Sikhumbuzo Moyo, Senior Sports Reporter
A landmark judgment by the Supreme Court that creditors who were owed before enactment of Statutory Instrument 33/99 should no longer be paid at the prevailing interbank rate has thrown a lifeline to perennial debtors such as Zifa and Highlanders.
The two organisations owe their creditors a combined $10 million but a judgment by Chief Justice Luke Malaba, sitting with Judges of Appeal Justice Susan Mavangira and Justice Nicholas Mathonsi, in a Zambezi Gas appeal means creditors that were owed before SI 33/19 was gazetted on February 22, 2019, will now be paid at the rate of one is to one that existed then.
The judgment was released on Monday.
Zambezi Gas appealed against a High Court judgment passed on June 25, 2018, that it pays NR Barber (PVT) Limited “the amount claimed (US$3 885 000) together with interest at the prescribed rate and costs of suit on an attorney client scale”.
Despite noting an appeal against the initial judgment, the High Court dismissed it on May 13, 2019.
“On May 21, the appellant (Zambezi Gas) deposited an amount of RTGS$4 136 806,54 into the first respondent (NR Barber Pvt Limited) account as settlement of the judgment debt plus interest and costs of suit.
“The first respondent (NR Barber Pvt Limited), through its legal practitioners, wrote to the appellant (Zambezi Gas) on the day of receipts of funds, complaining that the amount deposited was less the amount ordered by the court. The first respondent said the amount deposited was equivalent to US$144
788. 23. It used the interbank rate as at May 21, 2019. The contention was that the appellant still owed an amount of US$3 992 018, 31.
“The first respondent advised the appellant that it was instructing the second respondent (Sherriff of Zimbabwe) to proceed with the attachment of its property for sale in execution. The appellant respondent by a letter dated May 24, 2019, stating that the payment of RTGS$4 136 806,54 satisfied the judgment debt. It referred to the provision of s4(1)(d) of SI 33/19 for authority that the payment was a full and final settlement of the judgment debt,” read the court papers.
On July 4, 2019, the first respondent instructed the second respondent to attach the appellant’s properties in Hwange to recover the US$3 992 018,31 forcing Zambezi Gas to file an urgent chamber application in the court a quo seeking an order of stay of execution and a declaratory order to the effect that the judgment debt had been fully discharged in terms of SI 33/19.
“The matter of dispute between the parties was the correct interpretation of s4(1)(d) of SI 33/19,” Chief Justice Malaba ruled.
It was the higher court’s conclusion that the payment of RTGS$4 136 806.54 made by the appellant as settlement of the judgment debt was a full and final settlement of the judgment debt in terms of s4(1)(d) of SI 33/19.
“In the result it is ordered that the appeal is allowed with no order as to costs. The order of the court a quo is set aside and substituted with the following; the appellant’s payment of RTGS$4 136 806,54 is a full and final settlement of the first respondent’s judgment debt. There shall be no order as to costs,” ruled Chief Justice Malaba with the concurrence of Justices Mavangira and Mathonsi.
Reacting to the judgment yesterday, Zifa said while it empathised with its creditors, it is also obliged to follow the law.
“We are now poised to use this opportunity (Supreme Court judgment) to settle (all debts) with everyone,” said Zifa.
Zifa owed creditors in excess of $8,5 million during the 1:1 rate. For example, Zifa owed former national team coaches Kalisto Pasuwa and Norman Mapeza US$200 000 each for their tenure with the Warriors.
Following Monday’s Supreme Court judgment, Zifa will now pay the coaches ZWL$200 000 each.