Law firm blocked from using US$ 57k
THE US$57 000 pile of cash that was found in the strongroom at Mtetwa and Nyambirai law firm cannot be spent until the circumstances under which the money was brought to the firm are resolved, the High Court has ruled.
The ruling comes after Rungwandi and Rujuwa Legal Practitioners approached the court for an anti-dissipation order against Mtetwa and Nyambirai Legal Practitioners.
The law firms are embroiled in a legal wrangle over the pile of cash that was found in a strongroom belonging to Mtetwa and Nyambirai during police investigations into theft of trust funds involving more than $32 million.
Police stumbled upon the cash while investigating the theft of trust funds by Mtetwa and Nyambirai’s accountant Tendai Murambizi. He had placed the money in the strongroom for safekeeping at the behest of the other law firm whose principal had recently been a professional assistant at Mtetwa and Nyambirai.
Senior partner Ms Beatrice Mtetwa allegedly threatened to use the money to offset what her law firm is owed by Murambizi. This sparked the legal wrangle which then spilled into the High Court last month, with Rungwandi and Rujuwa seeking to block Ms Mtetwa and her partners from using the money to offset what Murambizi stole.
Justice Catherine Bhachi-Muzawazi on Wednesday granted the application by Rugwandi and Rujuwa Legal Practitioners stopping Mtetwa and Nyambirai Legal Practitioners from disposing off the money until the dispute between the firms is determined.
The cash pile will be kept intact until the court rules who is the owner.
She ruled that Mtetwa and Nyambirai law firm could not set-off a debt owed between two parties on money belonging to a third party not privy to the credit agreement.
They knew the money was entrusted to Murambizi, and in any case any claim to set off such money must have the amount claimed as legally recoverable.
“In any event, the entitlement or ownership dispute is the subject of the return day.”
The return day is when the parties argue the matter and the judge rules.
The interim relief given yesterday is simply to stop any irreversible action until the judge rules what everyone can or cannot do.
The judge found no prejudice to Mtetwa and Nyambirai law firm if the interim relief was granted, saying Rungwandi and Rujuwa were simply stating that they sought safe custody in the strong room although without their knowledge and consent.
It emerged during the hearing that the police initially suspected that the found money was part of the stolen loot, but upon further investigations and examination of documents tendered in support of the source of the funds, among other things, cleared the sums from those linked to the offence.
Also evident from the facts on record is the fact that Ms Mtetwa then decided to withhold the money indicating that since the signed acknowledgement of debt signalled a creditor and debtor relationship or contract between themselves and Murambizi, they were entitled to exercise a right of lien over the US$57 000, until such time they would have recovered the whole amount embezzled by Murambizi.
The cash was placed in the strongroom by Murambizi then an accounts clerk with the Mtetwa Nyambirai law Practice, who was the custodian of the keys and all the money kept at the firm.
It is alleged that Rungwandi and Rujuwa, a law firm whose principal, Mr Mark Rujuwa, a former professional assistant with Mtetwa and Nyambirai law firm, had unbeknown and without the consent of the law firm partners, left the amount in question in the custody of Murambizi for safe keeping in the strong room and safe. Coincidentally, when Murambizi went on vacation leave on February 22 ending on the 25th of the same month, it was discovered that he had been misappropriating trust funds deposited in his care.
Consequently, a police report was made leading to his arrest on February 25, 2022.
During police investigations, Murambizi handed over the cash found in his possession at his house as well as the rest of the partnership property that was in his possession.
Of the property he handed over to the law firm, from the strongroom and safe, in the presence of the police, was the US$57 000, the subject of the controversy, reportedly neatly wrapped and isolated from the rest of the trust funds in the safe.
It was during that process of handover counting that Murambizi advised the law firm’s authorities that money belonged to Mark Rujuwa.
At some stage during the investigations, however, Murambizi signed an acknowledgment of debt with the authorities’ law firm acknowledging the embezzlement of funds in the region of US$128 000 in local currency.
Following that acknowledgment Mtetwa and Nyambirai law firm embarked on a process of recovering its pilfered trust funds through Murambizi’s immovable and movable properties as well as cash in the sum $15 210, recovered from his home.