Zimbabwe Banking Corporation Limited v Trustfin Finance Limited

The plaintiff was the bearer of two negotiable certificates of deposit (NCDs) issued by the defendant on 11 December 2003 and 20 January 2004, with maturity dates of 2 January 2004 and 3 February 2004 respectively. The plaintiff did not present the NCDs on their due dates but allegedly presented them on 5 April 2004, which the defendant denied. The defendant alleged that the first communication from plaintiff was a demand letter dated 12 May 2004. The plaintiff sued for payment but was refused provisional sentence by the court, which ordered the matter to stand over for trial. The defendant filed a plea raising two defences: (1) that the plaintiff was not a holder in due course; and (2) that the defendant was discharged from liability under section 44(1) of the Bills of Exchange Act because the instruments were not presented on their maturity dates. The plaintiff excepted to the second defence, arguing that under section 93(1) of the Act, promissory notes not payable at a particular place need not be presented to render the maker liable.

• Whether negotiable certificates of deposit had to be presented on their maturity dates in order to render the maker liable
• Whether the place of payment was specified in the body of the promissory notes
• Whether section 44(1) of the Bills of Exchange Act applied to promissory notes
• Whether the matter was res judicata having been previously determined by Uchena J
• Whether presentment was required under section 93(1) of the Bills of Exchange Act

The exception was dismissed with costs on a party and party scale to be paid by the plaintiff.

Under section 95(1) of the Bills of Exchange Act, the provisions relating to bills of exchange apply to promissory notes with necessary modifications. Therefore, section 44(1) requiring presentment on the day a bill falls due applies to promissory notes. Where the place of payment is specified in the body of a promissory note (determined by whether the relevant line is carried through above the maker's signature), presentment at that place on the maturity date is necessary to render the maker liable under section 93(1) of the Act. The determination of whether a place is specified "in the body" of the note depends on the physical positioning of the payment instruction relative to the signature - if the line specifying payment is carried through above the authorized signatures, it is in the body of the note and presentment is required.

The court observed that exceptions, when well taken, can dispose of a case without the need to go through a trial, which was the reason for not awarding punitive costs despite finding the exception lacked merit. The court also expressed difficulty in understanding why the plaintiff contended that the point was not res judicata when the same issue had been adjudicated by Uchena J in the earlier provisional sentence application, and described the plaintiff's attempt to seek reconsideration of that judgment as improper.

This case provides important guidance on the interpretation of negotiable certificates of deposit under Zimbabwean law, particularly on when presentment for payment is required. It clarifies the application of the Bills of Exchange Act provisions to promissory notes and establishes the test for determining whether a place of payment is specified "in the body" of a note. The case demonstrates the importance of examining the physical layout and formatting of negotiable instruments to determine legal requirements for presentment. It also reinforces principles of res judicata regarding issues previously determined by the court.