It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd Ors 2012 (1) SA 543 when he said:“Ever since the bursting of the South Sea Bubble ...
It is WALLIS JA, with HARMS AJ, VAN HEERDEN JA, MALAN JA and PETSE AJA all concurring who waxed lyrical in Executive Officer of the Financial Services Board v Dynamic Wealth Ltd & Ors 2012 (1) SA 543 when he said:
“Ever since the bursting of the South Sea Bubble in 1720, governments have recognised the need, in the interests of the investing public, for regulation of the financial services industry.”
The plaintiff, a public company registered in Zimbabwe sued the defendant for payment of US$1,007,541=30 together with interest at the prescribed rate and costs of suit, being the plaintiff's money allegedly appropriated by the defendant from the plaintiff's bank in pursuance of a Monetary Policy Statement issued in terms of section 46 of the Reserve Bank Act [Chapter 22:15] (“the Act”) and a directive issued to banks in terms of section 35(1) of the Exchange Control Regulations, Statutory Instrument 109/96, SI109/1996.
The defendant is established in terms of section 4 of the Reserve Bank Act [Chapter 22:15] and is charged with, inter alia, the regulation of Zimbabwe's monetary system, the supervision of banking institutions, and the smooth operation of the payment system as well as acting as banker and financial advisor to, and fiscal agent of, the State.
It is salutary that the defendant performs these functions in order to regulate banking and protect the banking public.
In the discharge of its duties aforesaid, the defendant issued a Monetary Policy statement, on 1 October 2007, centralising all foreign currency accounts and directing the lodgement, at its doorsteps, of all corporate foreign currency balances held by authorised dealers.
One such authorised dealer is Banc ABC where the plaintiff maintained a foreign currency account.
In compliance with the monetary policy, and a subsequent directive issued by the defendant, Banc ABC lodged the plaintiff's foreign currency balance with the defendant.
That is the last time the plaintiff saw the money, as the defendant did not return it to Banc ABC as a result of which the plaintiff was unable to access that money.
The plaintiff then sued the defendant aforesaid seeking to recover the money but the defendant contested the action averring, in its plea, that, there was no causal nexus between the parties given that the plaintiff and the defendant did not enjoy any banking relationship and that the plaintiff should have proceeded against its Bank, that is Banc ABC, and not against the defendant.
At the pre-trial conference, the parties agreed on the issues for trial as:
“1.1. Whether or not the plaintiff has a cause of action against the defendant.
1.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.”
When the matter initially came before me for trial, the parties were of the view that the facts were generally common cause. They then requested the deferment of the hearing to enable them, firstly, to agree on the facts, prepare and file a Statement of Agreed Facts as well as heads of argument.
In due course this was done, and the Statement of Agreed Facts signed and filed by the parties reads:
“1. The plaintiff is Trojan Nickel Mine Limited, a public company registered in accordance with the laws of Zimbabwe.
2. The defendant is the Reserve Bank of Zimbabwe. It is established in terms of the Reserve Bank of Zimbabwe Act [Cap 22:45] (“the Act”) with the power, amongst other things, to regulate the banking sector.
3. The plaintiff, at all material times, maintained a foreign currency account number ZWTROJ001CALUS0019 domiciled at Banc ABC, formerly the African Banking Corporation.
4. On 1 October 2007, the Governor of the defendant, Dr G. Gono, issued a Monetary Policy Statement in terms of section 46 of the Act. The Monetary Policy Statement provided, in pertinent part, as follows..,.:
'6.2. In order to achieve the twin objectives of boosting exporter viability and improving the economy's accountability for total export and other foreign currency receipts, as well as ensuring judicious allocation of the scarce foreign currency resources, it has become necessary that the Reserve Bank introduces a new frame-work where we pool our resources together without disadvantaging the generators of that foreign currency.
6.3. Within this spirit, of preserving and promoting the welfare of our generators of foreign currency, who are the geese that lay the golden eggs, it has become necessary that the Central Bank centralises the management of FCAs, along with the creation of an interest earning investment window that boosts exporter viability.
6.4. What this means is that, with immediate effect, all corporate FCA balances at Authorised Dealers are to be lodged at the Reserve Bank, such that each bank maintains mirror accounts for transactions tracing purposes.'
5. On 2 October 2007, the defendant's Division Chief, Exchange Control, one M.B. Mpofu, directed a minute to the Head, Exchange Control Department of all Authorised Dealers, which read(s) in pertinent part as follows:
'Dear Sir/Madam
DIRECTIVE ISSUED IN TERMS OF SECTION 35(1) OF THE EXCHANGE CONTROL REGULATIONS, STATUTORY INSTRUMENT 109 OF 1996
1. INTRODUCTION
1.1. Reference is made to the Mid-Year Monetary Policy Statement announced by the Governor on 1 October 2007. In order to operationalize the measures highlighted therein, Authorised Dealers are accordingly directed as follows…,.:
2….,.
3. CENTRALISED FCA MANAGEMENT
3.1. Authorised Dealers are advised, that, with immediate effect, all Corporate and Non-Governmental Organisations (NGOs) FCA balances, as at 1 October 2007, shall be lodged with the Reserve Bank.
3.2. Authorised Dealers shall transfer all their Corporate FCA (including EPZ Companies) and NGOs balances to the Reserve Bank by close of business on 2 October 2007, as directed by International Banking and Portfolio Management Division, and submit to Exchange Control, individual exporter balances on those transfers made.
3.3. Authorised Dealers are required to maintain mirror accounts for their exporting clients indicating individual entitlements for transaction tracking purposes.
3.4. Authorised Dealers shall submit to the Exchange Control Inspectorate monthly foreign currency account statements for their clients for which global balances should be consistent with holdings at the Reserve Bank's Internal Banking and Portfolio Management Division.
3.5. All special FCAs (transitory accounts) and FCAs for International Organisations, Embassies, and Individuals shall remain with Authorised Dealers.
3.6. In order to ensure that exporters preserve the real value of the foreign exchange deposits under the pooled framework, all such deposits shall earn an all inclusive (interest) rate of 12% per annum in foreign currency for USD, Pound, Euro, Pula and Rand.'
6. The Ban ABC was, and remains, an Authorised Dealer.
7. The plaintiff alleges, that, it had a foreign currency balance of USD1,007,541=30 as at 1 October 2007 in its FCA aforesaid.
8. Banc ABC, pursuant to the directive in para 4 above, remitted the sum of USD1,492,516=06 to the defendant.
9. The plaintiff alleges, that, it has been unable to access its funds from Banc ABC despite demand.
10. The plaintiff has sued the defendant for:
'Payment of an amount of USD1,007,541=30 which amount is due and payable to the plaintiff by the defendant: which amount represents the entire balance of the money which was held by the plaintiff in a foreign currency account in African Banking Corporation Limited: which amount was appropriated by the defendant some time in 2008: and which amount, despite demand, the defendant fails or refuses to pay.'
11. The defendant has pleaded to the summons as follows:
'The defendant pleads that there is no causal nexus between the plaintiff and the defendant, more particularly that:
(a) The plaintiff and defendant have no banking relationship and the defendant did not manage or keep a banking account of the plaintiff and owed the plaintiff no duties normally associated with a banker and its depositor.
(b) The plaintiff's claim should be against its banker and not the defendant. It is improper and there is no legal basis alleged which would entitle the plaintiff to bring a claim against the defendant.
WHEREFORE, the defendant prays for the dismissal of the plaintiff's claim with costs.'
12. The parties have joined issue and agreed on the following issues for disposition:
12.1 Whether or not the plaintiff has a cause of action against the defendant.
12.2. Whether or not the defendant is obliged to pay the amount claimed or any amount at all.
13. The parties respectfully pray that this honourable court may dispose of the agreed issues on the basis of the facts agreed herein and Heads of Argument to be filed by both parties.
DATED AT HARARE this 22nd day of May 2013.”
The Statement of Agreed Facts is duly signed by counsel for the parties.
