Binga Rural District Council v Anna Mbomba

In 1997, Binga Rural District Council resolved to sell houses to employees who had served for a minimum of 10 years. The respondent, Anna Mbomba, indicated her intention to purchase stand number 259 Binga. In October 2007, the parties entered into a lease with option to purchase agreement for Z$360 million. The respondent paid a deposit of Z$100 million in two installments during November 2007. On 31 December 2017, the respondent's employment was terminated. She was granted permission to remain in occupation until 30 November 2018 but continued to occupy the property thereafter. The parties renegotiated terms and agreed the balance outstanding would be US$12,321.00. After re-evaluation by the Ministry of Local Government, the property was valued at US$17,061.00, and after conversion, the balance due remained US$12,321.00. On 20 July 2020, the respondent attempted to pay Z$12,321 (at a 1:1 rate) instead of US$12,321, citing S.I 33/2019. The applicant rejected this payment and sought to cancel the agreement and evict the respondent.

• Whether the contractual obligations between the parties were covered by S.I 33/2019 (relating to valuation of assets and liabilities in United States Dollars)
• Whether the respondent repudiated the contract of sale by attempting to pay in Zimbabwean dollars at a 1:1 rate instead of United States dollars
• Whether the applicant was entitled to evict the respondent from the property following alleged breach and repudiation of the agreement

1. The cancellation of the agreement of sale between applicant and respondent in respect of stand 259 Binga was confirmed. 2. The respondent and all those claiming rights of occupation through her were evicted from house number 259 Binga. 3. The respondent was ordered to pay the costs of suit.

For S.I 33/2019 to apply to an asset or liability, it must satisfy the three-legged test from Zambezi Gas: (1) the asset/liability must have existed before the effective date of 22 February 2019; (2) the value must have been expressed in US Dollars immediately before the effective date; and (3) it must not be excluded by section 44C(2) of the Reserve Bank Act. If the asset or liability was not valued or expressed in US Dollars immediately before the effective date, S.I 33/2019 does not apply, regardless of later revaluation in US Dollars. Repudiation of a contract occurs when a party acts in such a way as to lead a reasonable person to conclude that the party does not intend to fulfill their part of the contract. A unilateral attempt to change payment terms by paying in a different currency or at a different rate than agreed, under the guise of inapplicable statutory provisions, constitutes repudiation entitling the innocent party to cancel the contract and seek eviction where the contract relates to property occupation.

The court made observations about the respondent's conduct, noting that she "tried every trick in the book" to avoid paying the agreed balance and sought to rewrite the contract on terms of her own choosing. The court also commented that the respondent initially "pretended that she was genuinely intending to pay the balance" before attempting to alter the payment terms unilaterally. These observations, while not strictly necessary for the decision, illustrate the court's view of the respondent's conduct as being in bad faith. The court also noted that repudiation "may manifest itself in a variety of ways," suggesting a flexible approach to identifying repudiatory conduct beyond the specific circumstances of this case.

This case is significant in Zimbabwean law for clarifying the application of S.I 33/2019 regarding the valuation of assets and liabilities. It reinforces the three-legged test established in Zambezi Gas Zimbabwe for determining whether contractual obligations fall within the scope of the statutory instrument requiring 1:1 conversion between RTGS dollars and US dollars. The case demonstrates that assets or liabilities not denominated or expressed in US dollars immediately before the effective date of 22 February 2019 are not covered by the regulation. The judgment also provides guidance on what constitutes repudiation of contract, particularly in the context of unilateral attempts to alter payment terms under the guise of statutory provisions. It emphasizes that parties cannot use statutory instruments to avoid genuine contractual obligations where those instruments do not apply to their particular circumstances.