Court name
Supreme Court of Zimbabwe
Case number
SC 42 of 2006
Civil Appeal 113 of 2002

Zhou v Zvimba Rural Council (13/02) (SC 42 of 2006, Civil Appeal 113 of 2002) [2006] ZWSC 42 (15 October 2006);

Law report citations
Media neutral citation
[2006] ZWSC 42





















Judgement No. SC
42/06



Civil Appeal No. 113/02









TAPIWA FRANK ZHOU
v ZVIMBA RURAL COUNCIL








SUPREME
COURT OF ZIMBABWE


CHIDYAUSIKU
CJ, CHEDA JA & ZIYAMBI JA


HARARE,
JUNE 22 & OCTOBER 16, 2006








S
Moyo
, for the
appellant





W.T.
Pasipanodya
, for the
respondent












ZIYAMBI JA: On 24 June 1996,
the respondent (“the Council”) suspended the appellant from
employment and four days later sought
authority from the labour
relations officer in terms of s 3 of the Labour Relations (General
Conditions of Employment) (Termination
of Employment) Regulations,
1985 S.I. 371 of 1985 (now repealed) (“the Regulations”) to
dismiss him.






The labour relations officer
heard the matter on 2 August 1996 and, on 7 February 1997, gave
authority to the Council to dismiss the
appellant in terms of s 3(1)
(a),(g) and (h) of the Regulations.






Section
3 (1) provided as follows:






“3.
(1) Where an employer has good cause to believe that an employee is
guilty of -






(a) any act, conduct or omission
inconsistent with the fulfilment of the express or implied conditions
of his contract;






(b)
– (f) …



(g) habitual and substantial
neglect of his duties;







(h) gross incompetence or
inefficiency in the performance of his work;







(i) …


the
employer may suspend such employee without pay and other benefits and
shall forthwith apply to a labour relations officer for
an order or
determination terminating the contract of employment. …”







It was alleged, citing s 3(1)(a),
that the appellant had failed to disclose his interest to the Council
in the allocation of stands,
namely stands 16 and 17 to his wife
“Ratisai” and stands 67 and 69 to Sapient Business Leaders, a
company, of which Ratisai was
a director and he the company
secretary, and that he had allocated himself a loan of $25 000 which
was not authorized by the Council
or the Council regulations.





It
was further alleged, citing s 3(1)(g), that the appellant displayed
gross negligence in the performance of his duties in that,
among
other things, he allowed Council to incur an unauthorized overdraft
of $540 000 and allowed beer funds to be used for unauthorized
purposes.






The decision of the labour
relations officer was upheld on appeals to the senior labour
relations officer and the Labour Relations
Tribunal (“the
Tribunal”)(now the Labour Court).







At the hearing of this appeal Mr
Moyo
relied on two points of law, which he stated as follows, namely,
whether the appellant was obliged to disclose his interest (which
he
alleged was a known fact) to the Council and whether the appellant as
Chief Executive Officer could be held accountable for the
malperformance of the treasurer.





The
duty to disclose







It was Mr Moyo’s
submission that the appellant had no duty to disclose a fact which
was known. The finding of the Tribunal, however, was that
his
interest was not known to the Council. The letter which he produced
in proof of his submission that the fact of his interest
was known
was found by the Tribunal to be of doubtful origin. It was written
two years after the allocation of the stands took place.
The
Tribunal and the courts below made findings of fact concerning the
reliability of the letter, which findings this Court cannot
reverse,
this being an appeal on a point of law only. One factor of
relevance, however, is that there is no indication in the letter
that
the Council was aware, at the time of allocation of the stands in
question, that the applicants for the stands were the appellant’s
wife and a company in which his wife is a director and he the company
secretary.






In
any event, it was for the appellant to make a disclosure of his
interest in the stands in question and he did not do so. Even
as
late as 8 February 1996, at an executive committee meeting of the
Council, the appellant was requested to put in writing his “outside
interests”. He failed to do so and, he being the one who recorded
the minutes of the meeting, provided no minutes of that meeting.









The minutes of the meeting of the
Council, held on 16 July 1991, show that the appellant was present in
his then capacity as secretary
of the Council when the applications
for stands 16 and 17 by Ratisai and 67 - 69 by Sapient Business
Leaders were approved. There
is nothing in those minutes to show
that the appellant declared his interest on the said stands.







Again on 17 September 1991, the
Council held a meeting at which the appellant attended in his
capacity as secretary. During that
meeting the application for
Stand 170 to Sapient Business Leaders was approved. No declaration
was made by the appellant of his interest
in the outcome of the
application by virtue of his association with that company.







On the contrary, the appellant
sought to conceal his interest in the said stands, by omitting to
place certain motions on the agenda
for discussion by the Council,
for example, a motion querying the allocation of the above-mentioned
stands to Sapient Business Leaders
and to Ratisai.





Accordingly,
the conclusion of the Tribunal, that the appellant failed to disclose
his interest in the acquisition of the stands,
cannot be faulted.






The
malperformance of the treasurer







The appellant next took issue
with the finding by the Tribunal that, as Chief Executive Officer, he
was negligent in allowing the
treasurer to incur an unacceptably high
overdraft contrary to the Council’s regulations. In this regard,
it was submitted by
Mr
Moyo
that the appellant had no authority to dismiss the treasurer and the
Tribunal therefore erred in law when it attributed responsibility
for
the mismanagement of the Council funds to the appellant.






As
Chief Executive Officer of the Council, the duties of the appellant
were stated to be, to ensure:






a)
that the council operates efficiently;







b) that proper books of accounts
were held and financial procedures followed;







c) that resolutions of Council
and its committees are effected;




d) that officers and employees
of the new council get timeous instructions, directions and guidance
in the performance of their duties.






The
appellant, therefore, being the overall head of operations at the
Council, occupied a position of great responsibility. He was
the
person responsible, and accountable to the Council, for the efficient
management of the Council. It was not for the appellant
to say,
“people have been employed to do the job so I shall let them get on
with it however they choose”. His was a management
and
supervisory role and he was answerable to the Council for the proper
running of its affairs. It was therefore his duty to ensure
that
the Council’s regulations were fully complied with by the
treasurer.







On 26 February 1996, the
treasurer wrote to the appellant forwarding a projected cash flow for
the period ending 30 June 1996. It
was highlighted therein that the
Council would be experiencing cash flow problems and it was estimated
that an overdraft of $171
624, starting in March 1996 and rising to
$745 656 in June 1996, would be necessary. The treasurer advised
that he had spoken with
the bank manager who was agreeable to
affording an overdraft facility if it was “formalized with a
Council resolution”.







It seems it is the practice of
the Council to hold its meetings at the end of each month. Be that
as it may, no mention was made
of the overdraft to the Council by the
appellant, in any of the minutes of the meetings attached to the
record, namely, those of
the 29 March, 16 April, 23 April (finance
committee), 24 April (special meeting) and 28 May 1996 (finance
committee). The overdraft
was not authorized by resolution of the
Council but was somehow obtained with the result that the Council was
overdrawn by some $540
000,00.






It is evident to me that the
appellant breached his duty to ensure that proper financial
procedures were followed in compliance with
the Council’s
regulations. I find no merit, therefore, in the submission that the
appellant was not to be held responsible for
the acts of the
treasurer in incurring the overdraft.





It
is clear from the above that I hold the view that there is no merit
in the appeal and it is accordingly dismissed with costs.











CHIDYAUSIKU
CJ: I agree.














CHEDA
JA: I agree.














Scanlen
& Holderness
,
appellant's legal practitioners


Manase
& Manase
, respondent's
legal practitioners