Minister ordered to pay back $400k

Minister ordered to pay back $400k

Source: Minister ordered to pay back $400k – DailyNews Live

Tendai Kamhungira      9 May 2018

HARARE – The High Court has ordered Labour and  Social Welfare minister
Petronella Kagonye to pay over $400 000, including interest, borrowed from
a local bank over five years ago.

The court heard on May 24, 2011, CBZ Bank Limited and Kagonye entered into
an agreement in which the bank agreed to provide the politician with an
overdraft facility.

In the application, Kagonye and three other people – Peter Muganyi, Lilian
Muganyi and Cecilia Shingaidzo Midzi, who signed as surety and core
principal debtors – are cited as the respondents.

“It is ordered that: defendants pay the plaintiff the sum of $461 842, 46,
defendants pay the plaintiff interest on the above amount at the rate of
28 percent per annum.

“The hypothecated immovable property being a certain piece of land in the
district of Salisbury called Stand 808 Chadcombe Township of Stand 562
Chadcombe Township measuring 480 square metres held by the fourth
defendant (Midzi) under deed of transfer No. 4856/1992 dated the 3rd of
September 1992 is declared executable,” High Court judge Charles Hungwe’s
ruling reads.

According to the court order, all the movable properties under two
notarial general covering bonds were also declared executable.

Hungwe further ordered Kagonye and her accomplices to pay “…collection
fees calculated in terms of the Law Society of Zimbabwe by-laws, 1982” and
the cost of suit.

The litigation arose from a loan facility entered between the parties in
2011, which Kagonye failed to satisfy in terms of the agreement.

“The agreement between the parties provided inter alia that: the plaintiff
(CBZ) would loan and advance to the first defendant (Kagonye) an overdraft
facility in the total sum of $318 000 to finance the first defendant’s
farming operations.

“The plaintiff would be entitled to charge and debit the defendant’s
account with interest compounded monthly on the daily balance owing from
time to time as the rate may be varied from time to time in accordance
with the fluctuation in interest rates,” the court heard.

The bank said as of October 2016, the outstanding balance stood at $461
842, 46.

The bank argued in court papers that despite several demands, the
defendants failed or neglected to pay amounts claimed.

However, the respondents had argued that the bank had no cause of action
against Peter and Lilian, claiming they were wrongly cited.

“Second and third defendants do not owe plaintiff in any way,” the
respondents said, demanding the dismissal of the claim against the two.”

In the response, the respondents further said the overdraft facility
referred to in the application was converted into a loan facility on
October 23, 2012 with a fixed interest rate of 14 percent per annum.