BDO Zimbabwe Chartered Accountants v Robin Vela & Anor (The Auditor-General v Robin Vela & Anor)

### Preamble
Judgment No 51/25
Civil Appeal No R-SC 258/201
R-SC 285/20
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REPORTABLE   (51)

BDO     ZIMBABWE     CHARTERED     ACCOUNTANTS

v

ROBIN     VELA     (2)     THE     AUDITOR-GENERAL

And

THE     AUDITOR-GENERAL

v

ROBIN     VELA     (2)     BDO     ZIMBABWE     CHARTERED ACCOUNTANTS

SUPREME COURT OF ZIMBABWE

UCHENA JA, KUDYA JA & CHATUKUTA JA

HARARE:  23 SEPTEMBER 2024, 16 OCTOBER 2024 & 3 JULY 2025

T. Zhuwarara, for the first appellant

T. Magwaliba, for the second appellant

L. Madhuku with L. Uriri and M. Ndlovu, for the respondent

CHATUKUTA JA:

This is an appeal against the whole judgment of the High Court (the court a quo) handed down on 17 June 2020 under judgment number HH-405-20.  The court a quo set aside portions of a forensic audit report on the National Social Security Authority (NSSA) wherever the first respondent was referred to directly or indirectly.  The forensic audit had been conducted by BDO Zimbabwe Chartered Accountants on behalf of the Auditor-General of Zimbabwe.

BDO Zimbabwe Chartered Accountants and the Auditor-General of Zimbabwe noted separate appeals under R-SC 285/20 and R-SC 258/20 respectively.  The two appeals were consolidated as they relate to the same judgment.  For the sake of expediency, the appellant in R-SC 285/20 and second respondent in R-SC 258/20, being the Auditor-General of Zimbabwe, shall be referred to as “the Auditor-General” in this composite judgment.  The appellant in R-SC 258/20 and second respondent in R-SC 285/20, being BDO Zimbabwe Chartered Accountants, shall be referred to as “BDO”.  Where necessary the Auditor-General and BDO will be jointly referred to as “the appellants”.  The first respondent in both appeals shall simply be referred to as the respondent.

FACTUAL BACKGROUND

The Auditor-General of Zimbabwe is appointed in terms of s 310 of the Constitution of Zimbabwe, 2013 (the Constitution). BDO is a private accounting firm registered in terms of the Public Accountants and Auditors Act [Chapter 27:12].  The respondent was the erstwhile board chairman of the National Social Security (NSSA), a body corporate established in terms of s 4 of the National Social Security Authority Act [Chapter 17:04].  He had been the board chairman for the period extending from 12 June 2015 to 27 March 2018.

The background to the appeals is succinctly set out in Robin Vela v The Auditor-General CCZ 10/24 as follows:

“[3]	The appellant was the Board Chairman of the National Social Security Authority (“NSSA”) from 12 July 2015 to 27 March 2018.  The second respondent (BDO) is an accounting firm.  It was contracted by the first respondent (the Auditor-General) to conduct a forensic audit of the affairs of NSSA for the period 1 January 2015 to 28 February 2018.  The audit report was delivered to the first respondent by the second respondent on 4 March 2019.

[4]	The audit was in essence a forensic investigation into several corporate affairs of NSSA.  It assessed the investments made by NSSA during the period under audit to find out, among other things, whether any related party transactions, if any, were above board.  It further considered NSSA’s human resources practices to establish whether executive management recruited during the period 2015 – 2017 had been recruited in terms of the NSSA policy and laws and whether the remuneration framework had been approved by the NSSA Board and parent Ministry.  It also investigated the pensioner database, with attention being paid towards the integrity of the database, in order to verify the existence of ghost pensioners and identify weaknesses in the database.

[5]	Upon conclusion of the audit, the second respondent’s report made a number of adverse findings.  The report concluded that NSSA’s investments in Metbank were not above board and that they had caused NSSA losses.  In addition, it was found that the appellant was the proximate cause of an agreement between NSSA and Housing Corporation of Zimbabwe (Private) Limited, which agreement was said to have been irregularly entered into and had also caused loss to NSSA.  The report also concluded that the appellant had interfered in management issues…”

Aggrieved by the audit report, the respondent filed in the court a quo an application for its review in terms of s 3 (1) (a) as read with s 4 of the Administrative Justice Act [Chapter 10:28] (the AJA).

PROCEEDINGS BEFORE THE COURT A QUO

The respondent contended in the court a quo that BDO’s audit report was compiled in a manner that violated s 3 (1) (a) of the AJA warranting a review of the report.  He argued that BDO was exercising public power and jurisdiction that it did not have when it carried out the audit.  He also contended that the audit report was biased, malicious, irrational, incompetent and unfair.

The application was opposed by both appellants.  They argued that BDO was not an administrative authority whose actions are subject to review.  Its compilation of the audit report at the behest of the Auditor-General was not therefore subject to review under the AJA.

BDO specifically argued that it had been misjoined to the proceedings as it was not an administrative authority as envisaged by the AJA.  It denied the allegations of bias, malice and incompetence, arguing that the audit report did not target the respondent personally but was targeted at NSSA’s operations.

The Auditor-General also opposed the application on the additional ground that the audit was conducted lawfully and that the respondent's remedy, if he considered that the report unfairly damaged his reputation, was to pursue a defamation lawsuit.

DETERMINATION BY THE COURT A QUO

In its determination, the court a quo considered the provisions of s 8 (1) of the Audit Office Act [Chapter 22:18] (Audit Office Act) and s 309 of the Constitution.  It held that the Auditor-General’s powers and functions were set out in s 309 (2) of the Constitution.  It thereafter held that the Auditor-General had, by virtue of s 8 (1) of the Audit Office Act, delegated those powers and functions to BDO when it contracted BDO to conduct the audit.

The court a quo held that BDO therefore exercised delegated functions when it carried out the audit thereby performing a public function or exercising public authority.  The court a quo also held that by carrying out the forensic audit, BDO’s conduct fell squarely within the definition of administrative action contemplated by the AJA.  It held that the forensic investigation undertaken by BDO and its report were therefore subject to review.

The court a quo determined that the engagement letter addressed to BDO indicated the possibility of disciplinary or criminal action against the respondent arising from the audit. It thus held that it was reasonable for the respondent to perceive that the auditors were compromised as they appeared to be soliciting business related to proceedings that could either lead to the respondent’s prosecution or his dismissal from employment.

The court a quo found that the report, in so far as it related to the respondent, was contrary to the AJA as read with s 309 of the Constitution.  Consequently, it ordered that the forensic audit be reviewed and set it aside in all those respects that pertained, whether directly and/or indirectly, to the respondent.

GROUNDS OF APPEAL

Aggrieved, the appellants noted the present appeals. The grounds of appeal are essentially twofold. The first ground is premised on the contention that BDO’s investigations and report did not constitute an administrative action which is subject to review.  The second is grounded on the contention that the audit was fair on the respondent and did not exhibited any bias against him.

Both appellants sought an order allowing the appeal and for the setting aside of the court a quo’s judgment and substitution thereof with an order dismissing the application before the court a quo.

PROCEEDINGS BEFORE THIS COURT

Submissions by appellants

Mr Zhuwarara, appearing on behalf of BDO, argued that the respondent could only impugn a decision of an administrative authority in terms of s 4 of the AJA.  He further argued that BDO was not an administrative authority.  He submitted that its actions were not grounded in statute but rather in terms of the contract concluded with the Auditor-General in terms of the Audit Office Act.  He submitted that BDO was therefore not exercising administrative authority when it investigated NSSA and prepared its forensic report.  It was merely making recommendations for the Auditor-General’s consideration. He argued that it is the Auditor-General who would exercise administrative authority when it would make a decision upon consideration of the forensic report.  He further argued that the court a quo misdirected itself in finding that BDO was an administrative authority and that its forensic report was therefore reviewable.

Counsel further contended that no constitutional question was placed before the High Court. The matter concerned an interpretation of the AJA. He submitted that the Constitutional Court was correct in its finding in Vela v The Auditor-General & Anor CCZ 10/24 (CCZ 10/24), that the court a quo had erroneously relied on an interpretation of s 309 of the Constitution in determining a non-constitutional matter.  He further submitted that the court a quo also erroneously relied on ss 46 (2) and 68 of the Constitution in the same vein.  He argued that once it is established that the court a quo’s reference to the constitution was not necessary, this Court is bound to set aside the judgment of the court a quo and remit the matter to the court a quo for a fresh determination.

Mr Magwaliba, for the Auditor-General, adopted Mr Zhuwarara’s submissions in their entirety.  He further submitted that the court a quo relied in its determination on the term “public power”, which term he submitted was alien to the AJA.  He submitted that s 2 (d) of the AJA refers to performance of “any administrative duty” and not power.  He argued that where a cause of action is statutory, its determination should be within the four corners of the statute.  He argued that by introducing this alien term, the court a quo had arrived at a wrong decision.

Mr Magwaliba posited that the audit report was no more than a recommendation to the Auditor-General.  Its adoption and implementation by the Auditor-General is what would constitute administrative action.  He argued that the recommendation was antecedent to an administrative action not the administrative action. He further argued that recommendations were akin to unterminated proceedings and the application for review was premature.   He argued that until the Auditor-General had made a decision, the forensic report was not actionable.

Counsel further argued that the judgment of the court a quo was not enforceable.  He submitted that the judgment does not provide how it will be implemented, who would identify the portions that relate directly or indirectly to the respondent and in what way they affected the respondent.  Mr Magwaliba argued that the court a quo does not have the capacity to determine the specialized function of auditors and that no expert evidence was adduced.  He further argued that it therefore could not establish that the report was biased against the respondent.

Mr Magwaliba submitted that there is no question that the court a quo wrongly premised its judgment partly on the Constitution thereby rendering it liable for setting aside.  He urged this Court to adopt the Constitutional Court’s approach by setting aside the judgment of the court a quo.  He however submitted that there was no basis for a hearing de novo since there was no valid claim before the court a quo.

Submissions by the respondent

Mr Madhuku, for the respondent, argued that the Constitutional Court, in its judgments in Vela v The Auditor-General & Anor CCZ 1/23 and in CCZ 10/24, pronounced that the court a quo did not address a constitutional question.  He submitted that this Court should therefore determine the appeal on the non-constitutional issues raised in the grounds of appeal before it.

Mr Madhuku submitted that BDO was contracted in terms of the Audit Office Act to conduct the forensic audit on behalf of the Auditor-General.  He submitted that the Auditor-General had delegated her administrative authority to BDO.  He argued that actions undertaken by BDO were pursuant to public power derived from statute and therefore constituted an administrative action within the ambit of s 2 of the AJA.  He submitted that the term “administrative power” is used in s 2(1)(d) in the AJA.  He further asserted that recommendations are inherently reviewable.

Counsel argued that the contract between the appellants was sanctioned by statute under ss 8 and 9 of the Audit Office Act.  He further argued that the mischief behind s 8 of the Audit Office Act was to empower the Auditor-General to effectively discharge her statutory mandate as she does not have capacity to carry out her wide mandate.  He submitted that the contracts entered into in terms of the Audit Office Act were statutory contracts as opposed to ordinary contracts.  He further submitted that the statutory nature of such contracts was more apparent from s 9 of the Audit Office Act which requires the gazetting of such contracts.

As regards the question whether the application was premature, Mr Madhuku submitted that an action cannot survive judicial scrutiny merely because it is incomplete.  He contended that an incomplete action is reviewable when it affects rights and interests of an aggrieved party.

Counsel argued that the court a quo correctly interpreted all relevant provisions of the AJA and that it did not misdirect itself and therefore there is no basis for interfering with its decision.

Counsel further argued that the Constitutional Court in CCZ-10-24 directed this Court in para 4 of its order to determine the appeal on non-constitutional issues.  He submitted that this Court should not engage the question whether or not the court a quo was in any way influenced in its determination by constitutional provisions.

ISSUE FOR DETERMINATION

The grounds of appeal and the submissions made before this Court raise one issue for determination, that is:

Whether or not the court a quo was correct in finding that BDO was exercising administrative authority subject to review when it carried out the forensic audit for the Auditor-General.

APPLICATION OF THE LAW TO THE FACTS

This Court finds itself having to determine the above issue in light of the pronouncements by the Constitutional Court in its judgment in case number CCZ 10/24.  This followed a determination by that Court of what it termed a “purported appeal” against a judgment of this Court in case number SC 61/22.  This Court’s judgment was on the same appeals presently before us wherein it had, in determining the same grounds of appeal, resorted to interpreting s 309 of the Constitution in order to determine the appeals.

The Constitutional Court emphatically stated that neither this Court nor the court a quo had jurisdiction to interpret s 309 of the Constitution so as to resolve the dispute between the parties.  It affirmed that the AJA effectively gives effect to s 68 of the Constitution, rendering any reliance on constitutional provisions unnecessary for interpreting ss 3 and 4 of the AJA.  The Constitutional Court undertook a comprehensive consideration of the proceedings before the court a quo, and the reasoning that culminated in the court a quo's judgment.  Notably, the Constitutional Court observed that while the respondent initiated the application for review under s 3 (a) as read with s 4 of the AJA, the court a quo, in its determination, resorted to interpreting s 309 of the Constitution.

Throughout its judgment, the Constitutional Court alluded to the fact that the court a quo erred by resorting to s 309 of the Constitution in the determination of non- constitutional issues before it.  It remarked at para 59 that:

“The issue before the High Court and the Supreme Court was whether the second respondent was an administrative authority for purposes of the application that had been filed in terms of the Administrative Justice Act.  The resort to s 309 of the Constitution in order to resolve the dispute between the parties was not only unnecessary but also irregular and fell foul of the principles of subsidiarity and constitutional avoidance.”

It further remarked at paras 64 - 65 that:

“The court a quo should have resisted the invitation by the applicant’s legal practitioner for it to determine the dispute after taking into account the provisions of s 309 of the Constitution. Its decision to do so was therefore irregular. As already noted earlier in this judgment, it was the applicant who invited the High Court and thereafter the Supreme Court to interpret s 309 of the Constitution in order to determine whether or not the second respondent was an administrative authority for purposes of the AJA. Unfortunately both the High Court and Supreme Court took the bait and ended up interpreting s 309 of the Constitution instead of simply determining whether the second respondent was an administrative authority for purposes of the Administrative Justice Act.” (Emphasis added)

The Constitutional Court specifically dedicated part of its judgment to the question whether this court and the court a quo had jurisdiction to rely on s 309 of the Constitution.  In para 72 under the luminous subheading, BOTH THE COURT A QUO AND THE HIGH COURT HAD NO JURISDICTION TO INVOKE S 309 it remarked that:

[72] Proceeding on the basis that the constitutional issue relating to s 309 of the Constitution arose in the proceedings for relief under the Administrative Justice Act, the High Court would have had no jurisdiction to itself determine that question. The application before the High Court was predicated on ss 3 and 4 of the Administrative Justice Act. A constitutional matter arising in these circumstances should more properly have been referred to this Court in terms of s 175(4) of the Constitution. Armed with the determination by this Court on the constitutional issue arising, the High Court would then have been in a position to determine the application before it. By the same token, the court a quo should not have resorted to the interpretation of s 309 of the Constitution in order to determine the appeal before it that was predicated on Ss 3 and 4 of the AJA. It is apparent that both Courts needlessly grappled with the question whether the Auditor-General was allowed to delegate her administrative authority in order to decide whether the audit function was reviewable.

It further held that where redress is available through the application of principles of the common law or the provisions of statute law, the principles of subsidiarity and avoidance required that the court a quo avoid reliance on constitutional provisions in the determination of the application.  It was held that once the court a quo considered that it could not resolve the dispute before it without interpreting the provisions of the Constitution, it then should have proceeded in terms of s 175 (4) of the Constitution by referring the matter to the Constitutional Court.

The Constitutional Court stated that this Court and likewise the court a quo should have avoided being swayed by arguments that led them astray from addressing the defined legal questions before them arising from an interpretation of the AJA without resorting to interpreting the Constitution.  By succumbing to the respondent’s heads of argument, the Supreme Court as well as the High Court improperly broadened the parameters of their inquiry beyond their jurisdiction, thereby rendering their determination fundamentally flawed.

Mr Madhuku’s argument that the Constitutional Court held in CCZ 10/24 that the court a quo did not determine a constitutional issue was therefore misplaced in view of the above referred findings of that Court. Mr Madhuku sought to rely on the remarks of the Constitutional Court in Vela v The Auditor-General & Anor CCZ 1/23 at pp 9-10 where it was remarked that:

“In casu, it is common cause that the cause of action before the High Court was not predicated on a provision of the Constitution. It was rooted in administrative law in terms of which the applicant sought to have reviewed what he alleged was administrative conduct by the first respondent through the agency of the second respondent. … Because no such matter had been pleaded before it, it stands to reason that the High Court did not decide a constitutional matter. As is evident from its judgment, the High Court did not invoke any provisions of the Constitution in arriving at its determination on the non-constitutional matter that was before it… The ratio decidendi of its judgment on the substantive issue raised in the application for review was based on the application of the principles of administrative law. …”

This was a judgment to an application by the respondent for leave to appeal.  Mr Madhuku placed emphasis on the Court’s remarks that the ratio decidendi of the court a quo’s judgment “was based on the application of the principles of administrative law.”   He raised the same argument before the full bench of the Constitutional Court and went a step further to argue that the full bench was bound by the decision made in CCZ 1/23.

At para 28, the full bench of the Constitutional Court rejected Mr Madhuku’s arguments.  It held that :

“There can be no argument that the Court made an unmistakable finding that no constitutional matter had arisen before the court a quo and the High Court. Given that it is the full bench of this Court that has now asked the parties to address it on whether a constitutional matter properly arose before the court a quo, it cannot be said that the question amounts to a review of a decision of this Court.”(Emphasis added)

It further held in paras 29 and 30 that the full bench of the Constitutional Court is not bound by its pronouncements in interlocutory proceedings for leave to appeal.  The issue is therefore res judicata and the respondent cannot raise it afresh before this Court.

The court a quo indeed went beyond what was absolutely necessary to determine the non- constitutional issue before it by having regard not only to s 309 of the Constitution but also to ss 46 and 68 of the Constitution.  At p 12 of its judgment, it stated that:

“Essentially, the applicant’s complaint is that there were gross irregularities in the manner the forensic investigation was carried out by the first respondent acting through the auditors she had appointed.  The appropriate place to begin is the Constitution which, through s 68 (1), entitles everyone to just administrative action which is carried out in a lawful, reasonable and procedurally fair manner.

It proceeded to quote s 68 of the Constitution remarking that the constitutional right enshrined in s 68 (1) has been mirrored and given effect in terms of the AJA.  However, at pp17-18 it delved into interpreting s 68 (1) when it sought to distinguish the word “decision” used throughout the AJA and in particular in s 4 of that Act and the word “conduct” used in s 68 of the Constitution.  It remarked that:

“Thirdly, s 68 (1) of the Constitution, though using the word “conduct”, confirms that action is different from, and was not intended to mean decision. It provides that every person has a right to lawful, prompt, efficient, reasonable, proportionate, impartial and procedurally fair “administrative conduct”. Similarly, s68 (2) gives anyone who has been adversely affected by “administrative conduct” the right to be given reasons in writing for such conduct. The word decision was avoided (I dare say, deliberately), buttressing the argument that a decision per se is not a causa sine qua non for the remedy of judicial review to be tenable. Fourthly, the Constitution provides a further rationale for not construing action to mean decision, and s 46 (2) is a must read. It is couched as follows:

‘When interpreting any legislation, and when developing the common law or customary law, every court, tribunal or body must promote and be guided by the spirit and objectives of this Chapter’.

It must be borne in mind that s 46 (1) enjoins this court to give full effect to the rights and freedoms enshrined in this Chapter. It follows, in my view, that the best way to achieve this is to interpret the definition of “administrative action” in the AJA in a way which does not subsume action and decision into one. Such an approach would enhance the process of review by not confining it to decisions to the exclusion of examining the process and actions taken in the lead up to those decisions. In fact, the use of the formulation “administrative conduct” as opposed to decision, in s 68 of the Constitution, makes it imperative for a wider interpretation to be given.’”

The court a quo therefore used the mechanism in s 46 (2) of the Constitution, that is used when interpreting fundamental rights, to interpret the term “administrative action” in the AJA.  The section was used in order to widen the definition and ultimately come to the conclusion that BDO’s forensic audit was an exercise of administrative authority and therefore reviewable.

The Constitutional Court is the ultimate arbiter in all constitutional matters. Its domain is exclusively the Constitution and, it serves as its vigilant guardian by interpreting, safeguarding and upholding the principles enshrined therein. Consequently, its rulings on any and all constitutional issues carry binding authority over all other courts by virtue of the stare decisis principle, ensuring consistency and finality in the application of constitutional principles.

It was stated in Denhere v Denhere 2019 (1) ZLR 554 (CC) at 565B-C that:

“The words “stare decisis” are Latin words which mean that things that have been decided should be left to stay undisturbed. The meaning of the doctrine of stare decisis is that when a point of law has been once solemnly and necessarily settled by a decision of a competent court it will no longer be considered open to examination or to a new ruling by the same tribunal or those which are bound to follow its adjudication. The doctrine of stare decisis is therefore a rule of precedent or authority, addressed to lower courts and members of the public who are decision-makers, to the effect that decisions of the higher courts on particular points of law presented to and passed upon by those courts are law. Lower courts are bound to obey them in similar cases in future until they are overruled, even though a rigorous adherence to them might at times work individual hardship.”

The Constitutional Court unambiguously pronounced itself on the court a quo’s invocation of s 309 of the Constitution and the propriety of its judgment.  Following that pronouncement, this Court is compelled to a singular determination, that the court a quo misdirected itself.   This Court is thus precluded from allowing the court a quo’s judgment to stand by virtue of the stare decisis principle.  Arriving at a contrary decision on the question would be contrary to the principle.

What is even more compelling in this case is that the decision of the Constitutional Court was premised on the very case before this Court.  As stated in Denhere v Denhere (supra) at 566 D-E :

“The rule of stare decisis does not require decision-makers to comply with a decision which is a precedent on a particular point of law in every case regardless of the circumstances. The language of the decision is to be construed not as a statement of abstract propositions without limitation. It must be construed in connection with the particular facts of the case and the specific matters that were in view when the language was used. In other words, every rule of precedent has a set of juristic facts which it governs. The rule of stare decisis does not require adherence to a decision on a point of law in a case in which the state of facts is entirely different from the juristic facts governed by the precedent.”

The first ground of appeal therefore must succeed.  The court a quo’s finding that BDO was exercising administrative authority subject to review when it carried out the forensic audit for the Auditor-General was premised on an interpretation of constitutional provisions.  The court a quo did not have the jurisdiction to engage any of the constitutional provisions in order to arrive at the very simple question whether BDO fell under the ambit of the AJA and therefore whether its forensic audit was subject to review.

The above issue is dispositive of this appeal regardless of the other issues adverted to by the parties.

To allow the judgment of the court a quo to stand, despite the Constitutional Court’s unequivocal censure and characterization of the judgment a quo as reproachable, would constitute a grave judicial impropriety.

Regarding costs, the appellants, having been successful are entitled to costs.

Accordingly, it is ordered as follows:

The appeal be and is hereby allowed with costs.

The judgment of the High Court in HH 405/20 be and is hereby set aside.

The case be and is hereby remitted to the High Court for a hearing de novo.

UCHENA JA		:  	I agree

KUDYA JA		: 	I agree

Chambati, Mataka & Makonese Attorneys, Auditor-General’s legal practitioners

Sawyer & Mkushi, BDO Chartered Accountants’ legal practitioners

Makuwaza & Magogo Attorneys, respondent’s legal practitioners