Lloyd Ngwerume v Rydale Ridge Park (Pvt) Ltd and Samson Tegudu

In 2013, the applicant purchased a piece of land from the second respondent in an area being developed by the first respondent. The applicant approached the first respondent for cession of rights in the property, for which the first respondent charged US$2,200. On 28 June 2013, the applicant paid a deposit of US$600, leaving a balance of US$1,600. For nearly eight years, no further payment was made and the cession was not effected. On 12 May 2021, the applicant paid Rtgs$1,600 purportedly in settlement of the balance, relying on section 22(1)(d) of the Finance (No. 2) Act, 2019. The first respondent refused to accept the RTG payment, demanded payment in US dollars, and stated their current fees were now US$1,000, making the required payment US$400 to receive the services.

• Whether the relief sought by the applicant was competent
• Whether there were material disputes of fact incapable of resolution on the papers
• Whether section 22(1)(d) of the Finance (No. 2) Act, 2019 applied to convert the outstanding US$1,600 debt to RTGs$1,600 at a one-to-one rate
• Whether there was a liability owed by the applicant to the first respondent that fell within the scope of section 22(1)(d)
• Whether the applicant breached the contract and was entitled to specific performance

The application was dismissed with costs.

Section 22(1)(d) of the Finance (No. 2) Act, 2019, which converts assets and liabilities valued in US dollars to RTGs dollars at a one-to-one rate, only applies where there is an actual liability (something owed as a result of past transactions) or asset (account receivable for goods or services delivered). Where a deposit has been paid for services but those services have not been rendered and full payment has not been made, no liability exists on the part of the payer and no account receivable (asset) exists on the part of the service provider. In such circumstances, no right or obligation accrues to either party, and the currency conversion provisions do not apply to convert the outstanding amount from US dollars to RTGs dollars.

The court made observations about amendments to draft orders, reiterating that such amendments may be made during the course of hearing as long as they are backed by evidence in the founding affidavit and are not prejudicial to the opposing party, citing Kennedy Godwin Mangenje v TBIC Investments (Private) Ltd & Anor SC 16/18. The court also observed that not every dispute of fact is material, and not every material dispute of fact is relevant; what matters is whether the court can sufficiently appreciate and resolve the controversy on the papers before it. The court noted that the first respondent's position appeared akin to that of a municipality in relation to the land in question. The court also commented that arguments about breach of contract, while attractive, were not relevant to resolving the dispute.

This case provides important guidance on the application of section 22(1)(d) of the Finance (No. 2) Act, 2019 in Zimbabwean law, particularly regarding currency conversion provisions. It clarifies that the statutory conversion from US dollars to RTGs dollars at a one-to-one rate only applies where there is an actual liability or asset (account receivable) arising from past transactions. The case establishes that where a deposit has been paid but no service rendered and no full payment made, no enforceable liability or asset exists for the purposes of the currency conversion statute. The judgment is significant in commercial transactions during Zimbabwe's currency transition period, particularly in distinguishing between incomplete contractual arrangements and enforceable debts subject to currency conversion legislation.