BHUNU J: The respondent,
that is to say the Reserve bank of Zimbabwe is a body corporate
established in terms of the Reserve Bank Act [Cap
22:15]. Its function
among others include acting as the Exchange control Authority in
terms of the Exchange Control Act [Cap
22:05] as read with
the Exchange Control Regulations Statutory Instrument 109/09.
On the other hand the applicant is a duly registered company which is
in the business of exporting commodities.
In terms of s7 of the Exchange
Control Regulations (currency Exchange) 0rder S.I. 9 of 2004 the
applicant is required to acquit its export documentation that is to
say, repay or settle its debts or obligations to the respondent
arising from export receipts commonly known as CD3 forms. The section
reads:
“7(1) With effect from the 1st
January, 2004, every business organisation engaging in the export of
goods and services shall be required to acquit the export
documentation in respect of those exports.”
Failure to acquit CD3 forms in terms of the Regulations amounts to a
criminal offence punishable by the courts.
Sometime in 2000 the applicant fell into arrears with the acquittal
of some of its CD3 forms. As a result it was prosecuted, convicted
and fined in the Magistrates Court. In sentencing the applicant the
trial magistrate found special circumstances for not ordering
repatriation. As a result he sentenced the applicant to a fine of
$2,000,000.00 but declined to order repatriation as requested by the
state.
Repatriation in terms of the Regulations means to pay back.
Following the conviction and sentencing of the applicant the
respondent demanded the acquittal of the outstanding CD3 forms in
terms of the Regulations.
The applicant refused to repay or settle its debts to the respondent
arising from the outstanding CD3 forms arguing that it had been
absolved by the magistrate from paying its debts to the respondent
whereupon the respondent allegedly invoked the sanction provided by
s7 of the Exchange Control regulations S.I. 9 of 2009.
The effect of which was to freeze the applicant's foreign currency
account number 9440031502000.
The applicant then filed this application seeking a declarator to the
effect that it has been absolved from regularizing or acquitting its
CD3 forms by the Magistrates Court. It also sought an order
overriding the sanction imposed by the respondent.
The respondent has objected to the applicant's application on the
basis that it has not exhausted its domestic remedies and that the
magistrate's refusal to order acquittal of the CD3 forms did not
amount to absolving the applicant from regularizing or acquitting its
CD3 forms according to law.
The issues which arise from the undisputed facts is;
(i) whether or not the magistrate in sentencing the applicant
absolved it from regularizing or acquitting its CD3 forms according
to law; and
(ii) whether or not the applicant is properly before this Court.
While it is desirable that parties should be encouraged to exhaust
their domestic remedies before approaching the courts, the mere
existence of domestic remedies does not oust the unlimited
jurisdiction of this Court. The Court has therefore discretion
whether or not to entertain the application.
Having regard to the fact that the regularization or acquittal of CD3
forms has a direct bearing on the fiscus, the country's economy and
the applicant's business operations, it is in the national interest
that the matter be determined as soon as possible. That being the
case, I have decided to determine the matter on the merits so as to
avoid unnecessary delays which may have the effect of prejudicing
both parties and the nation at large.
I now proceed to determine the application on the merits.
In sentencing the applicant the trial magistrate declined to make a
repatriation order on the basis that he had found special
circumstances. In his reasons for sentence at page 9 of the record of
proceedings the Magistrate remarked that:
“For all the forgoing reasons
it is this court's finding that special reasons or circumstances
exist in relation to both the offence(s) and the offender. See: S
v Chisiwa
1981 ZLR 666 (H),
S v Mbano 1990 (1) ZLR
270 (SC).
It will be considered favourable that the Accused Company is a first
offender.
Of course the message must be distinctly conveyed to the Accused
Company and would be offenders, that CD3 Forms must be acquitted
within stipulated times as directed.
It will be noted also that quite substantial amounts of monies were
not accounted for to the Reserve bank and that this is to be
discouraged by the meting out of a fairly stiff penalty for the
conviction today, but not necessarily repatriation of the monies as
urged by State Counsel.
The following is the Accused Company's sentence:-
Fined $2,000,000,00 (new
currency) or,
in default of payment, Warrant of execution against property.”
I have carefully gone through the trial magistrate's reasons for
sentence and I have found nowhere he stated or suggested that the
applicant was excused or absolved from acquitting its CD3 forms.
It is clear from a proper reading
of the trial magistrate's reasons for sentence that he was alive to
the applicant's statutory obligation to acquit its CD3 forms hence
his remarks to the effect that the message must be driven home to the
applicant and others that CD3 forms must
be acquitted within the prescribed time limits.
Check the use of the compulsive
word “must”
and not “should”.
The acquittal of CD3 forms is a statutory obligation imposed by law.
That being the case, it is not the function of the courts to excuse
or absolve anyone from complying with the law. The mere fact that in
punishing the applicant during criminal proceedings the trial
magistrate declined to order repatriation did not absolve or excuse
the applicant from complying with the law.
By the same token the refusal to order repatriation was no bar to the
respondent from compelling the applicant to discharge its statutory
obligations failure of which it was entitled to invoke any statutory
penalties according to law.
Counsel for the applicant placing
reliance on the case of Flood
v Taylor 1978 RLR
230 further argued
that the matter is now res
judicata in the sense
that the rights of the parties have already been determined by the
magistrate's judgment. It was his argument that:
“All rights and obligations of
the Applicant and Respondent were concluded by the judgment delivered
by the learned Magistrate and does not require the Applicant to
exhaust domestic remedies.
Since the matter is now res
judicata it's
apparent that the respondent failed to comply with the judgment
granted by the magistrate. Contrary to the judgment they are forcing
the applicant to repatriate the monies or acquit CD3 forms and as
they prohibit the applicant from carrying out transactions on his
foreign account number 9440031502000. Strictly speaking this is a
clear violation of a court order hence it amounts to contempt of
court.”
It is needless to say that
counsel's reliance on the case of Flood
(supra.) is grossly
misplaced. That case held at page 232C that:
“When res
judicata is pleaded by
way of estoppel it amounts to an allegation that the whole of the
legal rights and obligations of
the parties are
concluded by the earlier judgment and that the plaintiff is estopped
by the findings of fact involved in that earlier judgment (see
Halsbury's Laws of
England, 4th
Edition, volume 16, paragraph 1527). The central issue then is what
the judgment prayed in aid should be treated as concluding and for
what conclusion it is to stand.”
The applicant's plea of res
judicata falters at
the very first hurdle in that the respondent in this case was not a
party to the criminal proceedings in the magistrates' court. It is
common cause that the parties to that case were the State and the
applicant.
In any case the magistrate's judgment did not order or prohibit the
respondent from compelling the applicant to discharge its statutory
obligations of repatriating or acquitting its CD3 forms.
That being the case, the respondent cannot be bound by a judgment to
which it was not a party and which made no specific order binding on
it.
It is instructive to always bear in mind that in our law criminal
proceedings are separate and distinct from civil proceedings such
that criminal proceedings are not a bar to civil proceedings.
Section 4 of the Criminal
Procedure and Evidence Act [Cap
9:07] provides that:
“4
Neither acquittal nor conviction a bar to civil action for damages
Neither a conviction nor an acquittal following on any prosecution
shall be a bar to a civil action for damages at the instance of any
person who may have suffered any injury from the commission of any
alleged offence.”
It is common cause that despite not being a party to the proceedings
in the magistrates court the respondent suffered financial loss,
damage or injury arising from the commission of the crime. In fact
the trial magistrate made a specific finding of fact that the
respondent suffered huge losses arising from the commission of the
crime.
It must be borne in mind that the object of criminal proceedings is
to punish the offender whereas the object of civil proceedings is to
compensate or provide redress to the injured party.
The standard of proof in criminal proceedings is ordinarily proof
beyond reasonable doubt whereas that for civil wrongs is proof on a
balance of probabilities.
It is therefore, not surprising that based on the same facts or
evidence a criminal court may arrive at a different decision from
that of the civil court.
For instance, it is unthinkable that a person negligently injured in
a road accident could be denied redress in the civil courts purely on
the basis of findings made in the criminal courts.
It therefore, stands to reason that criminal proceedings should not
be a bar to civil proceedings.
For that reason the respondent falls within the class of persons who
are not barred from seeking redress in the civil courts not
withstanding the applicant's conviction in the criminal court
arising from the same facts.
It makes good sense that what is not prohibited is allowed by law.
The respondent is therefore, entitled to resort to all civil remedies
at its disposal including statutory remedies provided by law.
That being the case, the application cannot succeed. It is
accordingly ordered that the application be and is hereby dismissed
with costs.
J Mambara & Partners, applicant's legal practitioners
Dube Manikai & Hwacha, respondent's legal practitioners
