Tanganda Tea Company v Darlington Matsitukwa

Prior to 1 January 2018, the plaintiff (Tanganda Tea Company) agreed to sell tea products worth USD 47,493.17 to the defendant (Darlington Matsitukwa) for resale in Malawi. The plaintiff delivered the tea products, but the defendant failed to pay. The plaintiff sued under HC9854/18 and recovered ZWL$ 5,876.38 through execution. The plaintiff accepted this as partial payment and deducted it from the capital sum, leaving a balance of USD 41,616.79. The defendant subsequently tendered two payments in ZWL currency (ZWL$16,000 and ZWL$25,717.70) to the plaintiff's legal representatives' trust account to extinguish the debt. The plaintiff declined these payments, insisting the debt was a foreign obligation payable in USD. The parties agreed the debt was a foreign debt but disputed whether the plaintiff's acceptance of initial ZWL payment constituted a waiver of the right to demand USD payment. The matter proceeded as a special case under Rule 52 of the High Court Rules, 2021.

• Whether the plaintiff waived its right to repayment of the debt in foreign currency
• Whether a statutory right under s44C(2)(b) of the Reserve Bank of Zimbabwe Act can be waived by its beneficiary
• Whether acceptance of partial payment in local currency constitutes waiver or estoppel regarding the balance of a foreign currency obligation
• The nature and requirements of waiver in contract law
• The application of the principle against approbation and reprobation

1. The claim partly succeeds. 2. The debt of USD$47,493.17 is declared a foreign obligation in terms of s44C(2)(b) read with s44C(10)(d) of the Reserve Bank of Zimbabwe Act. 3. The amount of USD$5,876.38 is deducted from the capital sum of USD$47,493.17. 4. The defendant must liquidate the judgment debt of USD$41,616.79 with interest at the prescribed rate from 30 September 2018 to date of full payment in forma specifica. 5. The plaintiff must restitute the defendant the tendered amount of ZWL$41,616.79 held in trust at the official exchange rate prescribed by the Reserve Bank of Zimbabwe. 6. Each party to bear its own costs.

A beneficiary of a statutory right under s44C(2)(b) of the Reserve Bank of Zimbabwe Act may waive the right to receive payment of a foreign obligation in foreign currency, as parties may mutually agree to settle such obligations in local currency. However, waiver requires proof of abandonment or surrender of the right with full knowledge of that right. Where implied waiver is alleged, the conduct relied upon must be unequivocal and leave no reasonable doubt as to the intention to surrender the right. A party who accepts partial payment of a foreign debt in local currency and deducts it from the capital sum owed is estopped from subsequently claiming that same portion should be repaid in foreign currency, as this would violate the principle against approbation and reprobation.

The Court observed that when a matter proceeds by way of special case under Rule 52 of the High Court Rules, 2021, the court is bound to accept the agreed facts as correct and cannot delve into whether the facts are correct, unless parties depart from agreed facts upon good cause shown. The Court noted that the case of Charariza v Matipano HH531-22 cited by the defendant was not applicable as it did not deal with a foreign debt or examine the principles of waiver and estoppel. The Court also commented that requiring the defendant to pay in USD would be considered in light of principles of equity and the defendant's reliance on the plaintiff's conduct, though this was not determinative given the clear facts showing no waiver of the balance.

This case clarifies important principles regarding foreign currency obligations in Zimbabwe, particularly: (1) that statutory rights under s44C(2)(b) of the RBZ Act can be waived by mutual agreement between parties, notwithstanding the seemingly peremptory language ("shall"); (2) the requirements for establishing waiver, including the necessity of proving abandonment with full knowledge of the right; (3) the distinction between express and implied waiver, with the latter requiring unequivocal conduct; (4) the application of estoppel and the principle against approbation and reprobation in the context of debt repayment; and (5) that a creditor who accepts partial payment in local currency for a foreign obligation cannot subsequently claim that same portion should have been paid in foreign currency. The judgment provides practical guidance on the interaction between exchange control legislation and common law contractual principles in Zimbabwe's complex currency environment.