The
second issue for determination is whether or not the in
duplum
rule
applies to the fiscus.
The
rule states that interest runs only until the sum of the interest
unpaid is equal to the sum of the capital. The
applicant submitted that the rule was intended to protect borrowers
from the exploitation of lenders and it was entitled ...
The
second issue for determination is whether or not the in
duplum
rule
applies to the fiscus.
The
rule states that interest runs only until the sum of the interest
unpaid is equal to the sum of the capital. The
applicant submitted that the rule was intended to protect borrowers
from the exploitation of lenders and it was entitled to the
protection afforded by the rule. In this regard, the applicant relied
on a number of cases; CBZ
Ltd v MM Builders & Supplies (Pvt) Ltd & Ors
1996 (2) ZLR 420; Georgias
& Anor v Standard Chartered Finance
1998 (2) ZLR 488; Ehlers
v Standard Chartered Bank Zimbabwe Ltd
2000 (1) ZLR 136 (HC); and Conforce
(Pvt) Ltd v City of Harare
2000 (1) ZLR 445.
The
applicant further submitted that at the time when interest was
charged, the common law rule applied to the fiscus. This has however
changed with the amendment of the General Laws Amendment Act [Chapter
8:07]
by the Finance Act (No.2), Act 8 of 2005. The General Laws Amendment
Act was amended by the insertion of section 11A which provides that
the rule does not apply to the fiscus.
Section
11A of the General Laws Amendment Act [Chapter
8:07]
provides;-
“11A
Exclusion of in
duplum
rule
in certain cases
(1)…,.
(2)
For the avoidance of doubt, it is declared that the rule of the
common law known as the in
duplum
rule
that prohibits the payment of outstanding interest in excess of the
amount representing the capital or principal sum of a debt does not
apply to fiscal debts, that is, to debts by way of outstanding taxes
or duties or penalties in respect of the non-payment thereof that are
owed to the Authority by a person liable to pay such taxes, duties or
penalties under the Scheduled Acts.”
