Southend Cargo Airlines (Pvt) Limited and Stephen Jackson Chituku and Patience Fadzai Chituku v Zimbabwe Development Bank

In June 1997, the applicants sought to lease a jet airliner from a company in the United States and required foreign currency to pay a deposit. They approached the respondent Zimbabwe Development Bank for a loan. The respondent did not have the foreign currency but purchased it using ZW$6,200,000.00 from its bank, which made payment directly to the applicants' creditor in the USA. The loan agreement stated the capital amount as "$6,200,000.00 in foreign currency." When the applicants defaulted, the respondent sued for US$590,470.68 plus interest. On 26 November 2002, a consent judgment was entered against the applicants in the sum of US$590,470.68 and ZW$54,917.68 plus interest. The applicants sought to set aside this consent judgment, claiming their second applicant's consent was overborne by fear when their legal practitioner withdrew and substitute counsel declined the brief. They also argued the judgment should not have been expressed in foreign currency.

• Whether good and sufficient cause existed to set aside a consent judgment under Rule 56 of the High Court Rules 1971
• Whether the applicants' explanation for entering the consent judgment was reasonable
• Whether the application to set aside was made bona fide
• Whether the applicants had a bona fide defence on the merits with prospects of success
• Whether the court was correct in entering a judgment expressed in foreign currency in the circumstances
• Whether the common intention of the parties was to create a debt obligation measured in foreign currency

The application to set aside the consent judgment was dismissed. The applicants were ordered to pay the respondent's costs.

A consent judgment will only be set aside on good and sufficient cause shown, applying the same test as for default judgments: reasonable explanation of circumstances, bona fides of the application, and a bona fide defence with prima facie prospects of success. Lack of consent is the predominant factor. Where a legal practitioner with express mandate from the client consents to judgment after consultation, and the client was aware of the circumstances and confirmed instructions multiple times, there is no basis to set aside the consent merely because the client later realized unfavorable implications not considered at the time. Courts will enforce foreign currency obligations according to the common intention of the parties as ascertained from the agreement, even where formal drafting is inelegant, and will not rewrite contracts to relieve parties from currency depreciation consequences where terms clearly express the parties' intention.

The court acknowledged understanding the applicants' anguish at the debt ballooning from ZW$6.2 million to ZW$486 million due to currency depreciation and delays in finalizing the dispute. However, Makarau J observed that the court is unaware of any rule of policy empowering it to rewrite clear contracts to make obligations less burdensome where terms express the common intention of parties. The judge noted that being caught out by currency downspiralling is not an issue for the law to address or redress. The court also made obiter comments about not placing too much emphasis on any single factor in the test for setting aside judgments, as an unsatisfactory explanation may be strengthened by a very strong defence on the merits. The court distinguished the case from Washaya v Washaya regarding unauthorized consent and Georgias regarding ambiguous mandate, finding neither scenario present here.

This case clarifies the principles for setting aside consent judgments in Zimbabwe (which shares common legal heritage with South Africa), confirming that the same test applies as for default judgments regardless of whether the consent was granted under the rules or at common law. It establishes that lack of consent is the predominant factor, but parties cannot escape properly authorized consent merely because they later realize unfavorable implications. The case also reinforces that courts will give effect to the common intention of parties in foreign currency loan agreements, and will not rewrite contracts to relieve parties from the consequences of currency fluctuations, even where the results appear harsh. It demonstrates the importance of finality in litigation and that parties must deploy all available defenses before consenting to judgment.