Southend Cargo Airlines (Pvt) Ltd and Others v Infrastructure Development Bank of Zimbabwe and Others

The applicants obtained a loan facility of ZWD 6,200,000 in foreign currency from the first respondent (then Zimbabwe Development Bank) on 5 June 1997 to lease an aircraft from an American company, Interject Leasing Corporation. The respondent purchased the foreign currency and paid it directly to the American company. The American company went into liquidation and the applicants' project collapsed. The applicants defaulted on loan repayment. A consent judgment was granted in foreign currency (USD 590,470.68 plus interest) in case HC 11569/98. The first respondent proceeded to execute against the judgment. The applicants' immovable property was auctioned on 30 April 2004, with the first respondent bidding $110,000,000, but the Sheriff refused to confirm the sale and transfer the property. In May 2003, the applicants unsuccessfully sought to have the consent order set aside (dismissed in HH 123/2004 by Makarau J). An appeal filed in 2004 remained unprosecuted. The Deputy Sheriff wrote a letter dated 13 February 2009 confirming the debt was paid in full. The applicants filed this application on 2 March 2009 seeking to set aside the writ of execution and have the judgment declared fully paid and settled. The first respondent denied receiving full payment and disputed the Deputy Sheriff's confirmation.

• Whether the writ of execution under HC 11569/98 should be set aside
• Whether the judgment debt had been fully paid and settled by the applicants
• Whether payment of a foreign currency debt could be made in Zimbabwe dollars at the official exchange rate
• Whether the Deputy Sheriff's confirmation of full payment was accurate and binding
• Whether the application constituted an abuse of process given the prior unsuccessful rescission application

The application was dismissed with costs awarded to the respondent.

Where a loan agreement contemplates borrowing in foreign currency and the lender purchases and disburses foreign currency on behalf of the borrower, the debt obligation is properly measured and repayable in foreign currency, with the discharge of the obligation effected through payment in local currency at the prevailing exchange rate. A Deputy Sheriff executing a judgment must verify payment figures with the judgment creditor before pronouncing that a judgment debt has been satisfied. A confirmation by the Sheriff that a debt has been paid, made without verification with the judgment creditor, does not bind the creditor or prevent execution where the creditor can demonstrate the debt remains unpaid. Applications seeking to stay execution of valid judgments based on alleged full payment will fail where the applicant cannot credibly demonstrate such payment and where the judgment creditor provides credible evidence that monies remain outstanding.

The court observed that it is not generally the court's duty to embark on a reconciliation exercise of figures for litigants, though where the court attempts to do so, it shall be guided by the most probable truth. The court also observed that the appeal filed by the applicants in 2004 against the rescission judgment, which still awaited prosecution after six years, was likely filed merely for purposes of delay. The court noted that the attempt to manufacture evidence (the forged letter) was a desperate move that totally discredited the applicants' claim and clearly proved they had no case at all. The court took full responsibility for the delay in preparing judgment from 8 July 2010 to the date of delivery and expressed sincere regret for this delay.

This case reinforces important principles regarding foreign currency judgments in Zimbabwe, particularly that where parties intend to contract in foreign currency and the creditor purchases and disburses foreign currency on behalf of the borrower, the debt obligation is properly measured in foreign currency despite repayments being made in local currency. The case also demonstrates the importance of finality in litigation and the principle that execution creditors, not the Sheriff, are the proper parties to confirm satisfaction of judgment debts. It illustrates the court's approach to frivolous applications seeking to frustrate execution of valid judgments, particularly where previous attempts to set aside the judgment have failed. The case serves as a warning against manufacturing evidence, showing that such conduct will destroy the credibility of an applicant's entire case.