South African fights RTGS payout of US$5,5 million debt by Gwanda town

BULAWAYO — The Bulawayo High Court has postponed to October 9 the hearing of a dispute between the estate of the late Lourens Marthinus Botha and Gwanda Rural District Council over whether a judgement debt of US$5.5 million was properly discharged in local currency.

The matter was postponed on Thursday for continuation of arguments, with the court yet to rule on the central dispute.

The estate, represented by executor Hendrik Johannes Bezuidenhout, is seeking an order declaring the judgement debt a foreign obligation payable in United States dollars.

It wants the court to set aside the council’s payment of RTGS$5,507,980 and order it to pay US$5,507,980 instead.

The draft order filed by the estate asks the court to declare that the monetary amount in an earlier High Court judgement constituted a foreign obligation under section 44C(2)(b) of the Reserve Bank of Zimbabwe Act. It also seeks an order reversing the RTGS payment and directing the council to pay the US$5,507,980 within 30 days.

The council is opposing the application and maintains that it has discharged the judgement debt through the payment already made.

The estate argues that the funds underlying the obligation originated outside Zimbabwe and that the debt therefore remained payable in US dollars.

Court papers filed in support of the application trace the dispute back almost two decades, to a joint venture agreement Botha, a South African national, signed with the council on December 17, 2007.

Under that agreement he was to carry out infrastructure improvements on the council’s Doddieburn Ranch, developing an eco-tourism facility and stocking it with game, using funds and equipment he sourced himself. The agreement provided that if the council ever terminated the arrangement, it would have to compensate Botha for the improvements and stock he had put in.

The council terminated the joint venture on October 22, 2014, triggering the compensation dispute that has run through arbitration and two levels of the court system since. An arbitrator, Promise Ncube of Coghlan & Welsh, made a series of awards, including a final arbitral award in Botha’s favour for the improvements, which the High Court subsequently registered as an order of court. The Supreme Court later dismissed the council’s appeal against that registration.

Botha did not live to see the matter resolved. He died in South Africa on December 4, 2019, while the Supreme Court appeal was still pending, and was buried there. Under a joint will he had executed with his wife, Gesina Maria Beatric Botha, the two were named co-executors of his estate; she later declined the appointment, leaving Bezuidenhout, a fellow South African, to administer the estate alone.

The estate’s founding affidavit sets out in detail where the money for the Doddieburn Ranch development came from, in support of its argument that the underlying obligation was always a foreign one. It cites a 2008 partnership agreement Botha signed in South Africa with Nordic Saga Investments 249 CC, under which the South African company injected R600,000 in cash and supplied fencing material, game-capture equipment, a tractor and trailer, and water-pumping infrastructure for the ranch. A separate 2008 agreement signed in Gaborone, Botswana, with a company described in the papers as Huntessentialfishfantastic (Proprietary) Limited, financed the purchase of lions, buffaloes and a hunting quota for the game farm, before the Botswana company went on to acquire a 51% shareholding in Doddieburn (Private) Limited in 2009 and fund the ranch’s lion, buffalo and sable breeding projects and its running costs.

The papers show the council eventually paid out RTGS$5,507,980 in two tranches at the end of July 2021 — seven months after the Supreme Court dismissed its appeal — which the estate says amounted to converting the original US$5,507,980 judgment to RTGS dollars at a rate of 1:1.

The estate contends section 44C(2)(b) of the Reserve Bank of Zimbabwe Act exempted the judgement from the general conversion of foreign liabilities into RTGS dollars that took effect on February 22, 2019, precisely because the obligation it captured was foreign in origin.

The estate’s application was filed by Ncube Attorneys, with Professor Welshman Ncube and Advocate Method Ndlovu representing the applicant, instructed by Matshobana Ncube.

The council is represented by Advocate Lucas Nkomo.

The matter will continue before the High Court in Bulawayo on October 9 before Justice Nokuthula Moyo.