High Court delivers landmark judgment on US$/RTGS conversion

Spread the love

HIGH Court judge Justice Joseph Mafusire has ordered financial institution Cabs to pay businessman Richard Harold Stuart Beattie and his wife Penelope Douglas Stone US$142 000 it converted to real time gross settlement during currency reforms in 2019.

Beattie and Stone were the joint applicants who were represented by Tererai Mafukidze instructed by Tendai Biti.

The respondents were Cabs represented by Thembinkosi Magwaliba, the Reserve Bank of Zimbabwe represented by Lewis Uriri and Finance minister Mthuli Ncube represented by one D Jaricha from the Attorney-General’s Office.

Mafusire pointed out that paragraphs 2.5 and 2.6 of the Exchange Control Directive RT120/2018, issued in terms of section 35(1) of the Exchange Control Regulations Statutory Instrument 109 of 1997 changing the currency situation, which Cabs relied on, was unconstitutional.

“The conversion of the amount of US$142 000 standing to the credit of the applicants savings account No 1005428905 with the first respondent (Cabs) as at November 28, 2016 violated section 71 of the Constitution,” Justice Mafusire ruled.

He said the aforesaid paragraphs of 2.5 and 2.6 of the Exchange Control Directive RT 120/2018 were impeachable because among other things, they together with the legislative provisions specifically singled out were collectively the device by which the second and third respondents improperly interfered with the contractual rights and obligations as existing between the applicants and the first respondent, resulting in among other things, the deprivation of the applicants right to property in breach of s71(2) of the Constitution,

“Additionally, paras 2.5 and 2.6 of the Exchange Control Directive RT120/2018 are ultra vires s35(1) of the Exchange Control Regulations 1996 in that they purported to arrogate themselves the power which the Exchange Control Regulations did not have and, in the process, purported to invade rights protected under s71(2) of the Constitution,” Justice Mafusire noted in his judgment.

“Paras 2.5 and 2.6 of the Exchange Control Directive RT 120/2018 dated October 4, 2018 are ultra vires s35(1) of the Exchange Control Regulations 1996, SI 109 of 1996 are hereby set aside.”

He also set aside section 22(1)(b) and (d) and section 22(4)(a) of the Finance (No 2) Act No7 of 2019 which violates s71 of the Constitution.

Justice Mafusire ruled that Cabs pay the applicants the sum of US$142 000 together with interest of 5% per annum from November 28 2016 to the date of payment.

“The government of Zimbabwe caused chaos and severe economic loss to millions of Zimbabweans when it demonitised the US dollar and introduced the valueless Zim dollar. We are pleased to announce that the High Court has declared unconstitutional the appropriation of US$ savings in our own case,” Tendai Biti Law tweeted after the ruling.

“Since 2019, we have acted for Richard Beattie and Penny Stone in their action to recover US$142 000 unlawfully converted by a bank. We are proud and privileged to have won yet another landmark.”

However, a senior official in the Finance ministry told NewsDay Weekender that they were likely to appeal the ruling.