Gardini Properties (Pvt) Ltd v Theresa Grimmel N.O. (in her capacity as Liquidator of Shuler Enterprises (Pvt) Ltd) and Others

The first respondent, as liquidator of Shuler Enterprises (Pvt) Ltd, issued summons in 2015 against the appellant and other respondents for payment of US$4,658.00 being money owed premised on a sale that was void at law. The summons was issued in 2015 and the claim was denominated in United States Dollars. On 7 October 2019, the Magistrate Court ordered the second respondent to pay the first respondent US$1,435.11 to be paid in Zimbabwean dollars at the prevailing interbank rate at the date of payment, plus interest at 5% per annum from date of summons and costs. The appellant appealed against this order, specifically the aspect dealing with the rate of payment.

• Whether the court a quo erred by mero motu ordering payment in Zimbabwean dollars at the prevailing interbank rate when the rate of payment was not an issue at trial
• Whether the court a quo properly applied section 4(1)(d) of the Presidential Powers (Temporary Settlement Electronic Dollars (RTGS Dollars) Regulations, 2019 SI 33 of 2019
• When the obligation to pay arose and what exchange rate should apply to the debt

The appeal succeeded. The judgment of the court a quo was set aside and substituted with an order that: (1) The 2nd defendant is ordered to pay the plaintiff US$1,435.11; (2) The 2nd defendant shall pay interest on the above sum at the prescribed rate of 5% per annum from the date of summons to date of full and final payment; (3) Costs of suit.

A court cannot mero motu order a specific rate of payment or currency conversion when that issue was not raised by the parties and not properly before the court. The obligation to pay arises when the cause of action crystallizes (in this case, when summons was issued), not when judgment is delivered. Any challenge to the rate of payment should be raised at the execution stage by the debtor, not prescribed by the court without it being an issue in the proceedings.

The court noted that it was open to the second respondent to challenge the rate of payment at execution if they wished to do so. This suggests that issues of currency conversion and applicable exchange rates are matters that can properly be raised at the execution stage of proceedings rather than necessarily being determined in the judgment itself.

This case is significant in Zimbabwean law for clarifying the limits of judicial discretion in determining the rate of payment for monetary debts. It establishes that a court cannot mero motu (of its own motion) prescribe a rate of payment or currency conversion when that issue has not been raised by the parties and is not properly before the court. The case also addresses the temporal application of currency regulations, confirming that the obligation to pay is determined at the time the debt arose (when summons was issued) rather than when judgment is delivered. This has important implications for currency fluctuations and the application of statutory instruments affecting currency in Zimbabwe, particularly during the period of currency transition from US Dollars to RTGS Dollars and the introduction of interbank rates.