CABS will not pay a client US$179 000 in foreign currency, being the balance converted to local currency at the height of currency reforms in 2019, after the High Court ruled that courts have no power to review Government policy on banking matters.
Mr Duncan Hugh Cocksedge had approached the High Court seeking an order compelling the bank to pay him the money it effectively converted to local currency in his account back to US dollars.
He also sought to impugn the Reserve Bank of Zimbabwe exchange control directive converting US dollars’ accounts into RTGS accounts as unconstitutional.
But the court refrained from deciding what it saw as a pure political question.
In a judgment handed down on Monday, Justice Webster Chinamora found Mr Cocksedge’s claim for repayment of his money in foreign currency contemptuous of the Government’s policy directive.
The judge took a view that the regulation of banking activities to achieve stability in the economic sector falls exclusively within the realm of the executive arm of Government.
“Put it 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,” said Justice Chinamora.
“Courts in this jurisdiction are familiar with the political questions doctrine and how to deal with a case where this arises.”
The Supreme Court has since confirmed that all balances and liabilities which were denominated in United States Dollars before February 22, 2019 became balances in Zimbabwean dollars at par with the United States dollar.
To this end, Mr Cocksedge’s claim for repayment in United States currency could not be sustained if it did not qualify under the provisions of section 44C of the Reserve Bank Act.
Mr Cocksedge’s account could not escape the consequences of the decision of the Supreme Court in Zambezi Gas Zimbabwe (Pvt) Ltd versus N.R. Barber and others and, Justice Chinamora flagged the claim as a disingenuous stunt to try and reverse the effects of the judgment in Zambezi Gas Zimbabwe.
“I also find the claim for repayment in the United States dollar against CABS a bit cynical, given that the banking institution was only complying with the law.
“I will therefore award costs on the scale of client and attorney in respect of CABS and costs on the ordinary scale to the second and third respondents,” he said, dismissing the claim.
This means that Mr Cocksedge has to pay the authorised fees of the CABS lawyers, as well as the far lower general legal costs of copying and serving papers and the like in the ordinary costs.
Justice Chinamora disagreed with Mr Cocksedge’s lawyer Mr Tendai Biti that by abiding by the RBZ directive and the Finance Act (No. 2) of 2019, CABS had failed in its duty to exercise caution in respect of Mr Cocksedge’s account.
He ruled that a registered and regulated banking institution would, in his view, be acting to the detriment of its clients if it behaved like a rebel and disobeyed the country’s banking laws and directives issued by its regulators.
“Section 17, as we have seen, makes this mandatory. My view is that no fault can accrue to CABS for complying with the law,” Justice Chinamora said.
Advocate Thabani Mpofu represented CABS, while Mr V Mhungu and Mr D Jaricha acted for RBZ and the Ministry of Finance and Economic Development. – The Herald
