This is an appeal against the judgment of the High court
granting an order for payment to the respondent of USD4,960,305=70 which the
appellant received into its own account from Standard Chartered Bank and
Commercial Bank of Zimbabwe, pursuant to a directive issued to the banks to
transfer the money from accounts held with them by the respondent.
After hearing argument from counsel for both parties the
appeal was dismissed with costs. It was indicated that reasons for the decision
would follow in due course.
These are they.
The appellant and the respondent are bodies established in
terms of the respective statutes for the achievement of specific purposes. They
are legal entities with a right to sue and be sued. The respondent is
established in terms of the Revenue Authority Act [Chapter 23:11]. The purpose
for which the respondent was established is to act as an agent of the State in
assessing, collecting and enforcing the payment of all revenues due to the State
and the transfer of that revenue to the Consolidated Revenue Fund for
appropriation by Government.
The Revenue Authority Act [Chapter 23:11] confers upon the
respondent, the relevant powers, the exercise of which is to ensure the
achievement of the purposes for which it is established. In this regard, the
respondent is authorized to open accounts with banks to receive deposits by
individuals of the revenue due to the State. The respondent is under an
obligation, as an agent, to account for all the money deposited into the
accounts and generally collected by it, by transferring the money into the Consolidated
Revenue Fund. Under section 101 of the Constitution of Zimbabwe, the respondent
is under an obligation not to transfer that money to anybody, other than the
Consolidated Revenue Fund. Section 101 of the Constitution provides that:
“101 Consolidated Revenue Fund
All fees, taxes and other revenues of Zimbabwe from
whatever source arising, not being moneys that -
(a) Are
payable by or under an Act of Parliament into some other fund established for a
specific purpose; or
(b) May, by
or under an Act of Parliament, be retained by the authority that received them
for the purpose of defraying the expenses of that authority;
shall be paid into and form one Consolidated Revenue Fund.”
Section 101 of the Constitution is given effect to by section
28(2) of the Revenue Authority Act [Chapter 23:11] which requires that revenue
collected by the respondent in terms of any enactment shall be paid into the
Consolidated Revenue Fund. Section 102(3) of the Revenue Authority Act [Chapter
23:11] provides that it is trite that no money can be withdrawn from the
Consolidated Revenue Fund unless an act of Parliament authorizes such
withdrawal and prescribes the exact manner and form of such withdrawal. Section
102(3) of the Revenue Authority Act [Chapter 23:11] provides that:
“(3) No moneys shall be withdrawn from any public fund,
other than the Consolidated Revenue Fund, unless the issue of those moneys has
been authorized by or under an Act of Parliament…,.”
Section 103 of the Revenue Authority Act [Chapter 23:11] lays
down the procedure by which authority may be sought from Parliament, through
the Minister of Finance, for withdrawal of money from the Consolidated Revenue
Fund:
“103 Authorization of expenditure from Consolidated Revenue
Fund
(1) The Minister for the time being responsible for finance
shall cause to be prepared and laid before the House of Assembly, on a day on
which the House sits, before or not later than thirty days after the start of
each financial year estimates of the revenue and expenditure of Zimbabwe for
that financial year:
Provided that if, by reason of the prorogation or
dissolution of Parliament, the provisions of this subsection cannot be complied
with, the estimates of the revenue and expenditure shall be laid before the
House of Assembly, on a day on which the House sits not later than thirty days
after the date on which the House first meets after that prorogation or
dissolution.
(2) When the estimates of expenditure, other than
expenditure charged upon the Consolidated Revenue Fund by this Constitution or
an Act of Parliament, have been approved by the House of Assembly, a Bill, to
be known as an Appropriation Bill, shall be introduced into the House providing
for the issue from the Consolidated Revenue Fund of the sums necessary to meet
that expenditure and the appropriation of those sums, under separate votes for
the several heads of expenditure approved, to the purposes specified therein…,.”
The appellant is established under the Reserve Bank of
Zimbabwe Act [Chapter 22:15] for the purposes of managing the financial affairs
of private banking institutions and those of the State in terms of the law. The
powers which the appellant exercises in the execution of its functions are set
out in section 45 of the Banking Act [Chapter 24:20] which provides:
“45 Responsibilities of Reserve Bank
(1) Subject to this Act, the Reserve Bank shall be
responsible for -
(a) Continuously
monitoring and supervising banking institutions and associates of banking
institutions to ensure that they comply with this Act; and
(b) Conducting
investigations into any particular banking institution or class of such
institutions, where the Reserve Bank considers such an investigation necessary
for the purpose of preventing, investigating or detecting a contravention of
this Act or any other law.”
Section 6(1)(d) of the Reserve Bank of Zimbabwe Act [Chapter
22:15] imposed a duty on the appellant to discharge its functions with the view
of advancing the general economic policies of the Government.
It was repealed by Act 1 of 2010.
The appellant argued that the directive to the banks,
issued in 2009, was in terms of section 6(1)(d) of the Reserve Bank of Zimbabwe
Act [Chapter 22:15]. Section 6 of the Reserve Bank of Zimbabwe Act [Chapter
22:15] provides:
“6 Functions of Bank
(1) The functions of the Bank shall be -
(a) To
regulate Zimbabwe's monetary system; and
(b) To
achieve and maintain the stability of the Zimbabwe dollar; and
(c) To
foster the liquidity, solvency, stability and proper functioning of Zimbabwe's
financial system; and
(d)…,.
[Paragraph repealed by Act 1 of 2010]
(e) To
supervise banking institutions and to promote the smooth operation of the
payment system; and
(f) Subject
to Part VII, to formulate and execute the monetary policy of Zimbabwe; and
(g) To act
as banker and financial adviser to, and fiscal agent of, the State; and
(h) Whenever
appropriate, and subject to any written directions given to it by the Minister,
to represent the interests of Zimbabwe in international or inter-Governmental
meetings, multilateral agencies and other organizations in matters concerning
monetary policy; and…,.”
The import of section 6(1)(d) of the Reserve Bank of
Zimbabwe Act [Chapter 22:15] was that the appellant was under a duty to advance
the general economic policies of the Government of Zimbabwe by doing those
things which are permitted by the law. That would be out of monies of the State
held with the appellant as section 8(1) of the Reserve Bank of Zimbabwe Act [Chapter
22:15] requires it to act as the banker to the State.
Under section 8(1) of the Reserve Bank of Zimbabwe Act [Chapter
22:15], the respondent may be called upon to meet the settlement, by Government,
of its obligations towards its debtors.
In January 2009, the respondent's Governor issued, through
a monetary policy statement announcement, a directive to all commercial banks
to transfer all foreign currency held by individuals and institutions with
them, into the appellant's own account.
The appellant contends that it issued the directive in
terms of the authority granted to it under sections 6(1)(d) and 8(1) of the Reserve
Bank of Zimbabwe Act [Chapter 22:15].
As a result of the directive, Standard Chartered Bank and
Commercial Bank of Zimbabwe, transferred into the appellant's account, funds
totalling USD$4,960,305=70, from the respondent's accounts held with them.
The directive was later suspended in respect of monies held
in the respondent's accounts.
The appellant did not refund the money.
On 12 and 26 March and 17 April 2009, the respondent's
Commissioner General, who is the accounting officer responsible for the
discharge by the respondent of all of its functions in terms of the Revenue
Authority Act [Chapter 23:11], wrote to the appellant requesting that the
monies be refunded. There was no response. The appellant did not accede to the
proposal for a meeting between the parties, which are both Government
institutions, to discuss the matter with a view of finding an amicable solution
to the problem.
The Commissioner General, with the approval of the
respondent's Board of Directors, was compelled to institute proceedings on 20
July 2009, in the High Court for the respondent to recover the money.
In defending the claim, the appellant argued that it had a
right, under sections 6(1)(d) and 8(1) of the Reserve Bank of Zimbabwe Act [Chapter
22:15], to issue the directive in question. The appellant argued, further, that
the respondent should have sued the commercial banks, as opposed to itself, for
the recovery of the money. The reason given was that there was no privity of
contract between the two. The third argument raised by the appellant was that section
18 of the Reserve Bank of Zimbabwe Act [Chapter 22:15] granted it immunity from
proceedings of this nature.
The court a quo dismissed the defence on the grounds of the
obligations imposed on both parties by the provisions of sections 101, 102 and
103 of the Constitution. It did not consider the other grounds of opposition to
the claim.
On appeal, the failure by the court a quo to consider the
other grounds of opposition has been relied upon to support the contention that
there is a misdirection justifying interference with the judgment appealed
against.
In Foroma v Minister of Public Construction and National
Housing & Anor 1997 (1) ZLR 447 (H)
SMITH J held that the Housing and Building Act [Chapter 22:07] does not contain
any provision authorizing the disbursements of public money for the purpose of
funding a (VIP) housing scheme.
Withdrawal from the Consolidated Revenue Fund to support
the scheme had therefore been unlawfully effected.
The obligation imposed by the Constitution applies to all
concerned, including the respondent, the commercial banks, and the appellant.
The obligation is clear in that it prohibits, in absolute terms, any transfer
of revenue collected by the respondent to any other recipient except the
Consolidated Revenue Fund. Any act which has the effect of transferring the
money to any other recipient prior to it getting into the Consolidated Revenue
Fund, would be unlawful under the Constitution - regardless of who authorizes
that transfer. It would not be a valid defense to say that the money was used
by Government, or that the directive came from Government, because the
Constitution is binding on the Government.
Zimbabwe is a Constitutional democracy.
The attempt by the appellant to raise privity of contract
between the respondent and the commercial banks is of no consequence. In any
event, it is clear that the appellant overshot the scope of its powers under sections
6(1)(d) and 8(1) of the Reserve Bank of Zimbabwe Act [Chapter 22:15]. The
sections placed on the appellant an obligation, limited to the exercise of the
powers of monitoring financial systems.
The obligation to advance economic policies of
the Government, by making funds available to it, is limited to the appellant
having monies in its own accounts. The obligation does not authorize the
appellant to force transfers of money from other people's accounts.
