George Garai Murinda v Vutsa Nyarumbu

The appellant and respondent entered into a lease agreement on 1 July 2014, whereby the appellant paid a security deposit of US$600.00 to be refunded upon termination of the lease, conditional upon due performance of lease terms. The lease was terminated on 30 September 2020, and the appellant demanded payment of the US$600.00 or its bank rate equivalent with interest. The respondent defended on grounds that the deposit had been used for repairs and replacements (US$444.13) and tendered the balance of US$155.87 at a 1:1 RTGS rate in accordance with S.I. 33 of 2019. The magistrate's court found that the respondent failed to prove the alleged damages but held that the security deposit was payable at a 1:1 RTGS rate, ordering payment of RTGS 600.00 plus interest and costs.

• Whether the security deposit liability became due and payable before or after the promulgation of S.I. 33/2019
• Whether section 4(1)(d) of S.I. 33/2019 applied to the security deposit refund obligation
• Whether the liability should be paid at a 1:1 RTGS to USD rate or at the prevailing interbank rate at the date of payment
• Whether the value of the liability was assessed and expressed in United States dollars immediately before the effective date of 22 February 2019

The appeal succeeded with costs. The decision of the magistrate's court was set aside and substituted with an order that: (1) the respondent pay US$600.00 as refund of the security deposit payable at the prevailing interbank rate on the date of payment; (2) the respondent pay interest at the prescribed rate from the date of summons to date of final payment; and (3) the respondent pay costs of suit.

Section 4(1)(d) of S.I. 33/2019 does not apply to contractual obligations where the value of the liability was still to be assessed by application of an agreed formula immediately before the effective date of 22 February 2019, even if the underlying contract and the currency of payment (USD) were established before that date. It is the assessment and expression of the value of assets and liabilities in United States dollars immediately before the effective date that determines whether the 1:1 RTGS conversion rate applies, not the date of contract formation. Where a lease agreement provides for assessment of security deposit liabilities at the termination of the lease, and the lease terminated after the effective date of S.I. 33/2019, the security deposit refund obligation is excluded from the 1:1 conversion rate and must be paid at the prevailing interbank rate.

The court noted that the appellant appeared to agree that if the liability in terms of the contractual obligation was concluded or incurred before the effective date of 22 February 2019, then the 1:1 rate would apply, but contended that the liability became due and payable after the effective date. The court also observed that the magistrate's court had correctly found that the respondent failed to prove the damage allegedly caused by the appellant in relation to the claimed repairs and replacements totaling US$444.13.

This case is significant in Zimbabwean jurisprudence (applicable to South African law students studying comparative law) for clarifying the temporal application of currency conversion regulations, specifically S.I. 33/2019. It establishes that statutory provisions deeming USD obligations to be converted to RTGS at 1:1 do not apply where the value of a contractual liability was not yet assessed or crystallized before the effective date of the regulation, even if the underlying contract predated the regulation. The judgment reinforces the principle that it is the assessment and expression of value in foreign currency that matters for determining whether currency conversion regulations apply, not merely the date of the underlying contract. This has important implications for lease agreements and other contracts where obligations crystallize at a future date according to agreed formulae.