MAKONI
J: The plaintiff issued summons, out of
this court, claiming payment of storage charges for the period April 2008 to
June 2009 in respect of 12 kitchens in the sum of USD 18 0000-00, interest at
the rate applicable in the United States of America from date of summons to
date of settlement. It also claimed storage charges from 1 July 2009 until the
date of completion of the contract calculated at the rate of USD 100-00 per
month per kitchen The plaintiff also claims interest on that amount from 1 July
2009m at the sane rate as above, to date of completion of the contract and
costs of suit.
The
basis for the claim is that the parties entered into an agreement whereby the
plaintiff would assemble and fit kitchens in the defendant houses. In terms of
clause 7 of the agreement the defendant would be liable in respect of storage
charges to finished kitchen units until such time that the kitchens would be
fitted. The plaintiff incurred storage charges of the kitchens from April 2008
to June 2009. It also continues to incur storage charges from 1 July 2009 to
date of completion of the contract.
Mr
Dondo was asked to submit heads of
argument addressing the validity or otherwise of the agreement taking into
account that payment for the transaction was to be made in foreign currency.
It
was submitted on behalf of the plaintiff that the contract between the
plaintiff and the defendant does not fall foul of any of the provisions of the
Exchange Control Regulations, SI 109/96 (“the Regulations”). It did not
contravene s 4(1)(a)(iii) of the Regulations since payment in United States dollars cannot be
deemed “an exchange” of foreign currency. He quotes from the Oxford Learners
Dictionary 6th ed which defines the word exchange as follows:
“the process of
changing an amount of one currency that is money used in one country for an equal
value of another”.
He
submitted that in the event that the court finds that the agreement violated
the Regulations, the court has a discretion to relax the effect of the maxim in pari delicto est condition possedenis and not deny judicial
assistance to a party who parts with money in furtherance of such a
transaction.
The
word exchange in relation to the Regulations has been defined in Lloyd Gambiza v Pikirai Taziva HH 109-08. On p 4 of the cycostled judgment, GOWORA
J quoted from Shorter Oxford Dictionary which defines exchange as a noun variously as follows:
“the action of
an act, of reciprocal giving and receiving; a mutual grant of equal interest;
the one in consideration of the other.
In respect of
the verb, the dictionary describes the following meaning, so exchange – to
change away, to dispose of by exchange; to give or part with (something) for
something in return; to give and receive reciprocally; to interchange”.
I
would prefer the approach adopted in Gambiza
supra. The meaning ascribed to exchange by the plaintiff is too
restrictive. It relates to situations where parties exchange one currency for
another. The meaning that can be ascribed to exchange, in the context of which
it used in the Regulations is “to give” and “to receive”. The plaintiff was to
render a service to the defendant and the defendant would give and the
plaintiff receive an amount in foreign currency. The defendant did not have
permission of an exchange control authority to make payment in foreign currency.
This is prohibited by the Regulations. This would render the agreement between
the parties illegal and it cannot be enforced.
I
have been asked to exercise my discretion to relax the effect of the maxim in pari delicto est condition possedentis (in pari delicto). The maxim is translated as meaning “where parties
are equally in the wrong, he who is in possession will prevail”. See Dube v Khumalo 1986 (2) ZLR 103 SC at 109 D-C. The rationale for this
discretion is to prevent injustice where one party is enriched at the expense
of the other. See Jajbhay v Cassim 1939 AD 537 at 544 – 545.
In
my view, this is an appropriate case where the loss should lie where it fell.
The plaintiff did not part with anything in furtherance of the transaction. The
defendant was not enriched neither was the plaintiff impoverished in pursuance
of the transaction. Granting the order being sought by the plaintiff would
amount to enforcing an illegal contract.
In
the result, I will make the following order:
1. The plaintiff's claim is dismissed.
2. There will be no order as to costs.
Chinamasa, Mudimu, Chinogwenya
Dondo, plaintiff's legal practitioners
