7
HH 270/25
HCH1513/20
TANGANDA TEA COMPANY
versus
DARLINGTON MATSITUKWA
HIGH COURT OF ZIMBABWE
MUSHURE J
HARARE; 15 November 2024 & 22 April 2025
Special case
G Ganda, for the plaintiff
T Gombiro, for the defendant
MUSHURE J:
INTRODUCTION
The matter before the Court is a special case provided for in terms of r52 of the High Court Rules, 2021. The issue in dispute relates to the waiver of the plaintiff’s right to repayment of a debt in foreign currency arising from an unfulfilled contractual agreement with the defendant.
BACKGROUND
The legal proceedings between the parties have been long and drawn out, with the matter first proceeding by way of application proceedings on 28 February 2020. Following an appeal to the Supreme Court, the matter was remitted to this Court, where it was subsequently referred for trial. It was at this juncture that the parties agreed that the matter would proceed as a special case in terms of r52 of the High Court Rules, 2021.
Consequently, the parties filed their statement of agreed facts and heads of argument. They were in concert that there would be no need for a hearing to argue the matter and that the Court ought to make its determination based on the papers filed of record.
The facts of the matter as presented in the parties’ statement of agreed facts are reproduced verbatim hereunder:
“1. The agreed facts
Prior to 1 January 2018, the applicant and the respondent entered into an agreement in which Applicant agreed to sell tea products worth USD 47 493.17 to the Respondent for resale in Malawi.
Although the Applicant effected delivery of the tea products to the Respondent, the latter failed to make payment of the tea products.
The Applicant sued the Respondent under HC9854/18 and only ZWL$ 5 876.38 was recovered.
The respondent proceeded to make two separate payments in ZWL currency $16 000 and $ 25 717.70 to the Trust account of the Applicant’s legal representatives, thereby extinguishing the debt before the 22 November 2019.
The applicant has declined to accept the payments insisting that the debt was a foreign debt which should be settled in USD.
The parties have agreed that indeed the debt is a foreign debt and should have been settled in USD, the point of departure is whether the initial payment in ZWL and its acceptance extinguished the obligation to settle the debt in USD.”
PLAINTIFF’S SUBMISSIONS
It is the plaintiff’s submission that the payment of the debt ought to be satisfied in foreign currency. It is submitted that, once the tea products were sold in Malawi and the defendant received payment in foreign currency, the plaintiff was equally entitled to payment in foreign currency. The plaintiff avers that it would be untenable to expect the plaintiff to receive payment in local currency in the circumstances.
The plaintiff avers that the agreement was regulated by the country’s exchange control legislation. CD1 forms were secured and submitted to facilitate the export delivery to the defendant. The plaintiff avers, further, that a declaration was made in the CD1 forms that the currency in which the goods would be paid would be United States Dollars (USD). To serve the interests of the country, the plaintiff argues, the prescribed payment is in USD in respect of exports as opposed to applying the one is to one principle that was in operation at the material time.
Further, the plaintiff contends that export businesses are obligated by s7 of the Exchange Control (Currency Exchange) Order, 2004, to offer a proportion of foreign currency for auction to the Reserve Bank of Zimbabwe. Accordingly, the plaintiff asserts that this requirement of the law cannot be implemented if the defendant refuses or neglects to satisfy his debt in foreign currency or if the plaintiff is allowed to waive its right to be paid in USD.
The plaintiff also argues that by statutory command, particularly s44C ss (2) (b) and (10) (d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15] (‘the RBZ Act’), a party owed a foreign debt cannot receive or accept payment of a foreign debt under the one as to one principle; but such a debt remains payable in USD.
On the issue of waiver, the plaintiff denies that it waived its right to receive the payment in USD and takes the position that the party alleging waiver must provide clear evidence of such waiver. The plaintiff is of the view that there cannot be any waiver of a right where the right arises from statute. It is submitted by the plaintiff that in the present circumstances, waiver will attract a penalty in terms of section 7 (5) of the Exchange Control (Currency Exchange) Order 2004.
DEFENDANT’S SUBMISSIONS
The defendant argues that the plaintiff waived its right to have payment of the debt in USD. He argues that following the issuance of the judgment under HC 10306/18, a writ of execution was duly issued, resulting in ZWL 5 876.38 being realised from the defendant. The defendant further argues that the plaintiff, in trying to recover the remaining balance of USD 41 616.79, issued a summons for civil imprisonment against the defendant for payment of the outstanding balance.
The defendant urges the Court to note the deduction of the ZWL payment from the principal sum of USD$ 47 483.17 by the plaintiff, leaving the balance at USD$ 41 616.79 which it claimed in the summons for civil imprisonment under HC6686/19. The defendant submits that the plaintiff should be estopped from retracting its prior acceptance of payments made in ZWL currency.
The defendant submits that he construed the plaintiff’s actions as constituting a waiver of its right to demand payment in USD. The defendant further submits that acting on this ‘reasonable interpretation’, the defendant tendered payments of ZWL16 000 and ZWL25 717.70 to extinguish the debt in full. The defendant avers that the said matter was set down on the unopposed roll on the 27th of November 2019. The plaintiff failed to appear. The defendant submits that the failure to appear on the date of the hearing was an indication of the plaintiff's acceptance of the payment he had made in ZWL.
Relying on this Court’s decision in Charariza v Matipano HH531-22, the defendant submits, further, that the plaintiff accepted payment in a currency different from what was originally agreed upon over an extended period and this may be interpreted as a waiver of its right to demand payment in USD. It is the defendant’s argument that the plaintiff is estopped from demanding payment in USD.
The defendant contends that requiring him to pay the debt in USD would be unjust and inequitable, considering his reliance on the plaintiff’s tacit agreement and conduct, as well as the economic prejudice to him.
ISSUE FOR DETERMINATION
The sole issue for determination is whether or not the plaintiff waived its right to repayment in foreign currency.
WHETHER OR NOT THE PLAINTIFF WAIVED ITS RIGHT TO REPAYMENT IN FOREIGN CURRENCY
In the present matter, it is important to relate to the nature of the proceedings before determining the issue at hand. When a matter proceeds by way of a special case, parties agree on a set of facts and invite the court to determine a question of law arising therefrom: See Lutzkie v Chief Immigration Officer SC48-17 at p.5. When the facts have been agreed upon, the court cannot delve into whether or not the facts are correct, but it is bound to accept those facts as being correct and make a determination from the facts as presented by the parties: Kunonga v The Church of the Province of Central Africa SC25-17 at p.10.
This is also underscored by r52(6) of the High Court Rules, 2021, which states that the Court shall be at liberty to draw from the facts and documents stated in any such special case any inference, whether of fact or law, which might have been drawn therefrom if proved at a trial. Therefore, the facts that are placed before the Court are critical in disposing of the dispute between the parties.
The only permissible exception to this norm is that parties can, however, depart from the agreed set of facts upon good cause being shown, and the court has the discretion to allow the withdrawal of an admission- Rural Electrification Fund v Lomagundi Poles (Private) Limited 2016 (1) ZLR 403 (H).
In casu, whilst the point of departure relates to whether or not the plaintiff tacitly waived the debt repayment in foreign currency, it is important to clarify the legal implications of a right arising from statutory command. The parties are at odds as to whether the plaintiff can be held to have waived a statutory right emanating from the RBZ Act. It is necessary for the disposition of this matter to clarify in the first instance whether a statutory right can be legally waived by its beneficiary.
Several leading authorities provide guidance in this regard. R.H Christie, in the text The Law of Contract in South Africa, 3rd Edition, 1996 at page 495 posits the following on this aspect:
“Another way in which the legislature may contribute towards the terms of a contract is by conferring a statutory right on one or both of the parties. The question then is whether the contract may be varied by waiver or contracting out of the statutory right. The answer must be found by applying the principles restated by Kotze JA in Bezuidenhaout v AA Mutual Insurance Association Limited 1978 1 SA 703 (A) 710A-D” (my emphasis)
The case of Bezuidenhout v AA Mutual Insurance Association Limited 1978 (1) SA 703 (A) at p.710-A-D cited by the learned author is authority for that:
“even a peremptory statutory provision may be renounced by a person for whose benefit it has been introduced. The scope of the rule is stated as follows by Craies on Statute Law, 7th ed, p 269:
‘if an object of the statute is not one of general policy, or the thing which is being done will benefit only a particular person or class of person, then conditions prescribed by the statute are not considered as being indispensable. This rule is expressed by the maxim of law, quilibet potest renuntiare Juri pro se intoducto.’
In Ritch and Bhyat v Union Government 1912 AD 719 at pp 734-5, Innes ACJ points out that the rule of our common law is to the same effect:
‘The maxim of the Civil Law (C 2 3 29) that every man is able to renounce a right conferred by law for his own benefit was fully recognized by the law of Holland. But it was subject to certain exceptions, of which one was that no one could renounce a right contrary to law, or a right introduced not only for his own benefit but in the interests of the public as well (Grot 3 24 6 n 16; Schorer n 423; Schrasssert 1 cl n 3 etc).’
Schrassert, in the passage referred to by Innes ACJ, indicates that, while everyone is entitled to renounce a right introduced for his benefit, that right ceases when a law prohibits the renunciation, especially when the prohibition is based not only on the debtor’s right but also on public interest: for the agreements of private individuals cannot derogate from public laws.”
I deduce from the above-cited authorities that the beneficiary of a statutory right is at liberty to waive such an entitlement conferred by the law for his or her benefit. It is evidently clear that rights accruing by virtue of statutory command may also be waived by the stated beneficiary. This is, however, subject to the following limitations. Firstly, one cannot waive a right contrary to the law. There is strong support on this exception from respectable authority in this jurisdiction including the dictum in Bulawayo Bottlers (Private) Limited v Minister of Labour & Ors 1988 (2) ZLR 129 (H) at p.143D and the case of Choga v Johnston’s Motor Transport (Private) Limited 1998 (2) ZLR 560 (H) at p564F-G. In addition, one cannot waive something which is not there to be waived. A nullity cannot be cured by conduct amounting to a waiver, acquiescence or consent. Similarly, in instances where the statutory provision prohibits such waiver, the right cannot be exercised.
Secondly, there cannot be a waiver in respect of statutory provisions which are made for the benefit of someone other than the party against whom the waiver is asserted. Thirdly, the latitude to renounce a right is restricted where the statutory obligation is in the public interest. Thus, it becomes necessary in this matter to examine the relevant provisions of the RBZ Act in order to ascertain whether they were framed for public benefit/interest or whether they are covered by one of the listed exceptions.
Section 44C of the RBZ Act reads as follows:
“44C Issuance and legal tender of electronic currency
(1) …
(2) for the avoidance of doubt it is declared that the issuance of any electronic currency shall not affect or apply in respect of –
(a) …
(b) foreign loans and foreign obligations denominated in any foreign currency, which shall continue to be payable in such foreign currency.” (the underlining is for emphasis)
The provision is essentially an exception clause to the general position that contractual obligations valued in United States dollars immediately before the effective date, that is 22 February 2019, were to be paid in RTGS dollars at parity or at a one-to-one rate. As to the interpretation of this provision, in Breastplate Service (Private) Limited v Cambria Africa Plc SC66-20 the Supreme Court stated as follows at p.5 of the cyclostyled judgment:
“What emerges clearly and unequivocally from s 44C(2)(b) of the Reserve Bank Act, as read with s 4(1)(d) of SI 33 of 2019, is that foreign loans and obligations denominated in any foreign currency are excluded from the broad remit of SI 33 of 2019. Thus, foreign loans and obligations continue to be valued and payable in the foreign currency in which they are denominated.”
Once a debt satisfies the jurisdictional facts that establish a foreign obligation, such a debt, by operation of the law, is excluded from the ambit of SI33 of 2019. That a foreign obligation is payable in foreign currency is trite: Mushayakarara v Zimbabwe Leaf Tobacco Company (Private) Limited SC 108-21, Mugweni v Tian Ze Tobacco (Private) Limited SC120-21 & Baron v Verdure Investments & 2 Ors SC28-24 .
While I take note of the plaintiff’s submissions on the strength of Tobacco Processors Zimbabwe (Private) Limited v Mutasa & 11 Ors SC12-21 on the peremptory import of the word ‘shall’ used in s44C (2) (b) of the RBZ Act, I also take note that the Supreme Court has already made a pronouncement on the practical application of the section in Breastplate Service supra at p12 of the judgment in the following terms:
it would be commercially incongruous and internationally unacceptable to attempt to settle any foreign loan or obligation in local currency, unless this is mutually agreed between the parties involved. Secondly, and more importantly, the exemption from the scope of local currency in respect of foreign loans and obligations is explicitly preserved and embodied in s 44C (2) (b) of the Reserve Bank Act itself. (my emphasis)
I am inclined, on the basis of the above authority, to lean towards a conclusion that the benefit under s44C (2) (b) of the RBZ Act is for the party against whom the foreign obligation is owed. It seems to me that the above passage answers the question on whether or not a party can renounce its benefits under s44C (2) (b) of the RBZ Act. While the Court observed that it would be commercially incongruous and internationally unacceptable to attempt to settle any foreign loan or obligation in local currency, it also issued a critical rider that the parties involved may mutually agree to settle the foreign loan or obligation in local currency.
Accordingly, it is settled that the plaintiff in this matter had the capacity to waive the express payment of the debt in foreign currency. Whilst the debt was without question, a foreign obligation, the plaintiff was at all material times endowed with the right to vary the method of repayment.
There is no bar that operates against the settlement of a foreign obligation in local currency provided that the parties mutually agree to settle the debt in local currency or a party is amenable to receiving the payment in local currency at the inter-bank rate. In my view, the mutual agreement constitutes a form of renunciation of the beneficiary’s right to receive the payment in foreign currency. A party can, in the circumstances, waive their right to receive settlement of the debt in foreign currency. A party has an election to waive the statutory right accruing in terms of s44C (2) (b) of the RBZ Act.
In casu, the crux of the issue is whether or not the plaintiff waived the statutory right to have the debt settled in foreign currency. It is critical to note that the parties are in agreement, from their joint statement before the Court, that the plaintiff only recovered ZWL$5 876.38 from the defendant in the proceeding under HC 9854/18. This is amplified in the preamble of the statement of agreed facts, where it is stated as follows:
“WHEREAS the Applicant instituted legal proceedings against the Respondent under Case No. HC 9854/18, claiming an amount of $47,593.17. The Respondent filed an Appearance to Defend on October 31, 2018, prompting the Applicant to apply for Summary Judgment under HC 10306/18. Pursuant to the granting of the judgment, a writ of execution was issued, resulting in the realization of ZWL$5,876.38.
AND WHEREAS the Applicant accepted this amount as partial payment and deducted it from the capital sum initially claimed, leaving an outstanding balance of $41,616.79, which was communicated to the Respondent.”
Furthermore, the parties are in agreement that the two separate payments of ZWL$16 000 and ZWL$25 717.70, made by the defendant, were declined by the plaintiff. It has already been settled that the beneficiary of a statutory right under s44C of the RBZ Act can vary the manner of repayment of the debt. The only issue outstanding is whether the conduct of the plaintiff in this instance amounted to a waiver of the right to have the debt satisfied in foreign currency.
The principle of waiver has been canvassed in several authorities in our jurisdiction. In a fairly recent decision of the Supreme Court; Ziswa & Anor v Chadwick & Anor SC92-22, the principle of waiver was elucidated as follows at p14-15:
“A waiver is defined by GUBBAY JA (as he then was) in Agricultural Finance Corporation v Pocock 1986 (2) ZLR 229 (S) at 236F as:
“an abandonment or surrender with the necessary knowledge of a right accruing exclusively for the benefit of the appellant”
A waiver extinguishes a right and any concomitant obligation due to a party. In Mutual Life Insurance Co of New York v Ingle 1910 TPD 540, INNES CJ explained the legal position as follows at p 540:
"It seems to me that the mere intention, a mere mental resolution to waive a right not communicated to the other party cannot in law constitute a waiver or renunciation of the right by the person entitled to enforce it ... Until the intention to waive a right is communicated to the other party, or evidenced to him by some overt act, a change of mind is always possible and permissible. Otherwise a man might by an entry in his own diary, of an account of a casual conversation with a friend (quite unknown at the time to the party affected), find himself debarred from enforcing a right which on further reflection he was desirous of vindicating. After all, waiver is the renunciation of a right. When the intention to renounce is expressly communicated to the person affected, he is entitled to act upon it and the right is gone. When the renunciation, though not communicated, is evidenced by conduct inconsistent with the enforcement of the right, or clearly showing an intention to surrender it, then also the intention may be acted upon, and the right perishes. But a mere mental resolve, not so evidenced, and not communicated to the other party, but discovered by him afterwards, seems to me, (apart from considerations founded upon lapse of time) to have no effect upon the legal position of a person making the resolve" (my emphasis)
And at p 551, the learned CHIEF JUSTICE further affirmed that:
“When a person entitled to a right knows that it is being infringed and by his acquiescence leads the person infringing it to think that he has abandoned it, then he would under certain circumstances be debarred from asserting it.”
The overriding requirement for a waiver is that there ought to be surrender or abandonment coupled with knowledge of the right. In Chidziva & Ors v Zimbabwe Iron & Steel Co Limited 1997 (2) ZLR 368 (S), at p.379, it was held that:
“In the present case, no real attempt was made to show that the appellants abandoned their rights with full knowledge of those rights. All that was submitted was that the appellants accepted the retrenchment packages. The respondent should have gone further to show that they did this with full knowledge that they were abandoning their rights. On this, I also cite with approval the passages at p 489 of Christie‘s above cited book where the learned author said:
“… there is ample other authority that it must be clearly proved that the person who is alleged to have waived his rights knew what those rights were. A party who fails to prove this necessary ingredient of waiver may still be able to raise the defence of estoppel against any attempt to enforce the rights in question. When it cannot be proved that the party alleged to have waived knew what his rights were it may appear that his ignorance is properly classified as ignorance of law. It can now be regarded as settled, despite van den Heever J‘s decision to the contrary in Schwarzer v John Roderick Motors (Private) Limited 1940 OPD 170 at 185 that in this connection ignorance of the law is excusable provided it is iustus et probabilis‘ — justifiable and probable. This is especially so since Willis Faber Enthoven (Private) Limited v Receiver of Revenue 1992 (4) SA 202 (A) which equates mistake of fact and mistake of law for purposes of the condicto indebiti. Murray J‘s words in Ex p Sussens 1941 TPD 15 at 20 may be taken as a correct statement of law:
‘The necessity for a full knowledge of the law in the case of waiver follows from the principle that waiver is a form of contract, in which one party is taken deliberately to have surrendered his rights: there must therefore be proof of an intention as to surrender, which can only exist where there is knowledge both of the facts and the legal consequence thereof.’
The necessity to prove knowledge of the rights allegedly waived before it can be said that conduct in question amounts to waiver, applies equally to a case where the act of alleged waiver has been performed not by the party to the contract himself but by his agent (Pretorius v Greyling 1947 (1) SA 171 (W) at 177)” (my emphasis).
It is, in my view, clear that when the appellants allegedly waived their rights, they were not aware of the rights and the legal implications. It took the hearing and the decision of this court to identify and confirm the rights. Indeed, there was no argument to the contrary.”
There is also ample authority to the effect that waiver may be express or implied. However, where it is sought to establish implied waiver, clear proof is required to show that the conduct of the party against whom waiver is pleaded is plainly inconsistent with an intention to enforce it. The case of Laws v Rutherford 1924 AD 261 has been followed in a long line of cases in our jurisdiction and establishes the legal position that waiver is a question of fact, depending on the circumstances.
Taking into account the rationale of the cited authorities and the agreed facts between the parties, it is emphatic that the plaintiff did not waive its right to the repayment of $41 616.79 in foreign currency. It is an admitted fact that the plaintiff is on record as consistently declining the two separate payments that were made by the defendant as repayment of $41 616.79 in local currency. It is well established that where reliance is made on implied waiver, the facts and circumstances relied on must be unequivocal in character. As held in the case of Barclays Bank of Zimbabwe Limited v Binga Products (Private) (Limited) 1985 (3) SA 1041 (ZS), the conduct must leave no reasonable doubt as to the intention of surrendering the right in issue. This threshold has not been met in the present circumstances.
The defendant’s attempt to establish a tacit waiver in this regard is irreconcilable with the admission highlighted in the statement of agreed facts. In fact, s36 of the Civil Evidence Act [Chapter 8:01] becomes relevant as a party is not permitted to attempt to disprove admissions made. As soon as the defendant attempted to repay the amount, the plaintiff was insistent on the satisfaction of the debt in the appropriate currency. The plaintiff cannot be taken to have either expressly or tacitly waived its right in respect of the outstanding $41 616.79.
However, the above position is distinguishable from the plaintiff’s conduct in relation to the initial repayment of ZWL$ 5 876.38, by the respondent. The statement of agreed facts highlights that the sum was recovered as part payment of the debt by the defendant. As alluded to earlier, this payment was deducted from the capital sum of $ 47 593.17, and this was communicated to the defendant by the plaintiff.
Accordingly, the conduct by the plaintiff in this regard was indicative of the acceptance of the repayment of $ 5 876.38 in local currency. The plaintiff is evidently estopped from also claiming the repayment of the aforementioned amount in foreign currency. Such a state of affairs would be untenable and contrary to the settled position of the law.
I can do no further than refer to the case of Mashoko (in her capacity as the executrix dative in the estate of the late Albert Machengete Mashoko and Trustee of the Mashoko – Kusisa Family Trust) & Ors v Mashoko (duly assisted by her guardian Barbara Maonde-Chikosi) & Ors SC 114-22 at p.10, where it was held that:
“It is settled in this jurisdiction that a party is not allowed to approbate and reprobate a step in the proceedings. In other words, our law does not allow a party to have his or her cake and eat it at the same time. The basis of the doctrine is the principle that no person can be allowed to take up two positions which are inconsistent with one another, or to blow both hot and cold. See Hlatswayo v Mare & Deas 1912 AD 242 at 259.
In our jurisdiction the position was expressed emphatically in S v Marutsi 1990 (2) ZLR 370 at 374 B that:
“It is trite that a litigant cannot be allowed to approbate and reprobate a step taken in the proceedings. He can only do one or the other, not both.”
In the present matter, the plaintiff cannot approbate and reprobate in relation to the repayment of the initial $ 5 876.38 in local currency. The amount was duly deducted from the capital sum and cannot be repaid in foreign currency again due to the plaintiff’s initial acceptance of the same.
For completeness, I must also add that the case of Charariza v Matipano HH531-22 cited by the defendant is not applicable in casu because that matter does not deal with a foreign debt, nor does it deal with the issue of waiver that the parties have placed before me for determination. There is nowhere in that judgment where the court examined the principles of waiver and estoppel as submitted by the defendant.
In the final analysis, it is my finding that the claim partly succeeds. The principle of waiver does not apply as a defence to the repayment of the outstanding $41 616.79. The facts do not establish the existence of a tacit agreement between the parties in this regard.
However, concerning the initial repayment of ZWL$ 5 876.38, by the respondent, whilst the waiver cannot be proven, the plaintiff is estopped from claiming the same as a foreign currency obligation. The defendant had been duly informed of the acceptance of the settlement of the same in local currency. On that basis, the plaintiff cannot approbate and reprobate regarding the nature of the repayment of the $ 5 876.38 debt.
Regarding the issue of costs, the plaintiff has prayed for costs on a legal practitioner and client scale. No basis has been laid for this prayer. I see no compelling reasons why costs should be granted on a punitive scale. In addition, given that the plaintiff has only been partially successful in its claim, an order that each party bears its own costs would be most equitable in the matter.
DISPOSITION
Accordingly, it is ordered that:
The claim partly succeeds.
The debt of USD$47 493.17 against the defendant be and is hereby declared to be a foreign obligation in terms of s44C (2) (b) as read with s44C (10) (d) of the Reserve Bank of Zimbabwe Act [Chapter 22:15].
The amount of USD$ 5 876.38, be and is hereby deducted from the capital sum of USD$47 493.17, payable to the plaintiff by the defendant.
The defendant be and is hereby directed to liquidate the judgment debt of US$$41 616.79 with interest at the prescribed rate from 30 September 2018 to the date of full payment in forma specifica.
The plaintiff be and is hereby ordered to restitute the defendant of the tendered amount held in trust of ZWL $41 616.79 at the official exchange rate as prescribed by the Reserve Bank of Zimbabwe.
Each party to bear its own costs.
Mushure J: .................................................................
Honey and Blanckenberg, plaintiff’s legal practitioners
Chimwamurombe Legal Practice, defendant’s legal practitioners