KUDYA
JA: The
appellant appeals against part of the judgment of the High Court
sitting at Bulawayo that was handed down on 20 May 2021.
The
court a
quo
ordered the respondent to pay to the appellant delictual damages in
the sum of US$66,789.80 in local currency converted at the parity
rate of one-on-one as between the two currencies.
On
18 September 2009, the first respondent's locomotive hit and
damaged the first appellant's horse and trailer, which were stuck
at a railroad level crossing in Somabula. The appellants issued
summons on 29 June 2010, claiming damages in the sum of US$66,768.80.
The
respondents contested the claim and counterclaimed for delictual
damages in the sum of US$148,919.48.
On
20 May 2021, the court a
quo
granted the appellants claim and dismissed the respondents
counterclaim.
It
ordered the respondents to pay the amount at the parity rate of 1:1
between the RTGS$ and the United States dollar, ostensibly on the
basis of the relevant provisions of the Reserve Bank of Zimbabwe Act
[Chapter
22:15]
and the case of Zimbabwe
Gas (Pvt) Ltd v NR Barber (Pvt) Ltd
SC 3/20.
Aggrieved
by the parity rate at which the delictual damages were to be paid,
the appellant appealed to this Court.
The
sole ground of appeal is that the court a
quo
misdirected itself at law by misconstruing the rate at which the
delictual damages denominated in United States dollars were
convertible to local currency in terms of sections 22(1)(d) and (e)
as read with sections 20 and 22(4)(a) of the Reserve Bank Act
[Chapter
22:15]
(the Act).
The
sole issue that arises on appeal is whether or not the court a
quo
was correct to apply the one-to-one parity rate between the RTGS$ and
the US$ in respect of the award of delictual damages it awarded to
the appellant.
Before
us, Mr Tshuma
for the appellant made the following contentions.
He
argued that section 22(1)(d) of the Act prescribed the nature and
scope of the obligations and the cut-off date on which the RTGS
dollar was to be exchanged for the United States dollar at the rate
of one-on-one for delictual awards granted before the effective date
while para (e) of the same subsection provided the subsequent period
in which the interbank rate was to be applied. He further argued that
section 20 as read with section 22(4)(a) of the Act regarded extant
and executable judgment debts, local (and not foreign) financial and
contractual obligations as assets and liabilities to which all these
provisions applied.
He
strongly argued that as a delictual claim denominated in United
States dollars could not fall under the aegis of either an asset or
liability for accounting and other purposes or be executable as a
judgment debt, it could not be categorized as a delictual obligation
that would be payable at the one-on-one parity rate.
He
contended that it would only do so once a competent court made a
determination on liability and assessed the value of the liability.
The
appellant, therefore, submitted that the relevant provisions of the
Act did not apply to a delictual claim assessed or expressed by a
litigant but to a judgment debt assessed or expressed by a competent
court of law in United States dollars before and not after the
cut-off date.
Per
contra,
Mr Mazibuko
for the respondent argued that the court a
quo
correctly determined that the relevant provisions of the Act
incorporated delictual claims assessed or expressed in United States
dollars by the victim of the delict, on or before the effective date,
into assets and liabilities. He argued that the definition of and
reference to executable court decisions in section 20 of the Act was
additional to the value of assets and liabilities “for accounting
and other purposes” enshrined in section 22(1)(d) of the Act.
He
maintained that delictual claims were included in the phrase “other
purposes”.
He
argued that once these claims were assessed or expressed in United
States dollars by the victim, they would fall under the aegis of
assets and liabilities that were payable at the one-on-one parity
rate provided the claims were made before the cut-off date.
He
submitted that the determination of the court a
quo
that the delictual award was payable at the one-on-one parity rate
was correct. He premised his submission on the common cause facts
that the delictual claims in question were valued in United States
dollars and sought before the cut-off date.
The
respondent, therefore, submitted that the delict having been
committed against, and assessed and expressed by, the appellant in
United States dollars before the effective date, was covered by these
provisions.
The
relevant provisions of the Act are section 22(1)(d) and (e), section
22(4) and section 20.
Section
22(1)(d) and (e) as read with section 22(4)(a) of the Act prescribe
that the values of all assets and liabilities that were expressed or
any financial or contractual obligations, other than foreign
obligations, that were concluded or incurred in United States dollars
on or before 22 February 2019 (the effective date or cut-off date),
were deemed to have been expressed, concluded or incurred in RTGS
dollars at the rate of one-to-one to the United States dollar.
Further, that the value of all assets accrued or liabilities incurred
after the cut-off date would be payable at the prevailing interbank
rate of the local currency to the United States dollar.
Section
20 of the Act extends the application of the above cited provisions
of the Act to judgment debts.
In
addition, the ratio
decidendi
in the case of Zambezi
Gas Zimbabwe (Pvt) Ltd v N.R. Barber (Pvt) Ltd & Anor
SC 3/20, was that, in terms of the relevant provisions of the Act, a
judgment debt denominated in United States dollars on or before the
cut-off date would be liquidated at the parity rate of one-on-one to
the RTGS dollar.
It
is trite that regard must be had to the text, context and purpose of
the provisions and the broader architectural design of the Act. The
relevant provisions must, per force, be construed as a whole and not
in piecemeal fashion.
It
is also axiomatic that a delict, unlike a financial or contractual
obligation, cannot be categorized as an asset or liability until it
is voluntarily accepted as such by the wrongdoer or until such
acceptance is foisted upon the wrongdoer by a court of competent
jurisdiction.
This
is because a delict is committed and does not accrue like an asset
nor is it incurred like a liability.
In
accounting terms, an asset or a liability has an ascertainable
monetary value, which is recorded in the relevant books or statements
of account. This is the position that pertains to a judgment debt. It
constitutes an asset in the books of the judgment creditor and,
conversely, a liability in the hands of a judgment debtor.
Neither
of these parties can treat a delictual claim as an asset or a
liability. They can only do so after a competent court of law has
made a determination on whether the claim establishes a liability and
thereafter assesses the measure of such a liability.
In
any event, only a judgment debt and not a delictual claim can be
executed in the manner contemplated in section 20 of the Act.
It
is for these reasons that we agree with Mr Tshuma
that the text, context and purpose of both the relevant provisions
and the broader scheme of the Act incorporates a financial or
contractual obligation concluded or incurred before the effective
date and a judgment debt made on or before the effective date and not
a mere delictual claim lodged on or before that date into the ranks
of assets and liabilities.
We
are not persuaded by the contrary contentions made by Mr Mazibuko
that the text of the Act is wide enough to include delictual claims
lodged before the effective date into the category of assets and
liabilities that are payable at the one-on-one parity rate.
In
the circumstances, we are satisfied that the court a
quo
misdirected itself in both its construction and application of the
relevant provisions of the Act and in its appreciation of the ratio
decidendi
of the Zambezi
Gas case, supra.
The appeal, therefore, ought to succeed.
In
our view, the costs of appeal must follow the result.
Accordingly,
it is ordered that:
1.
The appeal succeeds with costs.
2.
The order of the court a
quo
is amended to read as follows:
(a)
The first and second defendants be and are hereby ordered to pay the
plaintiffs, jointly and severally, the one paying the other to be
absolved:
(i)
The sum of US$66,768.80 or its equivalent in RTGS dollars at the
applicable inter-bank rate on the date of payment.
(ii)
Interest thereon at the prescribed rate of 5 per cent per annum
calculated from the date of judgment to the date of payment in full.
(iii)
Costs of suit.
GWAUNZA
DCJ: I
agree
MWAYERA
JA: I
agree
Webb,
Low & Barry,
the appellants legal practitioners
Calderwood,
Bryce Hendrie & Partners, respondents legal practitioners
