Top News

Politics

Local News

Education

Crime and Courts

Business News

Entertainment

» » Legal Perspectives: Controversial Supreme Court Judgement



Fidelicy Nyamukondiwa


Can a Supreme Court judgement be appealed?


Until it delivers a judgement that concerns you, you may never know that the Supreme Court can throw people under the bus. It does not however leave everyone with goosebumps. While some will be under the bus, others will be rejoicing.  This editorial explores one of the controversial Supreme Court judgements handed down this year. It also clarifies the position of the law with regards to whether or not a litigant can appeal against a Supreme Court decision.
On 20 January 2020, the Supreme Court delivered a bombshell interpretation of Statutory Instrument 33 of 2019 in the case of Zambezi Gas Zimbabwe v N.R Barber and Anor (Zambezi Gas). This is the Supreme Court judgment that concluded that United States dollar debts are now payable in Zimbabwean dollars at a one to one rate.
Background information
On 20 February 2019, the RBZ Governor announced that local electronic balances, bond notes and coins would become ‘RTGS dollars’ as part of the country’s multi-currency system. He added that dollar balances in FCA Nostro accounts and mobile payment platforms, bond notes and coins would no longer be regarded as in equal value to US dollars. On 22 February 2019, Statutory Instruments 32 and 33 of 2019 were passed to give effect to the Monetary Policy measures.
Section 4(1) (d) of SI 33 of 2019 provides that; “… all assets and liabilities that were immediately before the effective date valued and expressed in United States dollars…shall on and after the effective date be deemed to be valued in RTGS dollars, at a rate of one-to-one to the United States dollar…” The effective date referred to in the section is 22 February 2019.
 On 24 June 2019, Statutory Instrument 142 of 2019 was promulgated. This is the SI that brought an end to the multi-currency system in Zimbabwe. It declared the RTGS dollar as the sole legal tender for all transactions in the country. The RTGS dollar is the Zimbabwean dollar (ZWL). On 1 August 2019, the Finance (No.2) Act, 2019 was promulgated. Its section 23(1) is a restatement of SI 142 of 2019.
The Zambezi Gas case.
On 25 June 2018, Zambezi Gas Zimbabwe Pvt Ltd (hereinafter ZGZ) was ordered by the High Court to pay USD$3 885 000(plus interests and costs of suit) to N.R Barber Pvt Ltd (hereinafter Barber). The payment was for services which Barber had rendered to ZGZ. Aggrieved by the High Court’s decision, ZGZ appealed to the Supreme Court. The latter dismissed the appeal on 13 May 2019.  Eight days later, ZGZ deposited ZWL 3 885 000-00 (plus interest and costs of suit) into Barber’s bank account. In total, it paid ZWL 4 136 806-54(including interests and costs of suit). Barber then queried that according to the Interbank rate, the deposited ZWL 4 136 806-54 was equivalent to only US$ 144 788-23 and hence US$3 992 018-31 was still owing. ZGZ‘s response was that in accordance with section 4(1) (d) of SI 33 of 2019, the ZWL 4 136 806-54 was the full and final settlement of the judgment debt.
Barber then engaged the services of the Sheriff to attach ZGZ’s property and sale it in a public auction to recover the ‘outstanding’ US$ 3 992 081- 31. ZGZ swiftly reacted by approaching the High Court with an urgent chamber application for an order to suspend the sale in execution and to declare the ZWL 4 136 806-54 as the full and final settlement of the debt in accordance with SI 33 of 2019. The High Court dismissed the application and ordered that the $ 4 136 806-54 be paid in US dollars and not Zimbabwean dollars.
This prompted ZGZ to take the matter back to the Supreme Court on appeal. It was then that the Supreme Court  was called upon to interpret section 4(1) (d) of SI 33 of 2019 and determine whether ZGZ was supposed to pay US$ 4 136 806-54 or ZWL 4 136 806-54. The Supreme Court allowed the appeal. It ruled in favour of ZGZ and declared that in terms of SI 33 0f 2019, the deposited ZWL 4 136 806-54 was enough to settle the debt.
Analysis and implications of the case.
One man’s meat is another man’s poison. The Zambezi gas case is meat for debtors and poison for creditors. The Zambezi Gas case did not change the law regarding the settling of USD debts in Zimbabwe. As hinted earlier on, what the Supreme Court did on 20 January 2020 was to give meaning to section 4(1) (d) of SI 33 of 2019.

 Of much relevance is its interpretation of the phrase ‘immediately before’. The Supreme Court elaborated that ‘immediately before’ does not mean ‘immediately before’ in the essence of time. At page 11 of the cyclostyled judgement, the Honourable Mr Chief Justice Luke Malaba explained that “The issue of the time-frame within which the liability arose in relation to the effective date of 22 February 2019 does not matter. What is of importance is the fact that the liability should have been valued before the effective date in United States dollars and was still so valued and expressed”.

The meaning of section 4(1) (d) of SI 33 of 2019 as interpreted by the Supreme Court is that as long as a debt or an asset (valued and expressed in USD) existed before 22 February 2019, such debt or asset would be regarded or considered to be valued as Zimbabwean dollars at a rate of 1 RTGS dollar to 1 US Dollar.
If therefore you had sold your house to John Doe for US$50 000 on 21 February 2019 (or any date before that) and he had only paid US$10 000 as at 22 February 2019, the amount that John Doe is entitled to pay to settle the debt in full would be ZWL $40 000. Simply put, the house is considered to be valued at ZWL 50 000 with effect from 22 February 2019.
Many would reason that a conversion of the US currency to Zimbabwean currency at a one to one rate amounts to a lesser value in Zimbabwean dollars. The fulcrum of Barber’s argument in the case was that a declaration to offset the debt in Zimbabwean dollars at a one to one rate would result in a US$ 3.9million loss. The Chief Justice however remarked that such a reasoning ‘is wrong at law’. It is no doubt that the Supreme Court’s decision is ‘poison’ to Barber and any other creditors who are owed substantial sums of money. Section 4(1) (d) of SI 33 of 2019 is no doubt the worst nightmare for creditors in Zimbabwe.  For ZGZ and similar debtors, SI 33 of 2019 is good news.
Is the Supreme Court’s decision final?
The Supreme Court is the final court of appeal in cases other than those which the Con-court has jurisdiction. The Con-court has jurisdiction over constitutional and other specified matters. It is therefore permissible to appeal the decision of the Supreme Court. A litigant can appeal against a Supreme Court decision if and only if the appeal is on a constitutional issue.
An Application for direct access to the Con-court is sanctioned by section 167(5) of the Constitution and Part IV of the Con-Court Rules (SI 61 of 2016). Part V of the Rules provides for appeals to the Concourt. Rule 32(2) states that a litigant who is aggrieved by the decision of any lower court (including the Supreme Court) and who wishes to appeal on a constitutional matter must seek leave to appeal. Leave to appeal simply means permission to appeal. The leave to appeal must be filed to the Registrar of the Con-court within 15 days of the decision to be appealed.
Conclusion
It is a fact that United States dollar debts incurred prior to 22 February 2019 are now payable in Zimbabwean (RTGS) dollars at a rate of 1 US$ to 1 ZWL.  In Zambezi Gas, the Supreme Court concluded that it iswrong at law’ to reason that a conversion of a foreign currency denomination to a local currency denomination amounts to a lesser value in the local currency.

 That section 4(1) (d) of SI 33 of 2019 is a welcome development for debtors and a nightmare for creditors is indubitable. As long as the Supreme Court decision in Zambezi Gas is not successfully appealed or as long as the constitutionality of SI 33 of 2019 is not successfully challenged, US dollar debts will remain payable in Zimbabwean dollars at a one to one rate.

Fiat Justitia Ruat Caelum!
Fidelicy Nyamukondiwa writes here his personal capacity. Contactable on 0785827154 nhanyams@yahoo.com  https://twitter.com/FidelNyams


About TellZim News

TellZim News; Keeping it Real...Committed to Tell Zimbabwe. No 39/40 Hellet Street, Masvingo. Call us on +263 39 262 401 email us on: editor@tell.co.zw
«
Next
Newer Post
»
Previous
Older Post

No comments

Leave a Reply