Old Mutual Assurance Company of Zimbabwe v Marick Trading (Private) Limited

The plaintiff and defendant entered into a lease agreement in August 2008 for stand no. 4491 Salisbury Township Harare. The defendant was obliged to pay monthly rentals in advance, pay interest on outstanding amounts, and pay operating costs including electricity and rates. The lease was terminated on 31 March 2010. A dispute arose concerning fair rentals for the period 1 January 2009 to 31 March 2010, which was referred to arbitration. On 8 December 2011, the arbitrator determined fair rental at US$7,800 per month. The plaintiff claimed US$83,965.43 for arrear operating costs and interest of US$117,000 on arrear rentals at 14% per annum. Summons were issued on 23 September 2014 and served on 30 September 2014. The defendant raised special pleas of prescription for both claims and res judicata for the interest claim.

• Whether the plaintiff's claim for operating costs had prescribed in terms of the Prescription Act [Chapter 8:11]
• Whether the plaintiff's claim for interest on arrear rentals had prescribed
• Whether acknowledgement of liability by the defendant interrupted the running of prescription in respect of operating costs
• Whether the claim for interest on arrear rentals was res judicata following the arbitral award

1. The defendant's special plea of prescription in respect of operating costs in the sum of US$83,965.43 was upheld. 2. The defendant's special plea of prescription in respect of interest on arrear rentals in the sum of US$117,000.00 was dismissed. 3. The defendant's special plea of res judicata in respect of interest on arrear rentals in the sum of US$117,000.00 was dismissed. 4. Each party to bear its own costs.

1. In terms of section 15(d) of the Prescription Act [Chapter 8:11], debts arising from lease agreements prescribe in 3 years. 2. Prescription commences to run as soon as the debt is due in terms of section 16(1) of the Prescription Act. 3. For operating costs under a lease agreement, the cause of action arises at the end of each month or after service of the bill of consumption. 4. Where rental amounts are disputed and subject to arbitration, the cause of action for interest on arrear rentals only arises after the arbitrator's determination, and prescription runs from that date. 5. Acknowledgement of liability cannot interrupt prescription where the prescription period has already lapsed. 6. For res judicata to apply, the previous decision must have concerned the same parties, same subject matter, and same cause of action. Issues not actually determined by a tribunal are not res judicata. 7. Interest on a debt is a separate claim from the principal debt and where the interest was not in dispute or determined by an arbitrator, a subsequent claim for interest is not res judicata.

The court observed that the rationale of the plea of res judicata is principally based upon the public interest that there must be an end to litigation and also that the authority vested in judicial decisions must be given effect even if they may be erroneous, citing Wolfenden v Jackson 1985 (2) ZLR 313 (S). The court also noted the settled requirements for acknowledgement of debt to interrupt prescription: (a) the acknowledgement must be made by the debtor or his agent; (b) the acknowledgement must be made expressly or tacitly acknowledging the existence of liability; and (c) the acknowledgement must be made to the creditor or his agent.

This case clarifies the application of prescription principles in the context of lease agreements in Zimbabwe, particularly regarding when the cause of action arises for different types of claims. It demonstrates that operating costs and interest on rentals are treated differently for prescription purposes. The case also illustrates the narrow scope of res judicata, confirming that only issues actually determined by a tribunal are subject to the doctrine, and that ancillary issues like interest not specifically addressed by an arbitrator remain open for subsequent litigation. The judgment provides guidance on the requirements for acknowledgement of debt to interrupt prescription, particularly that such acknowledgement cannot revive a debt for which prescription has already run.