The applicant herein is an association that comprises licensed tour and safari operators and represents their interests. The first respondent is the Zimbabwe Tourism Authority (the Authority) which is established under the Tourism Act [Chapter 14:20] and is primarily responsible for administering that Act.

Towards the end of 2007, the Zimbabwe Tourism Authority (the Authority) issued Circular No. ZTF/1/2007 addressed to all hunting operators to pay a 2% levy on all trophy fees received by them.

The applicant challenges the legality of that directive.

It seeks a declaratur that its members are not liable to pay any levy or surcharge on trophy fees paid by tourist hunters in designated tourist facilities. It also seeks an order restraining the respondents and their employees from taking any coercive action to enforce the levy.

Initially, in its opposing papers, the Zimbabwe Tourism Authority (the Authority) questioned the locus standi of the applicant as well as the propriety of the declaratory order sought by the applicant.

However, at the hearing of this matter, counsel for the Zimbabwe Tourism Authority did not persist with these ancillary issues.

The sole question for determination herein is whether the levying of the 2% surcharge on trophy fees is intra vires the Tourism Act and the Regulations made thereunder.

Tourism Act and Regulations

Section 2 of the Tourism Act [Chapter 14:20] defines a “designated tourist facility” to mean “any service, premises, place, or thing which the Minister has declared to be a designated tourist facility in terms of section thirty-five.”

Under section 35 of the Tourism Act:

“The Minister, after consultation with the Board, may, by statutory instrument, declare that —

(a) Any service whatsoever provided for tourists; or

(b) Any premises or place in or on which a service referred to in paragraph (a) is provided; or

(c) Any premises, place, or thing, whatsoever, which, in the Minister's opinion, affords an amenity to tourists;
shall be a designated tourist facility.”

The declaration of designated tourist facilities by the Minister was effected through the Tourism (Designated Tourist Facilities) (Declaration and Requirements for Registration) Regulations 1996 (SI106 of 1996).

In terms of section 3 of the Tourism (Designated Tourist Facilities) (Declaration and Requirements for Registration) Regulations 1996, S.I.106 of 1996, “the services, premises, or places specified in the First Schedule are declared to be designated tourist facilities.”

Item (c)(ii) of the First Schedule specifically lists as designated tourist facilities:

“services or facilities provided to tourists by…, hunting operators.”

Section 55 of the Tourism Act [Chapter 14:20] enables the fixing of levies and surcharges and provides, in its relevant portions, as follows:

“(1) After consultation with the Minister responsible for finance and the Board, the Minister may make regulations in terms of section fifty-seven prescribing levies to be paid by any class of registered tourist facilities or licensed persons.

(2) In prescribing any levy in terms of subsection (1), the Minister —

(a) Shall prescribe…,.; and

(b) May —

(i) Require any person conducting or operating a registered tourist facility to include in the price of any services rendered by him a surcharge at such rate as may be prescribed, and may require him to collect such surcharge;

(ii) Fix any other basis on which the levy shall be calculated.”

The levy envisaged by section 55 of the Tourism Act is prescribed in the Tourism (Designated Tourist Facilities) (General) Regulations 1996 (SI 107 of 1996).

Section 18 of the (Designated Tourist Facilities) (General) Regulations 1996, S.I.107 of 1996 requires the payment of a levy “in respect of all registered designated tourist facilities.”

Section 19 stipulates that:

“The levy shall be at the rate of 2 per centum of the gross amount, excluding sales tax or any other tax or duty charged to that [sic] tourist making use of any facility provided at the designated tourist facility concerned.”

Section 20(1) makes the operator of every designated tourist facility responsible for the payment and collection of the levy.

By virtue of section 20(2):

“The operator of a designated tourist facility shall add to the charge for accommodating each tourist thereat a surcharge equal to the amount of the levy payable in respect of the tourist concerned.”

Payment of Fees for Trophies

According to the applicant, its members charge their clients the stipulated 2% in respect of all services, facilities, and amenities provided, including hunting operations.

Furthermore, the tourist in question is charged an additional variable amount depending on the size of the animal to be hunted. Where the tourist fails to hunt any animal, he or she is refunded the additional amount paid. If the tourist is successful in hunting the animal, the trophy belongs to him or her exclusively, and the additional amount paid is retained by the hunting operator.

In these circumstances, the applicant's position is that the trophy per se does not constitute a service or facility provided by the operator.

According to the Zimbabwe Tourism Authority (the Authority), the hunting tourist is charged a pre-determined refundable fee for the right to hunt a specified animal, which right forms part of the facilities and services offered by the hunting operator. The trophy charge is not separately invoiced but is added to the daily rate charged to form part of the gross amount realized by the operator for hunting and all other services rendered to the tourist.

In short, the hunting services for which trophy fees are charged cannot be separated from the other services provided by the operator.

Whether Trophy Qualifies as Facility

The central question for determination in casu is this: Does a hunting trophy constitute a “facility” within the meaning of section 35 of the Tourism Act and Statutory Instrument 106 of 1996 so as to attract the levy and surcharge imposed by section 55 of the Tourism Act and Statutory Instrument 107 of 1996?

The word “facility” is defined in Black's Law Dictionary (5th ed.) and in Webster's New Twentieth Century Dictionary (2nd ed.) to mean:

“The easiness of access, the means by which something can be more easily done.”

It is common cause that hunting operations and safaris are facilities as defined in the legislation. It is also not in doubt that the trophy fee paid by a tourist to a hunting operator is a sum paid to be able to hunt through the hunting facilities provided by the operator. It follows, that, a hunting operation affords the means by which the tourist is able to access the trophy.

On this analysis, the trophy is quite clearly an intrinsic and inseparable part of the hunting services afforded by the operator. It cannot, in ordinary usage, be extricated from the service or facility provided by the operator. To do so would be tantamount to pure artifice.

As I perceive it, access to a trophy by a hunting tourist is analogous to the items provided in so-called mini-bars in hotel rooms. The tourist is charged a fixed rate by the hotel for the use of the room, including the mini-bar, as part of the facilities provided by the hotel. The tourist is at large, should he so desire, to consume items from the mini-bar. If he does, he is then required to pay an additional charge for the specific items that he has consumed.

A hunting trophy, in my view, is no different.

If the tourist succeeds in hunting an animal, he must pay the additional charge for his trophy which he has acquired solely by dint of the facility provided by the hunting operator.

It follows from the foregoing that a hunting trophy constitutes a “facility” as envisaged in the Tourism Act and its Regulations and is therefore subject to the levy and surcharge imposed thereunder.

In the result, the applicant is not entitled to the declaratur and interdict that it seeks and this application must be dismissed with costs.

These are twelve cases, which were consolidated into two matters, which were heard at the same time.

For easy reference, the one matter involved what may be called the ZimSun houses (five (5) defendants under HC2224/08). The five defendants being Alice Ndlovu, Sivumo Ndlovu, Kambarachi Zex Raura, Freda Khumalo and Simolita Maseko.

The other matter involved what may be called the National Housing Fund (“NHF”) houses ((seven (7) defendants under HC2225/08). The seven defendants being Loida Nyathi, Everson Ndebele, Collen Ndebele, Phindile Ncube, Sihlobo Sibanda, Shadreck Ndlovu and Stephen Ndlovu.

The trial lasted twelve days, which is understandable, considering that there were two witnesses for the plaintiff and twelve (12) witnesses for the defendants i.e. all the defendants.

Two of the defendants had died by the time the trial commenced, and they were substituted by the executrix of their estates.

There was a bundle of documents with slightly over four hundred (400) pages as well as some more documents which were later introduced during the course of the trial. However, a closer analysis will show that the issues are fairly simple, and are similar in the seven National Housing Fund (NHF) houses and the five ZimSun houses.

Basically, it boils down to this:

(a) Is the plaintiff the owner of the twelve houses in question, or are the defendants the owners?

(b) If the plaintiff is the owner, then the plaintiff is entitled to an order for:-

(i) Evicting the defendants.

(ii) Damages.

(iii) Costs of suit.

(c) If the defendants are the owners, then they are entitled to transfer of these houses into their names with an order for costs against the plaintiff.

In essence, the defendants have to prove that there were valid contracts of purchase in respect of each of the houses in dispute. The houses concerned are the following:

Loida Nyathi - House 4251
Everson Ndebele - House 4255
Collen Ndebele - House 4247
Phindile Ncube - House 4242
Sihlobo Sibanda - House 4246
Shadreck Ndlovu - House 4241
Stephen Mpofu - House 4244
Alice Ndlovu - House 4403
Sivumo Ndlovu - House 4401
Smolita Maseko - House 4408
Kambashu Zex Raura - House 4407
Fred Khumalo - House 4400

All these properties are at Chinotimba, Victoria Falls.

Cut to the bone, in all instances, the plaintiff claims that these are pool houses for use by plaintiff employees. The plaintiff contends that the defendants were given these pool houses by virtue of their employment with the plaintiff. It further being contended that upon termination of such employment, each individual defendant will cease to occupy the property in issue.

This position does not apply to one of the defendants, Stephen Mpofu, who was never employed by the plaintiff. His case is different but the bottom line is that he was granted occupation through a lease.

Of the twelve defendants, only two, namely, Sihlobo Sibanda and Smolita Maseko are still in the employ of the plaintiff.

As alluded to above, the defendants' counter claim is for an order directing the plaintiff to take all necessary steps to transfer the various stands to each defendant on the basis that the defendants purchased the Stands on a rent-to-buy scheme.

This is denied by the plaintiff.

It is beyond dispute that these properties in issue are registered in the name of the plaintiff. The plaintiff is the registered owner of these twelve Stands. This point is admitted in paragraph 2.3 of each of the defendants' plea under HC2225/08 and paragraph 2.5 in each defendants' plea under HC2224/08.

There are documents from the Ministry of Local Government (“Ministry”) dated 20 July 2000 (pages 45 and 55 of the bundle of documents) which evince the transfer from the Ministry to the plaintiff.

This creates a problem for the defendants who contend the Stands still belong to the Ministry.

They, however, did not take any legal action against the Ministry to prevent the transfer of the Stands from the Ministry to the plaintiff. Be that as it may, I propose to consider the evidence adduced by the parties in turn....,.

Phindile Ncube was employed by the plaintiff between 11 May 1987 and February 2009. He had joined the plaintiff as Revenue Clerk responsible for housing. In 1988 he was elevated to the position of Senior Housing Clerk responsible for the supervision of housing clerks and the computation of the home ownership scheme.

He gave a detailed account of the Government Housing policy....,.

He could not explain why he and the other defendants did not sue the Minister responsible for National Housing to transfer the houses in dispute to them, but adopted an attitude of supine indifference, when the said Minister transferred the said houses into the plaintiff's name....,.

This witness held himself out as an expert and the spokesperson for all the twelve defendants. He confidently described himself as a “local government practitioner”. He did this to try to speak with an authoritative voice that brooked no contradiction.

Regrettably, he failed dismally in this endeavour. He was an extremely poor witness. He was not credible as alluded to above. Further, he was a witness with an interest, not only in retaining Stand 4242 Chinotimba, but also because he had obviously misled the other defendants and given them the impression that he was the authoritative voice in respect of the twelve houses in question....,.

Phindile Ncube tried to assert that Central Government gave directives to Councils, such as the plaintiff and thus the plaintiff was obliged to obey these directives which had the force of law. In other words, the local authorities were only agents, or implementing arms of the Central Government.

This matter was initially placed before me under a certificate of urgency. As the final and interim relief sought on the provisional order were the same, I wrote an endorsement on the face of the application querying the manner in which the relief had been framed.

The letter of explanation was not placed before me and it was not until after some months that the matter was then brought to my attention. In the event, it was set down before me in chambers to be argued as an urgent application.

The respondents indicated a desire to file affidavits in opposition and it was agreed between the parties that the best way was for the matter to be dealt with as an opposed application. The parties thereafter filed their documents, including heads of argument, and the matter was then argued in court.

On the date of hearing, counsel for the applicants made reference to a number of authorities to which I had no access. He promised to avail them to me shortly thereafter, but, it was not until 31 May 2007 that this request was complied with. It was, as a consequence, virtually impossible to render a judgment soon after the hearing as I then was heavily committed in other duties.

I turn now to the application before me.

The applicants are unions representing members in the employ of the second respondent. The first respondent is a medical aid society set up for the benefit of the employees of the second respondent and would appear to have been set up by virtue of a Collective Bargaining Agreement between the second respondent and its employees.

It is common cause that the first respondent was collecting subscriptions from the employees and the second respondent. Benefits which the employees received were not related to the level of payment by the beneficiary and it was, consequently, a fact that the second respondent was operating as a welfarist society with its members being afforded the same benefits.

In August 2006, the second respondent put into effect a three-tier system where benefits were structured according to the level of contributions paid by respective members.

Following representations made to the second respondent, the changes were not put into effect immediately as the parties attempted to find a common position. However, at the end of August 2006, the second respondent gave notice of its intention to put the changes into effect at the beginning of October 2006. The changes were put into effect and the system is now operational.

In view of the reasons I alluded to earlier, an attempt to have a temporary interdict stopping the implementation was still-born. It therefore only leaves the final relief for determination.

The terms of the final relief are in the following terms:

1. That the implementation and execution of the tiered system by the first respondent, effected on 1 October 2006, be and is hereby set aside.

2. That the first respondent be and is hereby ordered to cease/stop and be inducted from implementing the tiered system introduced on 1 October 2006.

3. That the first respondent pays the costs of suit.

Extensive heads of argument were filed on behalf of the parties. In addition, both counsel addressed the court orally.

Counsel for the applicants argued that there were three issues for determination:

(i) The first issue was whether or not the first respondent had powers, in terms of its Constitution, to alter the medical aid scheme in existence since its inception. Counsel invited me to look at the narrow positivist meaning of clause 11(2) as well as the context of the agreement.

(ii) The second issue was whether or not the Board of the third respondent had issued a directive to the first respondent following upon a meeting held on 20 October 2006; and

(iii) The last issue was whether or not the applicants had a legitimate interest to be heard before a decision was made to link benefits to subscriptions.

Counsel for the respondents argued almost on the same premise as counsel for the applicants viz whether the second respondent had the power to introduce the benefit structure that it did.

His argument was that the applicants had considered the structure of the third respondent in isolation of the statute. He submitted that the first respondent had the power to alter the benefits accorded to its members. In so far as the third respondent was concerned it was his contention that it had not issued a directive to the first respondent to stop implementing the alteration in the benefit structure. Lastly, it was argued, on behalf of the first respondent, that, the provision of medical services by the first respondent to members of the applicants was not a condition of service and that therefore there was no need for the applicants' members to be consulted prior to the implementation of the changes.

I think the logical place to start in this matter is the examination of the relationship between the applicants and the first respondent.

The first respondent was established by the National Industrial Council for the Railway Industry in 1970. One of its objects was to afford members the facility of obtaining medical and surgical treatment for themselves, and their dependants, including the provision of drugs and medicines.

According to the Constitution in terms of which the first respondent was set up, its members comprised of the following; employees of Railways, employees of National Railways of Zimbabwe, Railmed, National Railways of Zimbabwe Pension Fund, RAE, RAU, RAYOS, REC, RMS, and Z.A.R.W.U. who are entitled to membership in terms of their conditions of employment.

Also included in the list of people entitled to be members are pensioners of the various institutions described above and the widows or widowers of those persons who had been in employment in the same and were members of the first respondent.

The applicants, being unions, are representing the persons employed by the various bodies I have referred to. Except for those employed by the first respondent, none of the members of the applicants can say that they are employees of the same. The greater number of the applicants' members therefore are employed by the other bodies.

Going by the objects of the Constitution of the first respondent, the applicants' members have a relationship with the first respondent whereby the latter has undertaken to afford the members facility for the provision of medical and surgical treatment as well as drugs and medication. Nowhere in their papers have the applicants' alluded to any other contract with the first respondent except for the provision of the services I have described above.

Yet, in addressing the question of the first respondent's actions in altering the benefit structure being offered to their members, the applicants contend that the actions of the first respondent are in fact an alteration of their conditions of service.

In order to dispose of the issue of the relationship between the applicants and the first respondent, it then becomes necessary to arrive at a decision as to the meaning to be ascribed to the phrase “conditions of service.”

When one is in service, one is in employment, and, therefore, conditions of service are the same as conditions of employment. In the case of OK Bazaars (1929) Ltd v Madeley NO & Anor 1943 TPD392, conditions of employment were described as:

“Conditions of employment in the present context means simply the terms, either express or implied, contained in a contract of employment.”

The terms and conditions of the employment contracts of the applicants' members are not in the purview of the first respondent. In my view, conditions of service can only exist where services of a personal nature are rendered, the one being the employer the other the employee.

We do not have services of a personal nature being rendered by the applicants' members to and on behalf of the first respondent.

I presume that the contracts of employment provide for contributions by the employer for subscriptions to a medical aid society. Beyond that, I refuse to go as the contracts are not before me and any further comments on my part would be mere speculation.

The point is made by counsel for the applicants that the effect of the alteration put in place by the first respondent was to fundamentally alter the structure of the Medical Fund from one based upon the principle of equal contributions from the employer and employee and equal unlimited benefits to a new principle of a scheme based on full recovery.

I accept that the entitlement to the medical aid benefit, on the basis of the equal contribution with the employer and attendant benefits is a condition of service. I do not accept, as contended by counsel for the applicants, that receiving equal benefits with other members where the one pays less than another member is a condition of service.

However, the linking of the benefits to the level of subscriptions paid by the first respondent's members does not affect the terms on which the members of the applicant are afforded employment by their respective employers.

The level and extent of benefits afforded to members is within the discretion of the first respondent and the employer has no input in such assessment.

There is no suggestion that under the new scheme the employer will contribute less than it has been contributing, because if that were the case then the applicants' members would have been on very firm ground in arguing that their conditions of service had been altered.

All the scheme does is to ensure that a contributor obtains services according to the level to which they can contribute in terms of subscriptions. The employer's obligation is not lessened in any manner as he is still obliged to contribute in equal measure to the contributions made by the member.

The condition of service is the entitlement to membership in terms of the contract of employment coupled with the employer's obligation to contribute an equal measure as the employee.

Since the employer does not determine the level of benefits afforded by the first respondent, the fact the benefits are reduced does not alter the conditions of service which remain unchanged. I am unable to find, therefore, that, the scheme has the effect of altering the conditions of service of the first respondent's members.

I move on.

The next issue I have to determine is whether the first respondent has the power, under the Constitution, to alter the benefit scheme in the manner that it did.

The powers of the first respondent must, of necessity, be examined in the conjunction with the provisions of the Medical Services Act [Chapter 15:13] (“the Act”) which regulates the manner in which medical aid societies conduct their business as well as the manner in which they are managed.

Although the first respondent, as an entity, was set up in 1970, which was prior to the promulgation of the Medical Services Act, its registration was deemed in terms of section 17 of the Medical Services Act.

I start with the definition section which not only describes a medical aid society but also specifies its purposes. The definition in section 2 of the Medical Services Act is as follows:

“…, any association or organization which accepts subscriptions from members or other persons wholly or mainly for the purposes of -

(a) Paying any expenses incurred by such members or persons, and, additionally, or alternatively, their dependants or employees, in respect of medical or dental treatment; and

(b) Meeting the whole or part of any expenses incurred by such members or persons, and, additionally, or alternatively, their employees, in respect of medical or dental treatment.”

The registration of a medical aid society is provided for in section 9 of the Medical Services Act.

Section 9(5) of the Medical Services Act provides that the Secretary shall be satisfied in relation to the following before he can register a medical aid society:

(a) The minimum cover for medical services to be provided by the medical aid society is adequate for the purpose of meeting the costs of medical services at such level as may be prescribed; and

(b) Adequate financial provisions have been made for the proper maintenance of the medical aid society.

In terms of section 10 of the of the Medical Services Act, the Secretary is empowered to cancel the registration of any medical aid society which fails to comply with the provisions of section 9(5).

My view is that the powers granted to the first respondent, in terms of the Constitution, have, of necessity, to be considered in conjunction with the provisions of sections 9 and 10 of the Medical Services Act.

The Constitution provides for the creation of a Board to administer the affairs of the first respondent. Ten members are required to sit on the Board; five of whom shall be appointed by National Railways of Zimbabwe and the last five from the other entities mentioned earlier on in the judgment, from those institutions whose employees or members are entitled to membership of the first respondent.

Clause 11, from which the Board derives its powers, is phrased thus:

“Powers and Functions of the Board of Management

(1) Subject to the provisions of the Medical Services Act, the regulations made in terms thereof and any other law, it shall be the duty of the Board to administer the affairs of Railmed in a judicious manner at all times and always to act in the best interest of both Railmed and its individual members and to implement the directives of the Secretary responsible for the Health Ministry and REC as may be given from time to time.

(1) It shall have the power to:

(a) Formulate and issue Rules of Railmed to include the schedule of rates payable by different categories of members;

(b) Modify, amend, repeal, substitute or suspend any or all of such Rules where general or specific circumstances require such action;

(c) Determine the range and scope of benefits to be afforded by Railmed; and

(d) Refuse, terminate or restrict benefits in respect of any beneficiary who contravenes any Rule of Railmed.”

Although they have been placed before me, I have not been referred to the Rules of Railmed specifically and I cannot comment further on them other than to say that the first respondent does have the power in formulating such Rules to regulate the rates payable by the different categories of members which, of necessity, taking into account the different levels of employees in the undertakings must go with a medical aid society.

In real terms, the first respondent would have to set the level and range that each category of membership would have to pay as subscription for the services to be availed to such member.

It follows, therefore, that, the rates of contributions set by the first respondent would then have a bearing on the range of benefits that can be accorded for the categories of rates of contributions set in the Rules. It is only fitting, therefore, that consistent with the power to regulate the schedule of rates of contributions to be paid by the various categories of the members, the first respondent also be endowed with the power to regulate the range and scope of the benefits to be afforded by Railmed.

I cannot see the practical effect of a medical aid society having the power to set the schedule of rates of contributions to be paid by the different categories of members but not having the power to set the range and scope of the benefits to be afforded to the membership. It would, in my view, be only logical that the range and scope of benefits be set and then the contributions be calculated. The one cannot exist independently of the other.

I venture to suggest, that, in arriving at the benefits and contributions that are attendant thereon the Board of the first respondent has to bear in mind the provisions of the Medical Services Act, in particular that it act in the best interests of the members and the society itself.

I am fortified in this view by the intent of the first respondent as spelt out in its objects - that, primarily of providing members the facility of obtaining medical and surgical treatment for themselves and their dependants, including the provision of drugs and medicines.

The objects of the first respondent would not be met if the first respondent were curtailed in its power as to what benefits it can offer to its members. If that were a matter for the decision of the REC then the latter would have been specifically accorded those powers.

It has not.

It merely has the power to make decisions of a strategic nature.

This brings me to the next rung. Is the decision regarding the extent of benefits to be afforded to the members of the first respondent one that can be termed strategic in nature?

According to counsel for the applicants, even though the first respondent had the power, under its Constitution, to determine the range and scope of the benefits to be afforded to its members, it did not have the power to change the society from a welfarist one to one run on market principles with the aim of full cost recovery.

I find it hard to comprehend why the restriction on the power afforded to the first respondent, under the Constitution, was framed in such a vague manner.

If it was the intention that the REC gives directives of a long-term plan to the first respondent it was simpler, in my view, to have phrased it as such.

Counsel for the applicants went further and argued that the three tier system that was adopted by the first respondent was not a mere scheduling of the rates and contributions or the mere determination of the range of scope of benefits, but, was rather the essence and product of the first respondent's strategic recovery plan which was prepared in 2004 and commissioned in 2005. He premises his view on the argument that the entitlement to medical benefits is a condition of service.

I have already found that the medical benefit is not a condition of service, but that what was a condition of service was the entitlement to membership and the concomitant contribution by the employer on behalf of the employee.

It is pertinent to note that the contracts of employment where the conditions are spelt out were not displayed to the court as much of the argument is based on the alteration of the same.

The Constitution does not define what it means by strategic.

From the argument pursued by counsel for the applicants, it is clear that the meaning he ascribes to strategic is to do with an alleged alteration of conditions of service.

I have above already discussed on whether the introduction of the three-tier system of benefits, by the first respondent, constituted a change in the members conditions of service and my conclusion was that it did not constitute such.

I turn next to the question whether or not the REC issued a directive to the first respondent.

The REC wrote two letters to the first respondent subsequent to the adoption by it of the three tier system of benefits. The first letter to the first respondent was phrased as follows:

“RE: INTRODUCTION OF THE THREE-TIER SYSTEM EFFECTIVE 1 OCTOBER 2006

1. On 20 October 2006, the Railway Employment Council met and decided as follows:-

1.1 The introduction of the proposed Three-Tier Scheme is to be suspended with immediate effect, viz from the 20th instant and it shall remain so suspended until you are advised to the contrary in due course.

1.2 The suspension is intended to enable the Railway Employment Council to have the matter resolved and you are advised accordingly.

2. In the meantime, the deductions for the remission to you shall be as hitherto was the case before the purported introduction of the Three Tier System by yourselves.”

The letter was written by the chairman of the REC, and, on receipt of this letter, the chairman of Railmed sought clarification, as, in his view, it appeared that the four trade unions and NRZ had not resolved to direct the Board of Railmed to suspend the Three-Tier System.

A letter was dispatched from the office of the chairman of the REC in the following terms:

“I merely advised you that the feeling in Council was that the introduction of the proposed three-tier system be suspended with effect from the 20th instant. This was necessary in order to enable the members of the Council to reach an agreement.

However, you may choose to ignore my advice but you do not have any reason to misunderstand what I said.

I never pretended to say that the trade unions and NRZ resolved to direct the Railmed Board to suspend the three tier system. I have no power to direct any member or constituent member of the REC to do anything.”

What emerges from the last quoted letter is that the Board of the REC had not passed a resolution which would have issued a directive to the first respondent to suspend the introduction of the three-tier system.

It also emerges clearly from the chairman's letter that he was talking about a feeling in Council. There had been no agreement that the three tier system be suspended.

The letter from the chairman is very clear and it seems to me that if the applicants wish to contradict him and put forward a version that differs from his statement in the letter then they should have produced minutes of the meeting where the directive was given.

In the meeting of the Railway Employment Council (REC) Board, held on 20 October 2006, the chairman had noted that “the Council had no jurisdiction to instruct Railmed to cease the implementation of the scheme.”

In fact, the meeting could not agree on what action to take and the chairman indicated that he would write to Railmed and state that Council's position was that the status quo, as it was before the introduction of the three-tier system (for whatever merit), should prevail until Council wrote to Railmed on the position. This then led to the crafting of the letter initially sent to the first respondent, which letter was subsequently clarified.

When the two letters are read in conjunction with the minutes it becomes clear that the Railway Employment Council (REC) did not take a position on the implementation because of the divergence of views expressed by the Board members present.

Further, I did not understand, from my reading of the minutes, that the Railway Employment Council (REC) had resolved to give a directive to the first respondent to stop implementing the new system.

In the absence of that, I have to find that the Railway Employment Council (REC) did not issue a directive to the applicants to suspend the introduction of the three tier system of benefits.

The principle of legality requires that every decision or act of a public official which affects the rights or interests of an individual must be in accordance with an existing law otherwise it violates the rights of the individual concerned....,.

The principle of legality..., requires the Court to uphold conduct which is in accordance with law.

The first respondent's resort to Cabinet authority and directives as justification of his unlawful conduct is equally misplaced and without merit because Cabinet has no legislative authority. It is trite that laws are made in Parliament and not in Cabinet.

Legality of Consolidation

According to the applicant's counsel, which position was not questioned by counsel for the first respondent, every Provincial Lands Committee is ordinarily chaired by the appropriate Provincial Governor. The applicant's unchallenged evidence is that the relevant 2005 meeting of the Provincial Lands Committee in casu was chaired by the second respondent, who at that time was a Deputy Minister. That meeting decided to consolidate the applicant's farm with the farm allocated to the second respondent and further resolved that the applicant should vacate her farm. The applicant contends that the second respondent abused his influence in the Provincial Lands Committee to push for the consolidation of the two farms. The only response by the first respondent's deponent is that “the 2^nd respondent is best placed to answer these averments”.

The second respondent himself has failed to oppose this application and has simply not bothered to deal with the serious allegations against him.

On the undisputed facts before me, the only inference that can reasonably be drawn is that the second respondent did use his position to influence the consolidation process and the consequent allocation of the consolidated land to himself. There is no explanation as to why he chaired the meeting in question. Even if such explanation were to be availed, there is no doubt, whatsoever, that he simply should not have chaired that particular meeting of the Provincial Lands Committee.

The basic tenet of our common law is that nemo debet esse judex in propria sua causa – no one should be an arbiter in his own cause. (This time-honoured precept is codified in section 27(1)(b) of the High Court Act [Chapter 7:06] and in section 3(1)(a) of the Administrative Justice Act [Chapter 10:28] as read with section 5 of the Administrative Justice Act [Chapter 10:28]). This is so for the obvious reason that the proceedings of a public body or committee should be free from the possibility of bias and the attendant risk of its incumbents serving their own personal interests.

It follows that the decision of the Provincial Lands Committee in 2005, to consolidate the applicant's farm with the second respondent's farm, was vitiated by a fundamental irregularity. It was tainted ab initio and must therefore be declared a nullity. See McFoy v United Africa Co. Ltd [1961] 3 All ER 1169 (PC)….,. ; Muchakata v Netherburn Mine 1996 (1) ZLR 153 (S)….,.

I am constrained to add that this is not an entirely satisfactory basis for the implementation of the Land Reform Programme generally.

It seems to me that the administration and allocation of land for resettlement purposes, whatever the modality or form of allocation, should be properly and effectively regulated, so as to create a land allocation regime that is clear, transparent and accountable, and susceptible to judicial scrutiny to ensure due process and compliance. This could be achieved by way of regulations framed either under the Agricultural Land Settlement Act [Chapter 20:01] or under the Rural Land Act [Chapter 20:18].

I am fortified in this view by the general proposition that there can be no power without the requisite authority. As is explained by BAXTER: Administrative Law (1984)…., citing Municipality of Green Point v Powell's Trustees (1848) 2 Menzies 380…, and Roberts v Hopwood [1925] AC 578 (HL)…,:

“Except in the case of an exercise of power under the prerogative, a public authority has no powers other than those which have been conferred upon it by legislation.”

As regards administrative practices evolved through directives, circulars and the like, but without specific statutory authority, the learned author observes…, that they are:

“permissible – even desirable – for so long as they do not conflict in any way with the empowering legislation under which the public authority acts nor infringe legally protected rights and interests. Such practices cannot themselves constitute authority for the infringement of rights and interests; the notion that the administration could constitute a self-generating source of authority is completely alien to the principle of constitutional legality. It is true that administrative practice may shape the procedures adopted by public authorities, and this has been recognised by the courts. As such, however, customary practices do not constitute a source of authority which justifies the infringement of rights and interests; at best they may be construed as necessary or incidental to the proper functioning of the public authority concerned and therefore impliedly authorised by the empowering legislation anyway. The claim that custom might constitute a source of administrative power in itself is unacceptable and has been at least since Entick v Carrington (1765) 19 St Tr 1029, and there is no judicial authority to support it.”

Standard Chartered Bank Zimbabwe (“the appellant”) or (“the Bank”) is a commercial bank registered and operating in Zimbabwe.

The respondent is a company duly incorporated in terms of the laws of Zimbabwe and was carrying on business in Redcliff, Zimbabwe. It is a foreign investor whose specific purpose was the refurbishment of the blast furnaces of a Zimbabwean steel manufacturing company popularly known as Ziscosteel.

In October 2007, the respondent held two accounts with the Kwekwe branch of the appellant. As at 9 October 2007, there was, in the two accounts, an aggregate credit balance of US$47,739=86.

In terms of a directive issued by the Reserve Bank of Zimbabwe (sometimes referred to herein as “the RBZ”) sometime in October 2007, the appellant transferred, to the RBZ, the total credit balance of US$47,739=86 from the two accounts.

The directive does not form part of the record, but, it is common cause that it was purportedly issued in terms of section 35(1) of the Exchange Control Regulations 1996, SI109 of 1996 (“the Regulations”).

When the respondent demanded payment to it of the monies deposited in the accounts, the Bank refused to repay. It claimed that the intervention of the Reserve Bank of Zimbabwe (RBZ) had rendered it impossible for it to comply with its contractual obligation to make payment to the respondent.

The respondent applied to the High Court for an order compelling payment.

It alleged, that, the monies were wrongfully and unlawfully debited from its account without its consent and approval. It claimed, that, in terms of the law of banking, the Bank was contractually bound to repay the credit balances on demand.

The Bank contended, in its defence, that, upon receiving the directive by the Reserve Bank of Zimbabwe (RBZ), the funds held in the respondent's accounts ceased to be the property of the Bank and became that of the RBZ. It was contended further, that, the intervention of the Reserve Bank of Zimbabwe (RBZ) constituted an Act of State, and, therefore, a supervening impossibility which discharged the appellant from its obligations to the respondent.

The learned Judge granted the application. It is against his judgment that the Bank now appeals.

The main issue which falls for determination in this appeal is whether the Bank is liable to pay to the respondent the aggregate amount of US$47,739=86 transferred by it to the Reserve Bank of Zimbabwe.

THE LAW

The general rule relating to deposits made in a Bank account by a customer is that the money becomes the property of the Bank which can use such deposit as it pleases so long as it pays to the depositor, on demand, the equivalent of the amount deposited in the account.

In Standard Bank of South Africa v Echo Petroleum CC, Case No.192/11 (2012) ZASCA 18 (22 March 2012)…, it was said:

“The general rule is that, moneys deposited into a bank account fall into the ownership of the bank. The resulting credit belongs to the customer, the bank having a contractual obligation to pay the customer, on demand, and to honour cheques validly drawn on the account to the extent that it stands in credit.”

See also ABC Bank v Mackie Diamonds SC23-13; Foley v Hill (1848) 2 H.L. Cas 28.

The legal relationship between a Bank and its customer, whose account is in credit with it, is that of debtor and creditor.

Although the customer 'deposits' money to the credit of his account with the bank, the transaction is not one of depositum, but of loan: see Burg Trailers SA (Pty) Ltd v ABSA Bank Ltd 2004 (1) SA…,.; Ormerod v Deputy Sheriff, Durban 1965 (4) SA 670 (D)…,.; Absa Bank Ltd v Intensive Air (Pty) Ltd & Ors 2011 (2) SA 275.

If this legal position is followed to its logical conclusion, then, the deposits were the property of the Bank and what the Bank paid to the Reserve Bank of Zimbabwe (RBZ) was its own money.

That the Bank parted with the deposits in the account was of no import to the respondent whose right to be paid the equivalent of the deposits, on demand, remained unaffected by the Bank's dealings therewith.

The transfer to the Reserve Bank of Zimbabwe (RBZ), in terms of its directive, did not, therefore, extinguish the Bank's contractual obligation to make payment to the respondent.

THE DEFENCE

The Bank contends, that, it is discharged from its contractual obligations to the respondent by reason of a supervening impossibility otherwise known as a vis maior or casus fortuitus, namely, the Reserve Bank of Zimbabwe (RBZ) directive.

In support of its stance, it relies on the judgments in Peters, Flamman & Co v Kokstad Municipality 1919 AD 427 and Bob's Shoe Centre v Henneways Freight Services (Pty) Ltd 1995 (2) SA 421 (A).

The brief facts of Peters, Flamman & Co v Kokstad Municipality 1919 AD 427, as summarised in The Law of Contract in South Africa 3ed by RH CHRISTIE…, are that the appellant firm was contracted to light the streets of Kokstad for a period of years. During the currency of the contract, in wartime, the partners were interned as enemy aliens and their business wound up under the relevant war legislation. The Municipality's claim for damages for breach of contract and forfeiture of the firm's plant under a clause of the contract was rejected by the Appellate Division. At pp434-5 of the judgment of the court, SOLOMON ACJ remarked as follows:

“…,. Nor is it necessary to consider generally what are the circumstances in which it can be said that a contract has become impossible of performance. For the authorities are clear, that, if a person is prevented from performing his contract by vis maior or casus fortuitus, under which would be included such an Act of State as we are concerned with in this appeal, he is discharged from liability.”

In Bob's Shoe Centre v Henneways Freight Services (Pty) Ltd 1995 (2) SA 421 (A) the appellants were contracted to clear and deliver a consignment of shoes to the respondents factory in the city. A fire consumed the warehouse where the shoes were warehoused. The shoes were destroyed and it became impossible to complete performance of the contract.

Clearly, the facts of both these cases are distinguishable from those in casu.

The appellant herein has not shown, that, for some reason beyond its control, it cannot, from its resources, repay the debt. It has not proved impossibility.

It goes without saying, that, in order for its defence to succeed, the appellant must do more than merely allege impossibility. The impossibility must be proved, that is, it must be clear from the evidence that performance is impossible, not merely undesirable or uneconomical: see The Law of Contract in South Africa 3ed by R H CHRISTIE…,.

In any event, it would appear, that, where a Ministerial directive is given without statutory authority, obedience thereto will not qualify as a vis major or casus fortuitus.

The appellant has submitted, that, it was obliged to follow the Reserve Bank of Zimbabwe's directive and cites section 40 of the Exchange Control Regulations 1996, S.I.109 of 1996 (the Regulations).

It alleges, that, it did not oppose the directive because of its fear of the Reserve Bank of Zimbabwe (RBZ), which, in terms of section 37 of the Exchange Control Regulations 1996, SI109/1996, has the power to revoke its licence.

As the respondent submitted, the directive was issued without statutory authority. It was ultra vires the provisions of section 35 of the Exchange Control Regulations 1996, S.I.109/1996 (the Regulations) which grants no authority to the Reserve Bank of Zimbabwe (RBZ) to confiscate deposits in the accounts of customers of the Bank.

The correctness of this submission emerges quite clearly from a reading of the section which provides as follows:

“35. Authorised dealers and other persons to comply with directions

(1) Authorised dealers shall comply with such directions as may be given to them by an exchange control authority relating to -

(a) The exercise of any functions conferred on them by or under these regulations;

(b) The terms on which they are to exchange foreign currency for Zimbabwean currency;

(c) The offer of foreign currency in their possession for sale to the Reserve Bank.

(2) Persons concerned with —

(a) The keeping of any register in Zimbabwe; or

(b) The payment of capital moneys, dividends, or interest in Zimbabwe;
shall comply with such directions as may be given to them by an exchange control authority in relation to any function conferred or imposed on them by or under these regulations.”

Not only was the directive in violation of section 35 of the Regulations, but, the Bank had the option, if so minded, of resorting to the provisions of section 37 of the Regulations which provide for adequate opportunity to be given to the dealer concerned to make representations before any punitive measures were taken, as well as to the safeguards provided in section 40.

Both statutory provisions are set out below.

“37. Penalties for failure by authorised dealers to comply with regulations or directions

(1) Subject to this section, if an exchange control authority is satisfied that an authorised dealer has –

(a) Contravened any provision of these regulations; or

(b) Failed to comply with any order or direction with which it is its duty to comply;

The exchange control authority may direct the authorised dealer to cease all dealings in foreign currency, or such dealings as the exchange control authority may specify, for such period not exceeding twelve months as the exchange control authority may specify in the direction.

(2) Before giving a direction in terms of subsection (1), the exchange control authority shall give the authorized dealer concerned an adequate opportunity to make representations in the matter.”

“40. Orders

(1) Subject to subsection (3), the Reserve Bank may make orders for all or any of the following purposes —

(a) To protect or improve the value of Zimbabwean currency;

(b) To bring about and preserve stability in the currency market in Zimbabwe;

(c) To prescribe any matter, which, in terms of these regulations, is required or permitted to be prescribed or which, in the Reserve Bank's opinion, is necessary or convenient to be prescribed in order to give effect to these regulations.

(1) Orders made under subsection (1) may provide for —

(a) The manner in which authorized dealers shall conduct their business for the purposes of these regulations;

(3) Orders made under subs (1) shall not have effect until they have been approved by the Minister and published in the Gazette.”

At the hearing of the appeal, counsel for the appellant conceded, that, the Reserve Bank of Zimbabwe (RBZ) directive was ultra vires of the provisions of section 35(1) of the Exchange Control Regulations 1996, SI109/96 (the Regulations).

Paragraph (c), it will be seen, deals with the offer of foreign currency in their possession for sale to the Reserve Bank of Zimbabwe (RBZ).

He submitted, however, that, the defence of supervening impossibility was available to the Bank even where the directive was unlawful.

I disagree.

In The Law of Contract in South Africa 3ed by R H CHRISTIE…, the following observation is made by the author:

“The limits of vis maior and casus fortuitous have not been authoritatively defined for the purposes of this branch of the law, but, it is clear, from Peters, Flamman, where the internment and winding-up were carried out under statutory authority, that, any similar act of state would qualify.

Legislation subsequent to the making of the contract, making performance illegal either absolutely or without a specified consent which has been refused, will also qualify, as will refusal of a statutory consent, but not obedience to a ministerial directive given without statutory authority.

For the purposes of this branch of the law, there is no necessity to distinguish between vis maior and casus fortuitus, which, between them, include any happening, whether due to natural causes or human agency, that is unforeseeable with reasonable foresight and unavoidable with reasonable care.”…,.

And on page 528:

“Self-created impossibility, that is, impossibility resulting from the act of one of the parties, does not discharge the contract but leaves the party whose act created the impossibility liable for the consequences. This will be so whether the impossibility is complete or partial, and whether or not the act that causes the impossibility is wrongful.”

I respectfully associate myself with those views.

The acts complained of by the Bank do not qualify as vis maior or casus fortuitus and do not absolve the Bank from compliance with its contractual obligation to the respondent.

CONCLUSION

As has been shown above, the credit balance in the respondent's account is a debt that the appellant owes to the respondent.

The appellant has placed no evidence before the court which would establish that it has become impossible for it to make payment of its debt.

Its contention is that, having made payment to the Reserve Bank of Zimbabwe (RBZ) in terms of its directive, it no longer has the respondent's money in its possession and is consequently discharged from its obligation to make payment, upon demand, by the respondent.

The contentions by the appellant run contrary to the established principles of Banking Law, namely, that, the deposits became the Bank's property.

It seems that what the appellant's defence boils down to is that it ought not to be expected to pay in these circumstances.

But, as has been demonstrated above, the dealings by the appellant with the deposits in the accounts, namely, the payments to the Reserve Bank of Zimbabwe, were made at its own risk and did not affect its obligation in law to pay its debt to the respondent on demand.

The appeal is accordingly dismissed with costs.

It is clear that the unlawful directive issued by the appellant to the commercial banks is the causa sine qua non of the respondent's loss.

See International Shipping Company (Pty) Ltd v Bentley 1990 (1) SA 680 (A)…,.

The appellant is therefore liable to make good the loss.

Under section 17 of the Banking Act [Chapter 24:20], a commercial bank is under an obligation to “comply with the terms and conditions of its registration and with any directions given to it by the Reserve Bank or the Registrar in terms of this Act.”

Whether or not the appellant's powers in terms of the Securities and Exchange Act can be exercised without leave of the court

The appellant strongly avers that in issuing the directive as it did to the first and third respondents it was acting pursuant to the Securities and Exchange Act [Chapter 24:25]. To this end, the appellant maintains that no leave must be sought in executing its duties in terms of the Act clothing it with authority.

As submitted by counsel for the appellant, the appeal raises the question whether a company in liquidation may escape the exercise of administrative powers by a regulator purely because it is in liquidation. According to the appellant, a lawful directive of general application cannot be impugned on the basis of the provisions of the Companies Act requiring prior approval of a court.

The long title of the Securities and Exchange Act [Chapter 24:25] identifies the following as some of the objectives of the Act: to control and regulate the marketing of securities and investment in securities and to regulate and register securities exchanges.

Section 4 of the Securities and Exchange Act [Chapter 24:25] outlines the objectives, functions and powers of the Securities and Exchange Commission of Zimbabwe (appellant in casu). Some of the appellant's objectives are to, inter alia, provide high levels of investor protection; reduce systemic risk, that is to say, a risk that a failure on the part of one or more registered securities exchanges or licensed persons to meet their obligations may result in other registered securities exchanges or licensed persons being unable to meet their respective obligations; and to promote market integrity and investor confidence.

It is clear that the powers conferred to the appellant by the Act to achieve its objectives and functions are not made subject to the Companies Act [Chapter 24:03].

The first respondent avers, and affirms the finding a quo that a dispute between the liquidator and any other person relating to ownership of assets held by the company in liquidation can only be dealt with in terms of the relevant provisions of the Companies Act. Section 222(3) of the Companies Act [Chapter 24:03] provides as follows:

“(3) Any person aggrieved by any act or decision of the liquidator may apply to the court after notice of motion to the liquidator and thereupon the court may make such order as it thinks.”

The question, therefore, is whether or not the appellant is a person contemplated in section 222(3) of the Companies Act [Chapter 24:03]. Is the appellant's exercise of powers conferred to it by the Securities and Exchange Act [Chapter 24:25] subject to section 222(3) of the Companies Act [Chapter 24:03]?

A plain reading of section 222(3) of the Companies Act [Chapter 24:03] shows that the “acts or decisions” intended are those of an individual liquidator who must be notified of the approach to the court. That restricted meaning cannot be extended to include general regulation without producing absurd results.  For example, a regulator who has noticed bad practices by liquidators across the board would have to seek the leave of the court citing each and every one of the errant liquidators before institution corrective measures of general application!

The Securities and Exchange Act is meant to offer independent security to investors which duty cannot be properly discharged if one needs to first seek leave before engaging in acts that secure investments of investors generally.

The directive in question was issued to all securities dealing firms 'instructing them not to carry out disposal instructions for firms that are either on suspension, are under liquidation, or had their licences cancelled, without obtaining prior approval from it.' 

The directive is clearly of general application.

It matters not that it might have been prompted by a singular instance of perceived potential market risk.  Indeed, many pieces of legislation or regulation come about as responses to singular instances with a potential for systemic impact. By contrast, see CW v Commissioner of Taxes 1988 (2) ZLR 27 (HC) where a provision was so particularised, viz, an exemption from capital gains tax extended only to 'those who did not contest' payments for the compulsory acquisition of their shares, that it was held unconstitutional “as it effectively penalized persons who sought to have their constitutional rights tested in the courts.”

In casu, the appellant acted within its mandate of regulating trading and dealing in securities, supervising and regulating persons carrying on licensed activities and issuing notices and guidelines for any purpose that might facilitate the realization of its objectives and the fulfilment of its functions. It is difficult how the appellant can be said to have acted arbitrarily and unlawfully as submitted by counsel for the respondent, who alleges that:

1. “The directive was meant to deal specifically with one company in liquidation but pretended to be a general directive.”

However, I have already noted that a regulation may be prompted by a singular event but that would not detract from its lawfulness as long as it is of general applicability. The terms of the regulation cover more than just the first respondent.

2. “The directive does not appear to have been in writing.”

It is regrettable that a copy of the directive was not made part of the record, but the terms thereof appear to be common cause and the substance quoted above was actually taken from the first respondent's own heads of argument.

3. “The directive was not communicated to affected persons by the appellant itself. In casu, the liquidator only heard about it from the second and third respondents.”

The argument is not fully developed as to why the first respondent was entitled to individual and direct communication of the directive and how the failure to do so renders the directive arbitrary and unlawful.  Equally undeveloped is the submission that “it is not clear which organ of the appellant issued the directive.”

4. “The appellant proceeded on the basis of a distinction between a 'nominee shareholder' and an 'owner' and assumed that it had powers to order a nominee shareholder to transfer the relevant shares to the 'owner'.”

However, in my view, this objection has no relevance to the lawfulness of the general regulation but may be raised when and if the appellant acts in terms thereof when the transactions are referred to it.

Accordingly, I have come to the conclusion that the directive was neither arbitrary nor unlawful and that the court below erred in holding otherwise and failing to make the necessary distinction between general regulation, on the one hand, and particular disputations pertaining to a given liquidation, on the other.  The former does not require the prior leave of a court for its proper exercise.

The latter does. 

Therefore, the appellant was not under any obligation to first seek leave of the court before issuing out the above-quoted general directive which affected the first and third respondents the way it did….,.

Disposition

In the light of the foregoing, I am satisfied that the appeal has merit. The appellant need not first obtain leave before executing its duties in terms of the empowering Act….,.

It is hereby ordered that:

1. The appeal is allowed with costs.

2. The judgment of the court a quo is set aside and substituted with the following:

This matter was first placed before my brother MAFUSIRE J on 2 February 2017.

The applicants successfully sought his recusal, and since we are only two judges at the station the matter landed on my desk. I proceeded to set the matter down for hearing on 8 February 2017, but, on that date, I was advised that counsel for all the respondents were not available due to earlier commitments. I was compelled to reschedule the matter for hearing on 15 February 2017.

The applicants are Farmers' Associations which represent sugar cane farmers in Chiredzi. The first respondent is the Minister of Industry and Commerce whose Ministry oversees the sugar industry. The second and third respondents are millers and also engage in sugar cane farming in the lowveld. The applicants and the second and third respondents have a commercial relationship in the production, milling, and marketing of sugar. It would appear that this relationship is plagued by problems.

The applicants filed an urgent chamber application in which they seek an interdict couched in the following terms;

“TERMS OF FINAL ORDER SOUGHT

(a) The 1^st respondent's directive, dated 28 November 2016, be and is hereby set aside.

(b) The parties shall continue to implement DOP at the rate of 82.65% to 17.35% until the report by Ernest and Young is perfected and approved by all parties.

(c) 1^st respondent is ordered to pay costs.”

INTERIM RELIEF SOUGHT

The respondents are interdicted from implementing the DOP at the rate of 77% to 23% until this application is heard.

SERVICE OF PROVISIONAL ORDER

The Deputy Sherriff, or members of the Zimbabwe Republic Police, are authorised to serve the copies of the provisional order on the respondents.”

The background giving rise to this application are more succinctly outlined in the opposing affidavit by the first respondent, one Michael C Bimha [the Minister].

The commercial dispute between the parties has been going on for some considerable time. The applicants' members, being sugar cane growers, who do not have a mill of their own, take their sugar cane to the mill owned by the second and the third respondents. The applicants' members are then paid by the second and third respondents on the basis of what is called the division of proceeds ratio (DOP).

In 1997, a review process of the division of proceeds ratio was carried out by Price Waterhouse and it pegged the division of proceeds ratio or rate at 73.5% to 26.5% in favour of the farmers since 1999. The parties, after sometime, were involved in a dispute as regards the proper division of proceeds rate. The applicants were alleging that the DOP rate set out in 1999 was no longer feasible. The parties were unable to agree on the DOP rate. This prompted the Minister to intervene by issuing a directive in terms of section 10 of the Sugar Production Control Act [Chapter 18:19] and set an interim division of proceeds ratio of 82.65% to 17.35% in favour of the farmers or applicants on 6 June 2014. This interim DOP rate was to subsist pending a review of the division of proceeds ratio by Chartered Accountants or consultants. Ernest and Young (EY) were appointed as the consultants.

According to the Minister (this has not been contested by the applicants) the parties agreed, then, that;

(a) They would respect and abide by the consultant's findings.

(b) In the event that the division of proceeds ratio differed from the interim one, the party to whom compensation is due would be provided with prompt and automatic compensation.

It is common cause that the review process was done by Ernest and Young and completed in January 2016. As a result of that review, the division of proceeds ratio was pegged at 77% to 23% in favour of the farmers or the applicants. This ratio is about 4% higher than the 1999 ratio.

This recommendation did not, unfortunately, put the matter to rest.

The parties still made representations to the Minister highlighting the possible shortcomings of the report by Ernest and Young. Some of those alleged shortcomings are highlighted in the applicants' founding affidavit. The Minister apparently lent his ear to these concerns and agreed that the review process should continue. The Minister, however, directed that the division of proceeds ratio of 77% to 23% in favour of the applicants or farmers be implemented pending another review process which would take on board the concerns raised by the parties. According to the Minister, this review process would take time and require resources hence the need to find an interim division of proceeds ratio.

It is this directive by the Minister which has prompted the applicants to approach this court, on a certificate of urgency, seeking interim relief in the form of an interdict.

According to the applicants, the Minister's directive defies logic in the Wednesbury sense and is irrational for a number of reasons which are;

(a) That the Minister seeks to rely on a division of proceeds ratio which he concedes is borne out of a flawed report by Ernest and Young.

(b) That the interim division of proceeds ratio of 77% to 23% in favour of the applicants would result in the applicants suffering irreparable harm which would mark the end of the sugar cane farming by indigenous farmers thus reversing the gains of the land reform programme

(c) That the applicants would simply be financially ruined, swimming in debt and be totally incapacitated.

It is on this basis that the applicants contend that this matter is extremely urgent as the applicants have no other remedy. The applicants contend that the second and third respondents would not suffer any prejudice if interim relief is granted and that the balance of convenience is in favour of granting interim relief.

Both counsel for the Minister and for the second and third respondents have raised points in limine. I allowed counsel for all the parties to make submissions both in respect of points in limine and the merits of the case out of expediency and convenience. I however indicated that in my ruling I would first consider whether this matter is urgent and that I would only deal with other points in limine if I considered the matter to be urgent. Needless to say I would only consider the merits of the matter if I find the points in limine to lack any merit.

The respondents took the following points in limine;

(a) That this matter is not urgent.

(b) That the substance of this application is a review application which cannot be made by a way of an urgent chamber application.

(c) That this application is flawed as it does not raise grounds for review.

(d) That the deponents to the applicants' founding affidavits have not shown that they have authority to depose to those affidavits.

(e) That the certificate of urgency is fatally defective.

On 22 February 2016, the first respondent summoned and ordered the applicant and others who were mining diamonds in Marange District to cease their operations as at that date. The first respondent's directive was followed by a letter which his Permanent Secretary addressed to the applicant's Chief Executive Officer. The applicant attached the letter to its application. It marked it Annexure B. The annexure is dated 22 February 2016. It reads, in part, as follows:

“RE: EXPIRATION OF SPECIAL GRANT 4765 AND 5247.

The above matter refers.

It has come to our attention that special grants 4765 and 5247 that were issued to you have since expired….,. It is trite law that a special grant is issued upon application and its issuance is done in terms of section 291 of the Mines and Minerals Act [Chapter 21:05] which demands that a period for the subsistence of the Special Grant shall be specified, failure of which renders the Special Grant void….,.

Since you no longer hold any title we do hereby notify you to cease all mining activities with immediate effect and to vacate the areas covered by Special Grants 4765 and 5247 for diamonds. You are given 90 days within which to remove your equipment and other valuables [22 February to 22 May 2016] and during this period access to the premises will be approved upon request to the Ministry.”…,.

The conduct of the first respondent and his Permanent Secretary, together with that of the other respondents, triggered this application.

It was the applicant's contention that the mentioned conduct prejudiced it in a substantial way. It submitted that the conduct jeopardized its operations and resulted in what it termed significant financial harm to it. It stated that the first respondent's decision adversely affected and infringed upon its rights.

The applicant submitted that it invested into the mining project more than $100 million in capital, plant and equipment as well as technology transfer and specialised skills development, infrastructure and social responsibility programs and it created thousands of jobs in its investment in the mining area. It said its expectation was that the special grants would remain valid for as long as mining operations were viable to enable it to recoup its investment. It stated that the first respondent was using the pretext of the invalidity of the special grants to punish other diamond mining companies, and it, for their refusal to enter into a merger which the first respondent was compelling them to enter into. It recounted the harm which it said it suffered, and continues to suffer, at the hands of the respondents in the following words:

“Debts are being incurred by the applicant which have to be paid; its employees and creditors have to be paid. A notice from the first respondent, wrongly issued, has resulted in the applicant not being able to carry out the ordinary functions and responsibilities of a company. Applicant is being prejudiced in its right and is therefore compelled to seek recourse from this Honourable Court to protect its interests and those of the applicant's employees affected by the actions of the respondents.”

It, therefore, moved the court to grant interim relief to it by way of setting aside the first respondent's directive and having the parties return to the status quo ante 22 February 2016.

The respondents opposed the application.

The first respondent submitted, among other matters, that:

(a) The mining grant was issued to the Zimbabwe Mining Corporation [“the corporation”] and not to the applicant;

(b) The fact that no deed of cession was attached to the application showed that no cession was ever made in favour of the applicant;

(c) The applicant's right was derived from the title of the corporation which neglected to renew the grant as a result of which it lapsed;

(d) The special grant was invalid on the basis that it did not have a termination date as the law required of it;

(e) Unauthorised lis i.e. annexure A which the applicant attached to the application was defective;

(f) The application was not urgent; and

(g) The relief which the applicant prayed for sought to establish an illegality.

The second respondent stated that his mandate was to deal with policy matters which related to the operations of the police. He said he did not direct or control the police to act as the applicant alleged. He submitted that he was not involved in the police's presence at the applicant's mining site. He moved the court not to make an order against him.

The third respondent contended that the Constitution of Zimbabwe conferred authority upon him to preserve law and order. He referred the court to section 219(1)(c) and (d) of the Constitution in the mentioned regard.

No one stops Government from governing. No one stops Government functionaries from crafting and implementing Government policy.

But in all this, the rule of law must be observed. This is paramount. It is a tenet the courts will defend to the last judge standing. The alternative is anarchy.

Law and order are indispensable elements of civilised society. This must sound like a broken record. But unless the need for it falls away the principle may continue to be re-stated. CHIDYAUSIKU CJ, in Minister of Lands & Ors v Commercial Farmers Union 2001 [2] ZLR 457 [S]…, put it this way:

“…,. [T]he law is supreme over decisions and actions of Government and private persons. There is…, one law for all….,. [T]he exercise of all public power must find its ultimate source in a legal rule….,. [T]he relationship between the State and the subject must be regulated by law. So must the relationship between subjects in order to prevent resort to self-help. The rule against self-help is necessary for the protection of the individual against arbitrary and subjective decisions and conduct of an adversary….,.”

This is an application for an interdict.

The applicant is a telecommunications services provider. The respondent is the Regulatory Authority established in terms of section 3 of the Postal and Telecommunications Act [Chapter 12:05] (the Act). The salient facts of this court application may be summarised as follows:

On 16 October 2014, the respondent issued Regulatory Determination Number 1 of 2014, a circular on Implementation of Excise Duty on airtime or network usage for voice, internet and data services provided by Public Telecommunication Service Providers. The determination fixes new National Interconnection tariffs and Mobile Voice tariffs for telecommunications operators for the period December 2014 to December 2016.

Aggrieved by this decision, the applicant has launched this application.

The applicant claims that the respondent varied or amended the existing tariffs without affording the applicant a right to be heard on whether or not the existing approved tariffs should be amended, and, if so, to what levels and when this should be done. That the respondent proposed to amend the existing tariffs by reducing them significantly. The applicant contended that the respondent's direction that the applicant propose tariffs which the respondent has itself set by 14 November 2014 is an effort to purge the illegality it committed by fixing tariffs for the applicant without having first received a tariff proposal from the applicant. The applicant maintains that the respondent's failure to afford the applicant an opportunity to be heard violates principles of natural justice as well as provisions of the Constitution. The applicant contends that the determination is biased against the applicant in that the tariff reduction will weigh heavily on the applicant than on the other operators who have not bothered to pay the $137,5 million licence fees. The applicant avers that there is no level playing field.

In addition, the applicant challenges the authority of the respondent to act in the manner it did.

The applicant argues that section 4(g) and (i) as read with section 100 of the Postal and Telecommunications Act [Chapter 12:05], under which the respondent purported to act, does not empower it to vary existing approved tariffs mero motu without an application or proposal for the variation of the tariffs by a licensee. The applicant further submitted that the respondent violated the audi alteram partem rule by imposing tariffs without first affording the applicant an opportunity to be heard on the proposed tariffs and the effective date of the tariffs. The applicant's position is that the respondent exceeded the powers conferred upon it and acted ultra vires the Postal and Telecommunications Act.

Counsel for the applicant contended that the respondent cannot purport to act in terms of section 42 as a tariff is not part of a licence and powers conferred upon the authority by section 42(1) do not include the power to amend a tariff.

The applicant canvassed the requirements of a temporary interdict and urged the court to find in its favour.

I will not, for the purposes of this judgment, summarize arguments advanced by both parties with respect to the merits of the interdict. The application is premised upon the trepidation that if the respondent is allowed to impose illegal tariffs before the applicant's rights are finally decided by the court, it will suffer irreparable harm if it subsequently succeeds in this dispute, in that it will not be able to recover the loss suffered as a result of the unlawful reduction in tariffs. The applicant reasons that the reduction in its tariffs will force the applicant to retrench some of its employees and to downscale its distribution network that has created 20,000 jobs. Further, that the applicant will be forced to discontinue some of its scholarship programs in which it pays fees for more than 40,000 less privileged members of the society.

The terms of the interim order sought are as follows:

“INTERIM RELIEF GRANTED

Pending the determination of this matter, the applicant is granted the following relief:-

1. That the implementation of the Postal and Telecommunication Regulatory Authority of Zimbabwe [Determination on Voice, Data and Internet Charges for Regulated Telecommunication Services in Zimbabwe] regulatory Authority of Zimbabwe (Circular on Implementation of Excise Duty on Airtime or network usage for voice, internet and data services provided by Public Telecommunication Service Providers) Regulatory Circular Number 1 of 2014 be and is hereby suspended.”

The final relief sought is for an order suspending the operation of the determination until the respondent has collected licence fees from other mobile operators.

The respondent's submissions in response may be summarised as follows:

The regulatory determination purports to cite section 100 instead of section 42(1)(d) of the Postal and Telecommunications Act [Chapter 12:05]. The true intention or purpose of the action can be gleaned from the consequences and not the label placed on the determination. There has not been any unlawful interference by the respondent in the applicant's business. The conduct complained of has a basis in section 42 which gives the respondent powers to amend licences in specific instances and an amendment can be made in terms of section 42(1)(d) if considered desirable and in the public interest. The regulatory determination does not seek to direct any licensee what to charge but sets a limit above which no operator shall charge. The same section, in subsection 2, enjoins the respondent, prior to amending the licence, to give its reasons for the decision and invite the licensee's input into the matter. The respondent denied that the determination is discriminatory. Counsel for the respondent submitted that there is no discrimination as the licence fees which other operators also pay have not been reduced. The other operators are expected to fork out the same full licence fees. He contended that the applicant has the advantage that it has been able to recoup part of its outlay on the back of high tariffs. He submitted that the tariffs have been reduced in the public interest.

The respondent took up two preliminary points;

(i) The respondent argued that the applicant has adopted a wrong procedure for seeking this relief.

The respondent submitted that the remedy of an interdict is resorted to only when other alternative remedies are not available and when the delays associated with the use of other remedies could cause irreparable harm. The respondent submitted that that the applicant ought to have sought relief in terms of section 96 of the Postal and Telecommunications Act [Chapter 12:05], as the effect of the regulatory determination complained about is to amend existing tariffs which are an extricable component of a licence. That the applicant ought to have requested for reasons from the Minister and if not satisfied with the reasons, appealed to the Administrative Court if need be. The respondent insists that a wrong procedure was adopted for seeking this relief, that the application is improperly before the court and ought to be dismissed on that basis alone.

(ii) The respondent's second point relates to the urgency of the application.

The respondent submitted that the application is not urgent as the applicant has always been aware of the respondent's intentions. Counsel for the respondent submitted that the dispute has been raging on since 2013 when research was conducted by the respondent - with the participation of the applicant. This resulted in the applicant penning a letter, dated 24 June 2014, wherein the applicant threatened to take the matter to court if the respondent did not withdraw its intentions. He submitted that this matter became urgent and ripe for taking to court in June 2014 and that the applicant has not explained its failure to take any action from July to 24 October 2014.

The respondent asserts that the applicant has not been candid with this court and was selective in the information it presented to the court. That if the applicant had disclosed to the court the existence of the letter dated 24 June 2014 this would have negatively affected any notions of urgency….,.

The applicant opposed both preliminary points.

The applicant insisted that this application is properly before the court. It submitted that this matter is not an appeal but a review against the determination and is properly before the court.