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Export Leaf Tobacco Company of Africa (Pvt) Ltd. v Gwavava (Civil Appeal No. 166/06)  ZWSC 13 (2 October 2008)
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Judgment No. SC 72/07
Civil Appeal No. 166/06
EXPORT LEAF TOBACCO COMPANY OF AFRICA (PRIVATE) LIMITED
v ALBERTINA GWAVAVA
SUPREME COURT OF ZIMBABWE
SANDURA JA, CHEDA JA & MALABA JA
HARARE, MAY 22, 2007 & OCTOBER 2, 2008
H Zhou, for the appellant
E W W Morris, for the respondent
This is an appeal against a judgment of the Labour Court in terms of which the appellant was ordered to reinstate the respondent as its director of finance.
Although the record of the proceedings is voluminous, the essential facts are relatively brief. They may be tabulated conveniently as follows –
1. At the relevant time the respondent (“Albertina”) was employed by the appellant (“Export Leaf”) as the director of finance. Export Leaf was part of the British American Tobacco Holdings group of companies (“BATco”).
2. As the director of finance, Albertina would countersign cheques issued on behalf of Export Leaf as payment for services rendered to Export Leaf by other companies or individuals.
3. While still employed as the director of finance by Export Leaf, Albertina was also employed by a company called Pickhill Enterprises (Pvt) Ltd (“Pickhill”). She was the company secretary of Pickhill and was also a director of the company. The company, which appears to have been a family company, had two directors. These were Albertina and a man called Elficio Gwavava.
4. Pickhill rendered accounting services to an unincorporated entity called Kwik Courier, which rendered services to Export Leaf. In addition, Pickhill traded as Kwik Courier.
5. In the course of her employment as Export Leaf’s director of finance, Albertina signed some cheques which were payable to Kwik Courier for services rendered to Export Leaf by Kwik Courier. Some of these cheques were later deposited into Pickhill’s bank account.
6. The Standards of Business Conduct Manual, which governed BATco’s employees, and with which Albertina was familiar, had the following provisions on the issue of conflicts of interest:
“Each employee should avoid situations where his/her personal interest could conflict with the interest of the Company. This is an area in which it is impossible to give a comprehensive list, and so employees must use their common sense and if in doubt ask their Director or the Company Secretary.
Employees must be aware that they may have a conflict between their personal circumstances (e.g. because their spouse has a financial interest in a company with which the Company intends to contract) and their duty to the Company, and for this to be taken into account in relevant dealings. For example, a person with a conflict of interest regarding himself/herself or a close family member, or even a friend, should not take part in relevant discussions and should exclude himself/herself from the decision making process. In addition it is important that an employee with an interest in a trading partner or supplier makes his/her position known. The Company Secretary keeps a register of such interests and should be informed in writing via the employee’s Director.” (emphasis added)
7. In February 1998 Export Leaf required its senior employees, including Albertina, to complete a form on which they were supposed to declare any conflict of interest which they had in relation to Export Leaf. Albertina completed and signed the form on 13 February 1998. On the form she declared that she understood how the Standards of Business Conduct applied to her and agreed to abide by them. She then went on to state that she had no conflict of interest.
8. On 18 February 2000 Albertina was suspended from her duties without pay and benefits, and was later charged with, inter alia, dishonest misrepresentation in terms of BATco’s Code of Conduct, the allegation being that she had breached BATco’s written rules and laid down procedures when she did not disclose her interests in enterprises which dealt with Export Leaf, i.e. her directorship in Pickhill, trading as Kwik Courier, and the fact that she was the company secretary of Pickhill, trading as Kwik Courier.
9. On 7 March 2000 a disciplinary hearing was conducted and Albertina was found guilty as charged, and was dismissed from her post with effect from the date of her suspension. Thereafter, she appealed to the Works Council, but the appeal was unsuccessful.
10. She then appealed to the Labour Court and was successful. The Labour Court ordered her reinstatement with no loss of salary or benefits. Aggrieved by that decision, Export Leaf appealed to this Court.
Two issues arise for determination in this appeal.
The first is whether Albertina had a conflict of interest to declare. I have no doubt in my mind that she had. The conflict arose from her dealings with Export Leaf on the one hand and Kwik Courier on the other.
As already indicated, Albertina was employed by Export Leaf as the company’s director of finance. Whilst employed in that position she was also employed by Pickhill which traded as Kwik Courier. She was a director and the company secretary of Pickhill.
Kwik Courier had business dealings with Export Leaf and was paid for the services it rendered to Export Leaf by means of cheques signed by Albertina, and later deposited into Pickhill’s bank account. In other words, acting on behalf of Export Leaf, Albertina signed cheques payable to Kwik Courier, an organisation in which she had an interest because her own company, Pickhill, traded as Kwik Courier. The cheques were later deposited into her company’s bank account.
In terms of the provisions of the Standards of Business Conduct Manual, Albertina was under an obligation to declare her interest in Kwik Courier because, in my view, Kwik Courier was “a trading partner or supplier” of Export Leaf. It rendered services to Export Leaf and was paid for such services.
The second issue for determination in this appeal is whether Albertina declared the conflict of interest in the manner required by the Standards of Business Conduct Manual by which she was bound. The answer to that question is in the negative.
As already indicated, the Standards of Business Conduct Manual contained the following provision:
“… it is important that an employee with an interest in a trading partner or supplier makes his/her position known. The Company Secretary keeps a register of such interests and should be informed in writing via the employee’s Director.” (emphasis added)
Quite clearly, this provision was not complied with because on 13 February 1998 Albertina completed and signed a BATco form on which she declared that she had no conflict of interest to disclose.
Thus, even if this Court were to accept Albertina's allegation that some of the directors of Export Leaf were aware of her involvement with Pickhill and Kwik Courier, that would not satisfy the requirement laid down in the Standards of Business Conduct Manual. She was aware that an employee with an interest in a trading partner or supplier was obliged to make his/her position known to BATco, and that the Company Secretary kept a register of such interest and should be informed about such interest in writing.
In my view, Albertina’s conduct was consistent with a clear intention to mislead Export Leaf into believing that she had no conflict of interest, when in fact she had interests in Pickhill and Kwik Courier which conflicted with her position in Export Leaf. She was, therefore, guilty of dishonest misrepresentation.
In the circumstances, the Court makes the following order –
1. The appeal is allowed with costs.
2. The order granted by the Labour Court is set aside and the following is substituted –
“The appeal is dismissed with costs”.
CHEDA JA: I agree
MALABA JA: I agree
Gill, Godlonton & Gerrans, appellant's legal practitioners
T.H. Chitapi & Associates, respondent's legal practitioners