State V Chala Enterprise [2025] ZWMSVHC 11 (10 March 2025)

HCMSCR 1321-24 HMA 09-25 STATE versus CHAK ENTERPRISE HIGH COURT OF ZIMBABWE ZISENGWE J MASVINGO, 10 March 2025 Criminal Review ZISENGWE J. Care must always be taken when prosecuting a corporation. There are various special provisions in the Criminal Procedure and Evidence Act, [Chapter 9:07] (“The CPEA”) and the Criminal Law (Codification and Reform) Act [Chapter 9:23] (“the criminal law code”) which regulate the matter in which a corporation is to be prosecuted, as distinct from the prosecution of a natural person. The accused, a business enterprise, was charged with contravening s 78 (19) (a) of the Forestry Act [Chapter 20:19]. The allegations being that on a date unknown to the prosecutor but during the period extending from August 2024 to 5 of September 2024, in the Save Valley Conservancy along Nesinanga Wildlife Ranch and Chegwite Resettlement Mkwasine, Chiredzi, the accused corporation unlawfully without a permit or authority as provided for in the Forestry Act cut, injured, collected, took and removed trees processing them into charcoal. During its prosecution, the accused corporation was represented by one Martin Bungu. Initially, Mr Bungu, ostensibly on behalf of the accused enterprise, denied the charge. In his defence outline he stated that the company had a Memorandum of understanding (MOU) with the Chiredzi rural district Council for the construction of roads in the latter’s area of jurisdiction, which M.O.U. it believed, authorised it to cut down trees. However, halfway through the trial, after one witness had testified for the State, Mr Bungu made an about turn and tendered a plea of guilty to the charge. He indicated that in the absence of proper documentation authorising the accused corporation to fell trees, its defence was unsustainable. The court then purportedly put the charge once again to Mr Bungu whereupon it altered the plea of Not guilty to one of guilty. The court then purported to proceed in terms of s 271 (2) (b) of the Act before returning a verdict of guilty. Following its conviction, the accused corporation was sentenced as follows: “To pay a fine of US$400 through the Clerk of Court, Chiredzi Provincial Court. Time to pay is the 30th of September 2024, in default of payment 90 days imprisonment.” When the record of proceedings was submitted to this court in the ordinary course, I observed a number of errors prompting me to direct a query to the trial magistrate in the following terms: “Were the provisions of s 385 (3) of the Criminal Procedure and Evidence Act [Chapter 7:07] followed, in that: Was a director or employee of the body corporate acted as a representative thereofWas it competent to impose a term of imprisonment as an alternative to payment of a fine (see s 385 (3) (iv))?” In her response to the query, the trial Magistrate graciously conceded having made the errors identified in that minute. There are indeed a number of procedural errors afflicting the proceedings. These will be briefly discussed below. The provisions of subsection 1 & 3 of s 385 of the CPEA are particularly relevant. They read: 385 Prosecution of corporations and members of associations (1) In this section— “director”, in relation to a corporate body, means a person who (a) controls or governs that corporate body, whether lawfully or otherwise; or (b) is a member of a body or group of persons which controls or governs that corporate body, whether lawfully or otherwise; or (c) where there is no body or group such as is referred to in paragraph (b), who is a member of the corporate body. (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) if the said person pleads guilty, the plea shall not be valid unless the corporate body authorized him to plead guilty; (ii)…….. [Not relevant] (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; From these provisions several issues arise. These will be dealt with in turn. Failure to obtain proof of the accused entity’s corporate nature First and foremost, it was incumbent on the part of the court to ensure that there was proof the accused company’s corporate nature. This could have been done through the production by the State of the accused company’s registration papers, notably the certificate of incorporation issued by the Registrar of Companies. It was improper to assume that the accused corporation held that status. Failure to so ensure that these documents amounted a material misdirection, for then it was not clear whether the accused corporation was duly incorporated and therefore deserved the legal protection accorded to it. Failure to obtain proof of the representative’s status vis a vis the accused corporation. Secondly, there was need to prove the capacity in which Mr Bungu purported to represent the accused entity. In the latter regard it remained unclear if he is a is a director or an employee of the accused corporation or whether he holds some other position in that entity. If Mr Bungu is a Director of the accused company, a certified copy of the CR14 showing him to be such a director needed to be submitted by the prosecutor from the bar. If, however, he occupies some other position other that of director there was need for proof that he is a member, employee or servant of the accused company. The State outline was equally unhelpful as it did not disclose the relationship between Mr Bungu and Chak Enterprises. Due regard also needed to be had to the provisions of s 277 of the Criminal law code. The said provision deals with the criminal liability of corporations and associations and that of their members, employees. In provides that – “for the purposes of imposing criminal liability upon a corporate body, any conduct on the part of - (a) a director or employee of the corporate body; or (b) any person acting on instructions or with permission, express or implied, given by a director or employee of the corporate body in the exercise of his or her power or in the performance of his or her duties as such a director, employee or authorised person, or in furthering or endeavouring to further the interests of the corporate body, shall be deemed to have been the conduct of the corporate body, and if the conduct was accompanied by any intention on the part of the director, employee or authorised person, that intention shall be deemed to have been the intention of the corporate body.” Failure to ascertain authority to plead guilty on behalf of a corporation Proviso (i) to s 385 (3) of the CPEA, above, is self-explanatory and hardly needs elaboration. The failure to obtain the requisite authority renders the plea of guilty (and hence the entire proceedings) a nullity. The reasons for this are not too far to find. Any conviction of a company may have far reaching consequences. It is therefore necessary to ascertain that the representative is not on a frolic of his own when he tenders a plea of guilty. The moment Mr Bungu, therefore, purported to alter his plea from one of not guilty to one of guilty, the trial court needed to pause to enquire whether he had the requisite authority to plead guilty to the charge as contemplated by the above proviso and to demand proof of such authority. The failure to do so rendered the proceedings a nullity. d) The incompetent imposition of a term of imprisonment in default of the payment of the fine Proviso (iv) of s 385 (3) makes it abundantly clear that it is incompetent to impose a term of imprisonment, even as an alternative to the payment of a fine. This is in keeping with two obvious considerations. Firstly, a corporation is an artificial persona. It is a fictitious person. It therefore cannot be imprisoned. Secondly, any person cited in his representative capacity cannot be imprisoned for the crimes of the corporation. This is on account of the well-known legal position of separate legal personality of corporations. See S v Simon Gamha N.O. HB-10-24. I must however hasten to point out that in terms of s 277 (3) of the Criminal law code, a director or other employee of the corporation may, in appropraite situations, be jointly liable with the accused corporation. Separately, there was the improper procedure adopted when the accused changed his attitude towards the charge midstream altering of a plea of not guilty to one of guilty. It was incompetent to put the charge afresh to the representative of the accused company. While it is settled law that an accused may change his plea from one of not guilty to one of guilty at any stage during the trial before sentence, the correct procedure in those circumstances is not to put the charge afresh to the accused, but rather to seek admissions of fact in terms of s 314 of the CPEA. DISPOSITION The proceedings were therefore blighted by a number of procedural irregularities and cannot be allowed to stand. Appropriate remedial action needs to be taken. Accordingly, the following order is hereby made: The conviction is hereby set aside and the sentence quashed.The matter is remitted to the Magistrate’s Court for a fresh trial which shall take due regard to all the provisions dealing with the prosecution of a corporation.In the event of a conviction the sentence to be imposed shall not be more severe than the one originally imposed.The accused representative of the accused corporation to be brought before the court without undue delay to be informed of the outcome of this matter on review. ZISENGWE J………….. CHAREWA J agrees…………………… HCMSCR 1321-24 HMA 09-25 HCMSCR 1321-24 HMA 09-25 STATE versus CHAK ENTERPRISE HIGH COURT OF ZIMBABWE ZISENGWE J MASVINGO, 10 March 2025 Criminal Review ZISENGWE J. Care must always be taken when prosecuting a corporation. There are various special provisions in the Criminal Procedure and Evidence Act, [Chapter 9:07] (“The CPEA”) and the Criminal Law (Codification and Reform) Act [Chapter 9:23] (“the criminal law code”) which regulate the matter in which a corporation is to be prosecuted, as distinct from the prosecution of a natural person. The accused, a business enterprise, was charged with contravening s 78 (19) (a) of the Forestry Act [Chapter 20:19]. The allegations being that on a date unknown to the prosecutor but during the period extending from August 2024 to 5 of September 2024, in the Save Valley Conservancy along Nesinanga Wildlife Ranch and Chegwite Resettlement Mkwasine, Chiredzi, the accused corporation unlawfully without a permit or authority as provided for in the Forestry Act cut, injured, collected, took and removed trees processing them into charcoal. During its prosecution, the accused corporation was represented by one Martin Bungu. Initially, Mr Bungu, ostensibly on behalf of the accused enterprise, denied the charge. In his defence outline he stated that the company had a Memorandum of understanding (MOU) with the Chiredzi rural district Council for the construction of roads in the latter’s area of jurisdiction, which M.O.U. it believed, authorised it to cut down trees. However, halfway through the trial, after one witness had testified for the State, Mr Bungu made an about turn and tendered a plea of guilty to the charge. He indicated that in the absence of proper documentation authorising the accused corporation to fell trees, its defence was unsustainable. The court then purportedly put the charge once again to Mr Bungu whereupon it altered the plea of Not guilty to one of guilty. The court then purported to proceed in terms of s 271 (2) (b) of the Act before returning a verdict of guilty. Following its conviction, the accused corporation was sentenced as follows: “To pay a fine of US$400 through the Clerk of Court, Chiredzi Provincial Court. Time to pay is the 30th of September 2024, in default of payment 90 days imprisonment.” When the record of proceedings was submitted to this court in the ordinary course, I observed a number of errors prompting me to direct a query to the trial magistrate in the following terms: “Were the provisions of s 385 (3) of the Criminal Procedure and Evidence Act [Chapter 7:07] followed, in that: Was a director or employee of the body corporate acted as a representative thereof Was it competent to impose a term of imprisonment as an alternative to payment of a fine (see s 385 (3) (iv))?” In her response to the query, the trial Magistrate graciously conceded having made the errors identified in that minute. There are indeed a number of procedural errors afflicting the proceedings. These will be briefly discussed below. The provisions of subsection 1 & 3 of s 385 of the CPEA are particularly relevant. They read: 385 Prosecution of corporations and members of associations (1) In this section— “director”, in relation to a corporate body, means a person who (a) controls or governs that corporate body, whether lawfully or otherwise; or (b) is a member of a body or group of persons which controls or governs that corporate body, whether lawfully or otherwise; or (c) where there is no body or group such as is referred to in paragraph (b), who is a member of the corporate body. (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) if the said person pleads guilty, the plea shall not be valid unless the corporate body authorized him to plead guilty; (ii)…….. [Not relevant] (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; From these provisions several issues arise. These will be dealt with in turn. Failure to obtain proof of the accused entity’s corporate nature First and foremost, it was incumbent on the part of the court to ensure that there was proof the accused company’s corporate nature. This could have been done through the production by the State of the accused company’s registration papers, notably the certificate of incorporation issued by the Registrar of Companies. It was improper to assume that the accused corporation held that status. Failure to so ensure that these documents amounted a material misdirection, for then it was not clear whether the accused corporation was duly incorporated and therefore deserved the legal protection accorded to it. Failure to obtain proof of the representative’s status vis a vis the accused corporation. Secondly, there was need to prove the capacity in which Mr Bungu purported to represent the accused entity. In the latter regard it remained unclear if he is a is a director or an employee of the accused corporation or whether he holds some other position in that entity. If Mr Bungu is a Director of the accused company, a certified copy of the CR14 showing him to be such a director needed to be submitted by the prosecutor from the bar. If, however, he occupies some other position other that of director there was need for proof that he is a member, employee or servant of the accused company. The State outline was equally unhelpful as it did not disclose the relationship between Mr Bungu and Chak Enterprises. Due regard also needed to be had to the provisions of s 277 of the Criminal law code. The said provision deals with the criminal liability of corporations and associations and that of their members, employees. In provides that – “for the purposes of imposing criminal liability upon a corporate body, any conduct on the part of - (a) a director or employee of the corporate body; or (b) any person acting on instructions or with permission, express or implied, given by a director or employee of the corporate body in the exercise of his or her power or in the performance of his or her duties as such a director, employee or authorised person, or in furthering or endeavouring to further the interests of the corporate body, shall be deemed to have been the conduct of the corporate body, and if the conduct was accompanied by any intention on the part of the director, employee or authorised person, that intention shall be deemed to have been the intention of the corporate body.” Failure to ascertain authority to plead guilty on behalf of a corporation Proviso (i) to s 385 (3) of the CPEA, above, is self-explanatory and hardly needs elaboration. The failure to obtain the requisite authority renders the plea of guilty (and hence the entire proceedings) a nullity. The reasons for this are not too far to find. Any conviction of a company may have far reaching consequences. It is therefore necessary to ascertain that the representative is not on a frolic of his own when he tenders a plea of guilty. The moment Mr Bungu, therefore, purported to alter his plea from one of not guilty to one of guilty, the trial court needed to pause to enquire whether he had the requisite authority to plead guilty to the charge as contemplated by the above proviso and to demand proof of such authority. The failure to do so rendered the proceedings a nullity. d) The incompetent imposition of a term of imprisonment in default of the payment of the fine Proviso (iv) of s 385 (3) makes it abundantly clear that it is incompetent to impose a term of imprisonment, even as an alternative to the payment of a fine. This is in keeping with two obvious considerations. Firstly, a corporation is an artificial persona. It is a fictitious person. It therefore cannot be imprisoned. Secondly, any person cited in his representative capacity cannot be imprisoned for the crimes of the corporation. This is on account of the well-known legal position of separate legal personality of corporations. See S v Simon Gamha N.O. HB-10-24. I must however hasten to point out that in terms of s 277 (3) of the Criminal law code, a director or other employee of the corporation may, in appropraite situations, be jointly liable with the accused corporation. Separately, there was the improper procedure adopted when the accused changed his attitude towards the charge midstream altering of a plea of not guilty to one of guilty. It was incompetent to put the charge afresh to the representative of the accused company. While it is settled law that an accused may change his plea from one of not guilty to one of guilty at any stage during the trial before sentence, the correct procedure in those circumstances is not to put the charge afresh to the accused, but rather to seek admissions of fact in terms of s 314 of the CPEA. DISPOSITION The proceedings were therefore blighted by a number of procedural irregularities and cannot be allowed to stand. Appropriate remedial action needs to be taken. Accordingly, the following order is hereby made: The conviction is hereby set aside and the sentence quashed. The matter is remitted to the Magistrate’s Court for a fresh trial which shall take due regard to all the provisions dealing with the prosecution of a corporation. In the event of a conviction the sentence to be imposed shall not be more severe than the one originally imposed. The accused representative of the accused corporation to be brought before the court without undue delay to be informed of the outcome of this matter on review. ZISENGWE J………….. CHAREWA J agrees……………………