PROSECUTOR GENERAL v TENDENEDZAI and Another (76 of 2025) [2025] ZWHHC 76 (14 February 2025)

1 HH 76-25 HCHACC 167/24 PROSECUTOR GENERAL versus PHILLIP TENDENEDZAI and MINISTER OF NATIONAL HOUSING AND SOCIAL AMENITIES HIGHCOURT OF ZIMBABWE CHIKOWERO J HARARE; 28 November 2024, 6 December 2024, 24 January and 14 February 2015 Opposed Application K Mufute, for the applicant M Kuwana, for the 1st respondent 2nd respondent in default CHIKOWERO J: [1] This is an application for an order to confiscate property equivalent in value because the property that would have been liable to confiscation cannot be located or identified. The application is made in terms of s 78(2) of the Money Laundering and Proceeds of Crime Act [Chapter 9:24] (The Money Laundering Act) as read with r 59(1) of the High Court Rules, 2021. THE FACTS [2] [3] All the facts are common cause. These are they. On 10 February 2023 Phillip Tendenedzai (Phillip) was convicted by the Magistrates Court sitting at Harare following a trial on a charge of theft of trust property as defined in s 113(2)(d) of the Criminal Law (Codification and Reform) Act [Chapter 9:23]. He had collected cash in the sum of US$13 147 from various branches of his employer and, instead of delivering the same to the employer, converted the same to his own use. Nothing was recovered. [4] He was sentenced, on the same day, to give 5 years imprisonment of which a year was suspended on the usual conditions of good behaviour. A further two years imprisonment was suspended on condition that he restitutes the complainant (his employer, being the victim of the HH 76-25 HCHACC 167/24 crime) in the sum of US$13147 through the clerk of court at the Harare Magistrates Court on or before 30 June 2023. [5] He appealed the conviction and sentence. However, the appeal was dismissed because he did not pay the costs of the preparation of the court record. [6] Phillip did not pay the restitution opting instead to serve the alternative 2 years imprisonment which the Magistrates Court had suspended on condition of restitution. [7] The Prosecutor-General (the PG) failed to locate the US$13147 stolen by Phillip. She also failed to identify any property acquired by Phillip using the proceeds of the theft. This means that the PG could neither seek an order for civil forfeiture of the tainted property nor apply for an order for confiscation of that tainted property or the proceeds thereof. [8] Undaunted, the PG instructed the Ministry of Local Government and Public Works to conduct a valuation of Phillip’s rights and interest in stand Number 13 800 situate in the Township of Caledonia in the District of Harare. [9] Phillip used clean money to purchase the rights and interest in stand Number 13 800 Caledonia. He purchased the same from Nyikavanhu Housing Cooperative. He has effected improvements on that piece of land by constructing a house thereon. The funds that he deployed to effect these imprisonments were untainted. [10] Having conducted its valuation on 27 May 2024 the Ministry of Local Government and Public Works complied a report reflecting that the open market value of the property in question is now US$40 00. [11] Philip holds the rights and interest in this property through a lease agreement entered into between the Minister of National Housing and Social Amenities and himself. [12] On 12 September 2024 the PG filed this application seeking to confiscate property up to the value of US $13 147 of the US40 000 worth stand Number 13 800 situate in the Township of Caledonia in the District of Harare. SECTION 78(2) OF THE MONEY LANDERING ACT. [13] This provision reads: HH 76-25 HCHACC 167/24 “where any property that would have been liable to seizure or confiscation cannot be located or identified or, for whatever reason, it is not practical or convenient to seize or confiscated the property, a competent court may order the seizure or confiscation of property equivalent in value from the defendant, whether or not such property is tainted property or represents proceeds of crime.” Before interpreting this provision and applying it to the facts of this matter it is [14] convenient that I pause to quickly dispose of a preliminary point raised by Phillip. IS THE APPLICATION PROPERLY BEFORE ME? [15] The preliminary point is without substance. It is based upon a misreading of s 50(2) of the Money Laundering Act: [16] In material part s 50 of the Money Laundering Act reads: “50 Application for confiscation orders (1) Where a person is convicted of a serious offence, the Prosecutor General may apply to the Court for a confiscation against property that is identified as tainted property or terrorist property in relation to that offence. (2) Except with the leave of the Court, the Prosecutor- General must make an application under subsection (i) within six months of the date upon which a person was convicted of the offence.” [17] As correctly submitted by Mr Mufute, the present is not a s 50(1) application. Accordingly, s 50(2) does not kick in. That the PG filed the application more than six months after Phillip’s conviction is immaterial. There is no equivalent provision to s 50(2) where the application is in terms of s 78(2) of the Act. The preliminary point is dismissed. DISPOSITION [18] S 2 of the Act contains this definition: “property means assets of every kind, whether tangible or intangible, corporeal or incorporeal, moveable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including but not limited to currency, bank credits, deposits and other financial resources, travelers cheques, bank cheques, money orders, shares, securities , bonds, drafts and letters of credit, whether situated in Zimbabwe or elsewhere, and includes an interest, whether full or partial, in any such property.” [19] This definition is very wide indeed. For my purposes the immovable property called stand Number 13 800 situate in the Township of Caledonia in the District of Harare is property. So also is Phillip’s right or interest in that property. It too is property. His right or interest, which is property, is valued at US$40 000. The PG seeks an order to confiscate not that whole property but only such of the property as is equivalent in value to the US$13 147 which was stolen by Phillip but cannot be located or identified. HH 76-25 HCHACC 167/24 [20] In Prosecutor General v Chiba SC19/24 the Supreme Court had occasion to comment, in passing, on the meaning of ss 39(4) and 78(2) of the Act (the wording of both provisions being identical). There, at 136, it said: “This means a Court can, where the property which should have been seized or confiscated can no longer be found, order the seizure or confiscation of the defendants any other property of equivalent value whether or not that other property is tainted. It is apparent that the unavailability of the tainted property and its substitution by the untainted property must be pleaded. Both properties must belong to the defendant. It does not justify seizure or confiscation of property belonging to a third party. It must also be noted that the provisions relate to seizure and confiscation not civil forfeiture.” [21] Again in Chitukutuku and ors v The Prosecutor General and ors SC 103/24 the Supreme Court, also in passing, made the following remark at 29: “Although Counsel for the first respondent submitted that a proportion of the properties may be forfeited, this issue was never submitted for consideration by the court a quo. The difficulty or practicality posed by the two properties may be resolved by s 78(2) of the Money Laundering and Proceeds of Crime Act which provides that……” [22] The application meets the requirements of s 78 (2) of the Act. Those requirements have been alluded to at para 20 of this judgment. [23] The Money Laundering Act embodies this Country’s commitment, in line with international best practice, to fight serious crime by, among other things, dealing with the scourge of money laundering and proceeds of crime. The preamble to the Act reads as follows: “WHEREAS Section 327 of the Constitution provides as follows: (1) An international treaty which has been concluded or executed by the President or under the President’s authority- (a) does not bind Zimbabwe until it has been approved by Parliament; and (b) does not form part of the law of Zimbabwe unless it has been incorporated into the law through an Act of Parliament. AND WHEREAS the International Convention for the Suppression of the Financing of Terrorism was adopted by the General Assembly of the United Nations Organization by Resolution 54/109 of 9 December 1999 and entered into force on the 10th April, 2002; And WHEREAS since 1999 Zimbabwe has been a member of the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG), a body whose object is to adopt and implement measures to combat money laundering and the financing of terrorism and serious crime; AND WHEREAS by virtue of its membership of ESAAMLG, Zimbabwe is pledged to implement recommendations issued by an inter-governmental organization called the Financial Action Taskforce (FATF), whose 40 recommendations are regarded as representing international standards to which all States should aspire: HH 76-25 HCHACC 167/24 AND WHEREAS Zimbabwe is desirous of fulfilling its obligations under the International Convention for the Suppression of the Financing of Terrorism and implementing the said FATF recommendations: NOW THEREFORE be it enacted by the President and Parliament of Zimbabwe as follows:” S327 (2) of the Constitution provides for the domestication of international treaties to which Zimbabwe is a party. [24] S 78(2) embodies the principle of confiscation of substitute assets. In some jurisdictions it is referred to as value based confiscation. In the present case what is sought to be confiscated from Phillip’s untainted and legitimate assets is the value of the proceeds of the crime that he committed. This is done by deducting property equivalent in value to the proceeds of the crime that he committed. If the untainted property were a credit balance in a bank account held by him, such of the money equivalent to the unlocated or unidentified US$ 13 147 stolen from his employer would have been the target of the application for a confiscation order. It would matter not that the account may have reflected a credit balance in excess of US$ 13 147. [25] Similarly, it matters not that the total value of Phillip’s right and interest in the immovable property in question exceeds that which is sought to be confiscated, and that the right and interest presently resides in an asset which is illiquid. The value thereof has been ascertained. The value of the property is sufficient, on liquidation, to meet the object of the application as expressed in s 78 (2) of the Act. [26] In material part, Article 31(1) (a) of the United Nations Convention Against Corruption to which Zimbabwe is a party provides: “Article 31 . Freezing Seizure and Confiscation. 1. Each State Party shall take, to the greatest extent possible within its domestic legal system, such measures as may be necessary to enable confiscation of: (a) Proceeds of Crime derived from offences established in accordance with this convention or property the value of which corresponds to that of such proceeds.” [27] There are other various international instruments on combating the problem of money laundering and proceeds of crime to which s 78(2) can be traced. [28] Article 5 of the United Nations Convention on Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (Vienna Convention) states: “ 1. Each party shall adopt such measures as may be necessary to enable confiscation of: (a) Proceeds derived from offences established in accordance with article 3, paragraph 1, or property the value of which corresponds to that of such proceeds.” HH 76-25 HCHACC 167/24 [29] The FATF Recommendation 4 recognizes the concept of substitute assets in these words: “Confiscation and provisional measures Countries should adopt measures similar to those set forth in the Vienna Convention, the Parlemo Convention, and the Terrorist Financing Convention, including legislative measures, to enable their competent authorities to freeze or seize and confiscate the following without prejudicing the rights of bona fide third parties: (a) Property laundered, (b) Proceeds from, or instrumentalities used in or intended for use in money laundering or predicate offences, (c) Property that is the proceeds of, or used in, or intended or allocated for use in, the financing of terrorism, terrorist acts or terrorist organizations, or (d) Property of corresponding value.” [30] Article 16 of the African Union Convention on Preventing and Combating Corruption reads: “Article 16 Confiscation and Seizure of the Proceeds of Corruption 1. Each State Party shall adopt such legislative measures as may be necessary to enable: (a) Its Competent authorities to search, identify, trace, and freeze or seize the instrumentalities and proceeds of corruption pending a final judgment; (b) Confiscation of proceeds or property, the value of which corresponds to that of such proceeds derived from offences established in accordance with this convention.” [31] The rationale for legislation on substitute assets was explained by the United States of America Congress in justifying the inclusion of such a provision in its Criminal Forfeiture Act. In Stolen Assets Recovery, A Good Practices Guide for Non-Conviction Based Asset Forfeiture www. worldbank.org that explanation is given in these words: “A defendant may succeed in avoiding the forfeiture sanction simply by transferring his assets to another, placing them beyond the jurisdiction of the Court, or taking other actions to render his forfeitable property unavailable at the time of conviction….. Thus a person who anticipates that some of his property may be subject to criminal forfeiture has not only an obvious incentive, but also ample opportunity, to transfer his assets or remove them from the jurisdiction of the Court prior to trial and so shield them from any possibility of forfeiture……….. The important economic impact of imposing the sanction of forfeiture against the defendant is thus lost unless the government can forfeit non-tainted, substitute property.” [32] Without a provision such as s78 (2) of the Act to reach non-traceable property, Phillip and others of his kind would have an incentive to either spend or conceal the proceeds of crime if that is the only property that the forfeiture laws may reach while openly retaining untainted property secure in the knowledge that the latter is untouchable. HH 76-25 HCHACC 167/24 [33] In the Latin American Legal Studies Volume 4 (2019) at p191 -210 Mateo G Bermejo in his article Confiscation of Illicit Profits in the Spanish Penal Code, Historical and Conceptual Analysis says: “The third variant of confiscation of the benefits of crime, the so- called confiscation of equivalent value extends this institution to the “side” of the chain of acquisitions of goods with the benefits of crime, reaching assets of legal origin that are in the patrimony of the offender. In effect, confiscation of equivalent value is not limited to assets derived from criminal activity. Thus, it can be exercised against property owned by the convicted person that has been legally obtained and that has no connection with the crime for which it is being seized: confiscation is made for a certain amount of money. The political or criminal need to regulate confiscation of equivalent value stems from the fact that the confiscation of goods (original or substitute) presents two problems from the point of view of effectiveness; on the one hand, if the offender has spent the goods, they may no longer be confiscated and, on the other, if the goods have been transferred to third parties in good faith, they cannot be confiscated either. On the other hand, confiscation of equivalent value has a significant advantage since it is not impeded by the consumption, concealment, displacement or destruction of the goods of illegal origin (or their substitutes) since it proceeds against property of legal origin owned by the offender. For this reason, confiscation of equivalent value has become a central part of the international strategy against money laundering, an assessment that is evident in the UN Convection Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) which promotes it.” [34] S 853(p) of Title 18 of the United States Code provides: “If any of the property described in subjection (9) of this section, as a result of any act or omission of the defendant (1) Cannot be located upon the exercise of due diligence; (2) Has been transferred or sold to, or deposited with, a third party; (3) Has been placed beyond the jurisdiction of the court; (4) Has been substantially diminished in value; or (5) Has been commingled with other property which cannot be divided without difficulty; the Court shall order the forfeiture of any other property of the defendant up to the value of any property described in paragraph (1) through (5).” [35] In Colombia, Law 793, Article 3 provides for forfeiture of substitute assets as follows: “if it is not possible to locate or execute the seizure of the property declared subject to forfeiture at the time of ruling, the Judge may order the forfeiture of substitute property or goods owned by the same person and of equal value. This article shall not be interpreted to prejudice the rights of innocent third parties acting in good faith.” [36] S 12 (c) of the Republic Act 9160 of the Philippines reads: “where the Court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense defined under section 4, and said order cannot be enforced because any particular monetary instrument or property cannot, with due diligence, be located, or it has been substantially altered, destroyed, diminished in value or otherwise rendered worthless by any act or omission, directly or indirectly, attributable to the offender, or it has been concealed, HH 76-25 HCHACC 167/24 removed, converted or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the Court, or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity, thereby rendering the same difficult to identify or be segregated for purposes of forfeiture, the Court may, instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein, accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. This provision shall apply in both civil and criminal forfeiture.” [37] Article 127.3 of the Spanish Penal Code says: “If, for any circumstance, it were not possible to seize the assets stated in the preceding sections of this Article, seizure of other assets for an equivalent value pertaining to those criminally accountable for the act shall be seized.” [38] The Criminal Code of Switzerland, Article 71 reads: “where assets to be confiscated are no longer available the judge shall order a compensatory claim in favour of the State for an equivalent amount.” [39] Mr Mufute, for the PG, also cited S 2(1) (U) of the Prevention of Money Laundering Act of India. It defines proceeds of crime to mean: “(a) any property derived or obtained directly or indirectly, by any person, as a result of criminal activity related to a scheduled offence, or (b) the value of any such property, or (c) where such property is taken or held outside the country, then the property equivalent in value held within the country.” [40] As for cases dealing with substitute assets decided elsewhere, the PG cited the following. [41] In United States v Voight, 89 F.3d 10 50 (3d Cir. 1996) the Court held that a defendant convicted of laundering $1.6 million was required to forfeit that amount as a money judgment. When the government could not trace forfeitable proceeds to the defendant’s current assets, the court held that the government could satisfy the $1, 6 million judgment by seeking forfeiture of the defendant’s assets as substitute assets. [42] In United States v Candelaria – Silva, 166 F 3d 19, 42(1st cir.1999) the Court held that substitute assets may be forfeited if the government shows that as a result of any act or omission of the defendant, the forfeitable property cannot be located upon the exercise of due diligence or has been transferred, sold to or deposited with a third party. [43] In United States v Alamondi 452 F. 3d 310, 314 (4th Cir. 2006) it was held that S 853(p) (reproduced at para 37 of this judgment) is not discretionary and that when the government HH 76-25 HCHACC 167/24 cannot reach the property initially subject to forfeiture, federal law requires a Court to substitute assets for the unavailable tainted property. [44] In K Rethinam v Union of India (2018) 246 DLT, the Delhi High Court said: “The expression ‘value of any such property’ would be a value equivalent to the value of a property derived or obtained directly or indirectly by any person as a result of criminal activity. The property itself may no longer be available but the equivalent value of such a property, whether held in cash, etc, would be available for attachment.” [45] Nearer home, the High Court of Botswana in Director of Public Prosecution v Kgori Capital (PTY) Ltd UCHGB 000065/18 put the objectives of that country’s Proceeds and Instrumentalities of Crime Act 28 of 2014 (PICA) in these words: “The objectives of PICA include depriving persons of property suspected to be proceeds or instruments of crime. The said objectives serves as a crime control function. That is so because the commission of economic crimes is primarily motivated by the prospect of financial gain. Accordingly taking away the financial gain will deter economic crimes. Some criminals view being imprisoned as an occupational risk worth taking so long as they keep profits after serving their sentences. Confiscating the ill- gotten assets dissuades them from committing crime.” [46] Mr Kuwana, for Phillip, made two submissions in resisting the application on the merits. Both submissions are without substance. [47] First, he argued that since Phillip had served his jail term, inclusive of the two years suspended on condition of restitution, there remains no legal basis for ordering the confiscation of property equivalent in value to the money he stole. That cannot be correct. The survey of international legal instruments and comparative jurisprudence reflected in this judgment demonstrates that the object of an order of confiscation of property equivalent in value to the unlocated or unidentified tainted property is rooted in combating serious economic crime. As pointed out by the Botswana High Court in Director of Public Prosecution v Kgori Capital (supra) offenders of the kind of Phillip, who view imprisonment as an occupational risk worth taking so long as they can keep and enjoy the profits of crime after serving their sentences, need to know that gains derived from crime will in one way or the other be taken away from them.. Taking away Phillip’s untainted property equivalent in value to the unlocated tainted property is the answer. That will deter persons from committing serious economic crimes as the prospect of profiting from crime would be illusory. HH 76-25 HCHACC 167/24 [48] Secondly, Mr Kuwana is in error in reading the words “property of the same value” into s 78 (2) of the Act. The words used in the Act are “property equivalent in value.” The Act itself gives a very wide meaning to what it is that constitutes property. This I have earlier explained in this judgment. The definition of property encompasses a situation where immovable property of greater value could be liquidated to enable the confiscation of such portion of that property as is equivalent in value to the tainted property. This explains, in part, the establishment of the Recovered Assets Fund (S96), the crediting of all money derived from the fulfilment of confiscation orders into that Fund (S97) and the compensation of victims who suffer losses as a result of serious crimes out of moneys paid into that Fund (s 97 (9)). Otherwise, how would it be possible to compensate Phillip’s victim if a confiscation order were not to issue in respect of property equivalent in value to the tainted property? [49] The application meets all the requirements of s 78(2) of the Act. The application is granted. COSTS [50] I agree with both counsel that each party should bear its own costs. Indeed, this case appears to be the first in this jurisdiction that a court has been called upon to interpret and apply the provisions of s 78(2) of the Act. ORDER [51] IT IS ORDERED THAT: 1. The application is granted. 2. The first respondent’s right and interest in stand Number 13800 situate in the Township of Caledonia in the District of Harare up to the value of US$13 147 be and is confiscated to the State. 3. The Registrar of High Court shall issue a Writ of Execution Against Immovable Property requiring and directing the Sheriff for Zimbabwe to attach and take into execution the immovable property of the first respondent, being stand Number 13 800 situate in the Township of Caledonia in the District of Harare to cause to be realised therefrom the sum of US$ 13 147. 4. Each party shall bear its own costs. The National Prosecuting Authority, applicant’s legal practitioners Sadowera Kuwara, first respondent’s legal Practioners. HH 76-25 HCHACC 167/24