Gerald Dzangare v Securities and Exchange Commission of Zimbabwe

### Preamble

IN THE LABOUR COURT OF ZIMBABWE HELD AT HARARE 18 MAY 2023

JUDGMENT

NO.LC/H/235/23 CASE

NO. LC/H/66/23

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IN THE LABOUR COURT OF ZIMBABWE HELD AT HARARE 18 MAY 2023

AND 3 AUGUST 2023

IN THE MATTER BETWEEN:-

JUDGMENT NO.LC/H/235/23 CASE NO. LC/H/66/23

GERALD DZANGARE APPELLANT

AND

SECURITIES AND EXCHANGE COMMISSION

OF ZIMBABWE RESPONDENT

Before Honourable Mr. Justice L.M. Murasi

For Appellant Mr. R. Matsikidze

For Respondent Ms. N. Moyo

MURASI J:

This is an appeal against the decision of the Hearing Officer finding the Appellant guilty of misconduct culminating in his dismissal from employment.

The brief facts are that the Appellant was employed as the Acting Chief Executive Officer of Respondent. He also held the post of Head of Finance. This means that he held the two posts simultaneously. An audit was carried out following reports of misconduct. The audit report made certain recommendations amongst of which it was stated that Appellant had failed to discharge his duties both as Head of Finance and Acting Chief Executive Officer and the Board of Commissioners resolved to charge Appellant with misconduct. Appellant was informed of the charges against him in a minute dated 18 November 2022 and, in a letter dated 24 November 2022, Appellant was invited to a disciplinary hearing which was to be held on 29 November 2022. After a few false starts, the matter was finally heard on 9 December 2022. The Hearing Officer found the Appellant guilty on three of the charges and not guilty on one charge. Appellant is dissatisfied with the outcome and has appealed to this Court.

Appellant’s grounds of appeal are formulated as follows:

The Hearing Officer grossly erred at law and factually in convicting the Appellant of the acts of misconduct when the disciplinary complaint form (Charge Sheet) had bare statements which did not disclose an offence.

The hearing Officer erred in convicting the appellant of factual allegations instead of a particular offence.

The Respondent erred at law in stating factual allegations as an offence on the part pf the guilty verdict instead of the offence alleged to have been committed. Put differently, the Appellant was not convicted of any offence.

The discipline committee grossly erred at law and factually in finding the Appellant guilty of any offence when the evidence points clearly to that; there was a delay in the production of the information required as the finance department was incapacitated, high staff turnover, and the requested documentation was furnished.

The Hearing Officer grossly erred in convicting the appellant for an offence without considering the Finance report by the Corporate Secretary to the Finance Committee on the 23rd of March 2022, covering January and February, which exonerated the Appellant of any wrong-doing.

The Hearing Officer grossly erred in convicting the appellant for an offence without making a finding that the audit report did not consider the fact that management accounts were furnished to the Board on Q2 on 16 June 2022.

The Hearing Officer grossly erred in convicting the appellant for an offence without making a finding that there was a May government policy change of increasing the vesting period to 270 days and the introduction of gold coins was novel, and their impact could not be predicted without some empirical evidence of how they would perform.

The Hearing Officer erred at law and factually in finding the Appellant (guilty) of irrationally liquidating investments and unreasonably utilizing the proceeds without considering section 2C of the Respondent’s Investment Policy, which justifies the actions of the Appellant and further without particularizing the irrationality and unreasonableness scientifically or commercially.

The Hearing Officer grossly erred at law and factually in finding the Appellant (guilty of) purchasing a motor vehicle without the Board of Commissioners’ Authority, changed the vehicle specifications and violated the procurement and tender procedures when in fact, there was no authority from the board, the appellant did not participate in the tender process, and the audit committee was notified of the date of delivery of the vehicle.

The Hearing Officer grossly erred at law and factually by failing to make a finding that the Appellant performed his work diligently and met all targets set for him and according to the organization’s policies and was commended at the material time for good work output.

Appellant’s Submissions

Mr. Matsikidze stated that the first and second grounds of appeal were to be taken together in the submissions. He further stated that according the verdict returned by the Hearing Officer,

Appellant was not convicted of the charges he was facing as the charge was of incompetence. He argued that the particulars in the Charge were the ones used by the Hearing Officer in convicting the Appellant and not the charge itself. He further pointed out that this should charge should have appeared in the verdict and this does not appear. He indicated that the third ground of appeal should also be joined in the submissions in respect of the first and second grounds of appeal.

In the fourth ground of appeal which dealt with the delay in the submission of information, it was submitted that it was not denied by the Complainant in the hearing that there was incapacitation. It was argued that at the time, Appellant was the Acting Chie Executive Officer and he was not the one who was responsible for the recruitment of personnel and that the issue of high staff turnover was raised. As far as the fifth ground of appeal was concerned, it was stated that the Hearing Officer had erred in convicting the Appellant without considering the report of the Corporate Secretary which exonerated the Appellant.

The seventh and eighth grounds of appeal were joined in the submissions. It was submitted that there was no particularization as to what form the irrationality in the liquidation of investments had taken place and that it therefore been a bare allegation and a conviction was improper in the circumstances. AS far as the ninth ground of appeal was concerned, it was submitted that there was no evidence on record where the Appellant had changed the vehicle specifications and that the procurement had been done by the respective committee. Asked by the Court whether the Appellant had approved the procurement, Mr. Matsikidze responded that Appellant had approved the decision of the procurement committee.

In the heads of argument, the argument is made that the charge sheet did not disclose an offence and that the Hearing Officer ‘erred in convicting the Appellant on factual allegations instead of a particular offence.’ Further, ‘the trial officer never gave reasons for judgment as her judgment showed that she had not analysed the evidence that was put before her’. Most of the arguments in the heads of argument were those canvassed by Mr. Matsikidze in oral submissions.

Respondent’s Submissions

Ms. Moyo stated that she was going to abide by the documents filed of record. As to the point raised by Mr. Matsikidze concerning the charge, she stated that the submission was erroneous as what he was referring to were the particulars of the charge and these particulars appear in verdict by the hearing Officer. Ms. Moyo also stated that at page 84 of the record appears Appellant’s response to charges laid against and that he did not at that stage raise the issue concerning the charges and therefore Appellant could not at this stage allege that he was not properly charged. She also pointed out that the fourth to the ninth grounds of appeal were complaints about factual findings made by the Hearing Officer and that it was trite that an appellate tribunal could only interfere with those findings where there evidence of gross unreasonableness. She stated that none of the findings by the Hearing Officer could be termed unreasonable.

On the issue of incapacitation, Ms. Moyo submitted that Appellant was both Head of Finance and Acting Chief Executive Officer and should have been able to perform those duties but was not up to the task. She stated that there was no issue of high staff turnover as one employee had left and had been replaced. As far as the report by the Corporate Secretary was concerned, she argued that Appellant had not been told to perform one task, but several, which he had not done by June 2022 when the issues were raised. Ms. Moyo pointed out that the ground of appeal pertaining to policy change was misplaced. She stated that after a change in policy had been done by the Government, the Board had requested Appellant to an impact assessment of the new position.

In respect of the liquidation of funds, it was argued that Appellant was supposed to refer the issue to the EXCO which he did not do. She further argued that the funds from such liquidation had been used to fund staff costs which was irrational in the circumstances.

The issue of the motor vehicle was explained as follows by Ms. Moyo. She stated that a budget for two motor vehicles had been put in place. It was stated that Appellant had thereafter given a directive to purchase an SUV instead of two pool vehicles. There was therefore prejudice to the Respondent as the vehicle that was bought at Appellant’s instance cost the Respondent USD 144 000-00 instead of USD 84 500-00. It was argued that Appellant was Head of Finance and should have ensured the prudent use of Respondent’s finances.

As far as the tenth ground of appeal was concerned, Ms. Moyo stated that the issue was never placed before the hearing Officer and it was therefore improper fort the Appellant to bring it up on appeal and that it should accordingly be struck off. The heads of argument explain in detail the averments referred to by Ms. Moyo in oral submissions. Relevant case law was cited in support of these averments. The heads of arguments show that there was some industry in addressing the issues raised by the Appellant.

ANALYSIS

Before going into the merits of the case, I wish to make certain observations on the grounds of appeal filed by the Appellant. It is my view that these grounds could have been more elegantly drafted. This brings me to the second ground of appeal. It merely states as follows:

“The Hearing Officer erred in convicting the appellant on factual allegations instead of a particular offence.”

This ground of appeal falls into the category of those referred to by GAWRE JA (as he then was) in Dr Nobert Kunonga vs The Church of the Province of Central Africa SC 25/17. He had this to say pages 14 and 15 of the cyclostyled judgment:

“In Van d Walt vs Abreu 1994 (4) SA 85 (W) Stegan J made an exhaustive review of case law relating to notices of appeal from the Magistrates Court in South Africa. That case is authority for the proposition, based on the magistrates Court Rules of South Africa, that there are two distinct requirements, both of which have to be satisfied, for a proper

notice of appeal disclosing a valid ground of appeal. Firstly, the notice must specify details of what is appealed against (i.e. the particular findings of fact and rulings of law that are to be criticized on appeal as being wrong) and secondly, the grounds of appeal (i.e. it must indicate why each finding of fact or ruling of law that is to be criticized as wrong is said to be wrong.) For example, because the finding of fact appealed against is inconsistent with some documentary evidence that shows to the contrary; or because it is inconsistent with the oral evidence of one or more witnesses; or because it is against the probabilities.”

It is my view that the second ground of appeal fails to meet the standard enunciated in the above paragraph by the Learned Judge.

In the third ground of appeal, reference is made to the “Respondent’ having erred. The appeal is based on the decision by the Hearing Officer. Mr. Matsikidze did not seek to correct the ground of appeal. It becomes meaningless by reference to the ‘Respondent’ having erred. The two grounds of appeal are accordingly struck off.

A reading of the rest of grounds of appeal shows that Appellant takes issue with the factual findings made by the Hearing Officer. Precedent on how an appellate tribunal has to approach such appeals abounds. KORSAH JA in Hama vs National Railways of Zimbabwe 1996 (1) ZLR 664

(S) observed at 670 A-G:

“The general rule of law as regards irrationality, is that an appellate court will not interfere with a decision of a trial court based purely on a finding of fact unless it is satisfied that, having regard to the evidence placed before the trial court, the finding complained of is so outrageous in its defiance of logic of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion.

In Nyoni vs Secretary for Public Service, Labour and Social Welfare & Anor 1997 (2) ZLR (H) GILLESPIE J weighed in thus at 528 E-F:

“One is able therefore to state that the irrationality of decision, is that it has no basis in evidence, is an acceptable ground of review. It will be established not only where there is no evidence upon which the decision can be based, but also where the evidence, although present, was so inadequate that no finding could reasonably be based thereon. Or, put another way, that no person properly applying his mind to the issue could reach such a conclusion…The mere fact that the reviewing judge might have come to a different conclusion is no ground for interference.”

Having laid own the law, it will necessary to consider the evidence adduced in the matter. However the issue raised in the first ground of appeal will dealt with. It should not detain the Court. The charge preferred against the Appellant was stated as “description of alleged offence” in the following manner:

“Gross Incompetence/Inefficiency in the performance of work and Gross Negligence causing serious loss to the company.

Category D, paragraphs 8 and 10 respectively of the Securities and Exchange Commission employment Code of Conduct, 2015.”

The details were given as follows:

“During the period 1 February 2022-31 August 2022 in which you were the head of Finance and the Acting Chief Executive Officer for SECZIM you..”

The details of what the Appellant did are thereafter listed. The Hearing Officer in coming up with the verdict followed the lists of the particulars of the offence in relation to the evidence that had been led against the Appellant. The Hearing Officer proceeded to find the Appellant Guilty on three of the allegations and Not Guilty on one. It is my view that there is no merit in the ground of appeal.

The rest of the grounds raise the issue of the sufficiency of evidence adduced on behalf of the Respondent to convict the Appellant. I will proceed to produce extracts of the reports from the audit report in relevant as follows:

Page231:

“However, we noted from emails, that the instruction to liquidate investments was sent directly to the bank by F. Msemburi. There was no evidence on file to show that EXCO members were involved in the approval of investment liquidations.”

Page 233:

“During the period under review, we noted that liquidations were performed and EXCO was not directly in the liquidation process. The decision to invest, redeem and utilize investments evolved around the finance department between the A/CEO and the Finance Manager.”

Page 235:

“On 14 February 2022, the PMU raised a purchase order number SCZ 513 to acquire a pool vehicle on behalf of the Commission. The purchase order was raised by Ncube who was the Head of Procurement and it was authorized by Dzangare who was the Acting CEO and head of Finance. The purchase order related to the purchase of a Silver Hilux REVO Double cab, from Coslic Motors, for a total of US$70 430-46 and ZAR 33 000-00. We noted that the specifications of the poll car and quantity specified on the purchase order were different to the specifications and quantity of the pool cars on the tender document.”

Page 238:

“We reviewed the pool vehicle supporting documentation provided to us and noted that there was no evidence on file providing an account of how Coslic was engaged by SECZIM. In addition, there was no record of the considerations made by PMU in the evaluation of other potential suppliers of the pool vehicle.”

Page 241:

“Based on the analysis above, the Commission incurred an exchange loss totaling to ZWL 11 082 098-10 arising from the two payments as outlined in the table above.”

Page 243:

“We reviewed the total payments made by the Commission in relation to the pool car and noted that a total of ZWL 21 649 726-03 was transferred from the Commission’s bank account in relation to the pool car acquisition. We applied the prevailing official exchange rates on the dates that the payments were made and noted that a total amount of US$ 144 413-82 was paid by the Commission in relation to the acquisition of the pool car.

However, the 2022 Annual Procurement Plan provided a total of US$ 84 500-00 for two pool vehicles which resulted in an excess of US$ 59 913-82 from the amount paid on acquisition of the pool car.”

Page 245:

“WE inquired from Ncube and understood that the Acting CEO, on 7 February 2022 sent her a message advising that as EXCO they had agree that they park the purchase of the two pool vehicles but instead buy vehicles for staff. She further alluded that this message advised her to shelve the cars that she was looking for and get a double cab instead. However there was no evidence that authorization was sought from EXCO, Board or PRAZ to that effect.”

Page 264:

“Dzangare failed to satisfy requests made to him including financial impact assessments requested by the HR Committee, Finance and Strategy Committee and the Board.

Dzangare made decisions unilaterally, which would ordinarily require the input of EXCO. The decisions included the decision to acquire a pool vehicle, withholding employees’ salaries for the month of July and liquidation (of) investments.

Dzangare indicated that he was not privy to the exchange rates used for 2 local payments made to COSLIC Motors amounting to ZWL 15 580 000-00 and ZWL 806 000-00 respectively. In these instances, unofficial rates were used.”

The summary of the findings by the auditors is contained pages 218 and 219 of the documents filed in this matter.

Page 221:

“We reviewed minutes of the meetings held after the requests were made and did not evidence to show that the requested information was availed to the Commissioners by the A/CEO. More so decisions of the Special Human Resources Committee held on 19 July 2022 highlighted that the impact assessments were not submitted by 6 July 2022, as promised in the meeting on 1 July 2022.

According to minutes of the special Finance and Strategy Committee meeting held on September 2022 to discuss the cash flow challenges as SECZIM, the Commissioners noted and commented that management was requested by the Board to do a paper on the impact of the May measures introduced by the government. According to the Commissioners, the A/CEO had indicated that the government measures were temporary and did not furnish the Board with the paper.”

The above excerpts come from the report by the auditors which led to the Respondent preferring charges of misconduct against the Appellant. The question that arises is whether the Hearing Officer was correct in arriving at the decision that she did. The degree of proof required in the civil standard is comparative rather than being quantitative. It is a matter of one version being more probable than the other. In Miller vs Minister of Pensions [1947] 2 All ER 372, LORD DENNING stated as follows:

“It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say ‘we think it more probable than not’, the burden is discharged, but if the probabilities are equal it is not.”

I am of the view that a reasonable tribunal in the Hearing Officer’s place would have come to the same conclusion. Appellant’s involvement in the procurement of the vehicle is accepted by him. Appellant’s failures to provide material and documents required by Respondent’s Board are not denied. Appellant’s involvement in the liquidation of investments, to the exclusion of the EXCO, as ably detailed in the audit report are not denied by the Appellant. Appellant, attempts to deflect these factual failures by alleging that there was a high staff turnover in the Finance Department, which he headed. Sight should not be lost of the fact that Appellant was the Head of Finance and Acting Chief Executive Officer. It is unimaginable that with such positions, Appellant would want to shield under such averments which were within his realm to correct. The appeal ought to fail.

In the result, the appeal, being devoid of merit, is hereby dismissed with costs.

Matsikidze Attorneys–At-Law- Appellant’s legal practitioners.

Coghlan, Welsh & Guest Respondent’s legal practitioners.