CHEDA J: This
is an application for a default judgment.
The brief facts
are that on or around the 28th February 2005 plaintiffs sold to
defendants their shares in 1st defendants' company and the agreement
was reduced into writing. At the time
first defendant asked for a loan from the plaintiffs in the sum of $300 million
to enable it to capitalize itself and the loan was advanced and it was agreed
that it would be paid within a year.
The loan agreed to,
was for $300 million and not in United
States dollars.
In applying for
default judgment plaintiffs are now asking for the Zimbabwe
dollars to be converted to United
States dollars on the basis that judgment in
foreign currency would most truly express their loss and more fully compensate
them for that loss.
Mr. P. Ncube for plaintiff filed Heads
of Arguments in support of this application.
Mr. Ncube referred me to the case of Watergate (Pvt) Ltd v Commerical
Bank of Zimbank SC 78/05 were it was held that a party is entitled to
payment in foreign currency if we can show that a judgment in that currency
would most likely express its loss, and, thereby being fully compensated for
the said loss.
He also referred
me to the case of Makwindi Oil Procurement
(Pvt) Ltd v National Oil Company of Zimbabwe 1988 (2) ZLR 482(SC) and Watergate (Pvt) Ltd v Commercial Bank of Zimbabwe SC
78/05. .
In these cases the claim was for foreign currency arising from contracts
whereas in casu the parties did not agree on the foreign currency
element.
While the ruling
in that case is no doubt correct, I am of the opinion that the present case is distinguishable
because in casu the parties' agreement was for the purchase of shares in
Zimbabwe
dollars and no other currency was agreed to.
A contract where payment was to be paid in foreign currency in Zimbabwe would have
been unlawful and the parties were aware of this.
In the present
case plaintiff is seeking to enforce an illegal claim through the
backdoor. The court can not lend its
assistance to the enforcement of an illegal transaction, that is, the
conversion of a debt sounding in local currency to foreign currency where there
has been no prior agreement to do so.
What plaintiff is asking the court to do is to enforce an illegality on
the basis of financial sympathy. This is
a wrong device to use. I should point
out that defendants have not raised the issue of illegality and it was not
pleaded or relied upon in this court. However,
the court has a duty in the interest of justice to take the point mero motu
at any time during the hearing, see Stanford v City Bioscope 1917 CPD 591 at 593 and Cape Dairy and General Livestock Auctioneers v Sim 1924 AD 167.
This court cannot
lend its aid in the enforcement of a claim now couched in foreign currency when
the debt was in local currency.
The following
order is accordingly made:-
1. Judgment is entered in the sum of $300
million dollars together with interest
at the prime overdraft interest rate of Barclays Bank per month calculated from
the 31st March 2005 to the date of last payment.
2. Cost
of suit.
Messrs. Coghlan and
Welsh Partners, plaintiff's legal practitioners
