CHAPFIKA v RESERVE BANK OF ZIMBABWE 2007 (2) ZLR 337 (H)

Flynote

c Exchange control ” offences under exchange control legislation relating to foreign currency ” reward payable to person providing information regarding such offences ” when reward payable ” only payable when foreign currency recovered

Revenue and public finance ” public moneys ” expenditure or disbursement of ” must be authorised or sanctioned by Parliament

Headnote

The plaintiff had gathered information about breaches of the exchange control legislation perpetrated by a merchant bank. These breaches involved the externalisation of foreign currency. His information led to the bank being prosecuted and fined. The trial court did not, however, order the forfeiture of the funds involved; the funds had been exported with the requisite authority but without the bank having complied with the conditions stipulated in terms of that authority.

The plaintiff, relying on the defendant's Monetary Policy Statement which set up a "whistle blower's fund", demanded the payment to him of ten percent of the sum involved. The policy statement was somewhat ambiguous in its wording, but could be read as entitling a "whistle blower" to the reward either after recovery of the funds involved or upon provision of prosecutable proof of an offence. The defendant refused to pay the reward, arguing inter alia that the plaintiff was not legally entitled to it.

G Held, that one of the fundamental principles of public finance is that any expenditure or disbursement of public moneys, whether under a contract or otherwise, must invariably be authorised or sanctioned by Parliament. This basic principle of English constitutional law is reflected in theConstitution of Zimbabwe.

Held, further, that the entitlement of a "whistle blower" to the prescribed monetary reward for providing information about exchange control offences is prescribed by s 10 of the Exchange Control Act [Chapter 22:05], as amended by Act No. 16 of 2004. The clear meaning of the section is that the payment of a reward to a "whistle blower" is contingent upon the detection and prosecution of such an offence and the consequent recovery and forfeiture of funds or the recovery of funds per se, notwithstanding that no prosecution of an offence is instituted. In both scenarios the common and essential prerequisite is the recovery of convertible foreign currency. Once such recovery is effected, the informant is entitled to be awarded ten percent of the amount recovered. If no recovery is effected, the informant is entitled to nothing, even if a successful prosecution takes place and a fine is imposed. The imposition of a fine cannot be regarded as tantamount to recovery of the funds; a fine and a forfeiture order are quite distinct, both in their objectives and their consequences.