Zimbabwe Revenue Authority v (1) Carol Chioza (2) Vivian Chemwaita

### Preamble
Judgment No. SC 157/20
1
Civil Appeal No. SC 371/17
---------


DISTRIBUTABLE   (146)

ZIMBABWE     REVENUE     AUTHORITY

v

(1)     CAROL     CHIOZA     (2)      VIVIAN      CHEMWAITA

SUPREME COURT OF ZIMBABWE

GARWE JA, GUVAVA JA & MAKONI JA

HARARE: 21 JUNE 2018

N. Mugandiwa, for the appellant

T. Zhuwarara, for the respondents

GUVAVA JA:     This is an appeal against the judgment of the Labour Court wherein the court a quo allowed the respondents’ appeal against their conviction for gross negligence in violation of Category D9 of the appellant’s Code of Conduct.

After hearing arguments from both parties we gave the following order:

“1. The appeal be and is hereby allowed in part with costs.

The judgment of the court a quo allowing the appeal filed by the respondents in respect of the conviction for gross negligence in breach of Category D9 of the appellant’s Code of Conduct and reinstating the respondents in their former positions, be and is hereby set aside and in its place the following is substituted: -

‘(a)   The appeal against the conviction for gross negligence in violation of Category D9 of the code is dismissed.

(b) 	The decision of the Appeals Committee confirming the penalty of dismissal as well as the decision of the disciplinary committee imposing the penalty of dismissal be and are hereby set aside.

(c)  The matter is remitted to the Disciplinary Committee to consider the question of penalty afresh in light of the acquittal of the appellants on the charge of violating Category D25 of the respondents’ Code of Conduct.

(d)  In view of the fact that both parties have been partially successful, there will be no order as to costs.’

The judgment of the court a quo allowing the appeal filed by the respondents in respect of the conviction for any act inconsistent with the performance of duty as specified in Category D25 of the respondents’ Code of conduct be and is hereby confirmed.”

It was indicated that full reasons for granting the above order would be availed in due course. These they are.

BACKGROUND FACTS

The respondents were both employed by the appellant. In July 2009, the first respondent was employed as a Station Manager, at Forbes Border Post, Mutare and the second respondent was employed as the Revenue Supervisor in Charge of the commercial office at the same Station.

Sometime between January 2009 and August 2009 the appellant discovered that there were serious discrepancies in documents for vehicles and goods that entered Zimbabwe through the Forbes Border Post and exited into Mozambique. After investigations were carried out the respondents were charged with  misconduct under category D offences of the appellant’s Code of Conduct in July 2010. The appellant discovered that there was serious lack of supervision and very few controls in place. It was on this basis that the first and second respondents were charged. The charges and summary of evidence as discernible from the record can be summarised as follows.

Charge D9: - Gross negligence in the execution of duties, in that: -

Between the period January to May 2009 and July to August 2009 the 1st and 2nd respondents being the Station Manager and Revenue Supervisor in charge of Commercial office respectively failed to check/monitor/supervise the manual register pertaining to importations at Forbes Border Post, as was required and expected of them.

Between the periods January to August 2009, respondents failed to put in place adequate risk parameter/controls, checks and balances to ensure that importations were done properly. As a result of their failure some bills of entry were not entered into the registers, some entries were deleted from the registers with no explanations provided; duplicate and even triplicate entries were made in the register without reasons being proffered. Fake bills of entry were processed and used to smuggle fuel into the country. The failure to supervise operations was alleged to have led to revenue loss and for the 1st respondent the amount was pegged at not less than US$569 662.25 and for the 2nd respondent was US$401 132.25.

The 1st respondent under this charge group was further charged with failure to check/monitor/supervise accounting daybooks and spreadsheets pertaining to clients’ prepayment accounts. Consequently, between July and August 2009 two fraudulent transactions occurred in/on some prepayment accounts and goods were cleared against non - existing funds, and resulted in revenue loss amounting to US$168 530.00.

Charge D 25:- Acts inconsistent with the express or implied conditions of the employee’s contract of employment, in that the respondents’ failures as stated above were inconsistent with the fulfilment of their core duties as station Manager and Revenue Supervisor respectively.

It was also the appellant’s allegation that the respondents had received payment from subordinates who had been involved in fraudulent acts so that they would retain their employment. In respect of the second respondent it was further alleged that she had assisted a clearing agent for Ribbon Design in fraudulent activities.

Both respondents denied the charges levelled against them. After a disciplinary hearing they were both found guilty and dismissed by the appellant’s Disciplinary and Grievance Committee on 20 and 23 July respectively. They then appealed to the appellant’s Appeal Committee which upheld both verdicts of the Disciplinary and Grievance Committee. Aggrieved by the findings of guilt made against them, the respondents noted an appeal and review application before the court a quo.

SUBMISSIONS A QUO

Before the court a quo, the respondents argued that there was no evidence of gross negligence adduced to show that they were guilty. It was argued on behalf of the respondents that the affidavits of Andrew Shangu, Josephine Chimombe and Charles Kativhu did not implicate them and in any event the authors of the said affidavits were not called to testify or verify the contents of the said affidavits.  It was the respondents’ argument that the matter was based on credibility of witnesses and that most of the witnesses who provided the affidavits were accomplices in the matter and as such their evidence was not credible.

It was the respondents’ case that the Disciplinary and Grievances Committee and Appeals Committee erred in dismissing the respondents on the said allegations and relying on hearsay evidence. It was also the respondents’ case that the hearings before these committees were improperly constituted and irregular on the basis that the appellant used a lawyer who was in its employ to prosecute its case. The respondents argued that the appellant’s Code of Conduct did not provide for such right.

It was further argued that it was irregular for the appellant to ask the respondents to make submissions in mitigation before their cases had been determined. The respondents also argued that it was improper to apply the law retrospectively. It was submitted that the Standing Instructions which ought to have been used were the 2009 Standing Instructions and not the ones published in 2010.

On the other hand, the appellant submitted that there was sufficient evidence of gross negligence in the execution of duties adduced in the cases against the respondents. The appellant further argued that the respondents were required to check and monitor the registers pertaining to all importations. It was further argued that the respondents failed to do so and that they actually admitted to several omissions during their respective disciplinary hearings.  Some clearing agents were using fake bills of entry and this prejudiced the appellant financially.

It was argued for the appellant that there were Standing Instructions at Forbes Border Post that were in the custody of the first respondent which set out how they were supposed to operate. However, the appellant conceded that alterations were done to the 2009 Standing Instructions in 2010. It was alleged that when the present case surfaced the Standing Instructions manual that existed for the period prior to 2010 could not be located. New Standing Instructions were then published. It was nevertheless argued that the said Standing Instructions were similar. The new Standing Instructions reemphasized the need for proper procedures to be followed.

With regards to the affidavits, the appellant denied that the affidavits by Josephine Chimombe and Charles Kativhu could be construed as hearsay evidence but rather as direct evidence given by participants of the actual misconduct. The appellant also noted that the statements by Chimombe and Kativhu corroborated the findings of the investigations by loss control report. It is in these circumstances that the appellant submitted that the said affidavits and statements could be properly relied upon.

The appellant contended that the respondents were never denied the opportunity to cross examine witnesses. Whilst the witnesses did not appear personally to testify and their testimony came in the form of affidavits and statements and reports this did not prohibit the respondents’ counsel from requesting for them to be availed for the purpose of cross examination. Furthermore, the appellant averred that it was proper and regular for a legal practitioner employed by it to prosecute its case. The appellant submitted that it had been its norm to be assisted and guided by lawyers who were in their employ whenever they conducted disciplinary hearings.

The court a quo in dealing with the respondents’ appeal and review noted with concern the fact that the Appellant’s Appeals Committee relied on the evidence of Josephine Chimombe which was in the form of an affidavit when it was evident that she was an accomplice in the scam. The court a quo further concluded that the appellant had the onus to prove the allegations against the respondents. The court also held that the witness’s affidavits were vague and the fact that they were from accomplices who were never called to be cross examined could not prove the respondents’ guilt on a balance of probabilities.

The court a quo noted that the respondents had been charged with failing to put in place adequate risk parameters, controls, checks and balances to ensure that importations were done properly and yet the new Standing Instructions only came into effect in January 2010. The court thus found that it was improper to apply Standing Instructions retrospectively. Consequently, the court     a quo, in a very terse judgment, held that the respondents could not be held responsible for the loss to the appellant and allowed the appeal and ordered that the appellants be reinstated to their former positions.

The appellant was aggrieved by the finding of the court a quo and appealed against it to this Court. The appellant raised six grounds in its Notice of Appeal. At the commencement of the hearing the appellant’s counsel submitted that it was no longer appealing against the court a quo’s decision to acquit the respondents on the second charge. On that basis it was Mr Mugandiwa’s submission that the appeal was to be resolved on the sixth ground only which was that the court   a quo had erred in interfering with factual findings of the Disciplinary and Grievance Committee in circumstances where there was no basis to do so in respect of the first charge.

THE LAW

The test to be applied by an appellate court before interfering with the factual findings of a trial tribunal is whether or not the findings by the lower tribunal are so outrageous that no sensible person would have reached the same conclusion.  (See ZINWA v Mwoyounotsva 2015 (1) ZLR 935 (S), Hama v NRZ 1996(1) ZLR 664 (S), Reserve Bank of Zimbabwe v Corrine Granger and Another SC 34/01)

Mr Mugandiwa submitted that the grounds of appeal before the court a quo did not aver that the factual finding that led to the decision of the Disciplinary and Grievance Committee was grossly irrational. He thus argued that the court a quo ought to have explained why in such circumstances it interfered with the decision of the appellant’s Disciplinary and Grievance Committee.

It is now settled that a finding, without any basis, amounts to an error in law. In Reserve Bank of Zimbabwe v Corrine Granger & Anor SC 34/01 at page 6 this Court held that:

“A misdirection of facts is either a failure to appreciate a fact at all or a finding of fact that is contrary to the evidence actually presented.”

The court a quo with respect to the charge of gross negligence in the execution of the respondents’ duties in contravention of category D9 of the code of conduct held as follows:

“The appellants were also charged with failing to place adequate risk parameters, controls, check and balances to ensure that importations were done properly. The appellant (sic) have however told this Court that the Respondent did not provide Appellants with stationery and as such they could not be held responsible for missing centres.”

The charges against the respondents as noted above show that the respondents were charged with gross negligence which charge arose from the peculiar facts that they failed to check various manual registers and accounting spread-sheets pertaining to clients’ prepayment accounts. The respondents were also accused of failing to put in place risk parameters, controls, checks and balances to ensure that importations were done properly. It then led to the generation of fake bills of entry which were then used to support smuggling of fuel.

The court a quo erred by finding that the appellant’s failure to provide respondents with stationery justified the lack of checks, balances and controls. The alleged failure by the appellant to provide stationary, in my view, could not constitute a valid defence to the allegations of the misconduct. The court a quo’s finding that lack of stationery justified the lack of checks, balances and controls was a complete disregard of the evidence on record. The lack of stationery could not possibly have prevented the respondents from routinely checking that the customs officers were properly processing Bills of Entry and entering them into the registers and that each entry was properly signed for accountability.

As per their testimonies, it is clear that the respondents’ conduct amounted to gross negligence as they did not deny failing to supervise the work of their subordinates.  In Govora v Innscor Africa Limited SC 4/16, the Supreme Court stated as follows:

“The question whether or not the appellant was correctly found guilty of gross negligence of duty can only be determined by reference to evidence that proved on a balance of probability that he totally disregarded his duties. It is true that under the respondent’s code of conduct gross negligence is committed when an employee in the performance of his or her duties fails to take reasonable care to avoid acts or omissions that he can reasonably foresee would be likely to cause major loss or damage or injury. In this case there was total disregard of duty…”

In casu, the duty to monitor the registers, ensure that the subordinates were properly acquitting Bills of Entry, signing for them, and processing customs and exercise duty was the responsibility of the respondents.

The appellant’s Disciplinary and Grievances Committee made findings of fact to the effect that the Bills of Entry and the registers in which they were recorded were not monitored. Several trucks passing through from Mozambique had not been entered into the Zimbabwean system. The registers had entries that were crossed out and entries that did not bear any signatures. A simple routine check by the respondents as required by the appellant would have shown that something was amiss. From the Loss Control Report it was not in dispute that most of the evidence only surfaced after perusal of the records on the Mozambican side of the border. This clearly shows that the respondents had fallen short of discharging their duties as expected and were grossly negligent in carrying out their duties.

The court a quo in dealing with the issue of the Standing Instructions noted as follows:

“They also stated that standing instructions only came in January 2010. It would be improper to use such a document in retrospect. This Court is satisfied by the appellant’s explanation”

From the above, there can be no doubt that the court a quo placed undue weight on the standing instructions of January 2010. It is clear that the court was under the impression that the charge against the respondents emanated from a breach of the said instruction. A close reading of the record shows that the appellant never relied on the said 2010 standing instructions in charging the respondents. The appellant’s Disciplinary and Grievances Committee never relied on the Standing Instruction in coming to its determination. The court a quo thus did not properly understand the facts and came to the wrong conclusion. Therefore, there was no legal basis upon which the court a quo could interfere with the determination of the Appeals Committee.

As highlighted above, the respondents did not dispute being responsible for monitoring the activities at the border. They did not dispute that it was their responsibility to ensure that there were checks and balances in place for customs duty revenue collection in accordance with the appellant’s mandate. In this regard the respondents were guilty of negligence as defined under Category D9 of the appellant’s code.  The court a quo in my view thus erroneously replaced the opinion of the Disciplinary and Grievance Committee with its own opinion. This it could not do.

With regards to the complaint that there was reliance by the Disciplinary Committee on affidavit evidence it is clear that the court a quo also misdirected itself in this regard. Firstly, the respondents did not dispute that they were obliged in terms of their job description to supervise their juniors. The evidence showed that they did not do so. The affidavits showed that their juniors were confessing to what they had done in prejudicing the appellant. Secondly, it was not in dispute that their failure to pick up the shenanigans of their subordinates led to financial loss by the appellant. Finally, in the case of Chataira v ZESA SC 83/01 it was held as follows:

“From the authorities referred to above it is clear that at a hearing into allegations of misconduct, it is not necessary that viva voce evidence be led.  The employee concerned must obviously be shown any statements or documentary evidence that is being produced before the Disciplinary Committee but he cannot insist that the person who made the statement be called so that he can be cross-examined.”

In casu the respondents were given the affidavits and the Loss Control Report at the hearing.  They thus had all the documents which were used by the Disciplinary and Grievance Committee.

In the absence of a finding by the court a quo of irrationality on the part of the appellant’s Disciplinary and Grievances Committee, the court a quo clearly erred at law in setting aside the Appeals Committee’s decision in respect of the Category D9 charges.

With regard to the concession in respect to the category D25 charge it was our view that the concession was indeed proper. There was no evidence that the respondents had been paid by their subordinates so that they would not disclose their fraudulent activities.

In this regard the appellant’s appeal succeeds to the extent that the penalty of dismissal is set aside.  The matter ought to be remitted to the Disciplinary and Grievance Committee to consider the question of the respondents’ penalty afresh.  From the record it is quite apparent that the Disciplinary and Grievance Committee in considering the penalty to be imposed took into account that the respondents had been convicted of both the category D9 and category D25 charges. In view of the concession which has been made in respect of the category D25 charge it is only appropriate that the appellant takes this into account in imposing a penalty on the respondents.

As regards costs the appellant has been largely successful and it is entitled to its costs.

It was for these reasons that this Court issued the order captured at the beginning of this judgment.

GARWE JA	 			  I agree

MAKONI JA		  		  I agree

Kantor & Immerman, appellant's legal practitioners

M. C. Mukome, respondents' legal practitioners