ZETDC wins US$4 million debt recovery case

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By Mary Taruvinga, Senior Reporter

THE Zimbabwe Electricity and Distribution Company (ZETDC) has won a case it was seeking to recover a US$4,6 million unpaid power debt from Zvishavane Town Council.

This comes after five years of fighting in the courts with the town council refusing to pay the bill on grounds that it was also owed by ZETDC.

ZETDC mounted the lawsuit back in 2016, suing over 100 local authorities in attempts to recover over US$1 billion unpaid power bills.

The power company won the case at the High Court but Zvishavane was not happy about the outcome.

Zvishavane took the matter up to the Supreme Court, where the bench, chaired by Justice Samuel Kudya dismissed the appeal ruling the High Court was correct in ordering payment of the outstanding bill.

“I, therefore, find that the court a quo was correct to invoke the doctrine in determining whether the by-laws were void ab initio and of no force or effect,” said the judge.

Zvishavane had appealed at the Supreme Court seeking to set-off the main claim and prayed for the payment of the remaining credit balance of US$10 664 567.50, interest and costs of suit.

The local authority also said the High Court misdirected itself in holding that ZETDC’s way leave claim of US$2 375 083.50 was prescribed and that it is not a tax.

The Supreme Court however upheld arguments by ZETDC lawyer, Advocate Thabani Mpofu, that the by-laws were ultra vires both the primary Act and the relevant Act. Mpofu had argued that way leaves do not form part of that list.

Mpofu said as way leave charges were not chargeable under the Electricity Act. The Supreme Court concurred.

“The exercise of the way leave statutory servitude is not one of the matters that is specified in the Third Schedule.

“I, therefore, agree with Mr Mpofu that the appellant could not lawfully levy way leave charges in terms of s 227 (1) of the primary Act.

“I have already found that s 44 (1) of the relevant Act, which created way leaves was only subject to the other provisions of s 44 and not to any other statute.

“The only payment that could be made to the landowner under that provision would be compensation determinable in terms of Part III, V and VIII of the Land Acquisition Act. The subsection was not subject to the Urban Councils Act.

“The appellant could not, therefore lawfully impose way leave charges on the respondent.”

Court papers show that Zvishavane admitted owing the amount but counter-claimed for unpaid way leave charges and rates amounting US$15 310 916.10.

The amount among other things consisted of way leaves of US$4 750 167 inclusive of 15% VAT, incurred during the period extending from January 1, 2011 to June 30, 2016.

Zvishavane sought to set-off the main claim and prayed for the payment of the remaining credit balance of US$10 664 567.50, interest and costs of suit.

However, ZETDC disputed owing the counter-claimed way leave charges.

In the alternative, it pleaded prescription in respect of one-half of the claim to June 30, 2013, being the retrospective period in excess of three years from the date on which the counter-claim was served.

In the statement of agreed facts, it admitted owing Zvishavane US$720 984.53 in rates and other services other than way leave charges.

The High Court had upheld ZETDC ‘s special plea and dismissed Zvishavane’s claim for way leave charges in its entirety.

Judgment was granted in favour of ZETDC together with interest at the prescribed rate from 1 June 2016 to date of full payment.