Intratrek Zimbabwe (Private) Limited and Wicknel Munodaani Chivayo v Prosecutor General of Zimbabwe and L. Ncube N.O.

### Preamble
1
HH 849-18
HC 11 205/18
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INTRATREK ZIMBABWE (PRIVATE) LIMITED

and

WICKNEL MUNODAANI CHIVAYO

versus

PROSECUTOR GENERAL OF ZIMBABWE

and

L. NCUBE N.O.

HIGH COURT OF ZIMBABWE

MUSAKWA J

HARARE, 11 & 31 December 2018

Urgent Chamber Application

L. Uriri, for applicants

S. Fero, for first respondent

MUSAKWA J: This is an application for stay of proceedings that are before the second respondent pending the determination of an application for review of the second respondent’s dismissal of an exception to the charges.

The applicants are facing two counts of fraud and two counts of contravening s 5 (1) (a) (ii) of the Exchange Control Act as read with section 4.1.8 of the Foreign Exchange Guidelines To Authorized Dealers; ECD1 of 2009.

The charges read as follows-

“First Count

Fraud As Defined In Section 136 Of The Criminal Law (Codification And Reform) Act [Chapter 9:23]

In that on the dates mentioned in Column A of schedule ‘A’ hereattached and at Zimbabwe Power Company (Pvt) Ltd (ZPC), corner Samora Machel and Takawira, Harare, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them, unlawfully and with intent to defraud or realizing that there was a real risk or possibility that ZPC might be deceived, misrepresented to ZPC Finance Director, Hubert Chiwara that invoices mentioned in column B of the schedule were meant to fund the feasibility study for the 100 Megawatt Gwanda Solar Energy Plant and Hubert Chiwara acted upon the misrepresentation and released funds mentioned in column C of the said schedule from ZPC’s Stanbic Bank account numbers 0222033958501 and 02220333958502 respectively into accused (1)’s CBZ account number 23554830010 on the understanding that the accused were going to implement the said project but instead, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them converted the funds to his own use thereby causing an actual prejudice (sic) US$2 435 654.00.

Second Count

In that on the dates mentioned in Column A OF schedule ‘A’ hereattached and at Zimbabwe Power Company (Pvt) Ltd (ZPC), corner Samora Machel and Takawira, Harare, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them, unlawfully and with intent to defraud or realizing that there was a real risk or possibility that ZPC might be deceived, misrepresented to ZPC Finance Director, Hubert Chiwara that invoices mentioned in column B of the schedule were meant to fund pre-commencement works for the100 Megawatt Gwanda Solar Energy Plant and Hubert Chiwara acted upon the misrepresentation and released funds mentioned in column C of the said schedule from ZPC’s Stanbic Bank account numbers 0222033958501 and 02220333958502 respectively into accused (1)’s CBZ account number 23554830010 on the understanding that the accused were going to implement the said project but instead, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them converted the funds to his own use thereby causing an actual prejudice (sic) US$3 188 476.80.”

The charges under the Exchange Control Act read as follows-

“Second Charge (sic)

Contravening Section 5 (1) (a) (ii) Of The Exchange Control Act [Chapter 22:05] As Read With Section 4.1.18 Of The Foreign Exchange Guidelines To Authorized Dealers; ECD1 of 2009

In that on a date to the prosecutor unknown but during the period between 23 October 2015 and 20 April 2016 and at Intratrek Zimbabwe (Pvt) Ltd, 18th Floor, South Wing, Karigamombe Centre, Harare, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them, unlawfully entered into an agreement involving recurring fees amounting to US$849 479.00 with Pietznack Plant and Earth Moving Services, a company resident in Dallas in the United States of America without seeking prior approval from Exchange Control Authority contrary to the provisions of the Act.

Third Charge (sic)

Contravening Section 5 (1) (a) (ii) Of The Exchange Control Act [Chapter 22:05] As Read With The Exchange Control Authority GR1776 Of 26 April 2016

In that on a date to the prosecutor unknown but during the period between 23 October 2015 and 20 April 2016 and at Intratrek Zimbabwe (Pvt) Ltd, 18th Floor, South Wing, Karigamombe Centre, Harare, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them was granted Exchange Control Approval to load funds amounting to US$849 479.00 onto Wicknell Munodaani Chivayo’s VISA cards to facilitate the importation of various earthmoving equipment for civil construction purposes at the Gwanda Solar Plant from Pietznack Plant and Earth Moving Services, a company resident in Dallas in the United States of America on condition that both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them would submit to CBZ Bank for acquittal purposes, within 90 days of effecting the cross-border payment, the Bills of Entry (Imports) as proof of receipt of the imported goods into Zimbabwe but instead, to date, both Intratrek Zimbabwe (Pvt) Ltd being represented by Wicknel Munodaani Chivayo and Wicknel Munodaani Chivayo or one of them hasn’t submitted the acquittals thereby contravening the Act.”

Upon arraignment the applicants pleaded and excepted to the charges in terms of s 171 of the Criminal Procedure and Evidence Act [Chapter 9: 07]. The basis of the exception to the fraud charges is that the charges emanate from an Engineering, Procurement and Construction contract (EPC). Thus it was contended that the Procurement Act and Regulations have mechanisms for the enforcement of public procurement contracts (such as the contract between the applicants and Zimbabwe Power Company). Extensive reference was made to provisions of the Procurement Act, among them a provision relating to advance payments made to a contractor by a procuring entity. It will be noted that the fraud charges relate to invoices submitted to Zimbabwe Power Company by the applicants. According to the facts as outlined by the state the invoices were submitted purporting that advance payment was required for feasibility study implementation. Other invoices were submitted for advance payment for pre-commencement works. When information regarding contractual commitments was requested from applicants they allegedly submitted details of subcontractors who were purportedly paid. However, the alleged subcontractors are said to have distanced themselves from the claim.

It is alleged that the paper trail shows that the money that was claimed for feasibility studies was then diverted to various individuals and entities that had nothing to do with the contract. Evidence established that the funds were used to purchase motor vehicles, air tickets school fees and the settlement of civil suits. Other funds were used to fund VISA cards ostensibly for purposes of purchasing earthmoving equipment from Pietznack Plant and Earth Moving Services in Dallas.

Section 170 of the Criminal Procedure and Evidence Act provides that-

“(1)	 Any objection to an indictment for any formal defect apparent on the face thereof shall be taken by exception or by application to quash such indictment before the accused has pleaded, but not afterwards.

(2) 	Any objection to a summons or charge for any formal defect apparent on the face thereof which is to be tried by a magistrates court shall be taken by exception before the accused has pleaded, but not afterwards.

(3)	 Any court before which any objection is taken in terms of subsection (1) or (2) may, if it is thought necessary and the accused is not prejudiced as to his defence, cause the indictment, summons or charge to be forthwith amended in the requisite particular by some officer of the court or other person, and thereupon the trial shall proceed as if no such defect had appeared.”

From a plain reading of the above provision it is clear that an exception to a charge is based on formal defects that are apparent. That is not the basis on which exception to the fraud charges was taken in the present case. That the conduct complained of is purely civil in nature as it arises from a transaction that is governed by the Procurement Act and Regulations is not an objection to defects that are apparent on the charges of fraud. A distinction ought to be made between an objection to a charge and a defence to a charge. What is being contended as an objection to the charges is actually the applicants’ defence. No argument was advanced as regards the shortcomings in the fraud charges in relation to s 146 of the Criminal Procedure and Evidence Act.

Section 146 of the Criminal Procedure and Evidence Act provides that-

“(1)	 Subject to this Act and except as otherwise provided in any other enactment, each count of the indictment, summons or charge shall set forth the offence with which the accused is charged in such manner, and with such particulars as to the alleged time and place of committing the offence and the person, if any, against whom and the property, if any, in respect of which the offence is alleged to have been committed, as may be reasonably sufficient to inform the accused of the nature of the charge.

(2)	 Subject to this Act and except as otherwise provided in any other enactment, the following provisions shall apply to criminal proceedings in any court, that is to say—

(a)	 the description of any offence in the words of any enactment creating the offence, or in similar words, shall be sufficient; and

(b) 	any exception, exemption, proviso, excuse or qualification, whether it does or does not accompany in the same section the description of the offence in the enactment creating the offence, may be proved by the accused, but need not be specified or negatived in the indictment, summons or charge, and, if so specified or negatived, no proof in relation to the matter so specified or negatived shall be required on the part of the prosecution.

(3)	 Where any of the particulars referred to in this section are unknown to the prosecutor, it shall be sufficient to state that fact in the indictment, summons or charge.

(4) 	Where a person is charged with a crime listed in the first column of the Second Schedule to the Criminal Law Code, it shall be sufficient to charge him or her with that crime by its name only.

(5)	No indictment, summons or charge alleging the commission of a crime mentioned in subsection (4) shall be held to be defective on account of a failure to mention the section of the Criminal Law Code under which the crime is set forth.”

The court a quo was correct in its analysis of the exception in relation to the fraud charges. It properly applied s 146 of the Criminal Procedure and Evidence Act. The court a quo cited the case of S v Kurotwi and Another HH 106-12 (erroneously referred to as HH 73-12) in which at p 3 bhunu j as he then was commented on the essentials of a charge as follows-

“Thus the State is under an obligation to frame a charge among other things so as  to inform the accused person of the offence he is facing together with the particulars or essential elements of that offence. The section also requires the State to inform the accused of the person against whom the offence was committed and the nature of the property involved if any.

Failure to give such particulars would render the charge defective and exceptiable.

It is therefore necessary to examine and see if the charge complies with the essentials laid down in s 146 of the Criminal Procedure and Evidence Act.”

In S v Sikarama And Another 1984 (1) ZLR 170 (HC) and at 171-172 which dealt with a provision similar to s 146 (1) of the Criminal Procedure and Evidence Act, it was held that-

“The requirements embodied in this provision are, in essence, that (a) the offence with which the accused is charged, and (b) the material facts constituting the offence, are both set out with sufficient clarity for the accused to be properly informed of the case which he has to meet (Ex p Minister of Justice: in re R v Masow and Another, 1940 AD 75; R v Wantenaar 1940 SR 174).

It is emphasised that the section requires that it is the accused who is to be properly informed of the charge and all its particulars. It is, therefore, incumbent upon magistrates to ensure that the charge as set out has indeed been fully understood by the accused and to make any necessary amendments.

As was stated by horwitz j in R v September 1954 (1) SA 574 (o):

“A charge should be framed with reasonable clarity and certainty before an accused person is

Called upon to plead thereto.”

In S v Siphambili 1995 (2) ZLR 337 and at 339-340 chatikobo j made the following remarks concerning s 146 (1) of the Criminal Procedure and Evidence act-

“Section 146 (1) of the Code provides that an indictment should set out the offence with which the accused is charged in such manner and with such particulars as to time and place of the commission of the offence as to inform the accused sufficiently of the nature of the charge he is facing. In other words, the charge must disclose an offence and it must do so with sufficient particularity. The material facts constituting the offence must appear ex facie the indictment. See R v Mlotshwa 1968 (2) RLR 172 (G); 1968 (3) SA 360 (R); R v Wantenaar 1940 SR 174. If the charge does not disclose an offence it is fatally flawed and, unless it is amended, no conviction can be founded upon it. If it discloses an offence but is deficient in particularity, it is not necessarily fatal. The test is whether the accused has been prejudiced or not…………………………………………………….”

I would therefore conclude that the fraud charges are not defective. They are

sufficiently couched to disclose an offence. The objection being raised amounts to a

defence.

A slightly different situation arises when it comes to charges relating to the third

count. Section 5 (1) of the Exchange Control Act provides that-

“(1) Subject to subsection (2), a person who, either within or outside Zimbabwe—

(a) contravenes or fails to comply with—

(i) any provision of this Act other than section eight; or

(ii) the terms or conditions of any permit, authority, permission, direction, notice, order or other

instrument made or issued under or by virtue of this Act;

or

(b) for the purposes of this Act, makes any statement or produces any document which is false in any

material particular; shall be guilty of an offence.”

Since the third charge is to be read with the Foreign Exchange Guidelines To Authorized Dealers; ECD1 of 2009, it becomes necessary to take a look at the Guidelines. The Guidelines state that they are intended for use by authorised dealers for all foreign exchange transactions. Authorised dealers are defined as:

“Local commercial and merchant banks licenced by the Exchange Control to deal in foreign currency.”

Section 4.1.8 of the Guidelines that is specifically cited in the charge reads as follows-

“Registration of Service Agreements

Where the provision of services involves agreements with recurring fees, the initial agreements must be registered with Exchange Control, after which payments can be made without reference to Exchange Control.”

A reading of the third count does not show where it refers to service agreements. In that respect one can say that it is defective. It is difficult to know what it is the applicants were expected to comply with in the context of s 4.1.8 of the Guidelines. The material averments constituting a violation of the Guidelines are not stated. Thus the basis of liability is not laid out. In this respect see Wantenaar v The King 1940 SR 174 and S v Mlotshwa 1968 (3) SA 360.

It can also be noted that s 4.1.1 of the Guidelines provides that-

“For all import payments, Authorised Dealers may process transactions for corporates and individuals without prior Exchange Control authority.”

The court a quo reasoned that whether or not the applicants are authorised dealers is a matter for evidence. This is because it was of the view that the charges as framed disclose an offence. Thus the court a quo reasoned that the argument by the applicants that they are not authorised dealers amounts to a defence. If the court a quo had analysed the relevant provisions of the Guidelines it ought to have reached a different conclusion in respect of the third count.

Mrs Fero conceded that the applicants are not authorised dealers and submitted that the State was likely to revisit the charge. She further submitted that the fourth count is different as it does not relate to the Guidelines.

Mr Uriri submitted that a fatal concession has been made in respect of the third count. He further submitted that this works in favour of the applicants. In response to the contention that the grounds for review are imprecise he submitted that gross unreasonableness is itself a ground of review. He further submitted that a fatal error of law is a breach of the public policy of the state and is thus reviewable. In respect of the fourth count Mr Uriri submitted that GR1 776 are also Exchange Control Guidelines to authorised dealers.

In respect of the fourth count, unlike the 2009 Guidelines I did not have sight of GR1 776. This is despite the applicants having annexed a host of documents (including Exchange Control and Procurement Regulations) to their application. The state did not make submissions regarding Mr Uriri’s contention. Nonetheless within the context of s 170 of the Criminal Procedure and Evidence Act the charge cannot be said to be defective. The charge has no formal defects apparent on its face. Essentially the allegation is that the applicants failed to furnish CBZ with proof of imports within ninety days of making payments to a foreign supplier.

Therefore in light of there being no formal defects in three of the charges, it follows that the review application has no prospects of success in respect of those counts. What it means then is that trial can proceed in respect of the three viable counts. In terms of s 144 (3) of the Criminal Procedure and Evidence Act-

“If the court thinks it conducive to the ends of justice to do so, it may direct that the accused shall be tried upon any one or more of such counts separately and such direction may be made either before or in the course of the trial.”

Therefore it is ordered as follows:

The criminal trial of the applicants before the second respondent under case number CRB P 9114-5/2018 is suspended only in respect of the third count.

Costs for the provisional order are reserved for determination on the return date.

Manase & Manase, applicants’ legal practitioners

National Prosecuting Authority, first respondent’s legal practitioners