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Landmark currency conversion ruling awaits Constitutional court confirmation

20 Feb, 2023 - 00:02 0 Views
Landmark currency conversion ruling awaits Constitutional court confirmation High Court

The Chronicle

Patrick Chitumba, Midlands Bureau Chief
HARARE High Court Judge, Justice Joseph Mafusire, has ordered the Central Africa Building Society (CABS) to pay back architects, Stone/Beattie Studio Partnership, US$142 000, which was liquidated into local currency in 2018.

The architects represented by one Penelope Douglas Stone and Richard Harold Stuart Beattie sued CABS as well as the Reserve Bank of Zimbabwe and the Ministry of Finance and Economic Development arguing that if their banker did not pay, then the central bank and treasury should.

Justice Mafusire ruled that the conversion was unconstitutional. The ruling is subject to confirmation by the Constitutional court.

According to the judgement in possession of this publication, Justice Mafusire ruled that the conversion of the United States dollar amount into local currency 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 as at 28 November 2016 violated Section 71 of the Constitution.

“The first respondent shall pay the applicants the sum of USD142 000, together with interest thereon at the rate of 5 percent per annum from 28 November 2016 to the date of payment,” he ruled.

According to the background, the first respondent is a building society.

“It is a bank or an authorised dealer for the purposes of exchange control regulations. At all relevant times the applicants were in business as architects. They banked with the first respondent.

“As at 28 November 2016, the balance in their account was $142 000. The designation                                          of the account was USD,” reads part of the judgement.

Money – Image taken from Pixabay

The designation notes the judgement was in line with the currency regime in force at the time. At the time, the national economy was on a multi-currency system.

“That had been the situation since 2009. In terms of that system, the currencies of other countries, specifically the British pound, the Euro, the USD, the South African rand, and the Botswana pula had been made legal tender in Zimbabwe, courtesy of an amendment to the Reserve Bank Act (Chapter 22:15).

“The local currency would float and find its own level in the basket of all these other currencies. Over the years, the local currency depreciated in value so much that it practically became non-existent,” reads part of the judgement.
Stone/Beattie Studio Partnership want back their money — US$142 000.

“If the first respondent, their banker, will not pay, then the second and third respondents, collectively the monetary authorities, should. The applicants allege these monetary authorities are partly the reason the first respondent will not pay.

“The applicants want a whole range of some financial legislation, and certain monetary policies or directives, set aside on the grounds of constitutional invalidity,” reads the judgement.

Stone/Beattie Studio Partnership first came to the court in 2019 and the subject matter was the same. Justice Mafusire said the court ruled in their favour by directing the first respondent to pay.

“The first respondent did not pay. All the respondents appealed separately. The appeals succeeded. The judgment of this court was vacated. That was in March 2021. In August 2021 the applicants were back in this court,” he said.

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