On 3 August 2016, the defendant executed an acknowledgement of debt in favour of the plaintiff for US$31,780.80 and ZAR 458,799.80, together with interest at 10% per annum. The defendant paid off the US dollar component but left the South African Rand component unpaid. On 23 July 2020, the plaintiff sued for recovery of the outstanding ZAR 458,799.80 by way of provisional sentence summons based on the written acknowledgement of debt. The defendant raised two defences: (1) that the claim was prescribed as it was instituted close to four years after the acknowledgement of debt was signed, and (2) that the outstanding amount should be paid in local currency at a rate of 1:1 with the United States dollar based on Statutory Instrument 33 of 2019 as read with Statutory Instrument 142 of 2019.
The plaintiff's claim was granted as prayed. The defendant was ordered to pay the outstanding sum of ZAR 458,799.80 together with interest at 10% per annum as per the acknowledgement of debt dated 3 August 2016.
The binding legal principles established are: (1) An express written acknowledgement of debt interrupts the running of prescription in terms of section 18 of the Prescription Act [Chapter 8:11], and prescription cannot run against a creditor who holds such an acknowledgement; (2) Section 4(d) of Statutory Instrument 33 of 2019 only applies to assets and liabilities that were valued and expressed in United States dollars immediately before the effective date of 22 February 2019, and does not apply to debts denominated in other foreign currencies such as South African Rand; (3) A clear, unequivocal and unambiguous written promise to pay a debt constitutes a liquid document entitling the holder to sue under Order 4 of the High Court Rules for provisional sentence; (4) The law of prescription cannot assist a debtor who has expressly acknowledged liability to the creditor in writing.
The court observed that prescription thrives on the principle that the law assists the vigilant and not the sluggard, citing Ndebele v Ncube 1992 (1) ZLR 288 (SC). The court also noted that the defendant's statement regarding conversion of the Rand debt into dollars at the prevailing rate and then into RTGS dollars was "as far-fetched as it is the guess of all and sundry" and was "more in the area of conjecture" than any genuine attempt to liquidate the debt. The court remarked that the defences raised were either arising from a misconstruction of the law or the defendant's intention to "try its luck" with the laws of prescription and the Statutory Instruments. The court referenced Sibanda v Mashapaidze HH 56/11 for the definition of a liquid document and Jovennar Energy Services (Pvt) Ltd v Pickglow (Pvt) Ltd HH 504/15 for the principle regarding interruption of prescription by acknowledgement of debt.
This case is significant in Zimbabwean commercial law for clarifying two important principles: (1) the application of section 18 of the Prescription Act, confirming that an express written acknowledgement of debt interrupts the running of prescription, thereby preventing a debtor from relying on prescription as a defence when they have acknowledged liability in writing; and (2) the proper interpretation and scope of Statutory Instrument 33 of 2019 and SI 142 of 2019, establishing that the currency conversion provisions only apply to debts denominated in United States dollars and do not extend to debts in other foreign currencies such as South African Rand. The judgment provides important guidance on the requirements for provisional sentence based on liquid documents and prevents debtors from using currency legislation to escape debts denominated in currencies other than US dollars.