The High Court of Zimbabwe has dismissed a claim by Bulawayo-based law firm Job Sibanda and Associates seeking to recover US$13,166 from a former client, ruling that the debt was lawfully extinguished following payment in local currency in 2019.

In a judgment delivered in Bulawayo, Justice Mpokiseng Dube found that the defendant, Charles Mabhena, had fully discharged his obligation when he paid RTGS$14,922 on July 22, 2019, after the firm’s bill of costs had been taxed.

The law firm had issued summons claiming a balance of US$13,166 in respect of taxed legal costs, together with interest from May 8, 2019, the date of taxation. It argued that although the legal services were rendered between August and November 2018, the debt only became liquidated when the Taxing Master certified the amount in May 2019.

Mabhena opposed the claim, arguing that the summons was invalid because it sought payment in United States dollars at a time when the Zimbabwe dollar had been declared the sole legal tender. He relied on Statutory Instrument 33 of 2019 and Statutory Instrument 142 of 2019, which introduced the RTGS dollar and later abolished the multi-currency system for domestic transactions.

The court determined the matter as a special case in terms of the High Court Rules, focusing on whether the claim in United States dollars was unlawful and whether the defendant had already discharged his obligation.

In her analysis, Justice Dube referred to the Supreme Court decision in Zambezi Gas Zimbabwe (Private) Limited v N.R. Barber (Private) Limited & Anor, in which the apex court held that liabilities valued and expressed in United States dollars immediately before February 22, 2019 were, by operation of law, deemed to be RTGS dollars at a 1:1 exchange rate.

The judge noted that although the defendant had queried the initial invoice, the services were rendered and invoiced in 2018 in United States dollars. She held that the existence of a dispute over the amount did not alter the fact that the liability had been valued and expressed in foreign currency before the effective date of SI 33 of 2019.

“The fact that the defendant queried the amount did not erase the fact that the claim was for a sum denominated in USD,” the court found, adding that the statutory instrument did not require a debt to be liquidated before February 22, 2019 for it to fall within its scope.

On the lawfulness of the claim, the court ruled that following the promulgation of SI 142 of 2019 on June 24, 2019, the Zimbabwe dollar became the sole legal tender for domestic transactions. Both parties were domestic entities and the transaction was local.

“A claim sounding purely in USD for a domestic debt, without a prayer for conversion at the date of payment or an allegation of a foreign obligation, is in contravention of the law,” Justice Dube held.

The court concluded that the defendant’s payment of RTGS$14,922 constituted full and final settlement of the taxed costs at the statutory 1:1 conversion rate, rejecting the firm’s attempt to recover what it argued was the United States dollar value at the interbank rate.

Justice Dube dismissed the claim as being contrary to SI 33 of 2019 and SI 142 of 2019, declared that the defendant had fully settled his liability, and ordered the law firm to pay costs on the ordinary scale.