HARARE – A local pensioner, Duncan Hugh Cocksedge, is counting his losses after his US$179,000 bank balance which was being held in a CABS account was wiped out after being wholly converted to local currency through government’s controversial Exchange Control Directive RT120/2018.
Duncan had approached the High Court seeking redress, but his application was thrown out by Justice Webster Chinamhora.
Chinamhora ironically departed from an earlier ruling of precedence by his colleague, Justice Joseph Mafusire who ruled recently that some sections relied on by CABS were in breach of the national constitution and contractual obligations between the applicant and the first respondent.
On his part, Justice Chinamhora averred that it was not for the courts to change “political questions”.
The judge also said the regulation of banking activities to achieve economic stability and protect the banking public were the prerogative of the Executive.
“Put differently, how the government makes policies aimed to achieve monetary stability and incentivise the generation of foreign exchange in the national interest is a political question, best left to the politicians.
“Courts in this jurisdiction are familiar with the political questions doctrine and how to deal with a case where this arises.
“No basis exists, in my view, for not deferring to the minister who made the policy decision on behalf of the Executive.”
He also said Cocksedge had not shown his court that the deposit in his account was realised from offshore or foreign currency cash deposits.
He added, “The applicant has not shown that the provisions of the Exchange Control Directive RT120/2018 and the Finance (No.2) Act 2019 are not laws of general application.
“As a result, I do not find any merit in the applicant’s argument, and am inclined to dismiss his application.”
Cocksedge’s claim was for reimbursement of his US$179,541 by CABS.
He also wanted an order nullifying the Exchange Control Directive No. R120/2018 and the court to declare the provisions of s22 (1) (b) (d) and (e) of the Finance (No.2) Act 2019 unconstitutional in that they violate s71 and 56 of the Constitution.
At all times, he had a bank account with CABS (first respondent) and as of December 5 2016, the balance in his account was US$179,541.45.
On May 4 2016, the Reserve Bank of Zimbabwe (RBZ), cited as the second respondent, made a policy announcement that it was going to introduce an export incentive in the form of bond notes.
Prior to that, RBZ had issued bond coins to complement the multi-currency system.
The policy statement dated May 4 2016 said RBZ had acquired a US$200 million foreign currency export facility to cushion the high demand for foreign exchange and provide an incentive facility of up to 5% on all foreign exchange receipts including proceeds from tobacco and gold sales.
Further to the policy statement, through an Extraordinary Government Gazette, the President enacted the Presidential Powers (Temporary Measures) Amendment of the Reserve Bank Act.
Conscious of loss of value on his account, Cocksedge wrote CABS on December 6 2016 asking the bank to preserve his account and not to deposit any more funds.
He wrote again on June 2, 2020 demanding payment of US$179,541.45 but the payment was not made.
In his alternative claim, Cocksedge said the conduct of the RBZ and the finance minister was “unlawful, grossly unreasonable and irrational”.
He said the changes in law, effectively amount to unlawful and unconstitutional expropriation of value.
Consequently, he submitted that these actions violated the provisions of ss 56 (1) and 71 of the Constitution of Zimbabwe.
CABS did not dispute that Cocksedge had deposited US$179,541.45 before February 2023.
The bank said its banking services are regulated by RBZ adding that it had no disputes with the latter.
The bank also argued that it never made a secret or undue profit from Cocksedge’s deposit but was also affected by the changes in the economy and the monetary environment.
CABS refrained from commenting on the unlawfulness or constitutionality of the Exchange Control directive and said if court was to find out that payment was to be made to the applicant in US dollars, it should be indemnified by the RBZ and the minister.
RBZ also argued that Cocksedge had no right to challenge the provisions of the Exchange Control Directive.
It said the directive was only issued to banks in their capacity as authorised dealers and Cocksedge was not privy to that directive.
According to RBZ, the amount being a debt owed by CABS to the applicant before February 22 2019, was affected by the provisions of the Finance Act (No.2) of 2019 which converted RTGS at the rate of one to one.
RBZ also said CABS had acted according to the law and as such, Cocksedge could not try to impugn a lawful act.
Finance Minister Mthuli Ncube also argued that the Exchange Control Directive does not take away Cocksedges rights.