Staff Writer
Reserve Bank Of Zimbabwe former central bank governor Gideon Gono has suffered a setback after a court dismissed his bid to oust a lawsuit by a South African company which is demanding US$2.2 million for grain deliveries made between 2009 and 2010.
Gono and his companies Lunar Chickens and New Donnington Holdings entered seven special pleas or legal objections to the huge financial claim by ASP Marketing which is demanding payment for maize and soya beans delivered more than a decade ago.
In a September 27 judgement, Justice Joseph Martin Mafusire of the Harare High Court dismissed all the special pleas with costs, and the dispute will now go to trial.
Through his lawyer Tendai Biti, Gono and his companies raised several objections to the claim, including arguing that ordinary debts become prescribed after the lapse of three years; the court has no jurisdiction as the contracts provided for arbitration in South Africa; that the contracts were illegal and void because Lunar Chickens had no Reserve Bank of Zimbabwe authority to make foreign payments and that Selwyn James Vandeya, who filed the lawsuit for ASP Marketing, had no authority because the contract stated that one Alida Aletta Craukamp was the only one authorised to institute legal proceedings.
Biti also argued that ASP Marketing, as a foreign company with no assets in Zimbabwe, had failed to pay security for the defendants’ legal costs and further argued that New Doddington and another company, Rimaitidye Enterprises, were improperly cited as ASP Marketing had no cause of action against them.
And, citing Statutory Instrument 33 of 2019, Gono’s legal team said any money that might have been due and owing to ASP Marketing would not be payable in the local at a rate of 1:1 as the debt in question was not a “foreign obligation.”
Justice Mafusire dismissed all the objections. On the question of the claim being filed out of time, Justice Mafusire said whereas the Prescription Act does say ordinary debts are not legally enforceable after three years, the law also says that an express acknowledgment of debt within the period interrupts the running of prescription.
The judge noted that Gono acknowledged the debt to ASP Marketing’s Saul Ngobeni in an email on July 5, 2012, when he wrote: “I propose to pay, despite our current challenges, an amount starting next week of R200,000 equivalent per week. In ten weeks that will be R2 million and so forth.”
“Therefore, prescription would have started to run afresh from than time for the next three years until June 2015,” the judge said. “ASP Marketing took legal action by serving process on the defendants in June 2014. That’s well within the period of prescription.”
The judge said the argument on the breach of exchange control regulations had no merit as the law does not apply to individuals transacting with their free funds or money held in foreign accounts. Gono, the judge noted, had in fact made a payment to ASP Marketing using the South African bank account of one of his companies.
The plea on currency of the claim, the judge said, had been smuggled in by Gono’s legal team.
“It is not clear where this so-called plea has sprung from. It was never pleaded. Issues for trial stem from pleadings. It is the function of the pleadings to define with some degree of precision the nature and extent of the field of play,” the judge said.
He, however went on to say that particular objection cannot be used to stop the matter going to trial.
“It neither destroys ASP Marketing’s cause of action nor postpones it. It is just an objection to nowhere. In the event that ASP Marketing succeeds on liability, the currency of the quantum may still have to be determined. Thus, this is an objection that needs not detain the court at this stage,” Mafusire added.
The judge said “none of the special pleas by the defendants has any merits.”
“They are hereby all dismissed with costs. The trial of this matter shall resume at a date to be advised by the registrar of the High Court,” he added.
Gono was reserve bank governor between 2003 and 2013.
ASP marketing says in papers before the court that its executives got to know Gono in 2009 when they were supplying maize to the Zimbabwe government secured from contract farmers in South Africa.
Gono, who was running his chicken project with Lunar Chickens subsequently made maize and soya bean orders for his farm from ASP marketing to the tune of US$2,201,044.05.
Gono later tried to offset part of the debt by offering equity in his company but “this was rejected out of hand” by ASP Marketing, the company says.
Fadzayi Mahere is the lawyer for ASP Marketing.