Court name
Supreme Court of Zimbabwe
Case number
SC 45 of 2005
Civil Appeal 205 of 2003

Zimbabwe Financial Holdings v Mafunga (05/03) (SC 45 of 2005, Civil Appeal 205 of 2003) [2005] ZWSC 45 (31 October 2005);

Law report citations
Media neutral citation
[2005] ZWSC 45










REPORTABLE
ZLR (50)








Judgment
No. SC 45/05


Civil
Appeal No. 205/03









ZIMBABWE FINANCIAL HOLDINGS
v KUDA MAFUNGA








SUPREME
COURT OF ZIMBABWE


SANDURA
JA, MALABA JA & GWAUNZA JA


HARARE,
MAY 5 & NOVEMBER 1, 2005








A
M Gijima
, for the
appellant





C
Phiri
, for the
respondent









GWAUNZA JA: This is an appeal
against the judgment of the Labour Court, in terms of which the
appellant was ordered to reinstate
the respondent to his former
employment without any loss of salary or benefits. In the event
that reinstatement was no longer possible,
the appellant was ordered
to pay the respondent damages in
lieu
thereof.





The
facts of the matter are as follows:





The
respondent, who was employed by the appellant as a cashier in one of
its branches, cashed two savings account withdrawals amounting
to
$400 000. This was on 29 May and 1 June, 1999. It is common cause
that fraudsters had used a fictitious name to open the account
from
which the withdrawals were made. The fraudsters again visited the
appellant’s premises on 21 June 1999, with the intention
of
withdrawing more money from the fraudulent account. A trap that the
appellant had set for them failed to ‘net’ the suspected
fraudsters because, it was alleged, one of them was surreptitiously
alerted to the trap by someone inside the bank, leading to their
escape. The appellant alleged that the respondent was the one who
had warned the suspected fraudsters off, a circumstance that
the
appellant believed pointed to the possibility of collusion between
him (respondent) and the fraudsters.





Charges
were subsequently brought against the respondent in terms of Category
D of the appellant’s Code of Conduct as follows:






“1. You committed a serious
act, conduct or omission which is inconsistent with the fulfillment
of the express or implied conditions
of your contract.





2. You were
grossly incompetent and inefficient in the performance of your work.






3. You were grossly negligent and
caused a very serious loss to the bank; and






4. You failed
to comply with standing instructions or follow established procedures
which resulted in a very substantial loss to the
bank”.








A
disciplinary hearing conducted on the 3
rd
of August 1999 considered, among other evidence, sworn statements
made by deponents who claimed to have played a role in the opening
of
the fraudulent account from which the withdrawals in question were
later made. One of the deponents implicated the respondent
in the
scam. The statements were sworn at the police station following the
arrest of two suspects, one being the suspected fraudster
allegedly
warned off by the respondent.





At the end
of the disciplinary hearing the respondent was found guilty as
charged and dismissed from his employment. He appealed
to the
Grievance and Disciplinary Committee, which dismissed his appeal.
On 7 October 1999, the Appeals Board, to which the respondent
had
appealed following the decision of the Grievance and Disciplinary
Committee, upheld the respondent’s appeal and ordered the
appellant
to reinstate him. The appellant was aggrieved by this decision, and
appealed to the Labour Court, which, in its turn,
dismissed the
appeal.





The
appellant’s grounds of appeal are as follows:





“Grounds
of appeal






1. that the
Labour Court erred on a point of law by holding that the appellant
failed to justify its dismissal of the respondent on
a balance of
probabilities for lack of compliance with its beam procedures as
articulated in Circular No. 16/3/99, whereas, the Labour
Court’s
record of proceedings contained sufficient evidence which proved
otherwise;






2. that the Labour Court further
erred in law in failing to place reliance on affidavits deposed to by
respondents’ accomplices,
confessing to the fraud, on the basis
that the deponents had not given
viva
voce
evidence in the
Court; and






3. that
consequently, the Labour Court erred in law in holding that
respondent’s dismissal by the appellant was unlawful”.








I will
consider these grounds separately.





First
Ground of Appeal





The appellant
contends that there was sufficient evidence before the Labour Court
to prove that the respondent had not complied with
the appellant’s
BEAM procedures as articulated in Circular No. 16/3/99. In this
connection, it is alleged that the respondent
in contravention of
these procedures, cashed cheques of over $20 000 without referring to
the Manager or Accountant. The appellant
charges that the Labour
Court ignored the document on p 148 of the record, which was an
extract from the BEAM procedures, and which
increased the control
limit of $5 000 on BEAM authorisation for teller withdrawals, to $20
000. Further, that the history of the
account in question should
have alerted the teller to the fact that all was not in order, and
therefore, the need to refer the matter
to the manager or accountant.





There is in
my view merit in these submissions.





While
it is true, as noted by the court
a
quo,
that the teller’s
manual produced by the appellant in the court
a
quo
made no reference
to the need for tellers to refer cash withdrawals of over $20 000 for
authorisation by management, there is indeed
a document on p 148 of
the record, which clearly increased the control limit for
authorisation for teller withdrawals from $5 000
to $20 000. The
document is an extract from the Beam procedures that the court
a
quo
was persuaded the
respondent had followed before cashing the two savings account
withdrawals. The court
a
quo
made no reference
to this document, a circumstance that lends some weight to the
appellant’s assertion that the court had ignored
this evidence.
It has not been said by either party that this document did not form
part of the record in the court
a
quo
.





It is not in
dispute that the respondent did not refer the withdrawals, which far
exceeded the $20 000 threshold, to management
for authorisation.
The two withdrawals that the respondent cashed were for $200 000
each. In 1999, these constituted very large
amounts of money. If
as a general rule, cheque and cash withdrawals of $20 000 needed
authorisation, it is difficult to understand
how the respondent could
have believed he could cash withdrawals of amounts ten times more
than the $20 000, without some kind of
authorisation.





The
respondent’s actions become even more suspect when regard is had to
what the appellant termed the “history” of the account
in
question. According to the evidence before the Court, the account
in question had been fraudulently opened on 17 April 1999
with a cash
deposit of $1 000. On 19 May 1999 a large deposit of $874 720,25
was made into the account. On 28 April, 1999 two
small withdrawals
were made. The following day, 29 April 1999 the respondent cashed a
withdrawal of $200 000 from this account,
and two days after that,
another withdrawal of $200 000. Between these two withdrawals, a
large amount of $450 000 was withdrawn
from the same account but
through the services of a different teller. The appellant contends,
and I find myself in agreement with
its contention, that any diligent
teller would have viewed with suspicion the frequency of the
withdrawals from this account. He
or she would then have felt
obliged to take the type of action envisaged in the teller’s manual
under “General Routines” which
reads as follows:





“Do –
always refer to your accountant any transaction on which there is any
uncertainty”.





The account
was new and, given the fact that a fictitious name was used to open
it, the “client” was also new. Yet the respondent,
allegedly,
saw nothing unusual and felt no suspicion when, after making one
large cheque deposit, the client then went on, with unusual
frequency, to withdraw huge amounts of cash from the account.
Instead, the respondent facilitated the withdrawals in question,
resulting in the appellant suffering serious financial loss.





In my view,
the respondent was properly charged with gross negligence and causing
a very serious loss to the bank.





The Labour
Court found that the probabilities favoured the respondent’s denial
that he was required to refer withdrawals in excess
of $20 000 to
management and based its decision partly on that finding. This I
find is where the court
a
quo
fell into error.
Even if the respondent was indeed not required to refer withdrawals
in excess of $20 000, he was surely not exempted
from the general
rule that tellers were required to “always” refer to their
accountant any transaction on which there was any
uncertainty.





In my
opinion there was “uncertainty” in the transactions in question,
the respondent did not refer the transactions to his
accountant.
The Labour Court therefore clearly erred in disregarding, as it
obviously did, this important provision.





On that
ground alone the appeal should succeed.





Second
Ground of Appeal





The
appellant’s second ground of appeal is concerned with the rejection
by the court
a quo,
of statements made by witnesses who claimed to have been the
respondent’s accomplices in the fraudulent opening of the account
in question, and the subsequent withdrawals made from it.





It
is not in dispute that one of the suspected fraudsters, Sebastian
Muriritirwa, was arrested following a report made to the police
by an
administrative officer with the bank, Mr Mutanga (“Mutanga”).
Mutanga had observed the respondent communicating with
a suspected
accomplice of Muriritirwa, who had come into the bank to make a
further withdrawal from the account in question. The
suspected
accomplice was then seen walking quickly away from the bank, and, in
the company of Muriritirwa who met him at the door,
getting into the
latter’s motor vehicle and driving away quickly. Because the
suspected accomplice walked away quickly from the
bank after
communicating with the respondent and without conducting the business
he had come to the bank for, the appellant suspected
him of having
warned the accomplice off, thereby facilitating his escape. The
appellant also suspected him of being an accomplice
to the fraud.
Following his arrest, Muriritirwa deposed to an affidavit in which he
implicated the respondent as follows:





“As
I was (about) to get into the main entrance, I met Leonard at the
main entrance coming out of the bank. He advised me that he
had
been told to get out of the bank by Kuda, a bank teller based at the
bank”.





In rejecting
this evidence the learned President of the Labour Court said in his
judgment:





“The
same applies for the appellant’s reliance on affidavits made by
self confessed accomplices. Men of dubious probity, whose
evidence
could not be tested by cross examination. I am satisfied that the
accomplices being men of dubious characters had every
reason, to
colour and manufacture evidence in an attempt to wriggle out of
trouble or to lessen the severity of punishment by shifting
blame.
That being the case no reliance can be placed on their affidavits
unless they had given
viva
voce
evidence and the
veracity of their evidence subjected to scrutiny by cross examination
and corroborated by some other evidence.





One could not
safely rely on their evidence without falling in danger of convicting
an innocent man”.








The court a
quo
makes reference to
cross examination of the deponents to the affidavits – in effect
one deponent since the other made no reference
to the respondent by
name – or corroboration of their statements by some other evidence.





I am
satisfied there was adequate and credible corroboration of
Muriritirwa’s evidence. Such corroboration came from Mutanga,
who
described how he had seen Muriritirwa’s suspected accomplice being
“warned off” by the respondent, rushing out of the bank
and
together with Muriritirwa whom he met at the entrance, getting into
the latter’s car and driving away. This evidence dovetails
neatly
with that of Muriritirwa. There could not have been any collusion
between the two, since they were on opposite sides of
the dispute.





In
what amounts, in my view, to a misdirection of facts so gross as to
constitute a misdirection on a point of law, the learned President
of
the Labour Court rejected Mutanga’s evidence, stating as follows on
p 4 of the judgment:






“Mr
Muta
nga’s
evidence has no ring of truth. His conduct was grossly unreasonable
and illogical in the extreme. Surely, a bank accountant
cannot
pursue a fraudster on his own without raising any alarm or alerting
colleagues and security…”.








The evidence
on record shows clearly that Mutanga, having observed the suspicious
communication between the respondent and Leonard
Chidharara, the
suspected fraudster, rushed into the office of a bank official
referred to as Renzie Vulalo and reported what he
had observed.
According to Vulalo’s statement, the two then rushed after the
suspect and saw him hurrying to a parked car together
with
Muriritirwa. They then drove away. Vulalo stated in his report
that he knew Muriritirwa since he was a client at the bank.
Thus
contrary to the finding of the court
a
quo
, Mutanga did not
single handedly “pursue” the suspect without raising any alarm or
alerting colleagues and security. He took
the precaution, before
rushing after the suspect, to alert a colleague and enlist his aid in
following the movements of the suspect
after he rushed out of the
bank.





The evidence
relating to the actions of Mutanga and Vulalo in my view clearly
corroborates Muriritirwa’s sworn evidence. Based
on its own
argument, therefore, the Labour Court should have accepted, and not
rejected, Muriritirwa’s sworn statement concerning
the involvement
of the respondent in the perpetration of the fraud in question.
When this is taken together with the respondent’s
apparent
disregard of the suspicious history of the fraudulent account in
question, and his failure to refer the transaction to an
accountant,
the probabilities in my view favour a finding that the respondent was
complicit in the fraud.





The
Labour Court’s reference to the “danger of convicting an innocent
man” to my mind suggests the court was applying a higher
test for
proving a case against the respondent, than is required in a case of
this kind. I am satisfied, on the evidence before
the Court, that
the appellant proved, on a balance of probabilities, that the
respondent had committed the acts of misconduct that
he was charged
with.





The
appellant’s third ground of appeal, that the Labour Court erred in
law in holding that the respondent’s dismissal was unlawful,
is
therefore well founded.





I
find when all is told, that the respondent was properly charged and
found guilty of the misconduct in question. In the result
it is
ordered as follows:





1. The appeal
be and is allowed with costs;


2.
The determination of the Labour Court is set aside and is
substituted with the following:





“The appeal
be and is hereby allowed with costs”.

















SANDURA  JA: I
agree.























MALABA
JA: I agree.

















Gill,
Godlonton & Gerrans
,
appellant's legal practitioners





Kantor
& Immerman
,
respondent's legal practitioners