Fidelis Munyoro Chief Court Reporter—
Harare businessman Mr Eric Rosen has allegedly refused to settle more than US$50 000 of an outstanding debt to a local bank, arguing that the interest and penalties charged on the loan are tantamount to daylight robbery. Mr Rosen, through his company, Eric Rosen (Pvt) Ltd, obtained a loan totalling US$100 000 from ZB Bank between February and March 2013.
This was after the parties entered an agreement in terms of which the bank would extend to the businessman a revolving credit facility of up to US$50 000.
Under the agreement, ZB Bank disbursed to Rosen, on a revolving basis, including rollovers, total capital amount of US$264 371,25.
The bank charged total interest of US$20 082,49 plus bank charges of US$3 475,76, bringing the total payable to the bank to US$287 929, 50.
Mr Rosen, who is cited together with his wife Elizabeth and their company Eric Rosen (Pvt) Ltd, allegedly failed to make punctual payments under the facility but later managed to pay back US$236 272,44 including rollovers by end of January this year.
This left the couple with a balance of US$51 657,06 which they are allegedly refusing to settle.
This prompted ZB Bank to sue the couple and their company at the High Court to recover the outstanding balance.
According to the ZB Bank claim, the couple, bound themselves as sureties and co-principal debtors with Eric Rosen (Pvt) Ltd for payment of any and all monies due to the bank by the company.
The bank further stated in its claim that in terms of the agreement, interest was to accrue on the credit facility at the rate of 30 percent per annum.
It was also agreed that in the event of the company defaulting on making due and punctual payment of any outstanding amount upon the expiry of the facility, the arrears were to attract an interest of 50 percent per year.
According to the bank, Rosen agreed to pay bank charges regarding the administration of the account.
Through their lawyer, Mr Tinofara Hove of TK Hove and Associates, the couple is denying that the total amount payable to the bank is US$287 929-50.
“The defendants (the couple and their company) aver that they were advanced US$50 000 on 20th February 2013 and another US$50 000 on 19 March 2013,” said Mr Hove in the defendants’ plea.
Mr Hover challenged the bank to prove that the amount payable to it is US$287 929-50.
He said his clients deny owing the bank the balance of US$51 657,06 as alleged and contends that the interest that was being charged by the bank was excessive in the circumstances.
“The defendants aver that the penalty clause is void and unenforceable on the grounds that it is usurious,” said Mr Hove adding: “The interest rate of 50 percent is against public policy and therefore unenforceable.”
The civil trial, which was supposed to commence yesterday before Justice Joseph Martin Mafusire, was deferred to a later date during the course of this month.