Regis Magauzi v Francis Jekera and Sheriff for Zimbabwe N.O.

On 15 October 2018, the first respondent signed an acknowledgment of debt acknowledging his indebtedness to the appellant in the sum of US$26,100.00. When the debt remained unpaid, the appellant issued summons in case number HC 10118/18. On 22 February 2019 (the effective date when S.I. 33 of 2019 came into effect), the parties consented to summary judgment in favor of the appellant for payment of US$26,100.00 plus costs. On 14 November 2019, the first respondent paid Z$88,400.00 to the second respondent (Sheriff), claiming this was full settlement of the judgment debt at a 1:1 exchange rate pursuant to the Finance Act (No. 2) of 2019. The appellant disputed this, arguing the debt should be paid at the interbank exchange rate as the judgment was granted on, not before, the effective date. The first respondent then applied for a declaratory order that his payment constituted full settlement. The High Court granted the declaratory order, finding the obligation arose from the acknowledgment of debt signed before 22 February 2019, and therefore fell under s 22(1)(d) of the Finance Act, requiring payment at 1:1 rate.

• Whether the court a quo erred by relying on the acknowledgment of debt when it ought to have taken into consideration the date of the extant judgment in making its determination
• Whether section 4(1)(d) or section 4(1)(e) of S.I. 33 of 2019 (and corresponding sections 22(1)(d) and 22(1)(e) of the Finance Act (No. 2) of 2019) applied to the judgment debt
• Whether the material date for determining the exchange rate was the date the original obligation arose (acknowledgment of debt) or the date judgment was granted
• The proper interpretation of the phrase 'immediately before the effective date' in the context of valuation of judgment debts

1. The appeal was allowed with costs. 2. The judgment of the court a quo was set aside and substituted with an order dismissing the application for a declaratory order with costs on the legal practitioner and client scale.

1. When a court grants a consent order, it extinguishes the underlying cause of action, and all subsequent acts affecting the dispute between parties must rely on the court order, not the facts or reasons underlying it. 2. A judgment debt granted on the effective date of currency legislation (22 February 2019), but after the effective time (0.01 AM), does not fall under provisions applicable to debts valued 'immediately before the effective date' but rather under provisions applicable to transactions 'on and after' the effective date. 3. The phrase 'immediately before the effective date' in section 4(1)(d) of S.I. 33/2019 and section 22(1)(d) of the Finance Act (No. 2) of 2019 means that assets and liabilities must have been valued in United States Dollars before 22 February 2019; judgments granted on 22 February 2019 (even if based on pre-existing obligations) fall under section 4(1)(e) and must be paid at the interbank exchange rate. 4. The relevant date for determining which exchange rate applies is the date the judgment was granted, not the date the underlying obligation arose.

The Court noted that section 23(1) of the Finance Act (No. 2) of 2019 clarified that with effect from the second effective date (24 June 2019), foreign currencies were no longer legal tender in Zimbabwe, but that on 22 February 2019 (the first effective date) it was still lawful for a court to grant an order in United States dollars. The Court also observed that the effective date came into force immediately after midnight of 21 February 2019, creating a clear temporal division between what was valued 'immediately before' and what occurred 'on and after' the effective date. The judgment emphasized that execution of judgment debts is based on court orders, not the reasons for which the court order was granted, and parties cannot disregard a court order as they are bound by it.

This case is significant in South African and Zimbabwean law for clarifying the temporal application of currency conversion provisions during Zimbabwe's transition from multi-currency to RTGS Dollar regime. It establishes that when a judgment is granted on the effective date of currency legislation (but after the effective time), the judgment debt constitutes a new obligation that must be valued according to post-effective date provisions. The case reinforces the principle that a judgment extinguishes the underlying cause of action, and all subsequent dealings must be based on the court order, not the original obligation. It also confirms that courts must follow binding precedent in interpreting statutory provisions regarding currency valuation. The judgment provides important guidance on the precise temporal division between 'immediately before' and 'on and after' the effective date of monetary legislation.