence legislation did not apply, the court below erred. I may add that even if the court below was correct in its conclusion that the minimum sentence did not find application, it ought to have considered whether, given the objective gravity of the offences, a custodial sentence was nonetheless called for. That it did not do. I shall now turn to consider whether there are substantial and compelling circumstances justifying a departure from the prescribed minimum sentence of 15 years’ imprisonment.
 Brown’s personal circumstances alluded to above are not such that, by themselves, they compel a departure from the prescribed minimum sentence. I have taken into account, in Brown’s favour, that he initiated social responsibility programmes such as starting a choir and assisting school children. He was also a first offender. However, it is quite clear that the message by the legislature is that white collar criminals who commit offences of a certain magnitude must not be permitted a soft landing. I have at some length, contrary to the approach of the high court, considered the seriousness of the offence. Such trauma as was visited upon Brown because of his misdeeds was entirely of his own making. Brown, in testifying, showed a remarkable lack of insight into the gravity of his conduct. There was scant, if any, trace of real remorse. It is clear that Brown is a man of enormous energy with heightened business acumen and was the driving force behind FAM. Would that he had used those skills with a better moral compass. His continuing dishonesty demonstrated during his testimony redounds to his discredit. Lastly, the question of whether dolus eventualis on its own constitutes a substantial and compelling circumstance justifying a lesser sentence is required to be addressed. Although the absence of dolus directus may well count in his favour it is but one of the totality of factors to be taken into account. Having regard to all the aggravating factors referred to earlier, I am unable to conclude that there are substantial and compelling circumstances present that would justify a departure from the prescribed minimum sentence.
 In my view, the sentence imposed by the court below tends toward bringing the administration of justice into disrepute. Less privileged people who were convicted of theft of items of minimal value have had custodial sentences imposed. We must guard against creating the impression that there are two streams of justice; one for the rich and one for the poor.
 In S v Blank 1995 (1) SACR 62 (A) at 73B-D this court, in dealing with fraudulent conduct of a stockbroker, said the following:
‘In view of all these facts, I feel fully justified in imposing a sentence which will deter not only the accused and other stockbrokers from committing crimes similar to those of which the accused has been convicted, but also others involved in business who may be tempted to indulge in larger-scale crimes of dishonesty. The time has already arrived when the severity of punishments imposed for this sort of crime while of course taking the personal circumstances of a particular accused into account, should proclaim that society has had enough and that the courts, who are the mouthpiece of society, will not tolerate such crimes and will severely punish offenders: cf S v Zinn 1969 (2) SA 837 (A) at 542D-E.’
 Regrettably and finally, it is necessary to deal with the nature and frequency of judicial interventions during proceedings in the court below. At an early stage in Maddock’s testimony, which was to the effect that investor funds were being used to benefit Brown, FAM and its directors, counsel for the State asked Maddock whether Brown had the right to use funds in this manner, Veldhuizen J intervened and asked how Maddock could know whether that was so. The reply was obvious:
‘Because those were investors’ funds that had to be invested for the benefit of investors.’
 The passages reflecting the court’s interventions and exchanges with witnesses and counsel reflect an on-going consistent attitude that Brown’s conduct was not that reprehensible. A judicial officer faced with continuing evidence that trust moneys were being used in the manner described above ought to have been concerned about the propriety of such action rather than repeatedly seeking to excuse it. On occasion, accused persons complain that they have been prejudiced by judicial officers entering the arena. In the present case the State has cause for complaint. I have taken into account that for a substantial part of the proceedings Brown was unrepresented and would have been entitled to protection by the court in its role of ensuring a fair trial. The interventions set out above went beyond a court’s obligation in that regard. The judge, very early on, was antagonistic to the State’s case and repeatedly intervened to the benefit of Brown. I agree with counsel for the State that the judge’s behaviour reflected in these passages is deserving of censure. Counsel representing Brown was constrained to agree.
 For all the reasons set out above, the following order is made:
1. The appeal in respect of sentence is upheld.
2. The sentences imposed by the court below are set aside and substituted as follows:
‘i. On count 2 the accused is sentenced to 15 years’ imprisonment.
ii. On count 6 the accused is sentenced to 15 years’ imprisonment.
iii. The sentences are ordered to run concurrently.’