Metbank has been ordered to pay back $20 million worth of Treasury Bills to the National Social Security Authority (NSSA), after a judge said the bank’s court bid to keep the TBs had come “tumbling down in humpty-dumpty fashion”.
The case around the TBs forms part of the separate case in which Prisca Mupfumira, the former Labour Minister, is being charged for abuse of office.
In a judgement reached in June but only recently made available, High Court judge Nicholas Mathonsi ordered Metbank to return to the three TBs it had been holding as security.
Metbank had, in 2017, controversially secured the TBs from NSSA as security for some third party borrowings, but the bank failed to return the bills by June 2018 as agreed. After negotiations over the bills failed, NSSA then went to court, seeking the return of the three TBs or a payment of $20 million, plus a 5% per annum penalty fee on the $20 million, collection commission and costs of suit on the adverse scale.
NSSA, represented by advocate Tawanda Zhuwarara, told the court that Metbank had ignored a notice on 7 August, 2018, to remedy the breach of contract.
Through its legal representative, advocate Fadzayi Mahere, Metbank insisted it did nothing wrong, saying “there is no agreement between the parties” and that NSSA had not delivered any “formal agreement” to Metbank. Mahere argued that NSSA was in fact demanding the TBs back before they were due.
While Zhuwarara argued that the 2017 document the parties signed was a binding and enforceable security lending agreement under which Metbank was required to return the TBs, Mahere had insisted that what NSSA and her client had agreed to were negotiations that would be part of a formal agreement.
After pre-trial conferences, only two issues were left for the court to decide on; firstly, whether there was indeed a binding agreement on the TBs, and whether Metbank had any lawful basis to keep the TBs. However, Metbank then raised a preliminary issue.
“She (Mahere) submitted that a litigant who seeks the return of its property must proceed by way of vindication proceedings. It is incompetent for such litigant to plead its claim in contract,” Mathonsi noted. “In Ms Mahere’s view, when a claim is pleaded in contract and a breach is alleged, the competent relief is to seek specific performance or damages.”
However, Zhuwarara, for NSSA, described Mahere’s point in limine “as being the fruit of an idle mind fixated on buying time in the most callous manner”. He argued that NSSA’s claim was based entirely on a contract and that the claim before the court said so. – NewZwire