Isonya Investments (Pvt) Ltd v Moongroove Investments (Pvt) Ltd

On 18 December 2015, the defendant (Moongroove) entered into an agreement of sale with Redan Petroleum (Pvt) Ltd (trading as Puma Energy) for 3,000 square meters of Stand 18254 Harare Township. Redan paid US$531,518 by 2016 towards the purchase price. The property was never transferred and the sale agreement was void for non-compliance with section 39 of the Regional, Town and Country Planning Act (prohibiting sale of unsubdivided land without a permit). In July 2019, after Redan demanded performance, the defendant declared the sale void and offered to refund RTGS$531,518 (at 1:1 parity) citing currency conversion laws. Redan refused this tender. The parties then entered into a Notarial Lease on 2 July 2021 between the defendant and Isonya Investments (Pvt) Ltd (plaintiff, as cessionary of Redan's rights), treating the US$531,518 as prepaid rent. The plaintiff paid an additional US$85,000 for subdivision processes. The lease also proved invalid for the same regulatory failures. The defendant refused to refund any money, proceeded to lease the property to third parties for approximately US$1.4 million, and retained the plaintiff's total payment of US$616,518. The plaintiff issued formal demand on 6 November 2023 and instituted proceedings in 2024.

• Whether the plaintiff's claim was extinguished by prescription under the Prescription Act [Chapter 8:11]
• Whether the defendant's plea of prescription was properly raised in the pleadings
• Whether prescription was interrupted by the defendant's acknowledgment of liability (particularly the July 2021 lease agreement)
• Whether the defendant's debt to the plaintiff was converted to RTGS dollars at a 1:1 rate by operation of Statutory Instrument 33 of 2019 and the Finance Act (No. 2) of 2019
• Whether the plaintiff was entitled to restitution of money paid under void contracts on the basis of unjust enrichment (condictio sine causa)
• Whether costs on the attorney-client scale were warranted

1. The defendant shall pay to the plaintiff the sum of US$616,518.00. 2. The defendant shall pay interest on the above sum at the prescribed rate of 5% per annum from 6 November 2023 to the date of full payment. 3. The defendant shall pay costs of suit on the legal practitioner and client scale, including costs of the urgent chamber application in case HCH 2857/24.

The binding legal principles are: (1) A plea of prescription must be properly pleaded with sufficient particularity including the date on which prescription allegedly set in (section 20(2) Prescription Act; Angelique Enterprises v Albco). (2) Prescription is interrupted by express or tacit acknowledgment of liability (section 18 Prescription Act), and subsequent agreements (even if void) can constitute such acknowledgments if they admit the underlying debt. (3) The currency conversion provisions of S.I. 33/2019 and Finance Act (No. 2) 2019 do not apply to debts or causes of action that arose or crystallized after the effective date of 22 February 2019. Where no enforceable liability existed as at the conversion date, there is nothing to convert. (4) Post-conversion acknowledgments of liability can create new obligations not subject to the conversion regime, particularly where the debtor's conduct moves the obligation beyond the effective date. (5) The five elements of unjust enrichment (Industrial Equity Ltd v Walker) must be established: enrichment of defendant, impoverishment of plaintiff, causal connection, lack of legal justification, and no legal bar to recovery. (6) Money paid under a void contract is recoverable via condictio sine causa as the enrichment lacks juristic cause (causa data causa non secuta). (7) A tender of repayment in grossly depreciated currency that does not represent true equivalent value does not extinguish the debt or eliminate unjust enrichment. (8) Costs on the attorney-client scale are warranted where a party's conduct is unconscionable, in bad faith, or amounts to flagrant disregard of justice.

KATIYO J made several notable observations: (1) The defendant's managing director appeared cavalier about his oath and showed lack of good faith, revealing a "conscious lack of scruple or remorse" and a determination to retain the windfall unless legally compelled. (2) The defendant's strategy from 2019 onward was to "string the plaintiff along" with the abortive lease while never truly intending to refund the money unless cornered - conduct amounting to bad faith and intent to defraud. (3) The Court observed that allowing the 1:1 conversion would "produce a result that is as absurd as it is unjust" reducing over half a million dollars to about US$5 in real value - "a windfall resulting from legal legerdemain, not a just outcome." (4) The conversion legislation was intended to stabilize currency transition, not to allow parties to unjustly retain huge enrichments. (5) The Court characterized the defendant's position as essentially attempting to "steal" the plaintiff's money under cover of legal technicalities and described the overall conduct as "a legalized theft" if allowed to succeed. (6) The Court noted that denying restitution would not serve the policy of the Regional Town and Country Planning Act but would "punish the innocent party (the payer) and reward the party who took the money without authority." (7) The judgment emphasizes courts should not endorse results that effectively legalize theft of value under cover of statutes intended for different purposes, unless compelled by clear statutory language or binding precedent.

This case is significant in Zimbabwean jurisprudence for several reasons: (1) It clarifies the application of currency conversion laws (S.I. 33/2019) to claims arising after the effective date, holding that debts crystallizing post-conversion are not subject to the 1:1 RTGS conversion; (2) It demonstrates the interruption of prescription through acknowledgment of liability, particularly via subsequent invalid agreements; (3) It reinforces the law of unjust enrichment (condictio sine causa) as a remedy for money paid under void contracts, rejecting technical defenses that would lead to manifest injustice; (4) It addresses the intersection of illegality (statutory non-compliance in land transactions), restitution, and currency law; (5) It shows courts will apply substance over form and reject opportunistic reliance on legal technicalities to retain windfalls; (6) It provides guidance on when attorney-client costs are appropriate for unconscionable conduct. The judgment demonstrates judicial willingness to prevent unjust enrichment even where technical legal arguments might support retention of funds.