Stella Mundi (Private) Limited v Murimi Two Four Seven (Private) Limited & The Sheriff of Zimbabwe N.O.

The appellant, Stella Mundi (Private) Limited, an agricultural company run by the Zimbabwe Catholic Bishops Conference, entered into a written agreement on 1 June 2022 with the first respondent, Murimi Two Four Seven (Private) Limited, an agro-technology entity, for provision of agricultural services at Driefontein Mission Farm, Mvuma. A dispute arose resulting in litigation under HCHC 321/24 which was settled by consent order dated 30 June 2024. The consent order required payment of USD $187,754.42 in installments. The appellant breached the consent order by failing to pay the first instalment due on 31 July 2024. The first respondent issued a writ and the Sheriff attached the appellant's property on 8 August 2024. Between 14-15 August 2024, the appellant paid Zig 2,588,439 into the first respondent's bank account (converting the USD debt at the interbank rate of 1 USD to 13.7863 Zig). Notwithstanding this payment, the Sheriff proceeded to attach property on 21 August 2024. The appellant filed an urgent application for a declaratur seeking a declaration that the Zig payment had extinguished the debt and that the attachment was a nullity. The High Court dismissed the application, finding the appellant had not established a right warranting a declaratur.

• Whether the appellant satisfied the first requirement for the grant of a declaratur, namely having a real and substantial interest in the subject matter
• Whether a judgment debt expressed in USD pursuant to a consent order could be lawfully discharged by payment in Zimbabwe Gold (Zig) currency at the prevailing interbank exchange rate
• The proper interpretation of section 22(1)(d) and (e) of the Finance Act (No. 2) of 2019 and section 2(6) of SI 60/24 regarding the discharge of financial obligations
• Whether payment into the first respondent's bank account rather than the legal practitioners' trust account constituted valid performance of the consent order
• Whether the court a quo misdirected itself in finding that the appellant had not established a statutory sanctuary for converting the USD judgment debt to Zig

1. The appeal is allowed with each party bearing its own costs. 2. The judgment of the court a quo is set aside. 3. The matter is remitted to the court a quo, before the same Judge, for a determination of the other requirements for a declaratur.

An applicant seeking a declaratory order establishes a real and substantial interest in the subject matter when it places before the court statutory provisions requiring interpretation to determine whether its financial obligations under a court order have been discharged. The placement of section 22(1)(d) and (e) of the Finance Act (No. 2) of 2019 and section 2(6) of SI 60/24 before the court for interpretation, regarding whether payment in Zig currency discharges a judgment debt expressed in USD, constitutes sufficient basis for establishing the first requirement for a declaratur - namely a real interest in the subject matter. A court considering whether an applicant has established a right warranting a declaratur must consider all relevant statutory provisions, including section 22(1)(e) of the Finance Act which provides for variance from opening parity rates to be determined by willing-seller willing-buyer exchange rates. An appellate court may not grant a declaratur in the first instance where the court a quo has not exercised its discretion on all requirements for such relief; the appropriate remedy is remittal to allow the court of first instance to complete its determination.

The Supreme Court noted that the appellant properly conceded that its reliance on Makwindi Oil Procurement (Pvt) Ltd v National Oil Co of Zimbabwe 1988 (2) ZLR 482(S) in the court a quo was misplaced as the currency regime during that time was different from the current one. The court also observed that SI 60/24 introduced the Zig currency in substitution of the RTGS dollar and its purpose was to replace the RTGS with the Zig. The court noted similarities between this case and Zambezi Gas Zimbabwe (Private) Limited v N.R. Barber (Private) Limited & Anor 2020 (1) ZLR 138 (S), observing that in both cases the appellant sought an authoritative statement on the discharge of financial obligations following payment at what was considered to be a statutorily prescribed exchange rate. The court indicated that whether the appellant will be able to establish the other requirements for the grant of a declaratur remains to be seen.

This case is significant in Zimbabwean jurisprudence as it addresses the critical interface between consent orders expressed in foreign currency and the statutory regime governing legal tender and discharge of financial obligations following the introduction of the Zimbabwe Gold (Zig) currency. The case clarifies that even where parties consent to a judgment debt in USD, the statutory provisions regarding legal tender and currency conversion must be properly interpreted to determine whether payment in local currency at the prevailing exchange rate discharges the obligation. The judgment emphasizes the importance of courts properly analyzing all relevant statutory provisions, particularly sections 22(1)(d) and (e) of the Finance Act and SI 60/24, when determining whether a litigant has established a real and substantial interest warranting a declaratur. The case also reaffirms the principle that appellate courts should not grant declaratory relief in the first instance but should remit such matters to the court of first instance for proper consideration of all requirements for the grant of a declaratur.