Section 5(1)(a)(ii) of the Exchange Control Act [Chapter 22:05] as read with section 4(1)(a)(ii) of the Exchange Control Regulations S.I.109 of 1996 penalizes exchange of any foreign currency with any person other than an authorized dealer.

Section 4(1)(a)(ii) and (3) of the Regulations states:

"(1) Subject to subsection (3), unless permitted to do so by an exchange control authority-

(a) No person shall, in Zimbabwe-

(i) .

(ii) Borrow any foreign currency from, lend any foreign currency to or exchange any foreign with any person other than an authorized dealer;

(b).

(2).

(3) Subsections (1) and (2) shall not apply to-

(a) The acquisitions of foreign currency outside Zimbabwe by an individual who is a Zimbabwean resident, where the foreign currency is acquired with free funds which were available to him at the time of the acquisition; or

(b) The sale or loan of free funds by an individual who is a Zimbabwean resident to a foreign resident, where the free funds were available to the individual at the time of the sale or loan;

(c) .

(d)."

The section delegitimizes the payment of the purchase price in foreign currency by a local resident to another local resident without exchange control approval provided the funds are not free funds.

In the present matter, the second defendant did not disclose his source of the rands.he did not demonstrate that the rands were free funds. By exchanging those rands with the plaintiffs.he contravened section 4(1)(a)(ii) of the Exchange Control Regulations.

Share prices are based on a variety of factors. These are grouped under the headings of fundamentals and sentiment. The historical and future performance of the businesses in which Old Mutual operates in, the strength of its management team, the economic environment in which they operate, and the strength of those business units, are some of the fundamentals that affect its share price.

Sentiment is often driven by speculation which may, or may not, have a basis in the fundamentals of the business units. Sentiment may cause a share to go north without any fundamental basis. The term irrational exuberance best captures the rise in share prices that is not based on fundamentals.

The use of the share price of one company, however widespread its tentacles, to determine the value of the currency of a country, undermines the power often arrogated, by law, to monetary authorities of that country. Countries are often in varying stages of economic development. A comparison of the share price of the same behemoth corporation operating in such disparate countries cannot be an accurate measure of the values of the currencies of those countries as against each other. In any event, the factors that are used by monetary authorities to fix the value of the currency are different from those used by investors to buy and sell shares. Small volumes of shares changing hands may cause the share price in a country to rise, while the absence of interest in another market may cause it to fall.

In my view, the value of the Old Mutual share cannot be an accurate barometer of the value of the local currency against other currencies for the reason that Old Mutual is not a microcosm of the macroeconomic conditions in Zimbabwe, or even, for that matter, of the other economies in which it operates. It is for these reasons that I am not satisfied that it is an acceptable method of assigning value to the local currency.

Further, in opposing the application, the respondent avers that, in any event, it was not lawful, in October 2008, for the parties to transact in foreign currency without the approval of the exchange control regulator.

Neither of the parties had this prior approval.

It is common cause that at the time that the parties entered into the Agreement, the legal tender in Zimbabwe was the Zimbabwean currency. This was prior to the introduction of the multi-currencies that are now legal tender in the country. Due to the ravages of inflation, the local currency had lost ground as a currency of transacting business but the monetary policy was slow in changing to catch up with the reality on the ground. As such, transactions concluded prior to February 2009, when the multi-currency system was formally introduced, had to be effected, or consummated, in local currency to avoid being tainted with illegality.

Having found that the binding agreement between the parties is the first Agreement, in which the price was denominated in foreign currency, the next issue that arises is whether such a contract can find expression in this court.

The defendant has argued that the contract is illegal and that this court should apply the ex turpi causa rule against it. The plaintiffs argue that the contract was not illegal as they were not dealing in foreign currency but had simply sold their properties for foreign currency. In this regard, counsel for the plaintiff's urged me to construct the meaning of the provisions of section 4(1)(a)(ii) of the Exchange Control Regulations 1996 (S.I.109 of 1996).

Section 4(1)(a)(ii) of the Exchange Control Regulations 1996 (S.I.109 of 1996) prohibits any Zimbabwean from borrowing, lending, or exchanging any foreign currency with any person other than an authorised dealer.

In Matsika v Jumvea Zimbabwe (Private) Limited and Another 2003 (1) ZLR (H), CHINHENGO J had occasion to comment on the application of the section. In that case, both parties, as in this case, were resident in Zimbabwe. The one sold to the other a motor vehicle. The price of the vehicle was denominated in foreign currency. The court held that the transaction was illegal as it contravened the provisions of the Exchange Control Regulations 1996 (S.I.109 of 1996).

I agree.

There is no doubt that the first respondent can statutorily fix fees without appraising the second respondent and the Reserve Bank – see section 4(2)(c) of the National University of Science and Technology Act [Chapter 25:13].

I am aware of the difficulties which have dissuaded the executor from relying on the tariffs for 2005, 2006, and 2007.

The effect of relying on such tariffs is that the executor will be laden with a bill in local currency – which currency has been rendered obsolete, or otiose, by the advent of dollarization. Although officially the local currency remains legal tender in this country, it is not a secret that the introduction of the multi-currency regime has literally led to the debasement of the Zimbabwe dollar and its subsequent and unceremonious disappearance from circulation.

In my view, the issues to do with the current value of the Zimbabwe dollar are issues which require the intervention of the legislature, and not the courts. The legislature must come up with an acceptable method of giving value to the Zimbabwe dollars that have literally been locked out of circulation. This has affected almost every citizen or enterprise in the country. The predicament the executor finds himself in is, therefore, not peculiar to him.

The first respondent..., insisted that it had a right to carry out a post importation clearance audit because it was not satisfied that -

(a) The applicant was the owner of the vehicle at the time of arrival;

(b) The applicant had purchased the vehicle through his own free funds; and

(c) The applicant was exempted from paying duty in foreign currency.

As for (c) above, I think the law stands clearly pronounced in the case of (1) Zimbabwe Revenue Authority and (2) The Minister of Finance v Murowa Diamonds (Pvt) Ltd SC41-09 where GARWE JA confirmed that “as a matter of law, if a Zimbabwean resident obtains the funds from an authorised dealer then he or she becomes exempt from paying duty in foreign currency.”

The relevant provision of the law (i.e. sections 2 and 3 of the Customs & Excise (Designation of Luxury Items) Notice 2007, S.I.80A of 2007 relied on by the applicant and given a different meaning by the first respondent provides as follows -

“2(1) Subject to s3, the Minister of Finance designates the items of goods whose tariff codes and rates of customs duty are listed in the first and third columns of the schedule below as luxurious items for the purposes of section 115(2) of the Act.

(2) Payment of customs duty and value-added tax on the importation of any item of goods designated as luxury item under subs(1) shall be payable in United States dollars, Euros, or any other currency denominated under the Exchange Control (General) Order, 1996 (S.I.110 of 1996).

3. The following persons shall be liable to pay duty and value-added tax on luxury items in terms of s2:

(a) Every resident of Zimbabwe who imports luxury items that were purchased using funds obtained otherwise than through an authorised dealer; and

(b) .....,.”

It is not disputed that in casu the execution of the financial arrangement between the applicant and Dr.E.Nhodza was through an authorised dealer.

Given the Supreme Court's interpretation of the above provisions of the law, and the acceptance that the applicant was indeed a returning resident, whose financial dealings were through an authorised dealer, there can be no doubt that the applicant fell within the ambit of the exemption clause. He was therefore entitled to pay duty in local currency, and that is exactly what he did – through lawful channels.

With regards to the question of funds, I do not find that the first respondent's argument is sustainable because there is no suggestion that the applicant handled his funds in an illegal manner. There is also no suggestion that the applicant lacked free funds. The applicant did not deny that the funds indeed came from Dr.E.Nhodza's account. The applicant gave the following explanation -

“I also explained that the funds used to purchase the vehicle were my own and held in account Dr.E.Nhodza. The payment indeed was effected through Standard Chartered Bank Zimbabwe, an authorized dealer in terms of S.I.80A of 2007.”

I do not find anything in the Customs and Excise (General) Regulations 2001 barring the applicant from entering into legal financial arrangements with any other person for the importation of the vehicle into Zimbabwe. The law merely requires the parties to proceed through an authorized dealer.

The Deed of Sale did not state where the payment was to be made...,. If it was to be in Zimbabwe it was still going to be contrary to the Zimbabwe laws.

Section 10(1) of the Exchange Control Regulations S.I.109 of 1996 states that -

“10(1) Unless authorized by any exchange control authority, no person shall, in Zimbabwe -

(a) Make any payment to or for the credit of a foreign resident; or

(b) Place any money to the credit of a foreign resident.”

Section 10(2) of the Exchange Control Regulations S.I.109 of 1996 states that -

“Subsection (1) shall not apply to:

(a) Any payment lawfully made from money held in a foreign currency account; or

(b) Such other transactions as may be prescribed.”

In his evidence, the plaintiff said he had no money a in foreign currency account and so he was not exempted from seeking authority.

It was his evidence that at the time of entering into the Deed of Sale he had not obtained authority from the Exchange Control Authority. There was no denying that the Deed of Sale obligated him to make payment for the credit of a foreign resident. It was also his evidence that at the time he attempted to make the first payment in Zimbabwe dollars he had not obtained the requisite authority.

Indeed, as at the date of the trial, which was well after the date when the last instalment was due, he still had not obtained the requisite Exchange Control authority. Even his purported tender of the full purchase price in Zimbabwe dollars was done without such authority. Such purported tender was therefore illegal and of no force or effect.

In Macape (Pty) Ltd v Executrix, Estate Forrester 1991 (1) ZLR 315 (S)..., McNALLY JA had this to say about the situation -

“In other words, where one is concerned with payments inside Zimbabwe, it is perfectly lawful to enter into the agreement to pay. But without authority from the Reserve Bank, the actual payment may not be made.”

In Barker African Homes Homesteads Touring & Safaris (Pvt) Ltd & Anor 2003 (2) ZLR 6 (S) SANDURA JA had this to say on payment in Zimbabwe dollars but for the credit of a non-resident..., -

“Whilst the agreement to pay Z$15,000,000= to or for the credit of Barker in Zimbabwe would not be unlawful, the actual payment would be unlawful unless authorized by the exchange control authority.This is so because of the wording of s10(1)(a) of the Regulations which read as follows -

'Unless otherwise authorized by an exchange control authority, no person shall, in Zimbabwe:

(a) Make any payment to or for the credit of a foreign resident.'”

I am of the view that even if the court were for some reason to accept that payment was to be in Zimbabwe dollars, which I am not accepting, any purported payment in furtherance of the Deed of Sale, or for the credit of the defendant, was unlawful.

This court cannot be seen to be sanctioning such purported payment as valid for the purposes of enforcing the Deed of Sale.

The plaintiff's purported tender was without authority and, so, unlawful.

Counsel for the plaintiff was asked to submit heads of argument addressing the validity or otherwise of the Agreement taking into account that payment for the transaction was to be made in foreign currency.

It was submitted, on behalf of the plaintiff, that the contract between the plaintiff and the defendant does not fall foul of any of the provisions of the Exchange Control Regulations, S.I.109 of 1996...,.. It did not contravene section 4(1)(a)(iii) of the Exchange Control Regulations, S.I.109 of 1996 since payment in United States dollars cannot be deemed “an exchange” of foreign currency. He quotes from the Oxford Learners Dictionary 6^th ed which defines the word “exchange” as follows -

“the process of changing an amount of one currency, that is money, used in one country for an equal value of another.”

The word exchange, in relation to the Exchange Control Regulations, S.I.109 of 1996 has been defined in Lloyd Gambiza v Pikirai Taziva HH109-08. On p4 of the cyclostyled judgment, GOWORA J quoted from Shorter Oxford Dictionary which defines “exchange” as a noun variously as follows -

“the action of an act, of reciprocal giving and receiving; a mutual grant of equal interest; the one in consideration of the other.”

In respect of the verb, the dictionary describes the following meaning to “exchange” -

“to change away, to dispose of by exchange; to give or part with (something) for something in return; to give and receive reciprocally; to interchange.”

Counsel for the defendant submitted that the facility violated Exchange Control Regulations and that the purported authority dated 9 February 2010 stated that approval was for the loan facility on 31 January 2003 yet the facility was only entered into in April 2003. There was, he argued, no evidence of approval for each drawdown.

3. The claim made more than six years after the debt was due was illegal due to the plaintiff's non-compliance with Exchange Control Regulations S.I.109 of 1996

The defendant did not, according to Mr Neil James Bruce's evidence, doubt the authenticity of the letter from the Reserve Bank of Zimbabwe dated 9 February 2010. In the main, what Mr Neil James Bruce believed was that each draw down had to be backed by a separate approval. However, it cannot be doubted that the plaintiff's recent approach to the Reserve Bank of Zimbabwe was for the purposes of prosecuting this case. The Reserve Bank of Zimbabwe must have been made aware of that fact and hence the response it gave. I do not believe an institution of the Reserve Bank of Zimbabwe's standing would deceive this court. That approval is further confirmed in exhibit 1...., where the document addressed to the Reserve Bank of Zimbabwe states...., as follows -

“The customer drewdown an offshore loan on 31/12/03 of USD49,364=88 (Forty nine thousand three hundred and sixty four United States dollars and 88/100) under Stanbic Treasury Facility of USD5,000,000= approval under reference GE514 dated 31 January 2003 by the External Loans Co-ordination Committee wherein banks were authorised to lend up to 75% of their FCA balances against export proceeds supported by valid CD'Is. This loan was drawn under the client's USD284,226=99 Offshore loan facility under which they drewdown as detailed below:

Stanbic Bank Zimbabwe Limited

A member of the Standard Bank Group of South Africa

1. USD34,929=52 value 22/10/03.

2. USD36,305=99 value 23/10/03.

3. USD46,772=09 value 23/12/03.

4. USD37,614=51 value 07/11/03.

5. USD39,620=20 value 10/12/03.

6. USD39,620= value 23/12/03.

7. USD49,364=68 value 31/12/03.”...,.

Paragraph 3 of the above document, which document captures the subject matter of the facility, clearly repeats what is contained in the letter of 9 February 2010 from the Reserve Bank of Zimbabwe. It was the defendant's evidence that Exchange Control approval was required prior to any disbursements. In casu, and in accordance with the law, disbursements were effected in April 2003 on the basis of approval already granted on 31 January 2003.  The last drawdown referred to above and based on the existing approval was made of 31 December 2003.  It is clear, therefore, from the quoted document that the plaintiff was already conducting routine business with the Reserve Bank of Zimbabwe on behalf of the defendant on the basis of the approval granted on 31 January 2003.

The plaintiff in this matter issued summons out of this court claiming a decree of divorce, custody of the minor children of the marriage, and other ancillary relief.

Four issues were referred to trial in terms of a joint pre-trial conference minute filed by the parties on 27 November 2008. The issues were agreed to as follows:

1. Whether the marriage has irretrievably broken down.

2. Who amongst the parties should have custody of the minor children and who should have reasonable access to them?

3. In what way and/or in what sum should the non-custodial parent contribute towards the minor children's maintenance?

4. What constitutes the parties' marital estate and how should it be distributed between the parties upon divorce?

At the commencement of the trial, the defendant conceded that the marriage had irretrievably broken down.

Therefore, the only issues that remained for determination by the court related to the custody and maintenance of the minor children and division of the property.

The plaintiff testified that he married the defendant on 2 May 1987. The marriage between them has irretrievably broken down as they have lived apart from 2002 when the defendant went to work in the United Kingdom. He is of the view that the marriage can no longer be resuscitated.

Three children were born out of the marriage. The eldest is a major and is living with the defendant and studying at a University in the United Kingdom. The two minors live with the plaintiff in Zimbabwe where they attend school, save for a brief period in 2004 when they relocated to the United Kingdom but had to come back when the defendant fell ill.

On 13 August 2002, and during the subsistence of the marriage, they purchased an immovable property being a certain piece of land situate in the District of Salisbury called Stand 322 Vainona Township of Vainona measuring 4,164 square meters otherwise known as Number 5 Otter Road, Vainona. The purchase price of the property was Z$38,000,000 (thirty eight million dollars). The plaintiff stated that this amount included the transfer costs and the furniture which they took over from the previous owner.

The plaintiff stated that in order to raise the purchase price the defendant sent 10,000 British pounds as her contribution towards the purchase price. He converted this money on the informal market at a rate of $1 to Z$1,000 and obtained Z$10 million. They sold a property which they owned in Marimba Park for Z$20 million. The plaintiff paid Z$11 million from his earnings from buying and selling cars and took out a mortgage for $5 million.

The property is registered in the joint names of the parties.

He suggested that upon divorce the property be retained until the youngest child attains the age of 18 whereafter it should be sold and the proceeds shared equally between the parties.

The plaintiff further testified that in May 2003 he purchased a Pajero motor vehicle from Japan. He bought the motor vehicle with no assistance from the defendant. He sold the motor vehicle in 2005 so that he could raise money to collect the children from the United Kingdom after their mother fell ill.

With regards to the movable household goods he suggested that each party keep the items in their possession. It was his opinion that as the defendant had been living in the United Kingdom since 2002 she had acquired property there and therefore she should retain what she had acquired whilst he retained what had been accumulated in Zimbabwe....,.

In cross examination, it was put to the plaintiff that the free rate of exchange in July 2002 was US$1 to Z$1,400 and not Z$1,000 which he said he had exchanged the money. He denied that that was the exchange rate. He also denied that the defendant had sent him a further 3,000 pounds in August 2002. He stated that although he did not dispute that the money was withdrawn from her bank account he does not know what she used the money for. He however could not explain why the defendant had withdrawn the money a few days after signing the Agreement of Sale. He denied that she had contributed towards the construction of a wall around the property. He stated that it had only cost Z$1,8 million. He also conceded that although the defendant had made a withdrawal of 5,823 pounds from her account he did not know how she had used the money....,.

When questioned by the court, he stated that he was in a position to pay out the defendant her share of the immovable property if he was given an opportunity to do so. He also stated that he was happy to share the movable property as they had agreed prior to the commencement of the trial....,.

The plaintiff's evidence, in relation to his contributions towards the purchase price of the immovable property, did not ring true. Indeed, a mathematical calculation of the money, according to his evidence, would end up with a surplus amount. He stated that he contributed Z$11 million, the defendant paid Z$10 million, and the proceeds of Z$20 million from the proceeds of the Marimba Park house all went to the purchase price of the house. He also took out a loan of Z$5 million for transfer fees. Thus, the total amount raised was Z$46 million when the purchase price was only Z$38 million.

Throughout his evidence, and cross-examination, he insisted that he wanted to retain all the movable property which they acquired in Zimbabwe. It was only when he was questioned by the court that he stated that they could share the movables in accordance with the agreement that they had reached prior to the commencement of the trial....,.

The defendant confirmed that she and the plaintiff had agreed on the distribution of their movable property. She produced, by consent, exhibit 11 which shows how their property should be shared.

Thus, the only dispute between the parties related to the immovable property.

The defendant told the court that she had given the plaintiff 10,000 pounds. She produced a document which she downloaded from the internet which showed the exchange rates as at July 2002. The defendant urged the court to accept the rate on this document as opposed to the rate which the plaintiff had said he changed the money.

In August 2002, she sent a further sum of 3,000 pounds towards the purchase price of the property. The defendant testified that in November of 2002 she sent a further amount of 5,823=94 pounds to assist with renovations on the property. A wall was erected around the property and a new leather lounge suite purchased. They put in tiles in the swimming pool and relocated the gazebo from the tennis court to the swimming pool.

The defendant stated that, from her calculations, she had paid the full purchase price for the immovable property without the assistance of the plaintiff and she was thus entitled to a 90% share. She stated that if she were to be given a period of six months she would be able to pay him out.

In cross examination, the defendant maintained that the plaintiff did not contribute at all towards the purchase price of the immovable property. She was adamant that the black market rate upon which they changed their money was set by Government. She stood firm in her evidence that she had sent further amounts to the plaintiff towards the purchasing and renovations of the house....,.

I found the defendant to be a good witness who was fair and gave credit where it was due....,.

With regards to her evidence in relation to her contributions towards the purchase price of the house it was apparent that she had no real knowledge about the rates of exchange and had left the financial responsibility in the hands of the plaintiff. Whilst there was clear evidence that she had withdrawn various sums of money from her bank account in the United Kingdom there was no real link between the withdrawal and how the money was subsequently used....,.

MATRIMONIAL PROPERTY

The plaintiff and the defendant were both agreed on how they would share their movable assets.

The bone of contention remained with regards to how the immovable property should be shared. The plaintiff argued that he is entitled to 50% share of the property as he not only contributed towards the purchase price but he is also a registered owner. The defendant, on the other hand, submitted that she should get 90% of the property as she paid the whole purchase price of the property.

It is now settled that in order for the court to achieve an equitable distribution it must take into account all the factors that are set out in section 7(4) of the Matrimonial Causes Act. In making the award, the court must endeavor to place the parties in the position they would have been had the marriage continued. In Shenje v Shenje 2001 (2) ZLR 160 (H) GILLESPIE J stated that the court must consider all the factors set out in section 7(4) of the Matrimonial Causes Act. He stated as follows…,:

"The factors listed in the subsection deserve a fresh comment. One might form the impression, from the decisions of the court, that the crucial consideration is that of the respective contributions of the parties.

That would be an error.

The matter of the contributions made to the family is the fifth listed of seven considerations. The first four listed considerations all address the needs of the parties rather than their dues. Perhaps, it is time to recognize that the legislative intent and the objective of the courts, is more weighed in favour of ensuring that the parties needs are met rather than that their contributions are recouped."

The evidence led during the trial related to the amount contributed by each party towards the purchase and development of the matrimonial home.

Whilst there was very little dispute with regards the amount the defendant sent from the United Kingdom towards the purchase of the property, the dispute centered largely in regard to the exchange rate which was used to change the money from pounds to Zimbabwean dollars.

The court is faced with a real challenge as the parties both accept that the money was exchanged illegally using the black market rate. Being an illegal rate there is no documentation which sets out the actual rate of exchange. The problem is also compounded by the fact that such transactions are carried out on a willing buyer and willing seller basis after negotiating the rate of exchange. As the transaction is illegal nothing is written down, and, therefore, it is impossible to ascertain what the actual rate used was for the transaction.

The defendant sought to persuade the court to use a document which she had downloaded from the internet which set out the rate of exchange on the black market at that time. It was her belief that the document had emanated from the Government.

However, an examination of the document shows that it is not an official document but an article which was prepared by an individual quoting the Governor of the Reserve Bank. The rate of exchange on the document which she asked the court to accept is an illegal rate which is not recognized by the laws of this country. I thus had difficulties in accepting the document as proof of the exchange rate between the Zimbabwe dollar and the American dollar at the relevant time; it would mean an acceptance by the court of the black market rate.

Whether the personal guarantees entered into by the defendants required exchange control permission, and, if so, whether the guarantees are enforceable

The answer to this question lies in the testimony of Jayesh Shah and Christopher Goromonzi concerning what the two agreed in regards to sureties.

Jayesh Shah stated that Christopher Goromonzi advised him that the loan was to retire a loan held with the African Export Import Bank, which bank would in turn purchase the security for USD4 million. In the event that the deal with the African Export Import Bank failed, Christopher Goromonzi assured him that the three defendants would be able to meet the instalments from other business deals and work they were involved in outside Zimbabwe. Under cross-examination, Jayesh Shah stated that Christopher Goromonzi assured him that all three defendants were beneficial owners of Barato Holdings Limited and each had resources, assets, businesses and acted as consultants for other banks in the Region and in the worst case scenario would be able to put up their own resources. He assured him that they would be able to cumulatively raise USD150,000= every second or third month and clear the debt by 30 December 2004. He stated that the arrangement was confirmed by Tapera William Nyemba, hence the repayment schedule in the loan agreement.

In essence, Jayesh Shah averred that he was assured by Christopher Goromonzi and Tapera William Nyemba that they held free funds that they could utilize in meeting the suretyships.

This evidence was not contradicted by either Christopher Goromonzi or Tapera William Nyemba. Josphat Sachikonye did not dispute that he had offshore assets; all he said was that he did not have amounts in the region of the loan amount.

I believed Jayesh Shah for the reason that his story had the ring of truth and was confirmed by the probabilities. He stated that he had requested Trust Bank Limited to guarantee the loan but was told that that would infringe Central Bank requirements against Directors borrowing from their own bank. In addition, the first and second defendants were high flying bankers, who, when push came to shove, left the country and set themselves abroad. The third defendant is a skilled accountant who was the Managing Director of the Zimbabwean subsidiary of a multinational corporation. It was common cause that in terms of section 11(2) of the Exchange Control Regulations, S.I.109 of 1996, as long as the defendants intended to meet the suretyship from free funds that were available to them at the time of the execution of the guarantees they did not require Exchange Control approval. The guarantees in question would not, at the time, be met from local assets which could only be disposed of in local currency and not in United States dollars as required by clause 4 of each Deed of Suretyship.

The plaintiffs sought to rely on the provisions of section 45 of the Exchange Control Regulations of 1996, but that section only relates to debts lawfully incurred or contracts lawfully entered into. 

In this matter, the second respondent appeared before a Magistrate sitting at Beitbridge on the 25^th April 2014. The second respondent was facing one count of contravening section 25(1)(a) as read with section 25(5) of the Immigration Act [Chapter 4:02], that is, failing to appear before and complying with the directions of the Immigration officer. 

The second count related to contravening section 20(1)(b) of the Exchange Control (General) Order 1996 Statutory Instrument 110/96, S.I.110 of 1996, as read with section 5(i)(a)(ii) of the Exchange Control Act [Chapter 22:05], unlawful exportation of foreign currency.

The brief allegations against the second respondent were that he attempted to leave the country without declaring money in his possession in the sum of US$70,205=, ZAR639,800= and that he failed to report to an Immigration Officer. 

The second respondent pleaded not guilty to both counts and was discharged at the close of the State case. The reason for the acquittal was that the evidence established that the second respondent is a permanent resident of South Africa. The magistrate in the court a quo properly applied the law in that section 21 of the Exchange Control Regulations, 1996 provides as follows:

“Subject to subsection (2), unless otherwise authorised by an exchange control authority, no person shall export or cause to be exported from Zimbabwe –

(a) Any Zimbabwean currency;

(b) Any foreign currency…,;

(2) Subsection (1) shall not apply to -

(c) Any foreign currency which has been imported into Zimbabwe by a foreign resident and is being taken or sent out of Zimbabwe by that person on his person or his baggage;…,. “

In casu, the second respondent, being a permanent resident of South Africa, was entitled to possess the foreign currency on his person or in his baggage. 

On the first count, the evidence led was also not sufficient to secure a conviction and the second respondent was properly discharged at the close of the State case.

On 29 May 2014, the applicant filed a Chamber Application for an order in the following terms:

“IT IS ORDERED THAT:

1. The order to return the seized money to the 2^nd Respondent made by 1<