On
21 December 1999 at the 12km peg along the Rusape to Nyanga road a
horrific collision involving the respondent and an employee of the
appellant occurred. The former sustained frightful injuries. Sadly,
the appellant's employee succumbed to injuries occasioned from the
collision.
The
following facts are common cause.
The
respondent sued for and was awarded damages by the High Court on 23
January 2008. The damages so awarded were the following:
(i)
BP (Botswana Pula) 63,750 for the cost of replacement of a vehicle;
(ii)
BP83,717=90 in respect of medical expenses.
(iii)
BP1,800,000 for loss of income.
(iv)
Z$3,500 towing charges.
(v)
BP12,000,000 car hire charges.
(vi)
Z$2,000,000 shock, pain and suffering.
(vii)
Z$850,000 disability damages.
(viii)
Z$1,000,000 future medical expenses.
The
appellant was dissatisfied with the judgment and appealed to this
Court against the finding of vicarious liability as well as the
amounts awarded in Botswana Pula (BP). There was no appeal against
the amounts denominated in the Zimbabwe dollar. On 28 February 2012
this Court, in the case of The Cold Chain (Pvt) Ltd v Robson Makoni
SC09-12, issued an order in the following terms:
“IT
IS ORDERED THAT:
1.
The application to adduce further evidence is dismissed with costs.
2.
The appeal against the finding of vicarious liability is dismissed.
3.
The appeals in respect of the value of the replacement motor vehicle,
vehicle hire charges, and lost income are allowed and the order of
the court a quo is altered in the following respects:
(i)
In paragraph (a), Botswana Pula 40,000 is substituted for BP63,000;
(ii)
In paragraph (c), Botswana Pula 616,200 is substituted for
BP1,800,000;
(iii)
In paragraph (e), Botswana Pula 6,000 is substituted for
BP12,000,000.
4.
There will be no order as to costs of appeal.
It
is common cause that the appellant paid the amounts denominated in
Botswana Pula. In respect of the other sums it tendered payment in
Zimbabwe dollar. The respondent rejected the tender. He contended
that due to the erosion of the currency it had become moribund due to
disuse, and, as such, he had no use for it. He could not tender the
same for payment to anyone.
An
impasse ensued which resulted in the respondent filing an application
with the High Court for the conversion to United States Dollars of
the sums awarded to him in the local currency.
The
High Court found that it had no jurisdiction to convert the amounts
thus awarded to United States dollars. It said:
“In
conclusion, this Court's opinion on the issue of currency
nominalism, in the circumstances of this case, is that, while on the
whole this Court has inherent jurisdiction to ensure that the process
of execution is neither abused nor unfair, it does not have
jurisdiction to rewrite an order in the manner sought by the
applicant. I hold the considered view that this Court cannot revalue
an order for purpose of execution.”
In
short, it declined jurisdiction.
The
respondent was aggrieved and appealed to this Court and was
successful. In Robson Makoni v The Cold Chain t/a Sea Harvest
SC55-16, this Court said the following:
“The
principles enunciated in the case of Dube (supra) demonstrate that
the once and for all rule is not applicable to the facts of this case
because the applicant is not seeking further damages for the injuries
he sustained in the accident. He is seeking the conversion of the
damages he was awarded by the High Court in 2008 in Zimbabwean
dollars to United States dollars. The appellant's application is
intended to facilitate the enforcement of the order of damages in
Zimbabwean dollars. The once and for all rule prevents a plaintiff
from seeking further damages from a cause of action previously sued
on. It does not prevent him from seeking the currency adjustment of
an order already granted by the court.
Courts
have authority to adjust their orders but under prescribed
circumstances. Those circumstances depend mainly on whether or not
the court will be functus officio.
The
court a quo erred by relying on the once and for all rule to hold
that it had no jurisdiction to hear the appellant's application.
The application was for the conversion of already granted Zimbabwean
dollar awards to United States dollars, which both parties agree have
not yet been paid as there is a dispute as to how payment should be
made. It was thus premised on a subsequent dispute over how damages
awarded by the High Court in 2008 should be enforced.
The
court's awards had been made uncertain by the dollarization of the
Zimbabwean economy.
The
appellant could not have reasonably foreseen that the Zimbabwe
currency was going to be rendered moribund by the introduction of the
United States dollar as usable currency in Zimbabwe.”
The
court therefore allowed the appeal and issued an order in the
following terms:
“Accordingly,
it is ordered as follows;
1.
The appeal is allowed with costs.
2.
The decision of the court a quo is set aside.
3.
The matter is remitted back to the court a quo for a hearing and
determination on the merits.”
There
were three issues for determination before the court a quo. These
were the following:
(i)
The amount in local currency to be converted into foreign currency;
(ii)
The date of the prevailing rate of exchange to be applied for
purposes of conversion.
(iii)
The rate of exchange applicable for such conversion.
On
the first issue, the court a quo found that the total amount to be
converted into United States dollars was ZW$3,937,217=09. The learned
judge concluded, on the second issue, that the date of rate of
exchange to be applied was that rate which was prevailing on the date
of judgment, being 23 January 2008.
It
is this conclusion that the appellant disputes.
The
appellant was aggrieved by that decision and noted this present
appeal. The appellant moved an amendment to its grounds of appeal.
The respondent did not object and the amendment was allowed by
consent. The grounds of appeal, as amended, are framed as follows:
1.
The court a quo erred at law in not finding that the ZW$ award made
in favour of the respondent had, by operation of law, completely been
decimated, and that, consequently, there was no ZW$ to convert to US
dollars.
2.
The court a quo erred in using the 23rd
of
January
2008 as the date of payment, and, therefore, the conversion date
instead of using 24 October 2012 as the conversion date, it being the
date on which the respondent demanded payment.
3.
In any event, the court a quo erred in finding, as common cause, that
the rate of conversion from Zimbabwean dollars to United States
dollars, as at 23rd
January 2008, was USD$1: ZWD$30 contrary to the conversion rate of
USD$1: ZWD$30,000= pleaded by the respondent and accepted by the
appellant.
4.
The court a quo erred in finding that, on the facts pleaded, the
appellant was liable to the respondent in the amount of
USD$131,240=56.
The
respondent was also not satisfied with the determination by the court
and filed a cross-appeal on the following grounds:
1.
The court a quo erred in making a determination on the issue of pain
and suffering which was not an issue in dispute leaving the issue of
future medical expenses which was an issue in dispute.
2.
The court a quo, as a result, erred in awarding the respondent the
sum of US$131,240=56 instead of US$164,573=90.
I
will begin with the claim as presented in the main appeal, where the
salient issues for determination appear to be whether there was
continued liability, and, if so, the conversion rate at the time of
the dispute.
The
appellant sought that either the application a quo be dismissed, or,
by application of the suggested rate, it be ordered to pay US$131=24.
MAIN
APPEAL: WHETHER THERE WAS A CLAIM TO BE CONVERTED?
The
first two grounds are being raised for the first time in this appeal.
Counsel
for the appellant submitted that the issues being raised in those
grounds were not before the court a quo. Critically, therefore, in
its amended notice of appeal, the appellant seeks to introduce an
issue that the court a quo erred in failing to note that the award
made in favour of the respondent in 2008 was completely decimated and
therefore there was nothing to convert.
The
appellant argues that the amount awarded as damages had been ravaged
by inflation, and, as a consequence, there was nothing to convert
into foreign currency. In addition, it was contended that the
currency was devalued in terms of S.I.109 of 2008, the effect of
which was to render the local currency moribund.
It
is common cause that the award of damages was appealed to this Court
immediately after the judgment was rendered. The appeal itself was
heard on 5 October 2010 and there is no indication that during the
hearing the appellant made any effort to suggest that the amount
being appealed was no longer capable of being paid and that the
judgment could not in fact be given effect to. In addition to the
above, the appellant did not, at any stage, attempt to have the order
rectified following the promulgation of S.I.109/08. The appellant did
not, in this Court, provide any authority that would support its
contention that an order of court can be altered merely by the
promulgation of a legal instrument without a formal request to a
court for such alteration. In the premises, it is my view that the
amount awarded as damages in local currency was what should have been
used as a basis for the calculation of the foreign currency
equivalent.
The
further contention made on behalf of the appellant is that there was
no jurisdictional basis for the court to exercise its original
jurisdiction to convert the award to foreign currency on the basis
that there was nothing to convert.
In
Robson Makoni v The Cold Chain t/a Sea Harvest SC55-16 which was an
appeal against a decision of the High Court in which that court had
declined jurisdiction to grant an application for the conversion of
the original award into foreign currency, this Court said:
“I
am aware that the correction of judgments in terms of the court's
jurisdiction to protect and regulate its processes in the interest of
justice must be done within a reasonable time after the delivery of
the judgment to be corrected. In this case, the judgment to be
'corrected' was taken on appeal. It thus had to await the
decision of the Supreme Court after which the appellant sought
payment. When the respondent refused to pay the appellant made the
application which is the subject of this appeal. I am therefore
satisfied that the appellant applied for conversion within a
reasonable time. He, in other words, was not a sluggard.
Accordingly,
this case should not be seen as opening the gates to all cases where
judgments were denominated in Zimbabwean dollars and the affected
parties failed or neglected to timeously do what the appellant in
this case did, namely, seek the court's assistance to convert the
awards to usable currency. A court order which is clear and
enforceable at the time of delivery cannot be rendered nugatory and
unenforceable by unforeseeable subsequent events which affect its
clarity and render it unenforceable in its present form. The court a
quo is entitled to protect and regulate its orders so that they
remain enforceable.
I
therefore hold that in terms of section 176 of the constitution, the
court a quo has jurisdiction to hear and determine the appellant's
application.”
What
is evident in that passage is the absence of any suggestion from the
appellant that the amount awarded as damages could not be converted
by reason of the application to the award of the provisions of
S.I.109 of 2008.
Had
the court been addressed on this critical issue it would have made a
determination as to whether, in addition to the question of
jurisdiction relating to the conversion, the High Court enjoyed a
jurisdictional base related to the existence or otherwise of an
amount capable of conversion. The contention by the appellant that
there was nothing for it to convert to foreign currency therefore
raises two critical issues for determination.
(a)
The first is that the court a quo is being criticised for failing to
determine an issue that was never placed before it for adjudication.
It
is evident that the appellant chose to have the matter decided
without alerting the court of its views on the provisions of the
statutory instrument in question. After counsel for the appellant's
admission that this was an issue being placed before the court for
the first time, it stands to reason that for that reason the ground
cannot succeed.
In
addition to the above, it was contended that notwithstanding that
this issue was not before the court a quo this Court could make a
determination on the same. We were not invited to remit the matter
for the determination on this issue.
It
is trite that a point of law may be raised for the first time on
appeal. The question is, is this a point of law strictu sensu?
In
my view, whether or not S.I.109/2008 should be applied to the amount
to be converted constitutes not merely a question of law, it also
involves factual issues. The exercise in its application to the
dispute would, of necessity, require the leading of evidence from
both parties as to how the statutory instrument should be
implemented, the amount to be converted and the sum available, if
any. This, in my view, would have been an exercise properly
undertaken before the court a quo. It was not and it does not fall
for this Court to undertake this exercise for the simple reason that
this Court is not a court of first instance.
In
my view, the two grounds on which this premise is taken therefore
lack merit and ought to be dismissed.
In
addition to the above, a decision of the Supreme Court on a factual
issue is final.
In
Robson Makoni v The Cold Chain t/a Sea Harvest SC55-16, this Court
confirmed that the amount of damages awarded in the local currency be
converted to foreign currency. I am fortified in this view by the
remarks of MALABA CJ, in the case of Lytton Investments (Pvt) Ltd v
Standard Chartered Ltd & Anor CC11-18, to the following effect:
“What
is clear is that the purpose of the principle of finality of
decisions of the Supreme Court on all non-constitutional matters is
to bring to an end the litigation on the non constitutional matters.
A decision of the Supreme Court, on a non-constitutional matter, is
part of the litigation process. The decision is therefore correct
because it is final. It is not final because it is correct….,.
The
law of finality of decisions of the Supreme Court on
non-constitutional matters applies to all litigants equally, whether
they become winners or losers in the litigation process. The
declaration of finality of a decision of the Supreme Court, on a
non-constitutional matter, is itself a protection of the law. Once a
decision is as a matter of fact a decision of the Supreme Court on a
non-constitutional matter, no inquiry into its legal effect can
arise.”
Court
orders must address the dispute before the court for to do otherwise
would result in a patent miscarriage of justice.
The
issue was how much the award translated to in foreign currency and
that has been done.
At
this point, the words of OLIVER WENDELL HOLMES in his opening page of
The Common Law become appropriate. He stated that:
“The
life of the law has not been logic; it has been experience…,.The
law embodies the story of a nation's development through many
centuries.”
In
Kwindima Fabiola v Mvundura Louis HH25-09…, MAKARAU JP…, then
opined that the court has a discretion to award judgment in a
currency that will redress the injury suffered and adequately
compensate the injured for that loss. The learned Judge held that it
would naturally follow that where that currency is the foreign
currency as opposed to the local currency, the judgment should sound
in the foreign currency as to award damages in the local currency,
where the local currency has been rendered valueless by inflation,
might be to deny a plaintiff the redress that he or she seeks.
To
this end, the first two grounds are entirely devoid of merit.
The
next issue of contention is the date of conversion of the local
currency into foreign currency.
The
High Court found that the date of conversion was 23 January 2008
which was the date of judgment. The appellant disagrees and submits
that the date of conversion must be 24 October 2012 which is the date
on which the respondent demanded payment. In this regard, the
appellant contends that the court a quo erred and that the date of
conversion should be the date of payment. It sought reliance on a
judgment of this Court by GWAUNZA AJA…, in Chisese v Garamukanwa
2002 (2) ZLR 392 (S) wherein the learned judge stated:
“In
the absence of any stipulation to the contrary the general rules
should be followed; that the applicable rate of exchange is the one
prevailing at the time of payment and not at the time the contract
was made.”
The
facts of this authority are the following.
The
appellant therein paid tuition fees for the respondent's son in the
United Kingdom. Payment was made in pound sterling and the parties
regarded such payment as a loan by the appellant to the respondent.
The respondent avoided repaying the loan for nine years, and, when
the appellant finally sued him for payment, raised a series of
specious defences. The High Court found that the respondent was
indebted to the appellant, but, the appellant appealed to the Supreme
Court on the issues of how much was owed, the currency in which the
debt was to be paid and the appropriate exchange rate and the rate of
interest payable.
The
Supreme Court, having determined the outstanding amount, dealt with
the questions of the appropriate exchange rate, the rate of interest,
and costs.
The
decision in the above authority is in sync with judgments of this
Court in which the principle has been clearly set out that where a
judgment has been expressed in foreign currency the rate of exchange
to be applied for purposes of execution of the judgment is that
prevailing when leave to execute is given. It is common cause that in
March 2008, when the judgment was rendered, its value as against
other currencies was capable of assessment by the Reserve Bank of
Zimbabwe.
It
has since been demonetized.
The
contention by the appellant, following upon the dicta in Makwindi
Oil Procurement (Pvt) Ltd
v
National
Oil Company of
Zimbabwe
1988
(2) ZLR 482 (SC)
is that the rate of exchange to be applied for the conversion of the
local currency to the United States Dollar payable to the respondent
be that prevailing as at the date of payment.
In
my view, this contention, on the part of the appellant, completely
ignores the point that the award which was converted by the court a
quo was made in 2008 and that the date for the conversion of the
award is the date of the judgment, which, in this case, is 23 January
2008. When the court was called upon to convert the award, it was
called upon to look at the award as at the time the judgment was
granted - that is 23 January 2008. Thus, the court was called upon to
convert the amount granted on 23 January 2008.
The
remarks of GUBBAY JA…, in Makwindi Oil Procurement (Pvt) Ltd v
National Oil Company of Zimbabwe 1988 (2) ZLR 482 (S)…, are
apposite. The learned Judge of Appeal said:
“Fluctuations
in world currencies justify the acceptance of the rule not only that
a court order may be expressed in units of foreign currency, but also
that the amount of the foreign currency is to be converted into local
currency at the date when leave is given to enforce the judgment.
Justice requires that a plaintiff should not suffer by reason of a
devaluation in the value of the currency between the due date on
which the defendant should have met his obligation and the actual
date of payment or the date of enforcement of the judgment.
Since
execution cannot be levied in foreign currency, there must be a
conversion into the local currency for this limited purpose and the
rate to be applied is that obtaining at the date of enforcement.”
In
casu, the reverse situation is what prevails.
A
judgment sounding in the local currency was, by order of court, made
payable in foreign currency. The primary reason was that although
claimed in the local currency by the time judgement was rendered the
local currency had become moribund through disuse. It was no longer a
currency of choice. It was, for all intents and purposes, shunned by
the generality of the populace. The judgment expressed in the local
currency was of no beneficial value to the respondent.
However,
Chisese v Garamukanwa 2002 (2) ZLR 392 (S) made the very important
distinction that the parties did not intend to deal in foreign
currency – the loan was extended in a foreign currency but payable
in Zimbabwe in Zimbabwean dollars. The court ordered that the loan
amount to be paid back was to be the Zimbabwean dollar equivalent of
the loan that was extended in pound sterling. This judgment was
handed down in 2002 where the question was related to devaluation but
the currency itself was still in use. The court simply had to set the
date for consideration of the value.
In
casu, the currency had fallen away – it no longer existed for a
payment in its equivalent.
In
Chisese v Garamukanwa 2002 (2) ZLR 392 (S), the court applied the
principle of currency nominalism which was explained by R H CHRISTIE,
in the Law of Contract in South Africa, 3rd
Edition…, as follows:
“Once
the place, time, and currency of payment have been settled, by
reference to the terms of the contract and to the above general
rules, were not excluded by those terms, any profit or loss accruing
to either party as a result of fluctuations in rates of exchange must
lie where it falls; Toff v African Life Assurance Society Ltd 1933
TPD 189; Aktiebolaget Tratalja v Evelyn Haddon & Co Ltd 1933 CPD
156; Tropic Plastic and Packaging Industry v Standard Bank of SA Ltd
1969 (4) SA 108 (D).”…,.
The
rationale of this principle is that stability and certainty in the
value of money enhances legal security between contracting parties
which is seen as necessary in upholding the sanctity of contract
principle as any changes in the value of the contractual obligation
would undermine legal security. The wisdom in this may be seen where
the economic fluctuations are not so gross as to entirely prejudice
one party over the other.
This
principle could still be applied in 2002 in Zimbabwe as the
Zimbabwean dollar was still in use. However, as of 2008/2009 when the
country adopted a multi-currency system and the Zimbabwean dollar
fell into disuse the courts were in a precarious position.
In
2009, the country adopted a multi currency regime to allow for
monetary transactions in view of the status of the local currency.
That decision effectively put the nail in the coffin where the local
currency is concerned. Not only did it become moribund it became
unavailable. It was, as a matter of course, demonetized soon
thereafter.
I
would venture to suggest that the issue in this case is clearly
distinguishable from the authorities as to the applicable rate of
exchange when issues pertaining to conversion of currencies are
considered.
In
this case, the respondent obtained an order to permit him to convert
a judgment rendered in local currency into foreign currency. The
chief reason was that the local currency had depreciated in value to
such an extent that the judgment would be a brutum fulmen as long as
it remained expressed in the local currency. The second reason is
that the currency had been rendered moribund through dis-use and was
of no monetary value to him in enforcement of the same. The last and
most important reason is that it has been demonetized.
I
am unable to conceive of a situation where a currency that has been
officially demonetized can be subjected to a rate of exchange. It is
a practical impossibility. I would also venture to opine that where a
judgment rendered in a local currency is converted by a court into a
judgment expressed in foreign currency by virtue of the devaluation
of the former different considerations must apply as regards the date
of conversion of the currencies. I say this mindful of the dicta by
GUBBAY JA…., in Makwindi Oil Procurement (Pvt) Ltd v National Oil
Company of Zimbabwe 1988 (2) ZLR 482 (S) that justice requires that a
plaintiff should not suffer by reason of the devaluation in the value
of the currency between the due date on which the defendant should
have met his obligation and the actual date of payment or the date of
enforcement of the judgment.
The
learned judge in the court a quo had regard to a letter from the
Reserve Bank wherein the Bank stated that the official rate of
exchange prevailing on the date of judgment, viz, 28 January 2008 was
ZWD30,000 to USD1. However, from the judgment, it is evident that the
court a quo applied a different rate that of ZWD30 to USD1.
There
is reference in the supplementary heads of argument filed on behalf
of the respondent in the court a quo to the removal of three zeros
from the ZWD currency in accordance with the provisions of S.I.109 of
2008. The appellant suggests that the court a quo applied an
incorrect rate of exchange. Sight must not be lost of the fact that
balances in bank accounts and bills were affected by the
implementation of the statutory instruments. Although counsel for the
appellant suggested before us that it did not have a retroactive
effect; it became law as at 30 July 2008 and its immediate effect was
a revaluation of balances. Unfortunately, it did not have the effect
of revaluing orders of court.
I
find no misdirection on the part of the High Court in applying an
exchange rate of ZWD30 to USD1.
As
regards the date of conversion, the court a quo sought reliance on
Avacalos v Riley HH75-07 wherein MAKARAU JP…, clearly made a
distinction between judgments expressed in the local currency from
those expressed in foreign currency. The learned judge said:
“It
appears to me that Mrs Wood is seeking reliance from the dicta in
Makwindi Oil Procurement (Pvt) Ltd (supra) where it was laid down
that the amount of foreign currency in a judgment is to be converted
into local currency at the date when leave is given to enforce the
judgment. This is the established position, but, in my view, it only
applies where the judgment is expressed in foreign currency. Where
the judgment is to be expressed in local currency, then the amount of
the judgment is set and determined on the date that the consent to
judgment is filed. It cannot be re-converted on the date that
judgment is finally given as to do so will, in my view, be highly
prejudicial to the defendant who would have unequivocally elected to
have a judgment entered against him in a certain specified amount.”
In
the premises, I would resolve all the grounds in the respondent's
favour. The appeal is therefore dismissed as being devoid of merit....,.
In
the result the following order will issue:
IT
IS ORDERED THAT:
1.
The main appeal is dismissed.
