ZIMBABWE’S CURRENCY CRISIS PITS 2 COMPETING JUDGMENTS IN THE HIGH COURT; By Lincoln Majogo.

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Introduction

Within a fortnight, the High Court of Zimbabwe has handed 2 dissenting judgments on a similar issue. One which I shall refer to as the Mafusire judgment (Judgment handed down by Justice Mafusire in Stone Beattie v CABS & Ors HH 118-23) and another, which I shall refer to as the Chinamora judgment(Judgment handed down by Justice Chinamora in Duncan Hugh Cocksedge v CABS & Ors HH 152-23). Both judgments relate to the right to withdraw United States dollar deposits held in bank accounts before 22 February 2019 in that currency. The Applicants in both matters insist on withdrawing their money in United States dollars(USD), the currency in which they deposited their funds, and not in local currency at the rate of one as to one with the Zimbabwean dollar.

The chief grievance of the Applicants stems from various laws that were passed by the Government of Zimbabwe from the period 2015-2019 whose effects were to convert USD balances held in banks before 22 February 2019 to local currency at the rate of one as to one with the Zimbabwean dollar. The Mafusire judgment declared the said laws inconsistent with the Constitution. I have written a summary of that case which can be located in my previous blog post (lincmajogo.blogspot.com). It is the Chinamora judgment that is recent and in that case, the court declared the said laws to be in the public and national interest. I will summarize the Chinamora judgment briefly below:-

Issues before the court

·         Whether CABS had violated its duty of care towards the Applicants by refusing to pay funds in USD upon demand.

·         Whether the Exchange Control Directive RT 120/18 was irrational.

·         Whether sections 22(1)(b)(d)(e) of the Finance Act 2 of 2019 violate the right to equal treatment before the law and the freedom from compulsory deprivation of property.

Findings of the court

·         CABS did not violate any duty of care because by refusing to pay the Applicants funds in USD upon demand, it was simply complying with lawful directives of the Reserve Bank of Zimbabwe (RBZ).

·         There was nothing irrational about the laws passed by the Government because they were genuinely pursuing national interests.

·         The Applicants failed to prove that their rights to property had been unlawfully limited. The actions of the Government were in the public interest to restore public confidence in the Zimbabwean dollar. There was no violation of the right to equal treatment because the Directive affected all banks as authorized dealers and not CABS as a particular bank.

Critical observations

The first observation to note is that the Chinamora judgment does not require a confirmation from the Constitutional Court because it did not declare any provisions to be inconsistent with the Constitution. It is the Mafusire judgment that awaits confirmation proceedings from the Constitutional Court.

Secondly, in the Chinamora judgment, the court awarded punitive costs against the Applicants on the basis that the application seems sinister because the Supreme Court in Zambezi Gas v NR Barber SC 3-20 settled the exact same issue that the Applicants are bringing in the High Court. It is key to stress that the Zambezi Gas case dealt with an entirely different issue which was whether a judgment debt qualified as a debt for the purposes of SI 33 of 2019. The court in that case did not deal with the constitutionality of the said laws which was the issue before the court in this matter. An award of punitive costs is therefore unfortunate and unwarranted because it deters “aggrieved persons” from approaching the courts for relief in the fear of having punitive costs awarded against them if they lose. In such times where we face economic hardships, if the poor live in fear of paying punitive costs in the event of loss, we risk making justice a commodity only for the rich and not everyone.

Conclusion

Generally, the High Court is not bound by its previous decisions. Although it is preferable to have similar judgments emanating from the same court for certainty to the public, there is nothing unusual about the present situation. If anything it simply shows the freedom that judges have to pass judgments even if they conflict with prior decisions from the same court.

 

 

Disclaimer

The contents and suggestions contained in this article are for information purposes only and are not for the purpose of providing legal advice. If need be, you should contact the author to obtain advice with respect to any particular issue or problem aforementioned herein. Contact details: Cell +263 718832210, Email: LincMajogo1@gmail.com

 

 

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