The plaintiff, Trojan Nickel Mine Limited, maintained a foreign currency account at Banc ABC. On 1 October 2007, the Reserve Bank of Zimbabwe (defendant) issued a Monetary Policy Statement under s 46 of the Reserve Bank Act centralizing all foreign currency accounts and directing all corporate foreign currency balances held by authorized dealers to be lodged with the Reserve Bank. On 2 October 2007, the defendant issued a directive to all Authorized Dealers under s 35(1) of the Exchange Control Regulations SI 109/96 requiring immediate transfer of all corporate foreign currency balances. Banc ABC complied with the directive and remitted USD 1,492,516.06 to the defendant, which included the plaintiff's balance of USD 1,007,541.30. The defendant retained the money and did not return it to Banc ABC, preventing the plaintiff from accessing its funds despite demand.
1. Judgment entered in favor of the plaintiff against the defendant in the sum of USD 1,007,541.30 together with interest a tempore morae at the prescribed rate from date of summons to date of payment. 2. The defendant is directed to deposit the said sum into the plaintiff's Banc ABC account number ZWTROJ001CALUSD0019 or any other account held by the plaintiff at that bank. 3. The defendant to bear costs of suit.
The binding legal principles established are: (1) A central bank that issues a directive causing a commercial bank to breach its contract with a depositor by appropriating the depositor's funds is liable for intentional inducement of breach of contract and wrongful interference with contractual rights; (2) Regulatory authority over the banking sector does not authorize arbitrary deprivation of depositors' property or interference with the contractual obligation of banks to pay deposits on demand; (3) Where a party is enriched by appropriating another's property without legal justification, liability exists on the basis of unjust enrichment, the requirements being: (a) enrichment of defendant; (b) impoverishment of plaintiff with causal connection between the two; (c) unjustified enrichment; (d) not falling under classical enrichment actions; and (e) no positive rule of law refusing the action; (4) The absence of a direct contractual relationship (privity of contract) between a depositor and the central bank does not shield the central bank from liability where it has intentionally procured breach of contract or been unjustly enriched.
The court made several significant obiter observations: (1) Mathonsi J quoted with approval the statement from Executive Officer of the Financial Services Board v Dynamic Wealth Ltd 2012(1) SA 543 regarding the historical need for government regulation of financial services; (2) The court emphasized as a matter of policy that "the security of bank deposits should forever be protected by our courts" and that it would be "an affront to the rights of depositors if ownership of their property stored with banks and the culture of banking money instead of keeping it under a pillow were to be rendered a serious economic hazard and a ruinous activity"; (3) The court stated that "our law, which protects ownership of property is founded on a rock of wisdom" and that "courts should be clear, consistent and firm in enforcing principles protecting deposits"; (4) The court noted that "the expropriation of export proceeds prior to dollarization which have not been compensated is one of the major factors inducing weak balance sheets of businesses resulting in poor economic performance"; (5) The court distinguished the case from China Shougang International v Standard Chartered Bank Zimbabwe Limited HH 310/11 on multiple grounds and noted that the obiter statement in that case regarding lack of privity between central bank and depositor did not address the issue of wrongful procurement.
This case is significant in Zimbabwean jurisprudence for several reasons: (1) It affirms the actionability of intentional inducement of breach of contract and wrongful interference with contractual rights as delicts; (2) It recognizes and applies the general enrichment action in Zimbabwean law; (3) It establishes limits on the Reserve Bank's regulatory powers, holding that regulatory authority does not extend to arbitrary deprivation of private property or interference with depositors' contractual rights; (4) It strongly affirms the protection of property rights, particularly bank deposits, as sacrosanct rights that courts must firmly protect; (5) It addresses the broader economic context of expropriation of export proceeds prior to dollarization and its impact on business balance sheets and economic performance; (6) It sends a clear message that monetary authorities cannot appropriate private funds without legal basis and avoid liability by claiming lack of privity of contract.