Attachment of Reserve Bank of Zimbabwe property in settlement of debts is not an option for creditors and those owed should simply wait for the central bank to pay them through good faith when the money is available, the High Court has ruled.
Justice Tendai Uchena made the finding while removing five RBZ immovable properties from attachment over an outstanding debt of $2,1 million. In 2008, RBZ ordered 60 tractors from Farmtec Spares and Implements at the height of the farm mechanisation programme worth $2,1 million, but failed to pay.
The company successfully sued RBZ, but Justice Uchena last week agreed with the RBZ’s lawyer Advocate Lewis Uriri that the central bank’s property was State property and that it was protected in terms of the State Liabilities Act.
Justice Uchena ordered Farmtec to have the caveat which announced the attachment of the property cancelled with immediate effect.
“I, therefore, order as follows:
“That the first respondent (Farmtec) be and is hereby ordered to perform all acts necessary to cancel caveat 46/2010 registered, with the office of the 3rd respondent (Deeds Office) within seven days of this order.
“In the event that first respondent does not comply with paragraph 1, the second respondent (Sheriff) be and is hereby ordered to perform all acts necessary for the cancellation of caveat 46/2010 on behalf of the first respondent . . .”
The judge ordered Farmtec to pay costs of the suit.
The properties included:
1. Stand 548 Kariba Township (2 927 square metres)
2. Stand Number 1096 Greendale in Harare (1,6 hectares)
3. Stand Number 17613 Harare (1 483 square metres)
4. Stand Number 82 Umtali (1 487 square metres)
5. Stand Number 138 Rodel Township Nyanga (1,9740 hectares)
The decision was based on an amendment made to the RBZ Act through Statutory Instrument Number 115/10.
Section 63B was inserted in the RBZ Act, which protects the central bank’s property from execution.
Justice Uchena said the law equated RBZ property to State property, which could not be attached.
“The legislature obviously intended to equate the applicant to State organs which cannot be executed against because it had accrued debts which left it open to detrimental executions,” he said.
“This, in my view, is why the provisions had to first be made by way of Presidential Powers (Temporary Measures), and when enacted, through the General Laws Amendment Act Number 5 of 2011, had to be backdated to June 18 2010.” Farmtec’s lawyer Mr Davison Kanokanga of Kanokanga and Partners argued that the provisions of Section 63B of the RBZ Act should not affect a decision which was made before they came into effect.
He argued that the judgment was issued before the amendments and that the law does not have retrospective effect. But Adv Uriri succeeded in convincing the court that the provisions of the same section specifically states that the law applied to cases which were pending on June 18, 2010.
In terms of the agreement between RBZ and Farmtec in 2008, 150 tractors were to be delivered to the central bank for the farm mechanisation programme. In October 2008, the company managed to deliver the first batch of 60 tractors but payment was not made. That resulted in the firm not delivering more. Despite claims, the central bank never paid the debt resulting into the dispute spilling into the High Court. herald