CHAMBER
APPLICATION
PATEL
JA:
This
is an application for leave to appeal to the Supreme Court in terms
of section 44(6) of the High Court Act [Chapter 7:06].
In
particular, the applicant seeks leave to appeal against the decision
of the High Court handed down on 20 March 2019 in Case No. 11141/18
(as Judgment No. HH229-19).
The
effect of that judgment was to quash the criminal charges against the
respondents in Case No. CRB P 9114-5/18 and consequently to order
their acquittal on those charges.
The
Background
The
applicant herein is the Prosecutor-General. The first respondent is a
company styled Intratrek Zimbabwe (Pvt) Ltd (Intratrek), while the
second respondent, Wicknell Munodaani Chivayo (Chivayo), is that
company's Managing Director.
The
respondents were charged with two counts of fraud and two counts of
contravening local exchange control requirements. All four charges
emanate from an Engineering, Procurement and Construction Contract
(the Contract) entered into between Intratrek, represented therein by
Chivayo, and the Zimbabwe Power Company (Pvt) Ltd (the ZPC).
The
Contract, which was concluded on 23 October 2015, was for the
construction of a 100 megawatt solar power generation plant in Gwanda
(the Project).
The
first charge alleges fraud pursuant to misrepresentation by the
respondents through the submission of invoices designed to fund a
feasibility study for the Project. It is alleged that the ZPC
released a total of US$2,435,654.00 on the strength of those invoices
and that the respondents converted those funds to their own use
thereby causing actual prejudice in that amount.
The
second charge also alleges fraud by misrepresentation through the
presentation of invoices for pre-commencement works on the Project.
Again, it is alleged that the ZPC acted upon the misrepresentation
and released funds to the respondents who converted those funds to
their own use thereby causing actual prejudice in the sum of
US$3,188,476.80.
The
third and fourth charges pertain to alleged exchange control
violations. The third charge alleges that the respondents entered
into an unlawful agreement with a company resident in the United
States of America involving the payment of recurring fees amounting
to US$849,479.00 without seeking prior approval from the Exchange
Control Authority. The fourth charge alleges that the respondents
were granted exchange control approval to load Chivayo's VISA cards
with funds amounting to US$849,479.00 to import earthmoving equipment
for civil construction purposes at the Project. It is alleged that
the respondents failed to provide bills of entry to the CBZ Bank as
proof of receipt of the imported goods for acquittal purposes within
90 days of effecting payment.
Magistrates
Court and High Court Proceedings
In
Case No. CRB P 9114-5/18, before the Magistrates Court, the
respondents pleaded not guilty and excepted to all four charges in
terms of section 171(2) of the Criminal Procedure and Evidence Act
[Chapter 9:07].
The
exception was premised on the assertion that the facts as alleged in
the Charge Sheet and State Outline did not disclose any offence,
whether as alleged or at all.
The
learned magistrate found that the charges in question did capture the
essentials expected of a charge to enable the accused persons to
properly plead thereto. He accordingly dismissed the exception.
Aggrieved
by that ruling, the respondents filed an application to the High
Court for the review of the magistrate's decision on the ground
that it was grossly unreasonable and patently contrary to law. The
respondents also filed a separate application to the High Court for
the stay of proceedings before Magistrates Court pending the
determination of the application for review. The latter application
was heard and determined in Case No. HC11205/18 (as Judgment No.
849-18 per Musakwa J) on 31 December 2018. The learned judge found
that there were no formal defects in three of the four counts and
that the applicants (the respondents herein) had no prospects of
success on review in respect of those three counts. The third count
was found to be defective. The court accordingly ordered that the
criminal trial be suspended only in respect of the third count and
that the trial could proceed in respect of the other three viable
counts.
High
Court Judgment on Review
In
the judgment, which the applicant seeks leave to appeal against, the
High Court found that the learned magistrate had misdirected himself
because he dealt with an issue that was not before him. In
particular, he had been asked to adjudicate whether or not the facts
alleged disclosed an offence, but instead decided that the charges
against the respondents were properly framed and therefore disclosed
an offence. The High Court held that this was a reviewable
irregularity that went to the root of the matter. The court then
proceeded to determine the question itself by way of considering in
great detail the merits of the entire case against the respondents. I
summarise its principal findings as follows:
(i)
The payments made by the ZPC were advance payments authorised by
contract and this negated any intention to deceive or cause
prejudice.
(ii)
The ZPC incurred its own loss by negligently paying the respondents
before any performance bond or guarantee was put in place.
(iii)
Where a contractual agreement provides effective redress, the dispute
should be resolved contractually and liability should not be extended
under the different remedial regime of criminal law.
(iv)
The respondents did not commit any offence under the Exchange
Control Regulations as the Guidelines in question were not made under
the Exchange Control Act and, in any event, the respondents could
have sought exchange control approval after entering into the
relevant contract.
(v)
No criminal offence was established in relation to the non-acquittal
of payments as the Authority in question was not promulgated under
the Exchange Control Act and did not prescribe any offence.
(vi)
Chivayo merely represented Intratrek in his capacity as its Managing
Director and was therefore wrongly charged in his personal capacity.
(vii)
To the extent that section 277(5) of the Criminal Law (Codification
and Reform) Act [Chapter 9:23] (the Criminal Law Code) imputes
vicarious liability to Chivayo in respect of an offence allegedly
committed by Intratrek, the charges in question breached the
protective provisions of sections 49(1) and 56(1) of the Constitution
and were therefore invalid.
(viii)
On the totality of the facts and the merits, it was highly improbable
that a criminal suit would succeed and therefore its continuation
would violate section 49(2) of the Constitution.
The
learned judge concluded by reiterating that a criminal court does not
have any jurisdiction to hear or determine any case of a civil nature
as in casu. He then set aside the learned magistrate's ruling and
substituted it with an order that the exception to the charges should
succeed, resulting in all of the charges being quashed and both
respondents being formally acquitted.
Preliminary
Objections
As
already stated, the applicant seeks leave to appeal against the
judgment of the High Court in terms of section 44(6) of the High
Court Act.
His
intended appeal is premised on points of law and on the averment that
the court acquitted the respondents on a view of the facts which
could not reasonably be entertained.
Initially,
the respondents raised several preliminary objections to the
application relating, inter alia, to the failure to cite the learned
magistrate a quo as a party and to the form and content of the of the
notice of motion instituting the application as well as the content
of the founding affidavit accompanying the application. The
respondents consequently sought the dismissal of the application with
costs on a legal practitioner and client scale. Subsequently, at the
first hearing of the matter, on 17 April 2019, it was noted that the
applicant's heads of argument were singularly deficient as to both
form and content and that the respondents' heads of argument did
not address the merits of the matter at all.
It
was accordingly ordered by consent that the matter be postponed and
that both parties should file fresh heads of argument. Thereafter,
through Case No. SC253/19, the applicant sought condonation of his
failure to comply with the Rules and leave to file a corrected notice
of motion in Case No. SC 177/19.
Again,
the respondents through their notice of opposition raised several
preliminary objections of a procedural nature and prayed that the
application be struck off the roll with costs.
The
respondents took the position that both applications remained fatally
defective and that the applicant should abandon both and commence
entirely new proceedings.
Thereafter,
at the second hearing of both matters on 8 May 2019, the parties
agreed to proceed with the main application on condition that the
applicant would meet the costs of the subsidiary application. It was
consequently ordered by consent that the application for condonation
and leave to file an amended notice of motion under Case No. SC253/19
be granted and that applicant should pay the costs of that
application on the ordinary scale by 31 May 2019, failing which the
respondents were given leave to proceed against the applicant by way
of proceedings for contempt of court.
As
regards the main application in Case No. SC 177/19, the respondents
persisted with their position that the learned magistrate was the
primary respondent in the review application before the High Court
and, having been properly cited in that matter, he should therefore
also be cited in the application for leave to appeal against the
judgment of that court.
Counsel
for the applicant eventually deferred to this position and it was
ordered by consent that the learned magistrate be joined as the third
respondent and that the matter be further postponed to be heard on
the merits on 15 May 2019.
Grounds
of Appeal
The
intended grounds of appeal herein, as paraphrased, aver that the
learned judge a quo misdirected himself and/or erred in the following
respects:
1.
In finding that the facts do not disclose an offence of fraud when it
was apparent from the State Outline that the respondents had
misrepresented to the ZPC that a total of US$1,960,125.00 had been
paid to subcontractors when such money had not been paid and was used
by the respondents for their own benefit to the prejudice of the ZPC.
2.
In failing to consider the provisions of section 278(3) of the
Criminal Law Code which impute that a person's conduct can
constitute both criminal and civil liability and that the State could
resort to criminal redress in a matter that was not purely
contractual.
3.
In finding that the facts do not disclose an offence of fraud as
against the second respondent where he was chargeable in his personal
capacity as a director of the first respondent and there was a paper
trail to show that both respondents misrepresented facts to the ZPC
to its prejudice and that the funds were used by both respondents for
their own benefit.
4.
In making a finding that effectively interfered with unterminated
proceedings where there were no exceptional circumstances to warrant
such interference and where trial had commenced and evidence was
being led before the Magistrates Court.
5.
In finding that the facts pertaining to the fourth count do not
disclose an offence of entering into an agreement without seeking
prior exchange control approval.
The
relief sought by the applicant on appeal is that the appeal should
succeed and that the judgment of the court a quo be set aside and
substituted with an order dismissing the exception and continuing the
trial under Case No. CRB P 9114-5/18.
At
the hearing of the matter, the Court noted two anomalies in the
grounds of appeal.
The
first relates to the first ground with reference to the total amount
involved under the first and second counts, i.e. US$5,624,130.80 as
opposed to US$1,960,125.00. The second pertains to the fifth ground
of appeal which erroneously refers to the allegations contained in
the third count (which count was dropped at the criminal trial) as
opposed to the fourth count.
Counsel
for the applicant acknowledged these anomalies and sought an
amendment to the first ground to reflect the correct amount of
US$5,624,130.80. She also abandoned the fifth ground and requested
that it be expunged.
Counsel
for the respondents did not oppose these amendments. The grounds of
appeal were accordingly amended as prayed for by consent.
Concurrence
of Another Judge
Apart
from the stated grounds of appeal, counsel for the applicant persists
with a fresh point of law raised in her heads of argument, to wit,
that the learned judge a quo did not obtain the concurrence of
another judge, as required by section 29(5) of the High Court Act
[Chapter 7:06], before acquitting the respondents.
Counsel
for the respondents object to this point on the basis that it is not
dealt with in the notice of motion or founding affidavit and has
therefore been improperly raised.
Ms
Fero concedes this objection but submits that this Court is at large
to exercise its statutory powers of review in terms of section 25 of
the Supreme Court Act [Chapter 7:13]. She contends that the Court may
act mero motu to review and set aside the judgment a quo on the
ground that it lacked the concurrence of a second judge in terms of
section 29(5) of the High Court Act.
As
was accepted by all counsel present, the inevitable implication of
this course being adopted is that the present application would be
rendered redundant in its entirety because there would be nothing
left to appeal against.
Having
duly considered the matter, I do not think that it would be
appropriate or in accordance with the justice of this case to
exercise the powers of review conferred by section 25 of the Supreme
Court Act in the present circumstances. Quite clearly, as is conceded
by Ms Fero, this new point of law has been unprocedurally raised.
Apart from the fact that it does not appear from the pleadings, it
has been advanced at a very belated juncture, without the requisite
notice and to the obvious prejudice of the respondents. This is
clearly contrary to the established principles governing the
introduction and admissibility of a new point of law. See Cole v
Union Government 1910 AD 263 at 272, followed in Ngani v Mbanje &
Anor 1987 (2) ZLR (SC) 111 at 114.
Moreover,
from a purely practical standpoint, if the applicant's
interpretation of the relevant statutory provisions were to be upheld
and the decision a quo set aside as constituting a reviewable
irregularity, this would not preclude the respondents from mounting a
fresh application to the High Court to review the decision of the
Magistrates Court dismissing their exception to the charges against
them. In that event, the finalisation of the criminal proceedings in
casu would be further prolonged and delayed, contrary to the
interests of the proper administration of the criminal justice
system.
For
the foregoing reasons, I decline to entertain the new point of law
advanced on behalf of the applicant.
I
now turn to consider the merits and prospects of success of the four
remaining grounds of appeal as amended.
General
Considerations
Section
44(6) of the High Court Act provides for appeals by the Prosecutor
General against judgments of the High Court in the following terms:
“(6)
If the Prosecutor-General is dissatisfied with the judgment of the
High Court in a criminal matter, whether in the exercise of its
original or appellate jurisdiction or on review, including a review
pursuant to section 57 of the Magistrates Court Act [Chapter 7:10] –
(a)
on a point of law; or
(b)
because it has acquitted or quashed the conviction of the person who
was the accused in the case on a view of the facts which could not
reasonably be entertained;
he
may, with the leave of a judge of the Supreme Court, appeal against
such judgment to the Supreme Court: ... .”
The
right of appeal conferred by section 44(6) is essentially twofold;
(i)
either on a point of law or on a view of the facts which could not
reasonably be entertained; or
(ii)
on both the law and the facts.
As
regards an appeal on the facts, the test is primarily an objective
one, viz. is the impugned finding of fact one that is shown to be
objectively unreasonable and therefore one that could not reasonably
be entertained.
In
taking this view, I am not oblivious to the observations of Korsah JA
in Attorney-General v Paweni Trade Corp (Pvt) Ltd & Ors 1990 (1)
ZLR 24 (SC) at 32D.
In
that case, this Court was seized with applications for leave to
appeal filed by both parties together with the actual appeals noted
by both parties against the findings of the trial court. In
interpreting the parameters of the phrase under consideration, the
learned Judge of Appeal took the view that:
“……..if
there are reasonable grounds for taking certain facts into
consideration and all the facts, when taken together, point
inexorably to the guilt of an accused beyond peradventure, but the
trial court nonetheless acquits the accused, then the trial court has
taken a view of the facts which could not reasonably be entertained.
Put another way, if, on a view of the facts, the court could not have
reasonably inferred the innocence of the accused, then the verdict of
acquittal is perverse, and the Attorney-General is entitled to attack
it.”
The
earlier part of this passage appears to suggest a threshold for the
applicant to surmount which is somewhat higher than the objective
test that I have expounded, while the later part is more in accord
with that test.
In
any event, the case is distinguishable on the basis that it addresses
the considerations applicable in an application for leave to appeal
as well as the merits of the actual appeal itself. At this stage, I
am seized only with the former and not the latter. Moreover, the
pertinent facts in that case had already been fully ventilated before
the trial court and definitively determined by that court.
In
contrast, the facts in casu have yet to be canvassed and conclusively
determined by trial on evidence yet to be adduced.
For
these reasons, I am inclined in the present matter to lean towards
adopting and applying the later rather than the earlier part of the
passage that I have cited.
As
for the requirement of leave to appeal to be obtained before the
right to appeal can be exercised, this Court is vested with an
essentially gatekeeping function, viz. to allow only cases that
deserve to be heard on appeal to pass muster. What this entails is an
evaluation of the grounds of appeal to be relied upon and their
prospects of success at the intended appeal. See Chikurunhe & Ors
v Zimbabwe Financial Holdings SC10-08; Chipangura v Environmental
Management Authority SC35-12.
Whether
Offence of Fraud Disclosed
Counsel
for the respondents submit that paragraphs 10 and 11 of the State
Outline do not relate to the essential elements of fraud. In
particular, there is no allegation that the purported
misrepresentation was intended to deceive and operated to procure the
release of funds to the prejudice of the ZPC, either at the time that
the invoices were presented or at the time when the funds were
released.
Furthermore,
there is no specific allegation made against Intratrek, the first
respondent.
Counsel
for the applicant counters that the averments in paragraphs 10 and 11
of the State Outline relate to the manner in which the offence came
to light. The preceding paragraphs indicate that the respondents
submitted invoices and certificates for advance payments in respect
of the works to be carried out. They clearly allege an intention to
deceive and cause prejudice at the time of the alleged
misrepresentations. Paragraphs 10 and 11 capture what transpired
thereafter when the supposed subcontractors distanced themselves from
the invoices submitted by the respondents.
I
have already summarised at the outset the two counts of fraud as set
out in the Charge Sheet.
There
can be no doubt that they both allege the offence of fraud by
misrepresentation through the submission of invoices for a
feasibility study and precommencement works on the Project.
Additionally, they further allege that the ZPC released a total
amount of US$5,624,130.80 to the respondents on the strength of those
invoices and that the respondents converted those funds to their own
use thereby causing actual prejudice to the ZPC.
It
is also clearly alleged in both counts that in making those
misrepresentations the respondents acted unlawfully and with actual
or constructive intent to deceive and defraud the ZPC.
Turning
to the State Outline, the details of the alleged fraud are elaborated
as follows.
On
23 October 2015, ZPC signed the Contract with Intratek which was
represented by Chivayo (paragraph 4). The Contract provided that the
ZPC would advance monies for feasibility studies and pre-commencement
activities (paragraph 5). Between 4 December 2015 and 22 January
2016, Chivayo submitted two invoices on the pretext of feasibility
study implementation; the ZPC's Finance Director acted upon the
misrepresentation and released US$2,435,650.00 in nine instalments
and paid the same into Intratrek's CBZ bank account, on the
understanding that the subcontractor concerned was going to carry out
the feasibility study (paragraph 6).
However,
ZPC's Technical Director, Projects Manager and suspended Managing
Director indicated that they never met the subcontractor during the
supposed study period; there was also no record of the subcontractor
entering Zimbabwe during the period in question (paragraph 7).
Between 15 February 2016 and 25 April 2016, Chivayo submitted three
invoices, supported by payment release certificates, purportedly for
the implementation of pre-commencement works on the Project
(paragraph 8).
Again,
ZPC's Finance Director acted on the misrepresentation and released
total advance payments of US$3,188,476.00 in twelve instalments into
Intratrek's CBZ bank account (paragraph 9). On 26 April 2016, the
ZPC's Finance Director requested Chivayo to provide a schedule of
commitment in respect of the funds released towards the
implementation of the Project; Intratrek's Company Secretary
misrepresented that a total of US$1,960,125.00 had been paid to
subcontractors, who however distanced themselves from the invoices
submitted by Chivayo (paragraph 10).
The
paper trail indicates that Chivayo used the funds meant for the
feasibility study and pre-commencement works for his own personal
benefit by diverting them to various individuals and companies; the
funds were used to purchase vehicles and air tickets and for the
settlement of school fees and civil suits (paragraph 11). The ZPC
suffered total prejudice in the sum of US$5,624,130.80 and nothing
was recovered (paragraph 16).
The
crime of fraud is defined in section 136 of the Criminal Law Code in
the following terms: “Any person who makes a misrepresentation –
(a)
intending to deceive another person or realising that there is a real
risk or possibility of deceiving another person; and
(b)
intending to cause another person to act upon the misrepresentation
to his or her prejudice, or realising that there is a real risk or
possibility that another person may act upon the misrepresentation to
his or her prejudice;
shall
be guilty of fraud if the misrepresentation causes actual prejudice
to another person or is potentially prejudicial to another person
....”
The
essential elements of fraud as defined in this provision are trite:
(a)
the making of a misrepresentation;
(b)
actual or constructive intention to deceive another person;
(c)
actual or constructive intention to cause another person to act upon
the misrepresentation to his prejudice; and
(d)
resultant actual or potential prejudice to another person.
Having
regard to the Charge Sheet and State Outline in casu, I have no doubt
that the foregoing elements are aptly captured in those documents.
These include the making of misrepresentations through the submission
of false invoices, the intention to deceive and defraud the ZPC
through its officers and agents, the intention to cause the ZPC's
officers and agents to act upon the misrepresentation to its
prejudice and, as a consequence of such conduct and intent, causing
actual prejudice to the ZPC in the not insignificant amount of
US$5,624,130.80.
All
of these allegations, if proved, would undoubtedly constitute the
offence of fraud.
In
the premises, I take the view that the learned judge a quo
misdirected himself in finding that the facts alleged in the Charge
Sheet as read with the State Outline do not disclose an offence.
Consequently, he erred by upholding the exception to the charges of
fraud levelled against the respondents, quashing those charges and
acquitting the respondents, on a view of the facts that could not
reasonably be entertained. At the same time, he erred in law in his
misappreciation of the essential components of the crime of fraud and
their application to the facts before him. On a proper view of those
facts, he could not reasonably have inferred the innocence of the
respondents.
It
follows that the first ground of appeal is meritorious and enjoys
sound prospects of success on appeal.
Concurrent
Criminal and Civil Proceedings
Ms
Fero submits that the court a quo misdirected itself at law by
confining itself to the civil aspects of the transactions forming the
subject matter of the charges of fraud preferred against the
respondents. In this respect, it failed to consider the provisions of
section 278 of the Criminal Law Code which provides that there is
nothing to preclude a criminal prosecution where a contract is
involved.
Counsel
for the respondents accept that neither criminal nor civil
proceedings constitute a bar to either, but contend that section 278
is essentially concerned with disciplinary proceedings.
My
reading of section 278 is that it certainly is not restricted to
disciplinary proceedings. Admittedly, section 278(1) provides a
fairly comprehensive definition of “disciplinary proceedings”.
However that does not detract from the broader ambit of the
substantive provisions contained in subsections (2) and (3) which
state as follows:
“(2)
A conviction or acquittal in respect of any crime shall not bar civil
or disciplinary proceedings in relation to any conduct constituting
the crime at the instance of any person who has suffered loss or
injury in consequence of the conduct or at the instance of the
relevant disciplinary authority, as the case may be.
(3)
Civil or disciplinary proceedings in relation to any conduct that
constitutes a crime may, without prejudice to the prosecution of any
criminal proceedings in respect of the same conduct, be instituted at
any time before or after the commencement of such criminal
proceedings.”
These
provisions make it clear that the concept of double jeopardy does not
extend to criminal and civil proceedings which might be instituted in
respect of the same conduct or causa. They also make it clear that
such criminal and civil proceedings may be instituted at any time,
whether before, after or concurrently with one another.
More
significantly for present purposes, the institution of civil
proceedings or availability of civil remedies cannot prejudice or
preclude criminal proceedings in respect of the conduct giving rise
to civil liability.
That
this position is trite is evidenced by the paucity of judicial
precedent on the subject.
Nevertheless,
there is at least one decision in our jurisdiction wherein the
governing principle is lucidly articulated. In S v African
Consolidated Resources (Pvt) Ltd 2013 (1) ZLR 392 (H), the question
posed by the court was: “whether a criminal prosecution could be
instituted from the same facts giving rise to a civil suit and
whether it was impermissible to have a parallel process where the
conduct of an accused person gives rise to both criminal prosecution
and civil litigation.”
Musakwa
J answered his own enquiry at 400 E-F, as follows:
“That
out of the same set of facts civil litigation and criminal
prosecution has [sic] arisen cannot be a ground for excepting to an
indictment.
By
way of analogy, out of the same conduct may arise a criminal charge
and disciplinary/misconduct proceedings. The same action may further
spawn a delictual suit.”
It
is abundantly clear that the findings of the court a quo pertaining
to the chargoes of fraud against the respondents and the context in
which they arose militate against the statutory and common law
principles governing concurrent criminal and civil proceedings.
The
following are the pertinent misconceived findings of the court.
(i)
The first is that, because the payments made by the ZPC to the
respondents were advance payments authorised by contract, this
negates any intention to deceive or cause prejudice to the ZPC.
(ii)
The second is that, where a contract is capable of providing
effective redress, the courts cannot extend liability under a
different remedial regime of the criminal law, as this would be
contrary to public policy.
(iii)
The third and most outlandish is that a criminal court does not have
jurisdiction to hear or determine any matter involving a contract.
(iv)
The fourth and final, pursuant upon the third, is that the instant
case is a purely civil matter to be resolved contractually by
enforcing the dispute resolution provisions of the Contract.
I
am of the firm view that the learned judge a quo misdirected himself
at law in making the foregoing findings and consequently holding that
the State could not resort to the institution of criminal proceedings
in circumstances where the facts alleged, if proven, clearly
demonstrated the commission of fraud by the respondents.
In
the event, I am satisfied that the second ground of appeal has
excellent prospects of success on appeal.
Charges
of Fraud against Second Respondent
As
regards the charges against Chivayo, the court a quo found that he
merely represented Intratrek in his capacity as its Managing
Director. It was not alleged that he did anything pursuant to the
Contract in his personal capacity and he was therefore wrongly
charged in that capacity.
The
court also found that, to the extent that section 277(5) of the
Criminal Law Code imputes vicarious criminal liability to the
director of a company in respect of an offence committed by the
company, it breaches the protective provisions of sections 49(1) and
56(1) of the Constitution and is accordingly invalid.
As
for the constitutional dimension alluded to by the court a quo, the
overall effect of section 277 of the Criminal Law Code is that the
conduct of a director is imputable to the company and, vice versa,
the conduct of a company is imputable to each of its directors. Thus,
a director can be held vicariously criminally liable to be prosecuted
and punished personally for the crime of the company, unless he
proves that he took no part in the alleged criminal conduct.
Counsel
for the respondents submit that the whole of section 277 is
unconstitutional, as was held by the learned judge a quo. They rely
for this proposition upon the decision in S v Coetzee 1997 (3) SA 527
(CC), wherein the Constitutional Court declared section 245 of the
South African Criminal Procedure Act to be invalid for infringing the
presumption of innocence.
In
this regard, I would simply observe that the provision struck down is
materially different from our section 277 and, therefore, the
decision in Coetzee's case is not particularly germane to the
situation in casu.
In
any event, I do not think that the impugned provision and its
constitutionality or otherwise are relevant at all to the
circumstances of this case. More to the point, I am unable to accept
the argument advanced by counsel for the respondents that the facts
alleged relate only to the contractual obligations and conduct of
Intratrek and not to the conduct of Chivayo in his personal capacity.
The
two charges of fraud allege that both Intratrek and Chivayo, or one
of them, with intent to deceive and defraud the ZPC, made
representations to the ZPC's Finance Director through the
presentation of invoices designed to fund the feasibility study and
pre-commencement works on the Project. The charges further allege
that, instead of implementing the Project, both Intratrek and
Chivayo, or one of them, converted the funds released to them to
their own use, thereby causing actual prejudice to the ZPC.
The
third and fourth charges, pertaining to exchange control violations,
also clearly implicate both Intratrek and Chivayo, or one of them,
with having contravened the relevant exchange control requirements in
question.
Turning
to the State Outline, paragraph 2 states that “accused (1)” is
Intratrek, while paragraph 3 makes it clear that “accused (2)” is
“accused 1's Managing Director being charged in his personal
capacity”.
Paragraphs
6, 8 and 9 allege that “the accused” submitted five separate
invoices during the relevant period and that the ZPC's Finance
Director acted upon the alleged misrepresentation and released the
requisite advance payments in 21 different instalments into “accused
1's” CBZ bank account.
In
paragraph 10, it is stated that ZPC's Finance Director requested
“the accused” to provide a schedule of commitment in respect of
the funds released by the ZPC. It is then alleged that “the accused
again through his Company Secretary” misrepresented that a certain
sum had been paid to subcontractors.
In
paragraph 11, it is alleged that “accused” used the funds meant
for feasibility study and pre-commencement works “for his own
personal benefit” by diverting them to purchase vehicles and air
tickets and for the settlement of school fees and civil suits.
Paragraphs
12 to 14 pertain to the alleged exchange control violations. They
refer variously to the alleged conduct of “the accused”, “the
accused person” and “the accused persons”.
Finally,
paragraph 16 asserts that the ZPC suffered total prejudice of
US$5,624,130.80 and that nothing was recovered.
In
my view, the Charge Sheet, taken together with the State Outline,
make it abundantly clear that there is no question of any vicarious
liability being imputed to Chivayo in respect of the conduct of
Intratrek. On the contrary, he is specifically charged in his
personal capacity, for specific acts and misrepresentations
attributed to him either individually or jointly with Intratrek, and
not merely in his representative capacity as the Managing Director of
Intratrek.
In
the premises, I am satisfied that the learned judge a quo misdirected
himself in finding that the facts as alleged did not disclose the
offence of fraud as against Chivayo and that there was no basis for
charging him in his personal capacity.
Accordingly,
the third ground of appeal also holds high prospects of success.
Interference
with Unterminated Proceedings
The
nub of the fourth ground of appeal is that the court a quo erred in
interfering with un-terminated proceedings in the Magistrates Court
where there were no exceptional circumstances to warrant such
interference.
It
is common cause that proceedings in the Magistrates Court had already
commenced in respect of three of the four counts preferred against
the respondents. One witness had already testified on behalf of the
State and on the following date of hearing the public prosecutor was
to proceed to lead evidence from the next witness.
Counsel
for the respondents object that this ground of appeal was not raised
in the court a quo.
Furthermore,
they contend that the State had conceded that the court was entitled
to interfere if it were to be found, as it was, that the learned
magistrate had erred and misdirected himself in dealing with the
respondents' exception to the charges. Consequently, so it is
argued, the applicant cannot ground an appeal on a point that was
conceded.
Ms
Fero accepts that the court a quo had to deal specifically with the
exception raised and dismissed in the Magistrates Court. However, the
applicant did not concede that this went to the root of the matter.
What the applicant did was to accept simply that the court a quo
could set aside the learned magistrate's decision on the exception,
as having been erroneously arrived at on the wrong basis. But the
State specifically did not concede that the court a quo was then at
large to acquit the respondents on all the charges against them.
I
am unable to discern anything in the judgment a quo to controvert the
applicant's position as presented by Ms Fero. I accordingly propose
to deal with the fourth ground of appeal on the basis that it is
properly before me.
The
principles governing interference by a superior court with the
proceedings of a subordinate court are well established.
In
South Africa, the position was aptly enunciated in Walhaus & Ors
v Additional Magistrate, Johannesburg & Anor 1959 (3) SA 113
(AD). In the present context, it is instructive to cite in extenso
the relevant passages from that judgment, at 119D-120E, per Ogilvie
Thompson JA:
“If,
as appellants contend, the magistrate erred in dismissing their
exception and objection to the charge, his error was that, in the
performance of his statutory functions, he gave a wrong decision. The
normal remedy against a wrong decision of that kind is to appeal
after conviction. The practical effect of entertaining applicant's
position would be to bring the magistrate's decision under appeal
at the present, unconcluded, stage of the criminal proceedings
against them in the magistrate's court. No statutory provision
exists directly sanctioning such a course. ....
It
is true that, by virtue of its inherent power to restrain
illegalities in inferior courts, the Supreme Court may, in a proper
case, grant relief – by way of review, interdict or mandamus –
against the decision of a magistrate's court given before
conviction. ... . This, however, is a power which is to be sparingly
exercised. It is impracticable to attempt any precise definition of
the ambit of this power; for each case must depend upon its own
circumstances.
The
learned authors of Gardiner and Lansdown (6th ed., vol. I p. 750)
state:
'While
a superior court on review or appeal will be slow to exercise any
power, whether by mandamus or otherwise, upon the unterminated course
of proceedings in a court below, it certainly has the power to do so,
and will do so in rare cases where grave injustice might otherwise
result or justice might not by other means be attained. ... . In
general, however, it will hesitate to intervene, especially having
regard to the effect of such a procedure upon the continuity of
proceedings in the court below, and to the fact that redress by means
of review or appeal would ordinarily be available.'
In
my judgment, that statement correctly reflects the position in
relation to unconcluded criminal proceedings in the magistrate's
courts. .... [The] prejudice, inherent in an accused's being
obliged to proceed to trial, and possible conviction, in a
magistrate's court before he is accorded an opportunity of testing
in the Supreme Court the correctness of the magistrate's decision
overruling a preliminary, and perhaps fundamental contention raised
by the accused, does not per se necessarily justify the Supreme Court
in granting relief before conviction.
See
also Ismail & Ors v Additional Magistrate, Wynberg & Anor
1963 SA 1 (AD), where the same sentiments were echoed by Steyn CJ, at
5G-6A. “
The
position in our jurisdiction is no different and has been adopted by
our courts for exactly the same reasons. See Levy v Benatar 1987 (1)
ZLR 120 (SC), at 123-124; Ndhlovu v Regional Magistrate, Eastern
Division & Anor 1989 (1) ZLR 264 (HC), at 269-270 & 275-276.
See also Lee-Waverly John v The State & Anor HH 117-14, at p.3,
where it was observed that the High Court should only interfere where
actual and permanent prejudice will be occasioned to the accused.
Turning
to the judgment a quo, it is evident that the learned judge did not
consider the impact of his decision on the proceedings in the
Magistrates Court. He found, quite correctly, that the learned
magistrate had misapprehended the question before him and had
adjudicated the exception raised by the respondents on the wrong
footing.
The
learned judge should then have taken the salutary route of remitting
the matter to the court below to determine the exception on the
correct basis and thereafter to continue and conclude the proceedings
accordingly.
Instead,
having erroneously found that the misdirection went to the root of
the matter, the learned judge then proceeded to determine the merits
of the entire matter, by allowing the exception, quashing all of the
charges against the respondents and acquitting both of them, without
the benefit of all the evidence that would have been adduced in the
Magistrates Court.
Very
significantly, there was nothing to suggest that the respondents
would suffer any permanent prejudice from the continuation of the
proceedings in the lower court or that “grave injustice might
otherwise result” or that “justice might not by other means be
attained” by dint of such continuation.
As
I have indicated earlier, the trial in the court below had already
commenced and one witness had already testified on behalf of the
State with the next witness to follow.
In
short, the learned judge a quo erred at law in interfering with
unterminated criminal proceedings, in the absence of exceptional
circumstances warranting such intervention. It follows, in my view,
that the fourth and final ground of appeal also holds sufficient
prospects of success on appeal.
Disposition
To
conclude, I am satisfied that all of the grounds of appeal in this
matter, as amended, carry good prospects of success at the intended
appeal before this Court. The application for leave to appeal
accordingly succeeds and it is ordered as follows:
1.
The application for leave to appeal to this Court be and is hereby
granted.
2.
The applicant shall file and serve his notice of appeal within ten
days of the date of this order.
3.
Each party shall bear its own costs.
National
Prosecuting Authority, applicant's legal practitioners
Manase
& Manase, respondents' legal practitioners
