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Judgment

4 HH 412 - 25 HCH 1407/24 ISONYA INVESTMENTS (PVT) LTD versus MOONGROOVE INVESTMENTS (PVT) LTD HIGH COURT OF ZIMBABWE KATIYO J HARARE; 10 June & 10 July 2025 Summons Commencing Actions T Mpofu, for the plaintiff R.G Zhuwarara, for the defendant Introduction KATIYO J: This is a civil claim in which the plaintiff seeks to recover a sum of US$616,518 paid to the defendant under an abortive land transaction. The plaintiff’s case is founded on restitution (unjust enrichment) after a sale of land and a subsequent lease arrangement between the parties were both declared void for illegality. The defendant received and retained the plaintiff’s funds but has refused to refund them, prompting this litigation. In its defence, the defendant raises two primary legal objections: prescription (that the claim is time-barred) and currency conversion (that any obligation to refund was converted to RTGS dollars at a 1:1 rate under Statutory Instrument 33 of 2019). The defendant denies that it has been unjustly enriched, contending that it lawfully tendered a refund (albeit in local currency) and that the law permits it to retain the funds in the circumstances. The matter was heard by this Court with each side leading one witness. Mr. Cydwell Chitewe, the managing director of the plaintiff (and formerly of Redan Petroleum (Pvt) Ltd, the original contracting party), testified for the plaintiff. Mr. Sanjay Babbar, the managing director of the defendant, testified on behalf of the defendant. The evidence, much of it common cause, established the factual background set out below. The Court will first summarize the pertinent facts before distilling the issues for determination. It should be noted at the outset that both impugned agreements (the sale and the lease) are accepted by the parties to have been null and void ab initio; the plaintiff does not seek to enforce those contracts but rather to recover the money paid thereunder. With that in mind, the Court turns to the factual background. Factual Background On 18 December 2015, the defendant (Moongroove Investments (Pvt) Ltd) entered into an agreement of sale with Redan Petroleum (Pvt) Ltd (trading as Puma Energy) for an unsubdivided portion of certain land, namely 3,000 square meters of Stand 18254 Harare Township. Mr. Babbar signed the agreement on behalf of the defendant, and one Joao Oliveira e Souza represented Redan. The sale price and terms were such that an initial payment of US$200,000 was due upon signing, but in fact Redan went on to advance substantially more funds at the defendant’s request. By 2016, Redan had paid a total of US$531,518 to the defendant in connection with this sale. It is common cause that the defendant received and made use of the full value of these payments. Mr. Babbar candidly admitted in his evidence that the defendant “received and used full value” from the money Redan paid. Notwithstanding the sizeable payments made, the transfer of the property was never effected. The portion of land in question was never subdivided or lawfully transferred to Redan or its nominee. It later emerged that the agreement of sale was void for want of compliance with section 39 of the Regional, Town and Country Planning Act [Chapter 29:12], which prohibits the sale of unsubdivided portions of land without the requisite permit. In other words, the contract was illegal and a nullity from inception, a fact which, on the evidence, neither party actively addressed until years later. By mid-2019, Redan became increasingly concerned at the lack of progress. On 16 July 2019, Redan (through its lawyers) wrote to the defendant, demanding performance – essentially, calling upon the defendant to transfer the land or provide a remedy. The defendant responded by letter dated 24 July 2019, in which it revealed for the first time that the sale agreement was null and void for illegality. In that letter, the defendant tendered a “refund” of the US$531,518 that had been paid, but critically, it offered the refund in the form of RTGS$531,518 (at a 1:1 rate), citing the recent change in law that converted all domestic USD obligations into local currency. In effect, the defendant took the position that it could simply repay the nominal amount in vastly depreciated local currency and thereby extinguish Redan’s claim. Redan did not accept this tender – understandably so, given that by July 2019 the RTGS dollar had already begun to lose value against the US dollar, making such a “refund” economically absurd. No actual payment was made by the defendant at that time; the money remained with the defendant. Instead of immediately resorting to litigation, the parties entered into further negotiations. Their aim, ostensibly, was to “salvage” the failed sale transaction. This culminated in a Notarial Deed of Lease executed on 2 July 2021 between the defendant and Isonya Investments (Pvt) Ltd (the plaintiff in this case). It was explained that Redan, as part of a corporate restructuring, had ceded its rights in the land transaction to its affiliate, Isonya (the plaintiff). The lease agreement granted the plaintiff a lease of the same 3,000 m² portion of land for a 10-year period. Significantly, Clause 9.1 of the Lease provided that the annual rent of US$531,518 for the leased premises was “prepaid” – that is, the sum Redan had paid under the void sale agreement was to be credited as rent pre-payment. In addition, the plaintiff (through Redan or its group) paid a further US$85,000 to the defendant around that time, intended to assist the defendant with certain processes required for the lease or subdivision approval. This brought the total outlay by the plaintiff’s side to US$616,518 (the amount now claimed). Unfortunately, the 2021 lease agreement fared no better than the sale. It soon became apparent that this lease was also invalid, for essentially the same reason: the underlying property had not been subdivided or approved for separate leasing, again in contravention of the law. The “condition precedent” in the lease (which presumably involved obtaining regulatory approval) was never fulfilled. The defendant, after taking the additional US$85,000, abruptly advised that the lease was irregular and unenforceable. Notably, when renouncing the lease, the defendant did not offer to return any money – neither the US$531,518 re-characterized as rent, nor the extra US$85,000 that it had solicited under the guise of facilitating the lease. The plaintiff was once again left empty-handed, having received neither title to the land nor possession under a lease, despite a very large total payment. After the collapse of the lease in 2021, the plaintiff continued to seek an amicable resolution or alternative arrangement, but none was forthcoming. The defendant rebuffed further proposals (including a mooted new lease with another affiliate, Redan Coupon (Pvt) Ltd). Meanwhile, the defendant proceeded to transact with third parties concerning the same property. Evidence was led that the defendant entered a lease (or sale) of the property to a third party, from which the defendant has already received approximately US$948,800 and stands to receive a total of about US$1.423 million. In fact, the plaintiff had to obtain an urgent interdict (High Court case HCH 2857/24) to prevent the defendant from dissipating or transferring the property to the prejudice of the plaintiff’s claimed interest. Thus, by the time this matter came to trial, the defendant had not only retained the plaintiff’s US$616,518 for nearly a decade, but had also commercially exploited the property in question for its own benefit, earning a substantial windfall from third parties. Finally, on 6 November 2023, the plaintiff (having taken cession of Redan’s rights) issued a formal demand to the defendant to refund the full US$616,518 (being US$531,518 + US$85,000) on the basis that no valid agreement ever materialized. The defendant refused or neglected to pay. The plaintiff then instituted these proceedings. In its summons, the plaintiff claims: payment of US$616,518, interest thereon at the prescribed rate of 5% per annum from 6 November 2023 (date of demand) to date of payment, and costs of suit on the higher scale (legal practitioner and client). Witness Testimony As noted, Mr. Chitewe testified for the plaintiff. He essentially confirmed the chronology above: the payment of US$531,518 by Redan to the defendant by 2016, the subsequent discovery of the sale’s illegality, the defendant’s refusal in 2019 to provide either the land or an equivalent USD refund, the negotiations leading to the 2021 lease (and the additional US$85,000 paid), and the eventual collapse of that lease. He further testified that at no point in February 2019 was there any “claim” or cause of action being pursued by Redan, as both parties at that time still viewed the sale as on track – it was only in July 2019 that a dispute arose and a demand for refund was made. He stated that the defendant gave various acknowledgments of liability after that time (particularly through the lease agreement) such that the plaintiff always understood the defendant accepted responsibility to return the money in some form. He also recounted how the defendant, instead of resolving the issue, proceeded to lease out the property to a third party for a hefty sum, thereby profiting from an asset it had already been paid for by the plaintiff. Mr. Chitewe impressed the Court as a credible and truthful witness. He remained calm and consistent under cross-examination, sticking to factual matters and making appropriate concessions. The Court finds that his testimony was both internally and externally consistent with the documented evidence and probabilities. Mr. Babbar’s testimony for the defence did not dispute the core facts. He confirmed the signing of the 2015 sale agreement and the receipt of US$531,518 from Redan. He acknowledged the execution of the July 2021 lease and the receipt of the additional US$85,000. Indeed, Mr. Babbar conceded that the defendant had obtained “full value” from the monies paid by Redan. His defense, however, was that due to changes in the law, the defendant had no obligation to repay that value in like currency. He repeatedly asserted that “the law” permitted the defendant’s stance of paying only RTGS$ and that he felt justified in not reimbursing the plaintiff in real terms. Under cross-examination, Mr. Babbar made several notable admissions: (a) that as of February 2019 there was no dispute between the parties and the money paid was being treated as the defendant’s funds, with both sides still expecting the sale to proceed; (b) that the first dispute arose in July 2019, when the defendant declared the sale void, and that this dispute led to negotiations culminating in the 2 July 2021 lease agreement; (c) that the lease agreement was indeed an attempt to allow Redan (now the plaintiff) to “recoup its losses” from the failed sale, by treating the prior payment as prepaid rent; and (d) that the defendant was at all relevant times aware of the legal irregularities affecting both the sale and the lease, yet it went on to strike a lucrative deal with a third party for the same property, keeping the plaintiff out in the cold. When pressed on why the defendant should keep the plaintiff’s money under these circumstances, Mr. Babbar’s only answer was that the law allowed him to do so. Tellingly, he admitted he would not change his position even if the Court found his legal interpretation to be wrong. This reveals a conscious lack of scruple or remorse – the defendant was determined to retain the windfall unless legally compelled to relinquish it. The Court found Mr. Babbar to be a less credible witness. While factually he corroborated much of Mr. Chitewe’s account, his attitude and evasiveness on certain questions (particularly regarding the fairness of the situation) were troubling. The plaintiff’s counsel argued that Mr. Babbar did not consider his oath binding on his conscience. Without going that far, the Court observes that Mr. Babbar appeared cavalier about the truth, especially when discussing the defendant’s dealings post-2019. His justification for keeping the money – effectively “might is right” by virtue of a legal loophole – betrays a lack of good faith. It was evident that the defendant’s strategy from 2019 onward was to string the plaintiff along (with the abortive lease) while never truly intending to refund the money unless cornered. This conduct speaks of bad faith and an intent to defraud the plaintiff of its funds. Accordingly, where Mr. Babbar’s evidence attempted to minimize the defendant’s responsibility or to suggest that no enrichment occurred, the Court rejects it as false. The objective facts speak louder: the defendant has had the use of the plaintiff’s money for years and even profited from the land elsewhere, all without compensating the plaintiff one iota. Against that backdrop, the defendant’s technical defences must be examined. Issues for Determination From the pleadings and the closing submissions, the following are the three principal issues requiring determination: Whether the plaintiff’s claim is extinguished by prescription.Whether the defendant’s debt to the plaintiff was converted to RTGS dollars at a 1:1 rate by operation of law (Statutory Instrument 33 of 2019 and the Finance Act (No. 2) of 2019).Whether the plaintiff is entitled to restitution of the money paid and conversely, whether the defendant would be unjustly enriched if it retained the money. The validity of the underlying agreements is not in issue – it is common cause that both the sale and the lease were invalid and unenforceable. The plaintiff’s claim is instead delictual or quasi-contractual, based on unjust enrichment. With the issues thus defined, the Court will address each in turn. Analysis 1. Prescription The defendant’s first line of defence is that the claim had prescribed by the time it was instituted. In Zimbabwe, the prescriptive period for an ordinary debt is three years (Prescription Act [Chapter 8:11], section 15(d)). The defendant argues that the plaintiff’s cause of action arose, at the latest, by 16 July 2019 (when Redan demanded a refund), and that the plaintiff then waited more than three years (until late 2023) to sue – hence, prescription. The plaintiff disputes both the factual premise and the legal validity of this defence. As a preliminary matter, the plaintiff points out that the defendant did not properly plead prescription in accordance with the law. Section 20(2) of the Prescription Act [Chapter 8:11] requires that a party who invokes prescription “shall do so in the relevant documents filed of record in the proceedings.” This means a plea of prescription must be explicitly raised in the pleadings (typically by way of a special plea or clearly headed defence) with sufficient particulars, including the date on which the debt became due and the period of delay. In Angelique Enterprises (Pvt) Ltd v Albco (Pvt) Ltd 1990 (1) ZLR 6 (HC), the Court underscored that if prescription is not properly raised in the pleadings, it is not “properly before the court”. The plea must be clear and specific so the other party is alerted to meet it. In that case, the failure to plead the essential details of prescription (such as when prescription set in) was fatal. In the present matter, the defendant’s plea on prescription was sketchy. It did not particularize the date on which the debt is alleged to have prescribed, merely asserting in general terms that the claim was time-barred. As in Angelique Enterprises (Pvt) Ltd v Albco (Pvt) Ltd (supra), such an omission is problematic – “the date on which prescription is said to have set in has not been identified in the plea. It is therefore not in the pleadings. The court cannot relate to the plea of prescription when the date is not set out”. On this procedural ground alone, the prescription defence is on shaky footing. The plaintiff joined issue with the defendant on this, and the Court agrees that the special plea (to the extent one can call it that) is not properly before the Court. This provides one basis to dismiss the defence of prescription. Even if one were to entertain the prescription defence on its merits, it does not succeed. The critical question is: When did the plaintiff’s cause of action arise, thereby commencing the running of prescription? It is trite that prescription begins to run when a debt is due. A debt is due when the creditor’s cause of action is complete, i.e. when the claimant is entitled to institute action and demand payment forthwith. Importantly, a debt may “arise” and “be due” at different times – it arises when all the factual ingredients are in place, but it may only become due (in the sense of immediately claimable) later, for example upon demand or the occurrence of a certain event. As the authorities illustrate, “prescription does not set in unless a debt has become due, and a debt does not necessarily become due at the same time that it arises”. In Peebles v Dairibord Zimbabwe (Pvt) Ltd 1999 (1) ZLR 41 (HC), it was emphasized that the clock for prescription starts when the plaintiff is equipped with a complete cause of action to sue. Similarly, in Maravanyika v Hove 1997 (2) ZLR 88, the Supreme Court noted that although a debt often becomes due at the same time it arises, that is not invariably so. Each case turns on its facts as to when the plaintiff could first rightly institute the claim. In casu, the plaintiff’s cause of action is for unjust enrichment – essentially repayment of money paid under a void contract. When did this cause of action fully materialize? Certainly not at the moment the payments were made (2015-2016), because at that time both parties were proceeding under the belief that a valid sale existed. The money was paid as purchase price; there was no notion then that it was to be returned. For as long as the sale agreement was regarded as operative, the plaintiff had no claim for a refund – one cannot sue for restitution while happily affirming a contract. The cause of action to reclaim the money would arise only once it became clear that the contract was invalid or would not be performed. On the evidence, that moment came in July 2019, when the defendant explicitly disavowed the sale as null and void and indicated it would not transfer the property. It is around that time (mid to late July 2019) that the plaintiff’s claim for return of the money effectively became due, since the basis on which the money was paid had failed. Even the defendant’s counsel in closing accepted that by 16 July 2019 or, at the latest, 24 July 2019, a cause of action had arisen and the debt was due and payable. The Court finds that to be the point at which prescription would have commenced running, assuming nothing intervened to interrupt it. From late July 2019, three years would ordinarily expire by late July 2022. The plaintiff, however, instituted this action in March 2024 (summons was issued in early 2024). Prima facie, that is beyond the 3-year limit. However, the plaintiff argues that prescription was interrupted in the interim by an acknowledgment of liability, per section 18 of the Prescription Act. Section 18(1) provides that “the running of prescription shall be interrupted by an express or tacit acknowledgment of liability by the debtor.” Once interrupted, prescription begins to run afresh from the date of interruption (section 18(2)). An acknowledgment need not be made in a specific form; it may be tacit or express, and can be gleaned from conduct, communications, or agreements, so long as it amounts to an admission that the debt is due. Even an acknowledgment of part of the debt suffices to interrupt prescription for the whole, according to our case law. The rationale is that by acknowledging liability, the debtor causes the creditor to delay legal action in reliance on the acknowledgment, and thus the law resets the clock to avoid penalizing the creditor’s indulgence. The plaintiff’s position is that the defendant repeatedly acknowledged its liability to refund the money, thereby interrupting prescription. In particular, the July 2021 lease agreement is highlighted as a clear acknowledgment. In that Notarial Lease, the defendant expressly acknowledged that the sum of US$531,518 had been prepaid by the plaintiff (as rent). This is tantamount to acknowledging that the plaintiff had a credit or claim in that amount. Mr. Babbar himself admitted in court that the lease was intended to allow the plaintiff to recoup the money paid under the void sale. He confirmed that the negotiations leading to the lease were “perched” on the understanding that the defendant owed an obligation to make good Redan’s (now plaintiff’s) losses. These admissions leave no doubt that, by entering the lease agreement, the defendant was accepting that it had a liability equivalent to the US$531,518 (plus the additional US$85,000) – it simply sought to satisfy it indirectly by granting a lease. In substance, this was an acknowledgment of debt. Even aside from the lease contract, the defendant’s correspondence can be construed as acknowledgments. The 24 July 2019 letter, while couched as a denial of a USD obligation, did acknowledge the obligation to repay in some form (the RTGS tender was an implicit admission that the money should be paid back, albeit in local currency). Subsequent communications in 2019 (including a letter of 30 August 2019 referenced by the defence) involved the defendant offering reimbursement, which again is a tacit acknowledgment that something was owed. In any event, the July 2021 Lease stands as an unequivocal, express acknowledgment in writing. That occurred on 2 July 2021. Therefore, pursuant to section 18 of the Prescription Act, prescription was interrupted on that date and began running afresh thereafter. From July 2021 to the issuance of summons in early 2024 is about two years and some months – comfortably within the three-year period. The plaintiff’s closing submission correctly noted that “from July 2021 to the institution of the proceedings, a period more than three years had not become superimposed and the claim would not have prescribed”. The Court agrees. The defendant’s arguments to the contrary are unpersuasive. The defence contended that the lease agreement was itself illegal and “of no legal consequence,” and thus it “never created a debtor and creditor relationship”. That may be so in terms of enforceability of the lease as a contract, but it misses the point on prescription. An acknowledgment of liability need not be a valid contract or create a new debt; it is the act of acknowledgment that tolls prescription. Even a void or unenforceable agreement can contain an acknowledgment of fact (here, the fact that money was prepaid and due to the plaintiff) which the law takes cognizance of for purposes of interruption. What matters is the intention to admit owing the debt. On the evidence, the defendant clearly intended to admit that the US$531,518 paid by Redan was still owing in value – otherwise it would not have agreed to credit that amount as rent. The defendant cannot approbate and reprobate by saying in 2021 “we acknowledge you have paid this money toward our deal” and then in court saying “we never acknowledged any debt.” The tacit acknowledgment inherent in the lease is evident from the defendant’s own witness and documents. The defence also argued that the plaintiff was “indolent” and that “the law only protects the diligent not the indolent”. While it is true that prescription exists to discourage sleeping on one’s rights, in this case the plaintiff did not simply sit idle. It was actively engaging with the defendant in 2019, 2020, and 2021, trying to resolve the matter. The law recognizes such engagements by providing for interruption when the debtor’s conduct warrants it. Indeed, it would be against public policy to allow a debtor to lure a creditor into protracted negotiations or alternative arrangements (as the defendant did here) and then claim that the claim prescribed while the creditor was indulging the debtor’s promises. That is why acknowledgments reset the clock – “once there is an acknowledgment, prescription then begins to run again from the date of such interruption”. The defendant cannot benefit from time running during a period that it effectively asked the plaintiff to wait and see if the lease option would work out. Therefore, the Court finds that the plaintiff’s claim is not prescribed. The defendant, who bore the onus to prove prescription, has failed to discharge that onus. In sum, the prescription defence fails both on a technical pleading basis and on the merits. 2. Whether the Debt Converted at Parity under S.I. 33 of 2019 The next issue is whether the defendant’s obligation to refund the money was transformed by law into an obligation in RTGS dollars on a one-to-one basis, by virtue of Statutory Instrument 33 of 2019 (and section 22(4)(a) of the Finance Act No. 2 of 2019). Resolution of this issue requires examining the impact of Zimbabwe’s 2019 currency reforms on the parties’ rights. Legal background On 22 February 2019, through S.I. 33 of 2019 (later enacted as law in the Finance (No. 2) Act, 2019), the Government introduced the RTGS dollar as a new currency and provided that all assets and liabilities that were, immediately before that date, valued in United States dollars would be deemed to be valued in RTGS dollars on a 1:1 basis. In effect, domestic USD-denominated obligations were converted into local currency at parity, notwithstanding the subsequent loss of value of the RTGS dollar. Additionally, in June 2019, Statutory Instrument 142 of 2019 banned the use of foreign currency as legal tender for local transactions, meaning obligations would generally have to be settled in local currency. These measures, often referred to collectively as the “conversion” or “Zimbabwe dollarization” of USD debts, had profound consequences on contracts and judgments around that period. The defendant’s stance is that the plaintiff’s claim arises from payments made in 2015-2016 (well before 22 February 2019). Therefore – so argues the defendant – whatever debt it had to refund that money was an existing liability as at February 2019, and by operation of law it was converted to RTGS dollars at 1:1. The defendant relies on section 22(4)(a) of the Finance Act 2/2019 which indeed says that all liabilities incurred prior to 22 Feb 2019 and denominated in USD “shall be deemed to be in RTGS dollars at a rate of one-to-one”. The defendant also cites case law to buttress this point. In Barmlo Investments (Pvt) Ltd v Chivavaya SC 73/23, the Supreme Court held that if an obligation was incurred before the effective date and valued in USD, it fell within the ambit of the conversion law by operation of law. The Court in Barmlo went further to state: “It matters not that the parties had continued payments in US dollars after the promulgation of S.I. 33/2019… The moment the parties continued to treat the liability as being valued and expressed in United States dollars after the first effective date, they were acting contrary to the provisions of the law. Their conduct did not have the effect of reversing or annulling the deeming provision”. In other words, parties cannot contract out of or ignore the statutory conversion; the law will apply regardless of any acknowledgment or attempt to keep the debt in USD. The defendant also referred to High Court decisions such as Temprac Investments (Pvt) Ltd v Nu Aero (Pvt) Ltd & Anor HH 678/19 and Exodus & Co (Pvt) Ltd v Shavi HH 510/21, which similarly held that an acknowledgment of debt after Feb 2019 does not “preserve” a debt in USD if that debt was originally covered by the conversion law. Any term in a contract that stipulates payment in USD when the law forbids it, or payment into a foreign currency account, must be read as subject to the law and thus of no effect to the extent it contradicts the statutory provisions. Applying those principles, the defendant contends that the plaintiff’s US$616,518 was, by law, converted to RTGS$616,518 as of 22 February 2019. Thus, even if the plaintiff is entitled to anything, it would only be RTGS dollars – which by now are practically worthless. The defendant points out that it actually tendered RTGS$531,518 in July 2019 (the equivalent at 1:1 of the original sum), and argues that the plaintiff foolishly refused that offer “whilst the RTGS had value”. By the time plaintiff sued, the RTGS had severely devalued, and the defendant suggests that is a predicament of the plaintiff’s own making, not something a court can remedy without defying the law’s conversion mandate. The plaintiff, on the other hand, submits that the conversion legislation does not catch this claim. The reasoning is as follows: At the effective date (22 Feb 2019), the plaintiff had no cause of action and the defendant had no enforceable “liability” to pay. The sale agreement was then still considered valid; the money paid was considered part of a consummated transaction (the plaintiff’s side had performed, and it was awaiting the defendant’s performance). There was no debt due to be paid or refunded as at that date. In the language of S.I. 33, there was no “asset or liability denominated in foreign currency” extant between the parties at that moment – just an inchoate contract that had not yet been abandoned. The plaintiff’s claim only crystallized after the effective date, when the contract was cancelled or declared void in July 2019. Therefore, the plaintiff argues, there was “nothing to convert” in February 2019. The conversion law cannot be applied to a claim that did not exist at the time. The plaintiff finds support for this position in recent case law. In Ingalulu Investments (Pvt) Ltd & Anor v National Railways of Zimbabwe & Anor SC 43-22, the Supreme Court was emphatic that if a claim had not been reduced to a judgment or otherwise finalized by the effective date, “nothing converts.” Likewise, in Lock v Lock & Anor SC 127-22, the Supreme Court reiterated that the mere existence of a claim before conversion did not automatically convert it in the absence of a judgment; a live, undetermined claim remained to be dealt with on its merits post-conversion. And in Cheuka v Mafenya HH 516-19, the High Court held that where the basis of a claim is discovered only after the effective date, the conversion provisions do not apply. Here, the “dispute” or basis for the plaintiff’s claim only arose on 24 July 2019 (when the defendant repudiated the sale and offered the RTGS refund). That was well after 22 Feb 2019. According to Cheuka (supra), a claim arising under those conditions is not subject to S.I. 33’s conversion at all. Furthermore, the plaintiff argues that even if one viewed the obligation as somehow existing before Feb 2019, the defendant’s post-conversion conduct effectively created a new obligation after the effective date. In particular, the July 2021 lease and its acknowledgment of the debt had the effect of a novation. The plaintiff cites Chimbandi v Mabel Canvass (Pvt) Ltd SC 68-22, where a debtor initially denied liability on a USD debt but later, after Feb 2019, admitted liability and kept postponing payment, leading to a judgment in 2020. The Supreme Court observed that by vacillating and ultimately acknowledging the debt beyond the effective date, the debtor “pushed the obligation to pay the debt beyond the effective date”. In effect, the debt in Chimbandi was treated as having arisen after the currency cut off, meaning the conversion did not apply. The plaintiff says this case is analogous: the defendant’s express acknowledgment of the US$531,518 in the 2021 lease and its agreement to treat that amount as a continuing obligation effectively novated any earlier obligation and created a fresh one after February 2019. Having done so, the defendant cannot now retreat behind S.I. 33 and claim the amount was “deemed paid” or settled in RTGS. Having considered the rival contentions, the Court is persuaded by the plaintiff’s arguments. It is crucial to delineate what exactly was the “debt” or “liability” in question, and when it arose. In a scenario such as this, where money was paid under a contract that later is voided, the liability of the payee (defendant) to return the money is not a contractual debt (since the contract is void) but a debt arising in law (restitution). That debt becomes actionable when the contract is repudiated or deemed void and the payer demands his money back. As analyzed under prescription, the plaintiff’s right to demand its money back solidified in July 2019. Before that date, the plaintiff was not treating the money as a debt owed to it; it was part of an ongoing transaction. Thus, it would be artificial to say that in February 2019 the defendant had a “liability” to the plaintiff in USD – neither party regarded it as such at the time. Indeed, Mr. Babbar acknowledged that as of February 2019 there was no dispute and both parties considered the money effectively belonged to the defendant (under the sale). It is almost paradoxical: the defendant now wants to say the money was a liability all along (to invoke conversion), yet at the time the defendant itself did not view it as a liability it had to pay back. One cannot have it both ways. If there was no cause to pay back in Feb 2019, then by definition there was no “liability denominated in USD” that the law would convert. Moreover, even assuming, arguendo, that a contingent liability existed pre-2019 (e.g. the possibility that the sale might be void and the money refundable), the manner in which events unfolded took the matter out of the ordinary conversion scenario. The defendant’s active acknowledgment of the debt after 2019 is a distinguishing feature. In Barmlo and similar cases, parties tried to continue business as usual in USD or signed acknowledgments of debt in USD for obligations clearly incurred before the currency change. The courts rightly struck down those attempts, holding that the law cannot be contracted out of, and a historical USD debt remains a RTGS debt by law despite what the parties say or do. Here, however, by the time the defendant acknowledged the debt in 2021, the obligation to refund was not a “historical” acknowledged debt from before 2019 – it had never been acknowledged or formalized until that point. The lease agreement was not an attempt to override S.I. 33 so much as it was an attempt to settle the dispute in a different way. It implicitly conceded that the plaintiff was owed value for the money paid. In the Court’s view, this falls within the spirit of the Chimbandi case: the defendant, by its post-effective-date conduct, moved the goalposts and treated the obligation as a live issue beyond Feb 2019. Additionally, subsequent legal developments must be noted. As of the date of this judgment (2025), the use of foreign currency in Zimbabwean domestic transactions has been permitted again under later policy measures. The strictures of S.I. 33 and S.I. 142 of 2019 were, in practice, eased by 2020 and thereafter. Courts have, in appropriate cases, ordered payment in United States dollars or in Zimbabwe dollars at the prevailing exchange rate, so as to do justice and reflect economic realities (especially where the debt was clearly incurred as USD value). While the defendant implores this Court to hold fast to the literal one-to-one conversion, doing so here would produce a result that is as absurd as it is unjust: it would mean the defendant repays RTGS $616,518 – an amount which, due to hyperinflation and devaluation, is virtually negligible. The plaintiff’s unrebutted evidence is that treating US$531,000 as RTGS would reduce it to the equivalent of about USD $5 in real value today. It bears emphasizing: the defendant’s argument implies it should get to keep over half a million real dollars and discharge its obligation by paying a few dollars. That is a windfall resulting from legal legerdemain, not a just outcome. Our law of unjust enrichment, as well as common sense, balks at such a proposition. Unless compelled by clear statutory language or binding precedent, a court should not endorse a result that effectively legalizes a theft of value under cover of a statute intended for a different purpose. The Court does not find that S.I. 33/19 or the Finance Act compel that draconian result here. On the contrary, applying the purposive and context-sensitive approach indicated in Ingalulu, Lock, Cheuka, and Chimbandi (supra), the Court holds that the defendant’s debt to refund the plaintiff was not converted to RTGS at 1:1. By the time the debt became due and was acknowledged, the effective date had passed, and the obligation is to be treated as a post-February 2019 obligation to make restitution of value. Therefore, the defendant remains liable to repay the full US$616,518 in actual value, not a watered-down RTGS sum. It is perhaps worth noting additionally that the plaintiff’s claim is not one based on any instrument or agreement that was extant in February 2019 which specified a USD amount. It is a free-standing enrichment claim. If one asked on 22 Feb 2019, “What was the defendant’s obligation to the plaintiff at this moment?” the answer would have been “Nothing, provided the contract goes through.” Only when the contract failed did the obligation arise – and by then, insisting on the fiction of 1:1 conversion serves no legitimate policy, only to enrich the wrongdoer. The conversion legislation was intended to stabilize currency transition, not to allow parties to unjustly retain huge enrichments. Indeed, even the Supreme Court in Barmlo acknowledged that parties’ conduct cannot annul the law’s deeming provision; it did not say that an entirely new cause of action arising later is subject to the deeming. Therefore, in justice and in law, the plaintiff’s money must be returned in the currency (or value) it was conferred. Accordingly, the defendant is liable for US$616,518 (being the sum of US$531,518 + US$85,000) to the plaintiff, and that sum is payable in United States dollars. If for any reason actual USD payment is infeasible, then it must be paid in the Zimbabwean dollar equivalent at the interbank rate prevailing on the date of payment – so that the plaintiff receives the full USD-equivalent value, not a meaningless number of RTGS dollars. 3. Restitution and Unjust Enrichment The final issue is the substantive one: whether the plaintiff has established its claim for restitution, i.e. that the defendant would be unjustly enriched if it were allowed to keep the money. Much of this ground has been covered in the factual narrative and indeed is largely common cause. It is not disputed that the plaintiff (through Redan) paid a total of US$616,518 to the defendant and received nothing in return – no land, no lease, no performance of any sort. It is also indisputable that the defendant has enjoyed the benefit of those funds all along. The defendant’s own witness admitted that the money was used by the defendant for its own purposes. Thus, on a prima facie level, one party (defendant) is enriched and the other (plaintiff) is impoverished by the exact same amount. The question is whether the enrichment is unjustified in law, and if so, whether the law provides a remedy. This being a classic case of a void contract, the applicable remedy is the condictio sine causa – a general unjust enrichment action available to recover money paid under an agreement that fails or is void for no lawful cause. Our courts have long recognized this cause of action. In Jengwa v Jengwa 1999 (2) ZLR 121 (H), for example, it was held that where one party is enriched at the expense of another in the absence of a lawful cause, an enrichment action will lie to restore the status quo ante. The requirements for the general enrichment action were well articulated in Industrial Equity Ltd v Walker 1996 (1) ZLR 269 (H) at 298, which listed five elements: (a) the defendant must be enriched, (b) the plaintiff must be impoverished, and there must be a causal link between the enrichment and impoverishment, (c) the enrichment must be unjustified (not legally justifiable), (d) the case should not fall under a specific nominate enrichment action (to avoid overlap, but the condictio sine causa is available when no other specific condictio applies), and (e) there must be no positive rule of law denying the remedy to the plaintiff. Let us examine these elements in turn, as applied to the facts: Enrichment of the Defendant: Clearly present. The defendant received US$616,518 and has had the benefit of that money since 2015-2016 (for the bulk of it) and 2021 (for the remainder). Even if the defendant spent the money or converted it to other assets, it was enriched at the moment of receipt. Thereafter, it even parlayed the subject matter (the land) into further gains by leasing it to a third party, but without ever compensating the plaintiff. Mr. Babbar admitted the defendant got “real value” from the payments. This element is indisputable.Impoverishment of the Plaintiff: Equally clear. The plaintiff’s coffers were depleted by US$616,518 to the defendant’s benefit. That money came out of the Redan/Puma Energy group’s resources. The plaintiff (as cessionary of Redan) stands in the shoes of the party that paid, and thus the impoverishment is properly attributed to the plaintiff. The causal link is direct: every dollar the defendant received corresponds to a dollar out of the plaintiff’s pocket. The “at the expense of” requirement is satisfied.Lack of Juristic Cause (Unjustified Enrichment): Here lies the crux. Was the defendant’s enrichment justified by a legal cause or was it sine causa? Initially, the money was paid pursuant to a contract (the sale agreement). Had that contract been valid and completed, the defendant’s enrichment would have been justified (as the purchase price for land). However, that contract was void ab initio. In law, it is as if the contract never existed; it cannot furnish a legal basis for the enrichment. The same goes for the lease agreement – it was also invalid and thus cannot justify the defendant keeping the “prepaid rent” or associated payments. In enrichment terms, the money was paid causa data causa non secuta (given for a cause that failed to materialize). Our law provides that such enrichment is without a legal cause and is reversible. Put simply, the defendant has no legal entitlement to retain the money – it was not a gift, not a loan, and there is no valid contract underpinning it. Keeping it would be unjust enrichment, pure and simple. The defendant’s only “justification” advanced is the technical defences of prescription and currency conversion, which the Court has already rejected. There is certainly no moral or equitable justification for the defendant’s enrichment; it is unconscionable for the defendant to hold onto the funds given that it provided nothing in return. Thus, the enrichment is manifestly “unjustified”.No Special Action Covering the Case: This requirement just ensures we are using the correct form of action. There are specific condictiones in Roman-Dutch law for specific scenarios (e.g. condictio indebiti for mistaken payments, etc.), but a payment under a void contract typically falls under the general condictio sine causa (condictio causa data causa non secuta to be precise). This case does not neatly fit a more specific category than the general unjust enrichment action, so that element is satisfied.No Legal Bar to the Claim: Lastly, there must be no positive rule denying relief. The defendant did not argue, for example, that the illegality of the contract invokes the in pari delicto rule (which can sometimes bar relief where both parties are equally at fault in an illegal transaction). Perhaps because in this case, the illegality was of a type (lack of a permit) that does not involve moral turpitude, and the plaintiff was not in delicto in the sense of engaging in fraud or grave illegality – it simply failed to obtain a permit which was as much the duty of the seller as the buyer. In any event, the defendant did not plead that the plaintiff should be denied recovery on grounds of equal guilt, and rightly so. The policy behind section 39 of the Regional Town and Country Planning Act is to prevent land fragmentation without approval, not to allow unjust enrichment. Denying restitution here would not serve the policy of the law; it would punish the innocent party (the payer) and reward the party who took the money without authority. There is thus no legal rule that says the plaintiff cannot recover in these circumstances – on the contrary, the trend of our case law is to allow the payee to recover in order to prevent unjust enrichment, unless the payee was guilty of turpitude worse than the recipient. Here, both parties overlooked a legal formality, but the defendant ended up with the money and no consequences, which would be an unfair result if allowed to stand. All requirements for the unjust enrichment claim are therefore met. The defendant’s enrichment has no legal cause and must be disgorged. The defendant’s only substantive response on enrichment was to assert that it had offered to refund the money in 2019 and that the plaintiff refused, so the defendant supposedly cannot be considered enriched. This argument is deeply flawed. An offer of repayment is not the same as actual repayment. The defendant did not escrow the funds or deposit them with the court; it kept them. The plaintiff’s refusal was not of repayment per se, but of a bad-faith tender that would have grossly undervalued the debt. At the time of the offer (August 2019), the defendant was effectively saying “I’ll pay you in local currency because the law says 1:1” when everyone knew the currencies were no longer at parity. The plaintiff cannot be blamed for insisting on proper value. The defendant’s stance would create a perverse precedent: a debtor could offer a token payment far less than what is owed, and if the creditor refuses, claim to be free of the debt or not enriched. That is not the law. Unless the tender was for the true equivalent of the debt and was kept good, the debtor remains enriched. Here, the defendant demonstrably remained in possession of the funds and in fact continued to deploy them to its advantage (not least by leveraging the property to get more money from third parties). Thus, the enrichment persisted. The defendant’s refusal to actually make restitution when it had the chance only strengthens the case that it has been unjustly holding on to the plaintiff’s money. In sum, allowing the defendant to retain US$616,518 under these circumstances would amount to a legalized theft. Our law of unjust enrichment “assuredly discountenances” such an outcome. The Court is satisfied that the plaintiff is entitled to succeed and recover the money it paid, with interest thereon. One additional consideration is costs on the higher scale. The plaintiff prayed for costs on the attorney-client scale, submitting that the defendant’s conduct and defence were vexatious and in bad faith. Indeed, the plaintiff’s closing characterization of the defendant’s attitude – “a corporate that believes it can take money belonging to others and not pay them back” – while harsh, is not entirely without basis. The defendant has put the plaintiff through a needless legal battle over what is a straightforward debt, all in an effort to hold onto an ill-gotten gain. The defence of prescription was tenuous (and not properly raised), and the defendant’s reliance on the conversion law was essentially an opportunistic technicality to avoid liability. The defendant’s own witness conceded he felt no moral compulsion to repay even if the law was against him. Such a stance, coupled with the fact that the defendant strung the plaintiff along with an invalid lease and even tried to dispose of the property to others, does, in the Court’s view, amount to unconscionable and reprehensible conduct. This is the type of case that warrants censure by way of punitive costs. The Court is empowered to award costs on a legal practitioner and client scale where a party’s conduct is vexatious, fraudulent, dishonest or in flagrant disregard of the law. Here, the defendant’s conduct – essentially attempting to “steal” the plaintiff’s money under cover of legal technicalities – is sufficiently egregious to justify such an award. Accordingly, costs will be granted on the higher scale so that the plaintiff is indemnified for the expense of having to litigate this matter. Disposition (Order) For the reasons discussed above, the plaintiff has proven its claim on a balance of probabilities. The claim for US$616,518 is upheld, and the defendant’s defences are dismissed. In the result, it is ordered that: The defendant shall pay to the plaintiff the sum of US$616,518.00 (Six hundred sixteen thousand five hundred and eighteen United States dollars).The defendant shall pay interest on the above sum at the prescribed rate of 5% per annum from 6 November 2023 (the date of demand) to the date of full payment.The defendant shall pay the costs of suit on the legal practitioner and client scale, such costs to include the costs of the urgent chamber application in case no. HCH 2857/24 (if not already granted there) that were necessitated by the defendant’s conduct. Katiyo J: ………………………………………… Mawere Sibanda Commercial Lawyers, applicant’s legal practitioners Danziger & Partners Legal Practitioners, defendant’s legal practitioners 4 HH 412 - 25 HCH 1407/24 4 HH 412 - 25 HCH 1407/24 ISONYA INVESTMENTS (PVT) LTD versus MOONGROOVE INVESTMENTS (PVT) LTD HIGH COURT OF ZIMBABWE KATIYO J HARARE; 10 June & 10 July 2025 Summons Commencing Actions T Mpofu, for the plaintiff R.G Zhuwarara, for the defendant Introduction KATIYO J: This is a civil claim in which the plaintiff seeks to recover a sum of US$616,518 paid to the defendant under an abortive land transaction. The plaintiff’s case is founded on restitution (unjust enrichment) after a sale of land and a subsequent lease arrangement between the parties were both declared void for illegality. The defendant received and retained the plaintiff’s funds but has refused to refund them, prompting this litigation. In its defence, the defendant raises two primary legal objections: prescription (that the claim is time-barred) and currency conversion (that any obligation to refund was converted to RTGS dollars at a 1:1 rate under Statutory Instrument 33 of 2019). The defendant denies that it has been unjustly enriched, contending that it lawfully tendered a refund (albeit in local currency) and that the law permits it to retain the funds in the circumstances. The matter was heard by this Court with each side leading one witness. Mr. Cydwell Chitewe, the managing director of the plaintiff (and formerly of Redan Petroleum (Pvt) Ltd, the original contracting party), testified for the plaintiff. Mr. Sanjay Babbar, the managing director of the defendant, testified on behalf of the defendant. The evidence, much of it common cause, established the factual background set out below. The Court will first summarize the pertinent facts before distilling the issues for determination. It should be noted at the outset that both impugned agreements (the sale and the lease) are accepted by the parties to have been null and void ab initio; the plaintiff does not seek to enforce those contracts but rather to recover the money paid thereunder. With that in mind, the Court turns to the factual background. Factual Background On 18 December 2015, the defendant (Moongroove Investments (Pvt) Ltd) entered into an agreement of sale with Redan Petroleum (Pvt) Ltd (trading as Puma Energy) for an unsubdivided portion of certain land, namely 3,000 square meters of Stand 18254 Harare Township. Mr. Babbar signed the agreement on behalf of the defendant, and one Joao Oliveira e Souza represented Redan. The sale price and terms were such that an initial payment of US$200,000 was due upon signing, but in fact Redan went on to advance substantially more funds at the defendant’s request. By 2016, Redan had paid a total of US$531,518 to the defendant in connection with this sale. It is common cause that the defendant received and made use of the full value of these payments. Mr. Babbar candidly admitted in his evidence that the defendant “received and used full value” from the money Redan paid. Notwithstanding the sizeable payments made, the transfer of the property was never effected. The portion of land in question was never subdivided or lawfully transferred to Redan or its nominee. It later emerged that the agreement of sale was void for want of compliance with section 39 of the Regional, Town and Country Planning Act [Chapter 29:12], which prohibits the sale of unsubdivided portions of land without the requisite permit. In other words, the contract was illegal and a nullity from inception, a fact which, on the evidence, neither party actively addressed until years later. By mid-2019, Redan became increasingly concerned at the lack of progress. On 16 July 2019, Redan (through its lawyers) wrote to the defendant, demanding performance – essentially, calling upon the defendant to transfer the land or provide a remedy. The defendant responded by letter dated 24 July 2019, in which it revealed for the first time that the sale agreement was null and void for illegality. In that letter, the defendant tendered a “refund” of the US$531,518 that had been paid, but critically, it offered the refund in the form of RTGS$531,518 (at a 1:1 rate), citing the recent change in law that converted all domestic USD obligations into local currency. In effect, the defendant took the position that it could simply repay the nominal amount in vastly depreciated local currency and thereby extinguish Redan’s claim. Redan did not accept this tender – understandably so, given that by July 2019 the RTGS dollar had already begun to lose value against the US dollar, making such a “refund” economically absurd. No actual payment was made by the defendant at that time; the money remained with the defendant. Instead of immediately resorting to litigation, the parties entered into further negotiations. Their aim, ostensibly, was to “salvage” the failed sale transaction. This culminated in a Notarial Deed of Lease executed on 2 July 2021 between the defendant and Isonya Investments (Pvt) Ltd (the plaintiff in this case). It was explained that Redan, as part of a corporate restructuring, had ceded its rights in the land transaction to its affiliate, Isonya (the plaintiff). The lease agreement granted the plaintiff a lease of the same 3,000 m² portion of land for a 10-year period. Significantly, Clause 9.1 of the Lease provided that the annual rent of US$531,518 for the leased premises was “prepaid” – that is, the sum Redan had paid under the void sale agreement was to be credited as rent pre-payment. In addition, the plaintiff (through Redan or its group) paid a further US$85,000 to the defendant around that time, intended to assist the defendant with certain processes required for the lease or subdivision approval. This brought the total outlay by the plaintiff’s side to US$616,518 (the amount now claimed). Unfortunately, the 2021 lease agreement fared no better than the sale. It soon became apparent that this lease was also invalid, for essentially the same reason: the underlying property had not been subdivided or approved for separate leasing, again in contravention of the law. The “condition precedent” in the lease (which presumably involved obtaining regulatory approval) was never fulfilled. The defendant, after taking the additional US$85,000, abruptly advised that the lease was irregular and unenforceable. Notably, when renouncing the lease, the defendant did not offer to return any money – neither the US$531,518 re-characterized as rent, nor the extra US$85,000 that it had solicited under the guise of facilitating the lease. The plaintiff was once again left empty-handed, having received neither title to the land nor possession under a lease, despite a very large total payment. After the collapse of the lease in 2021, the plaintiff continued to seek an amicable resolution or alternative arrangement, but none was forthcoming. The defendant rebuffed further proposals (including a mooted new lease with another affiliate, Redan Coupon (Pvt) Ltd). Meanwhile, the defendant proceeded to transact with third parties concerning the same property. Evidence was led that the defendant entered a lease (or sale) of the property to a third party, from which the defendant has already received approximately US$948,800 and stands to receive a total of about US$1.423 million. In fact, the plaintiff had to obtain an urgent interdict (High Court case HCH 2857/24) to prevent the defendant from dissipating or transferring the property to the prejudice of the plaintiff’s claimed interest. Thus, by the time this matter came to trial, the defendant had not only retained the plaintiff’s US$616,518 for nearly a decade, but had also commercially exploited the property in question for its own benefit, earning a substantial windfall from third parties. Finally, on 6 November 2023, the plaintiff (having taken cession of Redan’s rights) issued a formal demand to the defendant to refund the full US$616,518 (being US$531,518 + US$85,000) on the basis that no valid agreement ever materialized. The defendant refused or neglected to pay. The plaintiff then instituted these proceedings. In its summons, the plaintiff claims: payment of US$616,518, interest thereon at the prescribed rate of 5% per annum from 6 November 2023 (date of demand) to date of payment, and costs of suit on the higher scale (legal practitioner and client). Witness Testimony As noted, Mr. Chitewe testified for the plaintiff. He essentially confirmed the chronology above: the payment of US$531,518 by Redan to the defendant by 2016, the subsequent discovery of the sale’s illegality, the defendant’s refusal in 2019 to provide either the land or an equivalent USD refund, the negotiations leading to the 2021 lease (and the additional US$85,000 paid), and the eventual collapse of that lease. He further testified that at no point in February 2019 was there any “claim” or cause of action being pursued by Redan, as both parties at that time still viewed the sale as on track – it was only in July 2019 that a dispute arose and a demand for refund was made. He stated that the defendant gave various acknowledgments of liability after that time (particularly through the lease agreement) such that the plaintiff always understood the defendant accepted responsibility to return the money in some form. He also recounted how the defendant, instead of resolving the issue, proceeded to lease out the property to a third party for a hefty sum, thereby profiting from an asset it had already been paid for by the plaintiff. Mr. Chitewe impressed the Court as a credible and truthful witness. He remained calm and consistent under cross-examination, sticking to factual matters and making appropriate concessions. The Court finds that his testimony was both internally and externally consistent with the documented evidence and probabilities. Mr. Babbar’s testimony for the defence did not dispute the core facts. He confirmed the signing of the 2015 sale agreement and the receipt of US$531,518 from Redan. He acknowledged the execution of the July 2021 lease and the receipt of the additional US$85,000. Indeed, Mr. Babbar conceded that the defendant had obtained “full value” from the monies paid by Redan. His defense, however, was that due to changes in the law, the defendant had no obligation to repay that value in like currency. He repeatedly asserted that “the law” permitted the defendant’s stance of paying only RTGS$ and that he felt justified in not reimbursing the plaintiff in real terms. Under cross-examination, Mr. Babbar made several notable admissions: (a) that as of February 2019 there was no dispute between the parties and the money paid was being treated as the defendant’s funds, with both sides still expecting the sale to proceed; (b) that the first dispute arose in July 2019, when the defendant declared the sale void, and that this dispute led to negotiations culminating in the 2 July 2021 lease agreement; (c) that the lease agreement was indeed an attempt to allow Redan (now the plaintiff) to “recoup its losses” from the failed sale, by treating the prior payment as prepaid rent; and (d) that the defendant was at all relevant times aware of the legal irregularities affecting both the sale and the lease, yet it went on to strike a lucrative deal with a third party for the same property, keeping the plaintiff out in the cold. When pressed on why the defendant should keep the plaintiff’s money under these circumstances, Mr. Babbar’s only answer was that the law allowed him to do so. Tellingly, he admitted he would not change his position even if the Court found his legal interpretation to be wrong. This reveals a conscious lack of scruple or remorse – the defendant was determined to retain the windfall unless legally compelled to relinquish it. The Court found Mr. Babbar to be a less credible witness. While factually he corroborated much of Mr. Chitewe’s account, his attitude and evasiveness on certain questions (particularly regarding the fairness of the situation) were troubling. The plaintiff’s counsel argued that Mr. Babbar did not consider his oath binding on his conscience. Without going that far, the Court observes that Mr. Babbar appeared cavalier about the truth, especially when discussing the defendant’s dealings post-2019. His justification for keeping the money – effectively “might is right” by virtue of a legal loophole – betrays a lack of good faith. It was evident that the defendant’s strategy from 2019 onward was to string the plaintiff along (with the abortive lease) while never truly intending to refund the money unless cornered. This conduct speaks of bad faith and an intent to defraud the plaintiff of its funds. Accordingly, where Mr. Babbar’s evidence attempted to minimize the defendant’s responsibility or to suggest that no enrichment occurred, the Court rejects it as false. The objective facts speak louder: the defendant has had the use of the plaintiff’s money for years and even profited from the land elsewhere, all without compensating the plaintiff one iota. Against that backdrop, the defendant’s technical defences must be examined. Issues for Determination From the pleadings and the closing submissions, the following are the three principal issues requiring determination: Whether the plaintiff’s claim is extinguished by prescription. Whether the defendant’s debt to the plaintiff was converted to RTGS dollars at a 1:1 rate by operation of law (Statutory Instrument 33 of 2019 and the Finance Act (No. 2) of 2019). Whether the plaintiff is entitled to restitution of the money paid and conversely, whether the defendant would be unjustly enriched if it retained the money. The validity of the underlying agreements is not in issue – it is common cause that both the sale and the lease were invalid and unenforceable. The plaintiff’s claim is instead delictual or quasi-contractual, based on unjust enrichment. With the issues thus defined, the Court will address each in turn. Analysis 1. Prescription The defendant’s first line of defence is that the claim had prescribed by the time it was instituted. In Zimbabwe, the prescriptive period for an ordinary debt is three years (Prescription Act [Chapter 8:11], section 15(d)). The defendant argues that the plaintiff’s cause of action arose, at the latest, by 16 July 2019 (when Redan demanded a refund), and that the plaintiff then waited more than three years (until late 2023) to sue – hence, prescription. The plaintiff disputes both the factual premise and the legal validity of this defence. As a preliminary matter, the plaintiff points out that the defendant did not properly plead prescription in accordance with the law. Section 20(2) of the Prescription Act [Chapter 8:11] requires that a party who invokes prescription “shall do so in the relevant documents filed of record in the proceedings.” This means a plea of prescription must be explicitly raised in the pleadings (typically by way of a special plea or clearly headed defence) with sufficient particulars, including the date on which the debt became due and the period of delay. In Angelique Enterprises (Pvt) Ltd v Albco (Pvt) Ltd 1990 (1) ZLR 6 (HC), the Court underscored that if prescription is not properly raised in the pleadings, it is not “properly before the court”. The plea must be clear and specific so the other party is alerted to meet it. In that case, the failure to plead the essential details of prescription (such as when prescription set in) was fatal. In the present matter, the defendant’s plea on prescription was sketchy. It did not particularize the date on which the debt is alleged to have prescribed, merely asserting in general terms that the claim was time-barred. As in Angelique Enterprises (Pvt) Ltd v Albco (Pvt) Ltd (supra), such an omission is problematic – “the date on which prescription is said to have set in has not been identified in the plea. It is therefore not in the pleadings. The court cannot relate to the plea of prescription when the date is not set out”. On this procedural ground alone, the prescription defence is on shaky footing. The plaintiff joined issue with the defendant on this, and the Court agrees that the special plea (to the extent one can call it that) is not properly before the Court. This provides one basis to dismiss the defence of prescription. Even if one were to entertain the prescription defence on its merits, it does not succeed. The critical question is: When did the plaintiff’s cause of action arise, thereby commencing the running of prescription? It is trite that prescription begins to run when a debt is due. A debt is due when the creditor’s cause of action is complete, i.e. when the claimant is entitled to institute action and demand payment forthwith. Importantly, a debt may “arise” and “be due” at different times – it arises when all the factual ingredients are in place, but it may only become due (in the sense of immediately claimable) later, for example upon demand or the occurrence of a certain event. As the authorities illustrate, “prescription does not set in unless a debt has become due, and a debt does not necessarily become due at the same time that it arises”. In Peebles v Dairibord Zimbabwe (Pvt) Ltd 1999 (1) ZLR 41 (HC), it was emphasized that the clock for prescription starts when the plaintiff is equipped with a complete cause of action to sue. Similarly, in Maravanyika v Hove 1997 (2) ZLR 88, the Supreme Court noted that although a debt often becomes due at the same time it arises, that is not invariably so. Each case turns on its facts as to when the plaintiff could first rightly institute the claim. In casu, the plaintiff’s cause of action is for unjust enrichment – essentially repayment of money paid under a void contract. When did this cause of action fully materialize? Certainly not at the moment the payments were made (2015-2016), because at that time both parties were proceeding under the belief that a valid sale existed. The money was paid as purchase price; there was no notion then that it was to be returned. For as long as the sale agreement was regarded as operative, the plaintiff had no claim for a refund – one cannot sue for restitution while happily affirming a contract. The cause of action to reclaim the money would arise only once it became clear that the contract was invalid or would not be performed. On the evidence, that moment came in July 2019, when the defendant explicitly disavowed the sale as null and void and indicated it would not transfer the property. It is around that time (mid to late July 2019) that the plaintiff’s claim for return of the money effectively became due, since the basis on which the money was paid had failed. Even the defendant’s counsel in closing accepted that by 16 July 2019 or, at the latest, 24 July 2019, a cause of action had arisen and the debt was due and payable. The Court finds that to be the point at which prescription would have commenced running, assuming nothing intervened to interrupt it. From late July 2019, three years would ordinarily expire by late July 2022. The plaintiff, however, instituted this action in March 2024 (summons was issued in early 2024). Prima facie, that is beyond the 3-year limit. However, the plaintiff argues that prescription was interrupted in the interim by an acknowledgment of liability, per section 18 of the Prescription Act. Section 18(1) provides that “the running of prescription shall be interrupted by an express or tacit acknowledgment of liability by the debtor.” Once interrupted, prescription begins to run afresh from the date of interruption (section 18(2)). An acknowledgment need not be made in a specific form; it may be tacit or express, and can be gleaned from conduct, communications, or agreements, so long as it amounts to an admission that the debt is due. Even an acknowledgment of part of the debt suffices to interrupt prescription for the whole, according to our case law. The rationale is that by acknowledging liability, the debtor causes the creditor to delay legal action in reliance on the acknowledgment, and thus the law resets the clock to avoid penalizing the creditor’s indulgence. The plaintiff’s position is that the defendant repeatedly acknowledged its liability to refund the money, thereby interrupting prescription. In particular, the July 2021 lease agreement is highlighted as a clear acknowledgment. In that Notarial Lease, the defendant expressly acknowledged that the sum of US$531,518 had been prepaid by the plaintiff (as rent). This is tantamount to acknowledging that the plaintiff had a credit or claim in that amount. Mr. Babbar himself admitted in court that the lease was intended to allow the plaintiff to recoup the money paid under the void sale. He confirmed that the negotiations leading to the lease were “perched” on the understanding that the defendant owed an obligation to make good Redan’s (now plaintiff’s) losses. These admissions leave no doubt that, by entering the lease agreement, the defendant was accepting that it had a liability equivalent to the US$531,518 (plus the additional US$85,000) – it simply sought to satisfy it indirectly by granting a lease. In substance, this was an acknowledgment of debt. Even aside from the lease contract, the defendant’s correspondence can be construed as acknowledgments. The 24 July 2019 letter, while couched as a denial of a USD obligation, did acknowledge the obligation to repay in some form (the RTGS tender was an implicit admission that the money should be paid back, albeit in local currency). Subsequent communications in 2019 (including a letter of 30 August 2019 referenced by the defence) involved the defendant offering reimbursement, which again is a tacit acknowledgment that something was owed. In any event, the July 2021 Lease stands as an unequivocal, express acknowledgment in writing. That occurred on 2 July 2021. Therefore, pursuant to section 18 of the Prescription Act, prescription was interrupted on that date and began running afresh thereafter. From July 2021 to the issuance of summons in early 2024 is about two years and some months – comfortably within the three-year period. The plaintiff’s closing submission correctly noted that “from July 2021 to the institution of the proceedings, a period more than three years had not become superimposed and the claim would not have prescribed”. The Court agrees. The defendant’s arguments to the contrary are unpersuasive. The defence contended that the lease agreement was itself illegal and “of no legal consequence,” and thus it “never created a debtor and creditor relationship”. That may be so in terms of enforceability of the lease as a contract, but it misses the point on prescription. An acknowledgment of liability need not be a valid contract or create a new debt; it is the act of acknowledgment that tolls prescription. Even a void or unenforceable agreement can contain an acknowledgment of fact (here, the fact that money was prepaid and due to the plaintiff) which the law takes cognizance of for purposes of interruption. What matters is the intention to admit owing the debt. On the evidence, the defendant clearly intended to admit that the US$531,518 paid by Redan was still owing in value – otherwise it would not have agreed to credit that amount as rent. The defendant cannot approbate and reprobate by saying in 2021 “we acknowledge you have paid this money toward our deal” and then in court saying “we never acknowledged any debt.” The tacit acknowledgment inherent in the lease is evident from the defendant’s own witness and documents. The defence also argued that the plaintiff was “indolent” and that “the law only protects the diligent not the indolent”. While it is true that prescription exists to discourage sleeping on one’s rights, in this case the plaintiff did not simply sit idle. It was actively engaging with the defendant in 2019, 2020, and 2021, trying to resolve the matter. The law recognizes such engagements by providing for interruption when the debtor’s conduct warrants it. Indeed, it would be against public policy to allow a debtor to lure a creditor into protracted negotiations or alternative arrangements (as the defendant did here) and then claim that the claim prescribed while the creditor was indulging the debtor’s promises. That is why acknowledgments reset the clock – “once there is an acknowledgment, prescription then begins to run again from the date of such interruption”. The defendant cannot benefit from time running during a period that it effectively asked the plaintiff to wait and see if the lease option would work out. Therefore, the Court finds that the plaintiff’s claim is not prescribed. The defendant, who bore the onus to prove prescription, has failed to discharge that onus. In sum, the prescription defence fails both on a technical pleading basis and on the merits. 2. Whether the Debt Converted at Parity under S.I. 33 of 2019 The next issue is whether the defendant’s obligation to refund the money was transformed by law into an obligation in RTGS dollars on a one-to-one basis, by virtue of Statutory Instrument 33 of 2019 (and section 22(4)(a) of the Finance Act No. 2 of 2019). Resolution of this issue requires examining the impact of Zimbabwe’s 2019 currency reforms on the parties’ rights. Legal background On 22 February 2019, through S.I. 33 of 2019 (later enacted as law in the Finance (No. 2) Act, 2019), the Government introduced the RTGS dollar as a new currency and provided that all assets and liabilities that were, immediately before that date, valued in United States dollars would be deemed to be valued in RTGS dollars on a 1:1 basis. In effect, domestic USD-denominated obligations were converted into local currency at parity, notwithstanding the subsequent loss of value of the RTGS dollar. Additionally, in June 2019, Statutory Instrument 142 of 2019 banned the use of foreign currency as legal tender for local transactions, meaning obligations would generally have to be settled in local currency. These measures, often referred to collectively as the “conversion” or “Zimbabwe dollarization” of USD debts, had profound consequences on contracts and judgments around that period. The defendant’s stance is that the plaintiff’s claim arises from payments made in 2015-2016 (well before 22 February 2019). Therefore – so argues the defendant – whatever debt it had to refund that money was an existing liability as at February 2019, and by operation of law it was converted to RTGS dollars at 1:1. The defendant relies on section 22(4)(a) of the Finance Act 2/2019 which indeed says that all liabilities incurred prior to 22 Feb 2019 and denominated in USD “shall be deemed to be in RTGS dollars at a rate of one-to-one”. The defendant also cites case law to buttress this point. In Barmlo Investments (Pvt) Ltd v Chivavaya SC 73/23, the Supreme Court held that if an obligation was incurred before the effective date and valued in USD, it fell within the ambit of the conversion law by operation of law. The Court in Barmlo went further to state: “It matters not that the parties had continued payments in US dollars after the promulgation of S.I. 33/2019… The moment the parties continued to treat the liability as being valued and expressed in United States dollars after the first effective date, they were acting contrary to the provisions of the law. Their conduct did not have the effect of reversing or annulling the deeming provision”. In other words, parties cannot contract out of or ignore the statutory conversion; the law will apply regardless of any acknowledgment or attempt to keep the debt in USD. The defendant also referred to High Court decisions such as Temprac Investments (Pvt) Ltd v Nu Aero (Pvt) Ltd & Anor HH 678/19 and Exodus & Co (Pvt) Ltd v Shavi HH 510/21, which similarly held that an acknowledgment of debt after Feb 2019 does not “preserve” a debt in USD if that debt was originally covered by the conversion law. Any term in a contract that stipulates payment in USD when the law forbids it, or payment into a foreign currency account, must be read as subject to the law and thus of no effect to the extent it contradicts the statutory provisions. Applying those principles, the defendant contends that the plaintiff’s US$616,518 was, by law, converted to RTGS$616,518 as of 22 February 2019. Thus, even if the plaintiff is entitled to anything, it would only be RTGS dollars – which by now are practically worthless. The defendant points out that it actually tendered RTGS$531,518 in July 2019 (the equivalent at 1:1 of the original sum), and argues that the plaintiff foolishly refused that offer “whilst the RTGS had value”. By the time plaintiff sued, the RTGS had severely devalued, and the defendant suggests that is a predicament of the plaintiff’s own making, not something a court can remedy without defying the law’s conversion mandate. The plaintiff, on the other hand, submits that the conversion legislation does not catch this claim. The reasoning is as follows: At the effective date (22 Feb 2019), the plaintiff had no cause of action and the defendant had no enforceable “liability” to pay. The sale agreement was then still considered valid; the money paid was considered part of a consummated transaction (the plaintiff’s side had performed, and it was awaiting the defendant’s performance). There was no debt due to be paid or refunded as at that date. In the language of S.I. 33, there was no “asset or liability denominated in foreign currency” extant between the parties at that moment – just an inchoate contract that had not yet been abandoned. The plaintiff’s claim only crystallized after the effective date, when the contract was cancelled or declared void in July 2019. Therefore, the plaintiff argues, there was “nothing to convert” in February 2019. The conversion law cannot be applied to a claim that did not exist at the time. The plaintiff finds support for this position in recent case law. In Ingalulu Investments (Pvt) Ltd & Anor v National Railways of Zimbabwe & Anor SC 43-22, the Supreme Court was emphatic that if a claim had not been reduced to a judgment or otherwise finalized by the effective date, “nothing converts.” Likewise, in Lock v Lock & Anor SC 127-22, the Supreme Court reiterated that the mere existence of a claim before conversion did not automatically convert it in the absence of a judgment; a live, undetermined claim remained to be dealt with on its merits post-conversion. And in Cheuka v Mafenya HH 516-19, the High Court held that where the basis of a claim is discovered only after the effective date, the conversion provisions do not apply. Here, the “dispute” or basis for the plaintiff’s claim only arose on 24 July 2019 (when the defendant repudiated the sale and offered the RTGS refund). That was well after 22 Feb 2019. According to Cheuka (supra), a claim arising under those conditions is not subject to S.I. 33’s conversion at all. Furthermore, the plaintiff argues that even if one viewed the obligation as somehow existing before Feb 2019, the defendant’s post-conversion conduct effectively created a new obligation after the effective date. In particular, the July 2021 lease and its acknowledgment of the debt had the effect of a novation. The plaintiff cites Chimbandi v Mabel Canvass (Pvt) Ltd SC 68-22, where a debtor initially denied liability on a USD debt but later, after Feb 2019, admitted liability and kept postponing payment, leading to a judgment in 2020. The Supreme Court observed that by vacillating and ultimately acknowledging the debt beyond the effective date, the debtor “pushed the obligation to pay the debt beyond the effective date”. In effect, the debt in Chimbandi was treated as having arisen after the currency cut off, meaning the conversion did not apply. The plaintiff says this case is analogous: the defendant’s express acknowledgment of the US$531,518 in the 2021 lease and its agreement to treat that amount as a continuing obligation effectively novated any earlier obligation and created a fresh one after February 2019. Having done so, the defendant cannot now retreat behind S.I. 33 and claim the amount was “deemed paid” or settled in RTGS. Having considered the rival contentions, the Court is persuaded by the plaintiff’s arguments. It is crucial to delineate what exactly was the “debt” or “liability” in question, and when it arose. In a scenario such as this, where money was paid under a contract that later is voided, the liability of the payee (defendant) to return the money is not a contractual debt (since the contract is void) but a debt arising in law (restitution). That debt becomes actionable when the contract is repudiated or deemed void and the payer demands his money back. As analyzed under prescription, the plaintiff’s right to demand its money back solidified in July 2019. Before that date, the plaintiff was not treating the money as a debt owed to it; it was part of an ongoing transaction. Thus, it would be artificial to say that in February 2019 the defendant had a “liability” to the plaintiff in USD – neither party regarded it as such at the time. Indeed, Mr. Babbar acknowledged that as of February 2019 there was no dispute and both parties considered the money effectively belonged to the defendant (under the sale). It is almost paradoxical: the defendant now wants to say the money was a liability all along (to invoke conversion), yet at the time the defendant itself did not view it as a liability it had to pay back. One cannot have it both ways. If there was no cause to pay back in Feb 2019, then by definition there was no “liability denominated in USD” that the law would convert. Moreover, even assuming, arguendo, that a contingent liability existed pre-2019 (e.g. the possibility that the sale might be void and the money refundable), the manner in which events unfolded took the matter out of the ordinary conversion scenario. The defendant’s active acknowledgment of the debt after 2019 is a distinguishing feature. In Barmlo and similar cases, parties tried to continue business as usual in USD or signed acknowledgments of debt in USD for obligations clearly incurred before the currency change. The courts rightly struck down those attempts, holding that the law cannot be contracted out of, and a historical USD debt remains a RTGS debt by law despite what the parties say or do. Here, however, by the time the defendant acknowledged the debt in 2021, the obligation to refund was not a “historical” acknowledged debt from before 2019 – it had never been acknowledged or formalized until that point. The lease agreement was not an attempt to override S.I. 33 so much as it was an attempt to settle the dispute in a different way. It implicitly conceded that the plaintiff was owed value for the money paid. In the Court’s view, this falls within the spirit of the Chimbandi case: the defendant, by its post-effective-date conduct, moved the goalposts and treated the obligation as a live issue beyond Feb 2019. Additionally, subsequent legal developments must be noted. As of the date of this judgment (2025), the use of foreign currency in Zimbabwean domestic transactions has been permitted again under later policy measures. The strictures of S.I. 33 and S.I. 142 of 2019 were, in practice, eased by 2020 and thereafter. Courts have, in appropriate cases, ordered payment in United States dollars or in Zimbabwe dollars at the prevailing exchange rate, so as to do justice and reflect economic realities (especially where the debt was clearly incurred as USD value). While the defendant implores this Court to hold fast to the literal one-to-one conversion, doing so here would produce a result that is as absurd as it is unjust: it would mean the defendant repays RTGS $616,518 – an amount which, due to hyperinflation and devaluation, is virtually negligible. The plaintiff’s unrebutted evidence is that treating US$531,000 as RTGS would reduce it to the equivalent of about USD $5 in real value today. It bears emphasizing: the defendant’s argument implies it should get to keep over half a million real dollars and discharge its obligation by paying a few dollars. That is a windfall resulting from legal legerdemain, not a just outcome. Our law of unjust enrichment, as well as common sense, balks at such a proposition. Unless compelled by clear statutory language or binding precedent, a court should not endorse a result that effectively legalizes a theft of value under cover of a statute intended for a different purpose. The Court does not find that S.I. 33/19 or the Finance Act compel that draconian result here. On the contrary, applying the purposive and context-sensitive approach indicated in Ingalulu, Lock, Cheuka, and Chimbandi (supra), the Court holds that the defendant’s debt to refund the plaintiff was not converted to RTGS at 1:1. By the time the debt became due and was acknowledged, the effective date had passed, and the obligation is to be treated as a post-February 2019 obligation to make restitution of value. Therefore, the defendant remains liable to repay the full US$616,518 in actual value, not a watered-down RTGS sum. It is perhaps worth noting additionally that the plaintiff’s claim is not one based on any instrument or agreement that was extant in February 2019 which specified a USD amount. It is a free-standing enrichment claim. If one asked on 22 Feb 2019, “What was the defendant’s obligation to the plaintiff at this moment?” the answer would have been “Nothing, provided the contract goes through.” Only when the contract failed did the obligation arise – and by then, insisting on the fiction of 1:1 conversion serves no legitimate policy, only to enrich the wrongdoer. The conversion legislation was intended to stabilize currency transition, not to allow parties to unjustly retain huge enrichments. Indeed, even the Supreme Court in Barmlo acknowledged that parties’ conduct cannot annul the law’s deeming provision; it did not say that an entirely new cause of action arising later is subject to the deeming. Therefore, in justice and in law, the plaintiff’s money must be returned in the currency (or value) it was conferred. Accordingly, the defendant is liable for US$616,518 (being the sum of US$531,518 + US$85,000) to the plaintiff, and that sum is payable in United States dollars. If for any reason actual USD payment is infeasible, then it must be paid in the Zimbabwean dollar equivalent at the interbank rate prevailing on the date of payment – so that the plaintiff receives the full USD-equivalent value, not a meaningless number of RTGS dollars. 3. Restitution and Unjust Enrichment The final issue is the substantive one: whether the plaintiff has established its claim for restitution, i.e. that the defendant would be unjustly enriched if it were allowed to keep the money. Much of this ground has been covered in the factual narrative and indeed is largely common cause. It is not disputed that the plaintiff (through Redan) paid a total of US$616,518 to the defendant and received nothing in return – no land, no lease, no performance of any sort. It is also indisputable that the defendant has enjoyed the benefit of those funds all along. The defendant’s own witness admitted that the money was used by the defendant for its own purposes. Thus, on a prima facie level, one party (defendant) is enriched and the other (plaintiff) is impoverished by the exact same amount. The question is whether the enrichment is unjustified in law, and if so, whether the law provides a remedy. This being a classic case of a void contract, the applicable remedy is the condictio sine causa – a general unjust enrichment action available to recover money paid under an agreement that fails or is void for no lawful cause. Our courts have long recognized this cause of action. In Jengwa v Jengwa 1999 (2) ZLR 121 (H), for example, it was held that where one party is enriched at the expense of another in the absence of a lawful cause, an enrichment action will lie to restore the status quo ante. The requirements for the general enrichment action were well articulated in Industrial Equity Ltd v Walker 1996 (1) ZLR 269 (H) at 298, which listed five elements: (a) the defendant must be enriched, (b) the plaintiff must be impoverished, and there must be a causal link between the enrichment and impoverishment, (c) the enrichment must be unjustified (not legally justifiable), (d) the case should not fall under a specific nominate enrichment action (to avoid overlap, but the condictio sine causa is available when no other specific condictio applies), and (e) there must be no positive rule of law denying the remedy to the plaintiff. Let us examine these elements in turn, as applied to the facts: Enrichment of the Defendant: Clearly present. The defendant received US$616,518 and has had the benefit of that money since 2015-2016 (for the bulk of it) and 2021 (for the remainder). Even if the defendant spent the money or converted it to other assets, it was enriched at the moment of receipt. Thereafter, it even parlayed the subject matter (the land) into further gains by leasing it to a third party, but without ever compensating the plaintiff. Mr. Babbar admitted the defendant got “real value” from the payments. This element is indisputable. Impoverishment of the Plaintiff: Equally clear. The plaintiff’s coffers were depleted by US$616,518 to the defendant’s benefit. That money came out of the Redan/Puma Energy group’s resources. The plaintiff (as cessionary of Redan) stands in the shoes of the party that paid, and thus the impoverishment is properly attributed to the plaintiff. The causal link is direct: every dollar the defendant received corresponds to a dollar out of the plaintiff’s pocket. The “at the expense of” requirement is satisfied. Lack of Juristic Cause (Unjustified Enrichment): Here lies the crux. Was the defendant’s enrichment justified by a legal cause or was it sine causa? Initially, the money was paid pursuant to a contract (the sale agreement). Had that contract been valid and completed, the defendant’s enrichment would have been justified (as the purchase price for land). However, that contract was void ab initio. In law, it is as if the contract never existed; it cannot furnish a legal basis for the enrichment. The same goes for the lease agreement – it was also invalid and thus cannot justify the defendant keeping the “prepaid rent” or associated payments. In enrichment terms, the money was paid causa data causa non secuta (given for a cause that failed to materialize). Our law provides that such enrichment is without a legal cause and is reversible. Put simply, the defendant has no legal entitlement to retain the money – it was not a gift, not a loan, and there is no valid contract underpinning it. Keeping it would be unjust enrichment, pure and simple. The defendant’s only “justification” advanced is the technical defences of prescription and currency conversion, which the Court has already rejected. There is certainly no moral or equitable justification for the defendant’s enrichment; it is unconscionable for the defendant to hold onto the funds given that it provided nothing in return. Thus, the enrichment is manifestly “unjustified”. No Special Action Covering the Case: This requirement just ensures we are using the correct form of action. There are specific condictiones in Roman-Dutch law for specific scenarios (e.g. condictio indebiti for mistaken payments, etc.), but a payment under a void contract typically falls under the general condictio sine causa (condictio causa data causa non secuta to be precise). This case does not neatly fit a more specific category than the general unjust enrichment action, so that element is satisfied. No Legal Bar to the Claim: Lastly, there must be no positive rule denying relief. The defendant did not argue, for example, that the illegality of the contract invokes the in pari delicto rule (which can sometimes bar relief where both parties are equally at fault in an illegal transaction). Perhaps because in this case, the illegality was of a type (lack of a permit) that does not involve moral turpitude, and the plaintiff was not in delicto in the sense of engaging in fraud or grave illegality – it simply failed to obtain a permit which was as much the duty of the seller as the buyer. In any event, the defendant did not plead that the plaintiff should be denied recovery on grounds of equal guilt, and rightly so. The policy behind section 39 of the Regional Town and Country Planning Act is to prevent land fragmentation without approval, not to allow unjust enrichment. Denying restitution here would not serve the policy of the law; it would punish the innocent party (the payer) and reward the party who took the money without authority. There is thus no legal rule that says the plaintiff cannot recover in these circumstances – on the contrary, the trend of our case law is to allow the payee to recover in order to prevent unjust enrichment, unless the payee was guilty of turpitude worse than the recipient. Here, both parties overlooked a legal formality, but the defendant ended up with the money and no consequences, which would be an unfair result if allowed to stand. All requirements for the unjust enrichment claim are therefore met. The defendant’s enrichment has no legal cause and must be disgorged. The defendant’s only substantive response on enrichment was to assert that it had offered to refund the money in 2019 and that the plaintiff refused, so the defendant supposedly cannot be considered enriched. This argument is deeply flawed. An offer of repayment is not the same as actual repayment. The defendant did not escrow the funds or deposit them with the court; it kept them. The plaintiff’s refusal was not of repayment per se, but of a bad-faith tender that would have grossly undervalued the debt. At the time of the offer (August 2019), the defendant was effectively saying “I’ll pay you in local currency because the law says 1:1” when everyone knew the currencies were no longer at parity. The plaintiff cannot be blamed for insisting on proper value. The defendant’s stance would create a perverse precedent: a debtor could offer a token payment far less than what is owed, and if the creditor refuses, claim to be free of the debt or not enriched. That is not the law. Unless the tender was for the true equivalent of the debt and was kept good, the debtor remains enriched. Here, the defendant demonstrably remained in possession of the funds and in fact continued to deploy them to its advantage (not least by leveraging the property to get more money from third parties). Thus, the enrichment persisted. The defendant’s refusal to actually make restitution when it had the chance only strengthens the case that it has been unjustly holding on to the plaintiff’s money. In sum, allowing the defendant to retain US$616,518 under these circumstances would amount to a legalized theft. Our law of unjust enrichment “assuredly discountenances” such an outcome. The Court is satisfied that the plaintiff is entitled to succeed and recover the money it paid, with interest thereon. One additional consideration is costs on the higher scale. The plaintiff prayed for costs on the attorney-client scale, submitting that the defendant’s conduct and defence were vexatious and in bad faith. Indeed, the plaintiff’s closing characterization of the defendant’s attitude – “a corporate that believes it can take money belonging to others and not pay them back” – while harsh, is not entirely without basis. The defendant has put the plaintiff through a needless legal battle over what is a straightforward debt, all in an effort to hold onto an ill-gotten gain. The defence of prescription was tenuous (and not properly raised), and the defendant’s reliance on the conversion law was essentially an opportunistic technicality to avoid liability. The defendant’s own witness conceded he felt no moral compulsion to repay even if the law was against him. Such a stance, coupled with the fact that the defendant strung the plaintiff along with an invalid lease and even tried to dispose of the property to others, does, in the Court’s view, amount to unconscionable and reprehensible conduct. This is the type of case that warrants censure by way of punitive costs. The Court is empowered to award costs on a legal practitioner and client scale where a party’s conduct is vexatious, fraudulent, dishonest or in flagrant disregard of the law. Here, the defendant’s conduct – essentially attempting to “steal” the plaintiff’s money under cover of legal technicalities – is sufficiently egregious to justify such an award. Accordingly, costs will be granted on the higher scale so that the plaintiff is indemnified for the expense of having to litigate this matter. Disposition (Order) For the reasons discussed above, the plaintiff has proven its claim on a balance of probabilities. The claim for US$616,518 is upheld, and the defendant’s defences are dismissed. In the result, it is ordered that: The defendant shall pay to the plaintiff the sum of US$616,518.00 (Six hundred sixteen thousand five hundred and eighteen United States dollars). The defendant shall pay interest on the above sum at the prescribed rate of 5% per annum from 6 November 2023 (the date of demand) to the date of full payment. The defendant shall pay the costs of suit on the legal practitioner and client scale, such costs to include the costs of the urgent chamber application in case no. HCH 2857/24 (if not already granted there) that were necessitated by the defendant’s conduct. Katiyo J: ………………………………………… Mawere Sibanda Commercial Lawyers, applicant’s legal practitioners Danziger & Partners Legal Practitioners, defendant’s legal practitioners

Judgment

ISONYA INVESTMENTS (PVT) LTD v MOONGROOVE INVESTMENTS (PVT) LTD (412 of 2025) [2025] ZWHHC 412 (10 July 2025)

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ISONYA INVESTMENTS (PVT) LTD v MOONGROOVE INVESTMENTS (PVT) LTD (412 of 2025) [2025] ZWHHC 412 (10 July 2025)

Headnotes

Judgment

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Discussion