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REPORTABLE (8)

Judgment No. SC 11/04

Crim. Application No. 44/04

JAMES MAKAMBA v THE STATE

SUPREME COURT OF ZIMBABWE

HARARE, FEBRUARY, 23, 24 & 26, 2004

S Moyo, for the appellant

V Shava, for the respondent

Before: ZIYAMBI JA, In Chambers, in terms of Rule 5 of the Supreme Court (Bail) Rules

This is an appeal against an order of the High Court refusing bail to the appellant. On 14 February 2004 the appellant appeared before a magistrate on allegations of contravening s 5 of the Exchange Control Act [Chapter 22:05], as read with ss 4(1)(a)(i) and 11(1)(a) of the Exchange Control Regulations, SI 109 of 1996 ("the Regulations"). It was alleged that on eleven occasions he sold foreign currency to Telecel Zimbabwe. In his capacity as director of Telecel Zimbabwe he is alleged to have issued cheques for payment of foreign currency purchased from persons who were not registered dealers. Neither the appellant nor Telecel are registered foreign currency dealers. The appellant is also alleged to have opened a foreign currency account in Sandton, Johannesburg, South Africa without the requisite exchange control authority and to have illegally exported maize to South Africa and caused the proceeds of the sale to be banked in a Telecel Zimbabwe Limited foreign currency account in Luxembourg.

The learned magistrate before whom the appellant appeared placed him on remand but declined jurisdiction to grant bail to him because of the provisions of the Presidential Powers (Temporary Measures) (Amendment of Criminal Procedure and Evidence Act) Regulations, Statutory Instrument 37 of 2004 ("the Amendment Regulations"), which she felt prohibited her from doing so. By then the appellant had been in police custody for six days, having been arrested on 8 February 2004.

On or about 15 February 2004 (the date is not clear on the record) the appellant made an urgent application for bail to the High Court. Before the learned judge the argument for the appellant was that, firstly, the State had not alleged that the appellant might abscond or interfere with witnesses. There was, therefore, no ground for refusing bail. Secondly, the appellant had not been placed on remand in terms of s 32 of the Criminal Procedure and Evidence Act [Chapter 9:07] ("the Act"), but pursuant to a court order issued by CHITAKUNYE J. Therefore the Amendment Regulations, which sought to amend s 32 of the Act, did not apply to his case. Thirdly, in any event the said Amendment Regulations, being subsidiary legislation, could not amend a provision in an Act of Parliament.

The learned judge in the court a quo found against the appellant on the second and third contentions and the application was dismissed. The learned judge did not consider the merits of the application for bail, presumably because of her conclusion that the provisions of the Amendment Regulations were applicable to this case.

The appellant appealed to this Court with the leave of the court a quo. In his grounds of appeal he challenged the constitutionality of the provisions of the Amendment Regulations, a challenge which was not raised before the court a quo.

In addition, the appellant took issue with the finding of the learned judge in the court a quo that the appellant was placed on remand in terms of s 32 of the Act and not by virtue of a court order. The appellant sought, on appeal, an order that the Amendment Regulations be declared invalid and the appellant be admitted to bail. With the exception of the ground relating to the finding that the appellant was placed on remand in terms of s 32 of the Act and not by virtue of a court order, all the grounds of appeal were directed at challenging the constitutionality of the provisions of the Amendment Regulations.

This appeal was opposed by the respondent, which took the view that the appeal introduced extraneous matters not covered in the judgment or raised at the hearing before the court a quo. It was pointed out, too, in the respondent's response that the issues raised in the notice of appeal were for determination only by a Constitutional Court and the appellant had therefore followed the wrong procedure.

At the hearing before me, Mr Moyo, who appeared for the appellant, applied for an amendment to his grounds of appeal filed of record. The amendment sought to delete the grounds of appeal and to replace them with the following:

“The learned judge erred in failing to appreciate that SI 37 of 2004 was not applicable to the allegations against the accused person in his personal capacity.”

Mr Moyo indicated that this was the only ground of appeal that he would rely on. He was aware, he submitted, that only a Constitutional Court could deal with the other issues raised in the notice of appeal. The notice of amendment was handed to Mr Shava, who appeared for the respondent, only minutes before the hearing. I, therefore, at his request, granted Mr Shava a postponement to the following day (24 February 2004) in order to enable him to file his submissions on this new ground of appeal.

Although this ground of appeal was not before the court a quo, it is a point of law which therefore can be raised for the first time on appeal.

On behalf of the appellant Mr Moyo contended as follows - The appellant is charged with eleven counts of contravening s 5(1)(a)(i) of the Exchange Control Act [Chapter 22:05], as read with s 4(1)(a)(i) of the Regulations. Only these eleven counts are charged against him in his personal capacity. The charges preferred against him in his personal capacity are not specified in the Amendment Regulations and the court a quo was wrong in its finding that these offences were non-bailable. With respect to the remaining counts, the appellant was charged only in his representative capacity as a director of Telecel Zimbabwe. Because a director representing a company which is being prosecuted cannot be incarcerated, the appellant could not legally be detained in respect of those charges for which he was being prosecuted merely as a representative of the company.

Mr Shava, however, submitted that, on the contrary, the appellant was being charged in his capacity as a director of Telecel on his own account in terms of s 385(6) of the Act. This was not a case where Telecel was being prosecuted and the appellant was being charged as its representative. The appellant was being personally charged on all counts.

Section 385(6) of the Act deals with the personal liability of directors or employees of a company where an offence has been committed and the company is liable to be prosecuted. It provides as follows:

“(6) When an offence has been committed, whether by the performance of any act or by the failure to perform any act, for which any corporate body is or was liable to prosecution, any person who was, at the time of the commission of the offence, a director or employee of the corporate body, shall be deemed to be guilty of the offence unless it is proved that he did not take part in the commission of the offence, and shall be liable to prosecution therefor, either jointly with the corporate body or apart therefrom, and shall, on conviction, be personally liable to punishment therefor.”

Section 385(3) deals with the prosecution of a corporate body. It provides:

"(3) In any criminal proceedings against a corporate body, a director or employee of that corporate body shall be cited, as representative of that corporate body, as the offender, and thereupon the person so cited may, as such representative, be dealt with as if he were the person accused of having committed the offence in question:

Provided that -

(i) ...;

(ii) ...;

(iii) if the said person, as representing the corporate body, is committed for trial, he shall not be committed to prison but shall be released on his own recognizance to stand trial;

(iv) if the said person, as representing the corporate body, is convicted, the court convicting him shall not impose upon him in his representative capacity any punishment, whether direct or as an alternative, other than a fine, even if the relevant enactment makes no provision for the imposition of a fine in respect of the offence in question, and such fine shall be payable by the corporate body and may be recovered by attachment and sale of any property of the corporate body in terms of section three hundred and forty-eight;

(v) the citation of a director or employee of a corporate body to represent that corporate body in any criminal proceedings instituted against it shall not exempt that director or employee from prosecution for that offence in terms of subsection (6)." (emphasis added)

The Request for Remand Form 242 cites the appellant in his personal capacity, not as a representative of Telecel or any other company. There is substance in Mr Shava’s submission that the appellant is being charged personally on all counts.

The charges enumerated in the Remand Form are as follows -

1. Contravening s 5(1)(a)(i) of the Exchange Control Act [Chapter 22:05] as read with s 4(1)(a)(i) of the Exchange Control Regulations SI 109/96 (eleven counts). On these counts the appellant is alleged to have sold foreign currency to Telecel Zimbabwe Limited. Neither the appellant nor Telecel is an authorised dealer for the purposes of the Exchange Control Act.

2. Fraud: Alternatively contravening s 5(1)(a) of the Exchange Control Act [Chapter 22:05] as read with s 4(1)(a)(i) of the Exchange Control Regulations SI 109/96 (four counts).

3. Contravening s 11(1)(a) of the Exchange Control Regulations SI 109/96 (forty-five counts).

Section 11(1)(a) of the Regulations provides as follows:

“11. (1) Subject to subsection (2), unless otherwise authorised by an exchange control authority, no Zimbabwean resident shall -

(a) make any payment outside Zimbabwe ...”.

I turn to consider whether these charges are covered by the Amendment Regulations. Sections 2 and 4 of the Amendment Regulations provide as follows:

“2. Section 32 (‘Procedure after arrest without warrant’) of the Criminal Procedure and Evidence Act [Chapter 9:07] is amended in subsection (2) by the repeal of the proviso thereto and the substitution of -

‘Provided that if the person arrested without a warrant is charged with any offence referred to in paragraph 10 or 11 of the Third Schedule -

(a) the judge or magistrate before whom he is brought in terms of this section shall not decline to order his further detention or to issue a warrant for his further detention solely on the basis that there are no prima facie grounds for the charge, and no court shall admit such person to bail for a period of seven days from the date when an order or warrant for his further detention was issued in terms of this paragraph; or

(b) and the judge or magistrate before whom he is brought in terms of this section is satisfied that there are prima facie grounds for the charge, the judge or magistrate shall order his further detention or issue a warrant for his further detention for a period of twenty-one days (unless the charge is earlier withdrawn), and no court shall admit such person to bail for a period of fourteen days from the date when an order or warrant for his further detention was issued in terms of this paragraph.'...

4. The Third Schedule ‘Offences in Respect of Which Power to Admit Persons to Bail is Excluded or Qualified’) of the Criminal Procedure and Evidence Act [Chapter 9:07] is amended by the insertion of the following paragraph after paragraph 10 -

'11. Committing a serious economic offence, that is -

(a) contravening the Prevention of Corruption Act [Chapter 9:16];

(b) contravening section 63 ("Money-laundering") of the Serious Offences (Confiscation of Profits) Act [Chapter 9:17];

(c) the sale, removal or disposal outside Zimbabwe of any controlled product in contravention of the Grain Marketing Act [Chapter 18:14];

(d) contravening subsection (1) of section 3 (“Prohibition of dealing in or possession of gold”) or subsection (1), (2) or (3) of section 6 (“Disposal of gold by persons authorised to possess gold”) of the Gold Trade Act [Chapter 21:03];

(e) contravening subsection (1) of section 3 (“Unlawful dealing in or possession of precious stones prohibited”) or subsection (1) or (6) of section 6 (“Registers to be kept and returns to be made”) of the Precious Stones Trade Act [Chapter 21:06];

(f) contravening subparagraph (i) of paragraph (a) of subsection (1) of section 5 of the Exchange Control Act [Chapter 22:05] as read with -

(i) subsection (1) of section 10 of the Exchange Control Regulations, 1996, subparagraph (sic) and subparagraph (g) called (sic) “the Exchange Control Regulations”), by unlawfully making any payment, placing any money or accepting any payment in contravention of paragraph (a), (b), (c) or (d) of that section of the Regulations;

(ii) paragraph (a) or (b) of subsection (1) of section 11 of the Exchange Control Regulations, by unlawfully making any payment outside Zimbabwe or incurring an obligation to make any payment outside Zimbabwe;

(iii) paragraph (b), (e) or (f) of subsection (1) of section 20 of the Exchange Control Regulations, by unlawfully exporting any foreign currency, gold, silver or platinum, or any article manufactured from or containing gold, silver or platinum, or any precious or semi-precious stone or pearl from Zimbabwe;

(iv) subsection (2) of section 21 of the Exchange Control Regulations by unlawfully exporting any goods from Zimbabwe in contravention of that provision of the Regulations;

(g) contravening paragraph (b) of subsection (1) of section 5 of the Exchange Control Act [Chapter 22:05] by making any false statement or producing any false document in connection with a contravention of subsection (2) of section 21 of the Exchange Control Regulations;

(h) a conspiracy, incitement or attempt to commit any offence referred to in subparagraphs (a) to (g).’” (emphasis added)

Thus the amendment effected by ss 2 and 4 makes non-bailable contraventions of s 5(1)(a)(i) as read with s 11(1) (a) or (b), s 20(1) (b), (e) or (f) and s 21(2) of the Regulations.

With regard to the charges against the appellant set out in paras 1 and 2 of the Form 242, of contravening s 5(1)(a) of the Exchange Control Act as read with s 4(1)(a)(i) of the Regulations, these relate to the sale of foreign currency to Telecel by the appellant. I am in agreement with Mr Moyo that s 4 of the Regulations is not one of the provisions specified in the Amendment Regulations.

The charges which relate to contraventions of s 11(1)(a) of the Regulations are, however, covered by the Amendment Regulations.

One point of concern to me is that the facts alleged by the State on p 43 of the record do not establish prima facie that any payments were made by the appellant in contravention of s 11(1)(a) of the Regulations.

The State alleged that:

“The accused required exchange control authority to operate an external account. The accused without authority opened an account with Ned Bank Sandton, Johannesburg and thereafter, caused by facsimile or by other means, transferred moneys to America or other countries on four occasions, contrary to the provisions of section 11 of the Exchange Control Regulations SI 109/1996.

The accused acting together with others would illegally export maize to South Africa to a company in Industrial Commodities Holdings and other companies. He would then cause the proceeds to be banked in Telecel Zimbabwe's foreign currency account Invik Bank in Luxembourg. Presently there is evidence to show that this happened on four occasions. In so doing the proceeds from the sale of maize were externalised instead of being repatriated. This costitutes (sic) loss and prejudice to Zimbabwe.”

What is alleged is that moneys were transferred by the appellant, presumably from Ned Bank, Sandton, Johannesburg, South Africa, to America or other countries. There is no allegation that the moneys were transferred as payment to anyone.

Normally an accused person cannot be placed on remand where no prima facie case has been made out against him. See Martin v Attorney-General and Anor 1993 (1) ZLR 153 (S). However, the mandatory provisions of the Amendment Regulations are such that the judge or magistrate before whom the accused person (in this case the appellant) appears on a mere allegation of contravening any of the provisions listed therein is obliged to order the detention of the accused person for a minimum of seven days. If a prima facie case has been established, the judge or magistrate is obliged to order the accused's detention for twenty-one days and no bail application can be entertained before the expiry of fourteen days from the date of the order.

Thus the judge or magistrate before whom the accused person appears in terms of the proviso to s 32(2) of the Act as amended by the Amendment Regulations is deprived of his discretion whether or not to grant bail and merely acts as a rubber stamp to give a semblance of legality to the detention. This strikes me as being patently unconstitutional but the issue of the constitutionality of the provisions of the Amendment Regulations is not before me and, as was conceded by Mr Moyo, can only be determined by the Constitutional Court.

I have found that the charges brought under s 11(1)(a) of the Regulations are governed by the provisions of s 4 of the Amendment Regulations. This means that the proviso to s 32(2) of the Act, as amended by the Amendment Regulations, applies to any application for bail brought in respect of these charges.

The record does not show in terms of which subparagraph of the proviso the magistrate acted in ordering the detention of the appellant when he first appeared on remand. Indeed the learned judge who dealt with the bail application in the court a quo found herself unable to determine whether the magistrate had acted in terms of subpara (a) or (b) of the proviso.

If the appellant was detained in terms of subpara (a) of the proviso, it seems to me that the seven days mandatory detention have long elapsed and a bail application can now be entertained.

If the magistrate acted in terms of subpara (b) of the proviso, a bail application may be entertained fourteen days from the date of the order of detention. On the papers, it would appear to me that those fourteen days may have already elapsed. If this is so, the appellant would now be free to make a bail application in the usual manner. At this application the merits of the bail application would be considered and the court could then exercise its discretion as to whether or not to grant bail.

In view of the above, I would remit the matter to the court a quo to determine, on evidence to be placed before it, whether a bail application by the appellant may now be entertained and if so to enquire into the merits of any such application.

Before concluding this judgment, I wish to make the following observations on the manner in which this matter was handled -

In the first place, no application was made for leave of the High Court to appeal to this Court by the legal practitioner before filing the notice to appeal. It was only after the respondent had pointed this out in its response to the application that leave to appeal was obtained from the court a quo. It is unfortunate that the appellant's legal practitioner was remiss in such an elementary matter.

The second issue is the challenge as to the constitutionality of the provisions of the Amendment Regulations. As stated earlier, only a Constitutional Court is endowed with jurisdiction in such matters. The proper course would have been to proceed, albeit on an urgent basis, in terms of s 24(1) of the Constitution of Zimbabwe (“the Constitution”). On this issue, again, the appellant's legal practitioner adopted the wrong procedure.

The third issue is that no challenge as to the constitutionality of the provisions of the Amendment Regulations was raised before the court a quo. The constitutional issues raised under the guise of a notice of appeal were not before the court a quo. Had they been raised, the court might have considered whether to refer the matter to the Supreme Court in terms of s 24(2) of the Constitution.

It appears to me that had the proper procedures been followed less time would have been wasted and a resolution of the real issues in this matter be obtained more speedily.

Accordingly, the matter is remitted to the High Court in order to determine, on evidence to be placed before it, whether a bail application by the appellant may now be entertained and if so to enquire into the merits of any such bail application as may be brought before it.

Scanlen & Holderness, appellant's legal practitioners

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