Farai JERE AND Leonard Chisina AND Freeman Chikonzo Versus Lanzini Ncube N.O. AND THE Prosecutor General

### Preamble
1
HH 92-21
HC 5050/20
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FARAI JERE

and

LEONARD CHISINA

and

FREEMAN CHIKONZO

versus

LANZINI NCUBE N.O.

and

THE PROSECUTOR GENERAL

HIGH COURT OF ZIMBABWE

ZHOU J

HARARE, 28 October & 10 March 2021

Court application for review

L. Uriri, with him T. K. Hove and Mrs Ushe, for the applicants

No appearance for the respondents

ZHOU J: This matter came before me as an unopposed application for the review and setting aside of the decision of the Magistrates Court at Harare (the first respondent herein was the presiding Magistrate).  In terms of that decision the applicants’ challenge to their placement on remand on a charge of fraud as defined in s 136 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] was dismissed.  The respondents were served with the application but they did not file a notice of opposition and opposing papers hence the matter was set down on the roll for unopposed matters.  The applicants filed heads of argument in support of their application.

The allegations upon which the charge of fraud against the applicants arose will be taken as read from the annexure to the Form 242 which was used to seek their remand. They are as follows. The first applicant is the Managing Director of a company known as Helcraw Electrical (Pvt) Ltd. The second and third applicants are employed by the Zimbabwe Electricity Transmission and Distribution Company (hereinafter called ZETDC) in the capacities of Senior Manager and Engineer, respectively.  In 2006 Helcraw Electrical was awarded a tender to supply ZETDC with one thousand one hundred and fifty-one smart meters and Head End System at a cost of US$3 566 878.02.  The material terms of the contract were, inter alia, that:

A Factory Acceptance Test (FAT) was to be conducted in situ, that is to say, in the factory where the meters were being manufactured.

Helcraw Electrical (Pvt) Ltd was supposed to finance the flight, food and accommodation for the members of the delegation who were supposed to undertake the Factory Acceptance Test.

The specifications for the meters were to be: “Base current 5 amps and maximum current of 120 amps”.

Type tests were to be done at the site.

Head End System was to be a two way wireless communication.

It is alleged that the first applicant misrepresented to ZETDC that a company known as Secure Meters (Pvt) Ltd had a manufacturing plant for smart meters and Head End System in the United Kingdom.  The charge sheet alleges that there was no such a manufacturing plant.  On 24 November 2018 the second applicant, together with Engineers Mapapi and Tshuma from ZETDC and the third applicant, went to the United Kingdom in the company of the first applicant for the purpose of carrying out the agreed Factory Acceptance Test.  Once in the United Kingdom the applicants went to a warehouse where there were some smart meters.  The factory at which the Factory Acceptance Test was supposed to take place was non-existent, hence no such test was done.  The meters which were purportedly tested did not even meet the specifications on the basis of which the tender had been awarded to the first applicant’s company.  It is further alleged that the first applicant produced a fake Factory Acceptance Test visit report which the second and third applicants signed.  Some of the engineers who had gone to the United Kingdom with the applicants refused to sign the report because it fraudulently misrepresented what had been discovered in the United Kingdom but were forced by the second applicant to sign it.  The above events resulted in the first applicant delivering to ZETDC smart meters which did not meet the tendered specifications.  He was paid a sum of US$3 566 878.02.

The applicants contend that the above facts which are alleged do not justify a reasonable suspicion that they committed the offence of fraud, hence their challenge to being placed on remand.

Section 136 of the Criminal Law (Codification and Reform) Act [Chapter 9:23] provides as follows:

“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 prejudice as alleged is clearly established.  The ZETDC paid a sum of US$3 566 878.02 to the first applicant through his company.  The payment was for meters which did not meet the specifications which were the bases upon which Helcraw Electrical Engineering (Pvt) Ltd tendered and was awarded the contract.  The tender was not for the ZETDC to just give out money for any meters.  The meters had to satisfy the specifications.  In other words, the ZETDC was made to pay for meters which it did not require and which were unsuitable for its use.  This is the prejudice suffered.

The applicants allege that there was no misrepresentation involved.  The definition of misrepresentation which is contained in s 135 of the Criminal Law (Codification and Reform) Act is wide, and is as follows:

“’misrepresentation’ means any act or omission of any kind whatsoever which wrongly or incorrectly represents any fact, law, character, circumstance, opinion or other thing whatsoever and, without limiting the definition in any way, includes –

. . .“

The essence of fraud is the deceiving or misleading of the victim of the crime, hence the requirement of misrepresentation as an essential of the crime of fraud, see Jonathan Burchell, Principles of Criminal Law 5th ed. p.745.

In casu the allegation is that the meters supplied by the first applicant and his company are not what was represented by them when the contract was concluded.  In this respect, there are serious allegations of connivance with the second and third applicants to commit the fraud.  If it is proved that the first applicant and his company tendered for the meters which were in accordance with the desired specifications but went on to supply some other specifications then the circumstances would point to misrepresentation.  But there are other circumstances which the applicants are being alleged to have misrepresented as well.  It is being alleged that the first applicant misrepresented that a Factory Acceptance Test would be conducted and that Secure Meters (Pvt) Ltd had a manufacturing plant for smart meters and Head End Systems in the United Kingdom.  These allegations, if proved, would establish the misrepresentation which is an essential of the crime of fraud.  For the purposes of placing the applicants on remand it is sufficient that on the facts alleged there is a reasonable suspicion that the applicants committed the offence.  Whether these allegations will be proved by evidence is a matter for the trial itself.

In contesting their placement on remand the applicants have sought to rely on evidence led in the bail application proceedings.  Reliance on these passages ignores the fact that the Investigating Officer is not necessarily the only witness who would give evidence in the trial proceedings.  The Investigating Officer stated the following in his evidence, rec. 41:

“There are two other engineers who travelled with them (the applicants), they are . . . to 	say they 	only saw a warehouse in the UK and not a manufacturing company.”

Therefore, his statement that he did not establish as a fact that this factory was (or was not) there is immaterial if those who were supposed to see the factory were not shown it.  If the applicants’ case is that such a factory exists and that the meters supplied were in accordance with the tendered specifications then these are the facts which they should establish at the trial.  At the remand stage the approach is to inquire if the facts alleged disclose an offence, see Mutanda v Prosecutor-General of Zimbabwe & 3 Others CCZ01-17.  As noted above, the facts alleged in this case do disclose the offence of fraud.

Before I conclude, there is perhaps need to make a recommendation to the legislature to rethink the legal framework for dealing with matters such as this one and related cases.  Recently there has been an increase in cases involving government ministries, departments and other public sector entities and enterprises on the one hand, and private companies and citizens on the other hand.  The nature of corruption and the way of doing business involving these entities has probably mutated from what it may have been when the legal framework in terms of which we operate was conceived and developed.  Levels and the nature of corruption have also become very sophisticated.  The state, its entities and enterprises either genuinely lack capacity to negotiate these contracts or, in some cases, there may be complicity or connivance of those involved in the negotiation, implementation and even monitoring and evaluation of the contracts entered into.  The time has perhaps come for the state to consider criminalising a breach of contract where the party breaching or failing to perform adequately or at all is a private person or entity and the other party is a public sector organization.  Such criminal liability could be extended to the directors and other senior employees of the private entities involved.  This approach would ensure that only serious performers tender for public sector work.  Situations where a person who, or company which, does not own even a shovel successfully tenders for the construction of a road or other massive infrastructure are very real these days.  It is only when no service is rendered or the service rendered is substandard that it is realized that the “contractor” was either a “brief-case” company or was connected to some of those who would have negotiated on behalf of the public sector entity or somehow corrupted those involved in the decision-making process.  It should be worrying that public resources are spent by the public sector on legal proceedings seeking to enforce contracts or to recover money paid, or in conducting prosecutions, where the other party would have known at the onset that the tender was not genuine or was made in the hope of finding some other company or person to do the work for a small amount while the company tendering for the work pockets the bulk of the money.

In all the circumstances, the application for review is without merit.

The application is, accordingly, dismissed with no order as to costs.

T. K. Hove & Partners, 1st applicant’s legal practitioners

Sachikonye-Ushe, 2nd and 3rd applicants’ legal practitioners