SOUTH AFRICA-REGISTERED company Prisma Packaging has breathed a sigh of relief after the Supreme Court stopped a Zimbabwean company from settling an outstanding debt of R252 356,38 using a trading rate of US$1 to ZWL$1.
Supreme Court judges of appeal Justices Antonia Guvava, Felistas Chatukuta and Justice Mwayera set aside a judgment of the High Court that was granted in favour of the Zimbabwean company Nhimbe Fresh to pay ZWL$23 000 to offset a R252 356,38 debt.
The judges, however, ordered a retrial of the matter to allow Nhimbe Fresh to pay the debt using prevailing interbank rates.
Nhimbe Fresh and Prisma Packaging were involved in a long-standing dispute over a lower court judgment made in favour of Prisma Packaging.
Prisma Packaging obtained the said judgment at the Marondera Magistrates’ Court under case number MC 420B/18.
In a default judgment granted in February 2019 in Nhimbe Fresh was ordered to pay Prisma the sum of ZAR 252 356,38 with interest.
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Nhimbe failed to satisfy the judgment debt and Prisma obtained a warrant of execution against its property. Prisma subsequently instructed the Marondera Messenger of Court to attach property belonging to Nhimbe Fresh on January 2, 2020.
In January 2020, Nhimbe Fresh proceeded to pay ZWL$23 000 into Prisma’s bank account.
Nhimbe Fresh stated that the said sum was in full and final settlement of the judgment debt, costs and interest as at the date of the judgment.
Prisma Packaging, however, rejected the ZWL$23 000, prompting Nhimbe Fresh to make an application for a declaratory order at the court a quo.
Nhimbe Fresh further sought the release of its property which had been attached in execution.
The company said the payment was made after the conversion of ZAR252 356,88 to United States dollars and thereafter to Zimdollars at the rate of 1 as to 1.
Prisma opposed the application.
Prisma argued that Statutory Instrument 33/19 only applied to assets and liabilities that were denominated in United States dollars. But the Supreme Court judges established that there was no confusion as to whether or not the judgment debt had been paid in full.
“A huge amount still remains due and owing. The applicant made its own calculations and found that the amount that was due in United States dollars was US$23 000,” the Supreme Court judges ruled.
“By the applicant's calculations, the amount that remains outstanding would, therefore, be US$23 000 or its ZW$ equivalent payable at the prevailing interbank rate less ZW$23 000 which has already been paid.
“However, more than nine months have elapsed since the applicant converted the judgment debt to United States dollars. The prevailing market rates have since changed.”
The judges concurred that the High Court failed to resolve the issue between the parties.
The judges then ordered a trial de novo to ascertain the current conversion rate.