Peter Frederick Rennie v Elizabeth Khaka

The applicant (defendant in the original matter) and respondent (plaintiff) entered into a deed of settlement on 1 July 2008 at a pre-trial conference. The settlement arose from applicant's failure to transfer property purchased by the respondent. Under the deed, applicant was to purchase and transfer Old Mutual Limited shares to the respondent within fourteen working days from 4 July 2008, with the number of shares to be determined based on property valuations. The applicant failed to comply with the settlement terms. In 2012, the respondent applied to have the deed of settlement registered as an order of court. The application was served at applicant's last known residence and received by his domestic worker, Winnie Guzuzu. Applicant claimed he did not receive it as he had separated from his wife and no longer resided there. The deed was registered as a court order on 29 November 2012 in the exact words of the agreement. Applicant only became aware of the order on 10 November 2015 (three years later) when a contempt application was served on his legal practitioners. He then sought rescission of the registered judgment.

• Whether a court has power to set aside through rescission an order that stems from a settlement agreement made with full knowledge by the parties when the contract is not void or voidable
• Whether the applicant had a reasonable explanation for failing to oppose the registration of the settlement agreement
• Whether there were prospects of success for the rescission application
• Whether the settlement agreement had become impossible to perform due to inflation
• Whether the respondent's claim had prescribed by the time of registration
• What grounds are available to challenge a settlement agreement

The application for rescission was dismissed with costs.

A court does not have power to set aside through rescission an order that stems from a settlement agreement made with full knowledge by the parties when the contract between the parties is not void or voidable. Settlement agreements can only be challenged on specific grounds including duress, incapacity, mistake, fraud, bad faith, misleading conduct, failure to pay consideration, illegality or impossibility of performance. Absent evidence that can impeach a settlement agreement on these enumerated grounds, a settlement agreement is binding. A party cannot seek rescission of a deed of settlement which they were fully aware of and voluntarily entered into merely because they failed to perform or circumstances changed after execution.

The court observed that the explanation that the applicant did not receive the application was "at best unlikely" and that "it appears there was never any intention to fulfil" the settlement agreement. The court also noted that it was not privy to what was within the knowledge of the parties at the time they agreed to the time frames in the deed of settlement, what happened in between, or the reasons the judge who registered the deed took into account. The court commented that changed circumstances are not necessarily a bar to enforcement of settlement agreements, citing Ncube v Mpofu 2006 (2) ZLR 41 and Field NO & Anor v Compuserve (Pvt) Ltd 1990 (2) ZLR 253 (HC).

This case is significant in Zimbabwean (and by extension Southern African) jurisprudence as it clarifies the limited grounds upon which parties can challenge settlement agreements that have been registered as court orders. It reinforces the principle that settlement agreements entered into with full knowledge are binding contracts that cannot be easily set aside through rescission applications merely because a party failed to perform or circumstances changed. The judgment emphasizes the sanctity of settlement agreements and discourages attempts to escape contractual obligations through procedural mechanisms like rescission where there are no legitimate grounds to impeach the agreement itself.