Court name
Bulawayo High Court
Case number
HC 121 of 2003
121 of 2003
122 of 2003

Kerrigan Investments (Pvt) Ltd t/a Rifa Wildlife Safaris and Ors v Zimbabwe Revenue Authority (HC 121 of 2003, 121 of 2003, 122 of 2003) [2003] ZWBHC 26 (26 February 2003);

Law report citations
Media neutral citation
[2003] ZWBHC 26

                                                                                    Judgment No. HB 26/2003

                                                                                    Case No. HC 215-6/2003                                                                                                           HC 217-8/2003

                                                                                                    HC 219-20/2003                                                                                                         HC 121-22/2003



















Ms N. Ncube for the applicants

A. B. C. Chinakefor the respondent


Urgent Application


            CHEDA J:     Applicants filed urgent applications seeking an interim order


interdicting respondent from freezing, garnishing or interfering with their bank


accounts held by several banks in Bulawayo.


            As all applicants present the same issue and were being represented by the


same legal practitioner and equally so, respondent, I decided to deal with them


together.  Applicants are registered safari operators in terms of the laws of Zimbabwe. 


Respondent is a parastatal empowered to collect revenue for and on behalf of the


Government of Zimbabwe.  They do so under various Acts of Parliament and the


appropriate one in this case being the Income Tax Act [chapter 23:06].  It is under this


Act that respondent is authorised to audit, investigate and also freeze any person or




                                                                                                            HB 26/03



business concern’s account should they, during their investigations form an opinion


that there have been some irregularities, which may financially prejudice their fiscal


collection procedure.


            It is common cause that during audit inspections being carried out by


respondent such irregularities were found which led to the freezing of applicants’




            It is pertinent to mention that applicants have, also filed separate applications


asking this court to declare that respondent’s actions in freezing the said accounts


acted ultra vires its powers in terms of section 30 as read with schedule 17 of the


Income Tax Act [chapter 23:06], in ruling that, the withholding tax is due and


collectable by applicant for commission paid by non-resident clients to non-resident


independent operators.  They further seek an order that in terms of section 30 as read


with schedule 17 of the Income Tax Act there is no statutory obligation on the part of


applicant to collect withholding tax on commission paid directly to a non-resident


operator by a non-resident hunter.  These issues are yet to be determined by this court.


            Ms Ncube for the applicants argued that respondent has no legal basis for


freezing the said accounts because the commission on which the withholding tax is


founded does not originate from Zimbabwe.  Her further argument, is that, if


respondent is allowed to continue freezing applicants’ account, applicant will be


rendered bankrupt as they cannot economically operate their businesses without these




Mr Chinakefor respondent has vigorously opposed this application as he


argued that respondent is empowered to withhold tax in terms of section 30 of the



                                                                                                            HB 26/03       



Income Tax Act which reads:


            “Section 30 - Non-residents’ tax on fees


There shall be charged, levied and collected through out Zimbabwe for the benefit of the Consolidated Revenue Fund on non-residents’ tax on fees in accordance with the provisions of the seventeenth schedule at the rate of tax fixed from time to time in the changing Act.” (my emphasis)


            The question which should be determined is whether the word “commission”


as used in the present context falls within the scope of section 30 of the Income Tax



            It is basically on that basis that respondent is of the view that it is entitled to


freeze these accounts.  It is clear that there is a need for the determination by this


court as to whether there is any legal basis for respondent to have acted in the manner


they did . 


Applicants also argued that it is essential that they be allowed to utilise


their accounts pending the final determination of the other court application referred


to above.  Their fears are that in the event that the court holds in their favour


respondent will not be able to reimburse them.  In fact, Ms Ncube argued that not only


does respondent have problems in securing foreign currency but local currency as


well.  In reply Mr Chinake pointed out that this in fact is not correct as in the current


year respondent has successfully collected Z$258 billion and has this year budgeted to


collect Z$728 billion in revenue.  While it is correct to say that respondent has


problems with foreign currency, it cannot be correctly said so of the local currency. 


This therefore stands to reason that respondent is in a position to reimburse applicants


should applicants succeed in their other applications.





                                                                                                            HB 26/03



            This argument by Ms Ncube although sound however, it seems to overlook


one real possible route which applicants can take in the event that they are allowed to


utilise their accounts pending determination of their other applications by this court


that is of winding up their companies.  She buttressed her argument by pointing out


that the economy of the country in general is not favourable for business and that the


tourism industry in particular has taken a slump.  While these observations are indeed


correct, I find that there is reason enough for any business person to close shop or


diversify into other businesses.  It is possible therefore for applicants in those


circumstances to declare themselves insolvent after they have been allowed to utilise


their accounts.  Should this happen, then respondent will suffer irreparable harm as


they will not be able to recover tax in the event that, the court’s determination is in


their favour.  The situation will be however, entirely different if the courts determine


in applicants’ favour as their money will still be held in the bank.


            In an application of this nature applicant must show a prima facie case in order


to succeed.  In the present case it is clear that, there is a dispute as to the interpretation


of the relevant provisions of the Act under discussion.


            As pointed out above their fears are without justification in view of what they


might do after they have been allowed to freely utilise their accounts, this argument


is therefore rejected as it is devoid of any merit.  In addition they have failed to make


a prima facie case against respondent.  The reason for this is that, they have not been


truthful with the court in arguing that respondent will not be able to pay them in the


event of their success.  I am persuaded to agree with Mr Chinake’s argument that in





                                                                                                            HB 26/03       



the case of Western Safaris P/L, the account held is $1.8m, which represents, possibly


one asset of e.g. a motor vehicle.  To say that a business will be bankrupt as a result of


a freeze on an asset of $1.8m or so in a business which has been receiving such large


sums of foreign currency is not entirely correct.  It also emerged that the collection


percentage of the said commission is not uniform as it varies from one safari


operator to the other.  One wonders why this is so and applicants were unable to


explain this irregularity.  This on its own is reason enough to justify the freezing of


the accounts.  This goes to demonstrate their lack of bona fides.


            Having listened to both arguments and perused various documents before me I


am of the view that there is a need for the courts to determine the main application,


more particularly in view of the fact that the commission referred  to in the National


Parks Declaration forms lacks uniformity as far as the calculation of the commission


is concerned.  With all due respect, the fact that the calculation of commission is left


at the whims of applicants, is an indication that proper determination should be made


by this court.


            It is for the above reasons that respondent should be allowed to freeze


accounts in the meantime, which it reasonably believes, there have been irregularities


in the declaration of foreign currency.


            The court will therefore be failing in its duty, if it is seen to be hindering


respondent in its quest to correct what is prima facie an irregularity.  The balance of


convenience favours the freeze.


            There is no irreparable harm which will be suffered by the applicant if their


accounts are frozen and I accordingly dismiss this application with costs.



                                                                                                            HB 26/03






Messrs Lazarus & Sarifapplicants’ legal practitioners

Kenntor & Immerman respondent’s legal practitioners