REPORTABLE (65)

Judgment No. SC 68/02

Civil Appeal No. 127/01

EDNA CHISESE v BERNARD BUNU GARAMUKANWA

SUPREME COURT OF ZIMBABWE

CHIDYAUSIKU CJ, CHEDA JA & GWAUNZA AJA

HARARE, JUNE 17 & SEPTEMBER 30, 2002

P C Paul, for the appellant

T P Kawonde, for the respondent

GWAUNZA AJA: This is an appeal against a judgment of the High Court, in which the respondent was ordered to pay the appellant $22 341.26 together with interest on the sum of $66 000 from 7 April to 14 August 1995 and on the sum of $22 341.26 from 15 August 1995 to the date of payment.

Although the respondent had also, initially, filed a cross-appeal in relation to the part of the judgment concerning his counter-claim in the court a quo, he later abandoned such appeal.

The events that gave rise to this dispute arose nine years ago, in 1993. The appellant was then living and working in the United Kingdom, while the respondent owned, and was resident on, a farm in Chegutu, Zimbabwe. The two were related by marriage. The respondent had a son studying at a university in the United Kingdom.

It is not in dispute that at that time the respondent’s son was facing imminent deportation from the United Kingdom following his father’s failure to pay the required tuition fees for his education. Even though the parties gave different versions of the background to, and nature of, the transaction, it is also not in dispute that the appellant came to the rescue and, in three instalments, paid the whole amount outstanding or required in relation to the university fees in question. The fees totalled £5 490 and were paid in August and October 1993.

The appellant averred that the fees paid constituted a loan to the respondent, while the respondent’s evidence was that the fees represented the purchase price of a tractor bought by the appellant from him. Despite this conflict in the parties’ evidence, the learned trial judge correctly considered that the respondent did not dispute that the fees were paid on his behalf by the appellant, nor that he had a personal obligation to repay to the respondent in cash or kind the amount disbursed. The trial judge was satisfied, however, that at the time the fees were paid, there was no definite arrangement between the parties as to how and when the amount was to be repaid. Nor was anything said at that stage about interest.

It is evident from this, and the many other conflicts in the parties’ interpretation of the transaction, that they did not foresee what must have been regarded as an intra family arrangement of mutual benefit, ever becoming the subject of protracted litigation between them. This explains the difficulty the appellant, in particular, has had in attempting to fit the events surrounding this transaction into a legally acceptable mould.

Having considered the evidence of both parties, the learned judge in the court a quo accepted, correctly in my view, the evidence of the appellant that while he avoided committing anything to writing, the respondent had later undertaken to repay the amount owed through the provision of a tractor, valued at over Z$50 000 to the appellant. The appellant, however, never saw this tractor. On her visit to the respondent’s farm in 1994, the appellant mistakenly believed the tractor in question was one of two that were then at the farm, which both parties agree were not in a good state of repair. The respondent did not correct this misconception, and in addition refrained from informing the appellant that the tractor meant for her was at that time in Harare.

The trial judge, however, rejected the evidence of the appellant that in addition to the tractor, the respondent had agreed to build for the appellant a six-bedroomed house on a portion of his farm which he had, incidentally, sold to a company owned by the appellant and her children.

Having considered the evidence before the court on this matter, I find no fault with the trial judge’s rejection of that evidence.

It will be gathered from this that the matter of the university fees was not the only interaction between the parties. In November 1993 they signed a deed of sale, in terms of which the company, JV Itayi Farming Enterprises (Private) Limited, represented by the appellant, bought a subdivision of the farm owned by the respondent. The purchase price was to be paid, after the initial deposit of $200 000, in instalments over a period of time.

The two agreements, though separate and distinct, nevertheless impacted on the other in one significant way. This was that somewhere along the line, as the dispute concerning the repayment of the university fees to the appellant by the respondent raged, it was agreed that the arrears which the appellant’s company then owed to the respondent be offset against part of the fees owed to the appellant by the respondent. It is not in dispute that these arrears, which totalled Z$43 658.74, fell short of the university fees paid by the appellant on behalf of the respondent. The arrears, by way of set-off, were only paid after 14 August 1995.

While acknowledging this set-off, the appellant, in her notice of appeal, asserts that the balance owing to her was £3 011. I have failed to find justification for this amount, especially since no breakdown was provided to show how it was arrived at. This is because the parties are agreed –

(i) that the amount of fees paid by the appellant was £5 490; and

(ii) that Z$43 658.74, offset against the £5 490 owed to the appellant by the respondent, translated to £4 365.87 at the conversion rate of £1 = Z$10 (see the respondent’s summary of evidence in the court a quo).

When the latter amount is subtracted from the £5 490 the balance is, by my calculation, £1 124.13. I will accept, therefore, that this is the amount, exclusive of any interest, that the appellant was entitled to claim against the respondent in the court a quo.

This is, however, not the amount that the learned judge in the court a quo found was owed to the appellant. She found, instead, that even though the demand was made for the Zimbabwe dollar equivalent of £5 490, less the set-off, the appellant had, herself, quantified the Zimbabwe dollar equivalent at $66 000. This amount is referred to in a letter written by the appellant’s legal practitioners to the respondent’s legal practitioners. The learned judge, after observing that the appellant in her evidence confirmed this amount and that the respondent had not in effect disputed it, ruled that this was the Zimbabwean equivalent of what was owed, minus the set-off of Z$43 658.74. She then granted the order alluded to in the first paragraph of this judgment.

It is important to note that before this Court, neither party, albeit for different reasons, accepts $66 000 as the amount that was owed by the respondent to the appellant. The appellant’s claim is as set out in the summons. The respondent’s position, on the other hand, is that the total amount owing was Z$54 490.05, leaving, after subtracting the set-off (i.e. Z$43 658.74), a balance of $10 831.31.

I will consider first the correctness or otherwise of the learned trial judge’s finding that the capital amount owed to the appellant was Z$66 000. There seems to be no dispute that the first reference to this amount was made in a letter from the appellant’s legal practitioners to the respondent, in these words:¹

“You are aware that Mr Garamukanwa borrowed the sum of $66 000 from Mrs Mapondera during 1993.” (“Mapondera” being the appellant’s maiden name).

Mr Kawonde, who appeared for the respondent in the court a quo, expressed doubt as to the basis for arriving at this figure since, according to him, even the appellant’s lawyer was not aware of the exchange rate at the time the letter was written. Indeed, there is no indication that in that letter the exchange rate, if any, that was used to arrive at that figure, was mentioned. It appears the amount was arbitrarily arrived at without reference to any exchange rate. Finally, it is significant that the letter in question was not a letter of demand and, more significantly, that in her summons the appellant made no reference to the figure of Z$66 000, since her claim was for payment of £5 490 less the amount that was set-off.

Against this background, I am persuaded by the arguments advanced on behalf of both parties that the court a quo should not have accepted as proved that the amount of Z$66 000 was the Zimbabwean equivalent of the capital amount owed by the respondent to the appellant. I will accept and proceed on the basis that the amount, exclusive of any interest, that the appellant should rightly have claimed, both in the court a quo and in this Court, is £1 124.13, payable in Zimbabwe dollars.

In reaching this conclusion, I should note that I agree with the learned trial judge’s finding that the appellant, on her earlier visit to the respondent’s farm in 1994 and after her return to the country some time later, neither saw, nor had delivered to her, the tractor in question. Nor is the delivery of the tractor in question still an option. The respondent submitted he has since sold the tractor to someone else, and that he had not transmitted the money to the appellant. Therefore, the respondent, not having fully repaid the amount owed to the appellant, even after the set-off, still owed the appellant £1 124.13, exclusive of any interest payable.

The respondent’s argument that the appellant compromised her entire claim by agreeing to the set-off, was correctly rejected by the court a quo. In this connection, I would agree with Mr Paul’s contention that the failure of the agreed method of payment (i.e. the tractor) did not extinguish the respondent’s obligation to pay the full amount owed.

This then brings me to the crux of this appeal, which is, firstly, the rate at which this amount is to be converted to Zimbabwe dollars and, secondly, the interest rate to be applied.

It is contended for the appellant that the amount owing must be converted to Zimbabwe dollars and paid, at the rate applicable at the time payment is effected by the respondent. The respondent, on the other hand, argues that this amount must be paid, in Zimbabwe dollars, at the rate prevailing at the time it was paid to the university in question, in 1993.

On the question of interest, the appellant contends this must be paid, in relation to pound sterling, at the rate of 8% per annum, as being the applicable rate in the Supreme Court of Adjudicature in the United Kingdom. The respondent, on the other hand, avers no interest was payable by him since no agreement on this issue was ever reached by the parties.

CURRENCY OF REPAYMENT

I will deal first with the question of the currency of payment.

Despite the tenseness of the relationship between the parties, there is no doubt that the two understood that the respondent was not expected to pay the appellant in pound sterling. Since the agreed means of payment, that is the tractor, was in the end never handed over to the appellant (nor, as appears from the evidence before the court, did the respondent ever make any serious attempt to hand it over), I am satisfied, as was the learned judge in the court a quo, that it was in the contemplation of both parties that any payments would be made in Zimbabwe and in Zimbabwe currency. This is so regardless of the fact that the details of where and how the money was to be paid in Zimbabwe were not canvassed.

The conduct of the parties also confirms this understanding. The amount of the set-off was calculated and paid locally in Zimbabwe dollars. In addition to his other defences, the respondent contends before this Court that if Z$54 490.05 was the amount owing less set-off in the sum of Z$43 658.74, then the balance due by him to the appellant was $10 831.31. Even though no indication of how this figure was arrived at was given, and despite it having been rejected as the amount owing to the appellant, the amount of $66 000.00, referred to in the letter written to the respondent’s legal practitioners on behalf of the appellant, was expressed in Zimbabwe dollars. All these figures were converted from pound sterling to Zimbabwe dollars and were to be payable in Zimbabwe.

In the light of this, I find there is no merit in the contention made for the respondent that the agreement between the parties was illegal as it contravened s 8(1) of the Exchange Control Regulations. That section specifically prohibits actions that involve the making, or the incurring of any obligations to make, payment outside Zimbabwe.

APPROPRIATE EXCHANGE RATE

To be determined next is the issue of the exchange rate at which the amount owing to the appellant should appropriately be converted. That this is an issue at all is evidence of the parties neither having specifically addressed their minds to the matter nor having reached any agreement on it.

It is contended as follows for the appellant:

“… had the arrangement relating to the tractor been fulfilled (the) appellant would have received a tractor which was worth at least the sterling equivalent of the amount of the loan. If in the year between the time of the loan and the time of delivery there had been a devaluation of the Zimbabwean dollar, this would have no effect because the appellant would not be receiving Zimbabwe dollars but would be receiving a tractor which would be worth at least £5 490.00.”

Mr Paul went on to say, accordingly, that the implied agreement between the parties was that if the tractor was unacceptable, the respondent would repay to the appellant the Zimbabwean equivalent of the pounds sterling as at the date of payment.

There is authority to support Mr Paul’s submission on the question of the rate at which the conversion should be made. The learned author, R H Christie, in The Law of Contract in South Africa² stated that the general rule governing situations like the one at hand was laid out as follows in Barry Colne & Co (Tvl) Ltd v Jackson’s Ltd³:

“… failing any such special stipulation (i.e. that payment must be made in foreign currency), payment may be made in the currency of the place of payment equivalent to the value there of the foreign currency. An agreement, therefore, to pay 100 dollars at Cape Town is satisfied by payment of the value at Cape Town in Cape currency of 100 dollars. At what date must the value be taken, at the date when the contract was entered into, or at the date fixed for payment? … In a case where foreign trade and foreign currency is concerned, if one must look at the place of payment and not at the place of contract, I think it is not an unreasonable deduction that as regards time one must look at the time of payment and not at the time of contract – a principle which is in accord with modern commercial usage.”

The learned author continues at p 459, in relation to fluctuations in rates of exchange:

“Once the place, time and currency of payment have been settled by reference to the terms of the contract and to the above general rules, where not excluded by those terms, any profit or loss accruing to either party as a result of fluctuations in rates of exchange must lie where it falls [Toff v African Life Assurance Society Ltd 1933 TPD 189; Aktiebolaget Tratalja v Evelyn Haddon & Co Ltd 1933 CPD 156; Tropic Plastic and Packaging Industry v Standard Bank of SA Ltd 1969 (4) SA 108 (D)].”

Applying these principles to the dispute at hand, it is evident that there is no dispute as to the place of the contract. As for the currency of the payment, I have determined from the parties’ conduct, that it was understood to be Zimbabwean currency. The dispute as to the time at which the rate of exchange applicable is to be reckoned must therefore be resolved on the basis of the authority cited above. The time must be the time of payment and not the time of contract. The question of exchange rates’ gain or loss that arises in this case, where the exchange rates for pound sterling vis-à-vis the Zimbabwe dollar have fluctuated considerably since 1993, must also be resolved on the same basis. In other words, the profit or loss accruing to either party as a result of these fluctuations must lie where it falls. In this case the loss will lie with the respondent. Had the Zimbabwe dollar firmed, rather than weakened, against the pound, the loss would have had to lie with the appellant.

The respondent therefore is obliged to pay to the appellant the value of £1 124.13 in Zimbabwean currency, exclusive of interest, calculated at the exchange rate prevailing at the time he effects such payment.

INTEREST

It is not in dispute that from the time the appellant paid the educational fees for the respondent’s son, through to the time the parties agreed that the respondent would give the appellant a tractor in repayment of such fees and thereafter, the question of interest was never discussed between them.

The first reference made by the appellant to this issue would appear to have been in a letter addressed to the respondent’s legal practitioners dated November 15, 1993. It should be recalled that the last payment by the appellant in respect of the university fees had been made on 29 October 1993 (£41.00). The other two payments had been made on 17 August 1993 (£1 300.00) and 20 October 1993 (£4 149). The letter reads as follows:

“Dear Sirs,

SALE FROM B B GARAMUKANWA TO JV ITAYI FARMING ENTERPRISES – LOT 1 OF BENESYDE

This covering letter serves to give notice that should Mr Garamukanwa fail to sign the document concerning the loan he has received from us, which states that he is to pay interest at the rate of 33% on all outstanding loans from us and from the commencing date of such loans, then he must immediately repay all loaned money.

Yours sincerely,

E Mapondera V Chisese.”

Despite the misleading title, it is not in dispute that the content of the letter relates to the university fees paid by the appellant on behalf of the respondent. The letter reinforces the appellant’s assertion that the money had been paid and was to be repaid by the respondent, as a loan advanced to him. It also supports her evidence that she had unsuccessfully tried to get the respondent to commit to writing his acknowledgement of the debt that he owed to the appellant.

In the summons the appellant claimed interest on the amount owed, from the date of the letter cited above, i.e. 15 November 1993. Her contention is that that letter had the effect of placing the respondent in mora. The learned trial judge, relying on the test set out in the headnote to the judgment in Brightside Enterprises (Private) Limited v Zimnat Insurance Company⁴ ruled that the appellant’s letter of 15 November 1993 did not meet the relevant criteria for placing the respondent in mora. The headnote reads:

“The demand must be unequivocal or unambiguous. It must specify a date on which payment must be made or performance given and clearly indicate that the plaintiff requires to be paid or receive performance by that date.”

The learned trial judge found the letter of 15 November 1993 to be “ambivalent” and not to have the effect of placing the respondent in mora.

I concur with the learned trial judge’s finding. A closer look at the letter suggests –

(i) that the appellant prepared and sent to the respondent, for his signature, a document purporting to be an acknowledgement of debt;

(ii) that the document stated that he was to pay interest on all outstanding “loans” from her, of 33%;

(iii) that such interest was to be reckoned from the commencement date of the loans; and

(iv) that the respondent had not, as of the date the letter was written, signed the document in question.

The appellant, therefore, demanded in the same letter that the respondent either sign the document or “immediately” repay all the money owed.

It is clear from the above analysis of the contents of the letter that its import was to demand that the respondent sign the document or else pay all “loaned” money immediately. It does not say that the “loaned” money was to be repaid with interest, nor, consequently, what interest rate would apply. The reference to 33%, made by way of hinting at what the document required of the respondent in terms of interest, is not a categorical statement or demand for payment of that interest. While it is evident that the demand encapsulated in the letter was for immediate payment of the money “loaned”, i.e. the capital, it cannot be said that the same applied in relation to the interest or any other amount.

The letter, insofar as it is said to have been a demand for the payment of interest, therefore does not, in my view, satisfy the criteria set out in the headnote cited above, which was relied upon by the learned trial judge.

Having correctly rejected the letter of 15 November 1993 as containing a proper demand for interest from that date, the learned trial judge was satisfied that the letter of demand to the respondent dated 25 March 1995 constituted a proper demand. Although not constituting part of the record before this Court, it is not in dispute that such letter demanded payment of interest with effect from 7 April 1995. Hence the order of the trial court that interest be paid on the amount determined by it as being the Zimbabwe dollar equivalent of the amount advanced (i.e. Z$66 000) from 7 April to 14 August 1995. Thereafter interest was to be paid on the balance left after the set-off, from 15 August 1995 to the date of payment.

I agree with the trial judge’s calculation of the dates from and up to which interest on the capital amount and balance after the set-off is to be calculated.

I have already determined that up to the date of the set-off, which was 14 August 1995, the respondent still owed the appellant the full amount paid by her as university fees, i.e. £5 490. This amount, for lack of a proper demand, was owed without interest up to 7 April 1995. This state of affairs continued until the capital amount owed was reduced by the set-off with effect from 14 August 1995 to £1 124.13. What therefore is to be determined is –

(i) the interest rate applying to £5 490 from 7 April 1995 to 14 August 1995; and

(ii) the interest rate applying to £1 124.13 from 15 August 1995 to the date of payment.

The two amounts, together, in Zimbabwe dollar terms, constitute the correct amount of interest owed to the appellant.

The appellant claims interest on the pound sterling amounts owed at the rate of 8% per annum, which is the rate charged by the Supreme Court of Adjudicature in England. The learned trial judge rejected this rate and determined that the amount owed was to be paid in Zimbabwe dollars with interest calculated at the rate applicable in Zimbabwe. She correctly observed, on the basis of Mawere v Mukuna⁵, that while it was common cause that the money of account was pound sterling, the court had to determine the money of payment. In Mawere v Mukuna CHINHENGO J stated⁶:

“It is important to draw this distinction (between money of account and money of payment) for, if the money of payment is the same as the money of account, then, in my view, the rate at which interest should be calculated is dependent on the money of account. But if the money of payment is different from the money of account, and unless a specific rate of interest is agreed upon, the rate of interest to be used should be the legal rate applying to the money of payment. Such an interest rate would be based on the assumption that by agreeing to a different currency for the money of payment the parties by implication agreed that the rate of interest applicable to the money of payment would apply.”

In casu, I have determined that the parties’ understanding was that the money of payment would be Zimbabwe dollars. It is evident that the parties did not agree on any specific rate of interest.

Under these circumstances, I see no reason to depart from CHINHENGO J’s reasoning (above) concerning the rate at which interest is to be calculated. It has to be the rate prescribed in Zimbabwe. (See also Industrial Equity v Walker 1996 (1) ZLR 269 (H) and AMI Zimbabwe (Private) Limited v Casalee Holdings (Successors) (Private) Limited 1997 (2) ZLR 77 (S)).

The current prescribed rate of interest in Zimbabwe is 25% per annum. This is by virtue of Statutory Instrument 273/93, which became operational from 10 September 1993. This would be the appropriate rate to apply in casu, where, as has been determined, proper demand for interest was made with effect from 7 April 1995.

Taken together with my earlier determination as to the appropriate rate of exchange to apply in converting the amount owed to Zimbabwe dollars, the respondent therefore has to pay to the appellant –

(i) the equivalent in Zimbabwe dollars of £1 124.13 at the exchange rate applicable at the time of payment, plus interest on that amount at the prescribed rate of 25% per annum from 15 August 1995 to the date of payment; and

(ii) interest on the Zimbabwe dollar equivalent of £5 490 at the prescribed rate of 25% per annum, from 7 April 1995 to 14 August 1995.

There appears to be no dispute that the exchange rate at that time was £1 : Z$10.

COSTS

In the written submissions for the appellant at the close of the case in the court a quo, a request was made on behalf of the appellant that the respondent should pay the costs of suit in the High Court on a legal practitioner and client scale. Before this Court the appellant prays that the respondent pays the costs of this appeal on the ordinary scale. In her judgment, the learned trial judge did not address the request for costs on the higher scale but entered judgment in favour of the appellant with costs on the ordinary scale.

It is submitted in this Court that the argument for an award of legal practitioner and client costs is so strong that the learned trial judge either did not apply her mind to the matter or misdirected herself. This misdirection, it is further submitted, would be that the learned trial judge did not think that the conduct of the respondent was reprehensible.

Whether or not the learned trial judge was persuaded to order punitive costs, I agree that the reasons for her decision on that point should have been given.

Mr Paul, for the appellant, lists, among others, the following actions taken by the respondent, which he submits are indicative of his “deplorable behaviour” and an attempt to do everything in his power to “wriggle” out of his responsibility to effect payment; viz, that the respondent –

(i) “studiously” avoided committing himself in writing, to the terms under which repayment was to be made;

(ii) initially raised the defence, in his first plea, that the loan in question was only repayable on completion of his son’s education;

(iii) failed to repay the loan after his son’s education was completed, only to raise for the first time in 1998, four years after the event, the defence of a counter-claim against the appellant;

(iv) shortly before the trial in the court a quo, sought to withdraw the admission that there was a loan and to contend that the money which was paid to the university constituted payment for a tractor which he had sold to the appellant;

(v) made the “ridiculous” assertion that in accepting a set-off, the appellant had waived payment of the balance of monies owed to her;

(vi) contended that since the appellant indicated she was no longer interested in the tractor, he could keep the tractor and not pay back the fees in question; and

(vii) attempted to rely on the fact that repayment of the loan could not be enforced because of a contravention of the Exchange Control Regulations.

It is further contended for the appellant that all these defences were either dishonest or without merit.

Mr Paul cited other examples of what he termed the respondent’s ineptitude or unreasonable behaviour. These examples, however, relate to the other transaction between the parties, that is, the sale of part of the respondent’s farm to the appellant’s company and not the dispute at hand. To the extent that these examples are meant to reinforce the appellant’s claim for costs on the higher scale in the present case, I shall not take them into account. The proper time for them to be taken into account is in the context of the litigation said to be right now pending between the parties, and in that respect, in the High Court.

Mr Paul contends further that the gap between legal practitioner and client costs and party and party costs is considerable, meaning that a party who is obliged to take a defendant to court, in this case the appellant, would be considerably out of pocket even if she wins. As a result of the respondent’s unjustified failure to effect payment, at the latest by August 1994, the appellant, it is contended, had been forced to institute action against him.

The respondent opposes the claim for costs on the higher scale but does not address all of the points raised by the appellant in support of such a claim. It is submitted for the respondent that the appellant has not established that the case was so exceptional that such costs were warranted.⁷ It is contended in this respect that the appellant persisted with the claim of £5 490 even after a set-off had been agreed on, and that up to the last minute she had insisted that the payment should be in pound sterling as at the date of payment, and lastly that against the “sum of evidence” she had insisted that interest should be reckoned from the date when the amount was paid in the United Kingdom. As all these points were arguable, it is further contended, it would be prejudicial if the courts penalised litigants for taking such points.

It is correct that costs on a higher scale can only be awarded in exceptional cases. Lack of bona fides on the part of the party against whom such costs are sought may justify an award of costs on the higher scale. See Davidson v Standard Finance Ltd supra where the following passage is cited with approval:

“Absence of a bona fides in conducting litigation may constitute a ground for awarding costs on an attorney and client scale.”⁸

The appellant is in effect alleging a lack of bona fides on the part of the respondent.

I do not find this allegation to be without merit.

As the learned judge in the court a quo correctly found, the respondent was not being truthful when he asserted that the £5 490 paid on his behalf by the appellant constituted the purchase price of the tractor. Given the evidence before the court, the probabilities are very strong that the agreement concerning the tractor was reached after the money had been paid, and following the respondent’s refusal to commit his obligation to repay this money to writing.

This refusal, itself an indication of his lack of bona fides in the light of the appellant’s obvious act of kindness towards him, left the way open for the respondent to come up with various defences to the action. A closer look at the defences shows they were advanced with only one purpose in mind – to avoid making any payment at all to the appellant.

Firstly, albeit that plea was withdrawn, the respondent’s immediate response to the summons was to admit the loan but give the defence that it was only to be repaid at the completion of his son’s studies.

Having withdrawn this defence, the respondent came up with the discredited one that the £5 490 was the purchase price of a tractor. By his admission, he never showed the appellant this tractor, but instead did nothing to disabuse the appellant of the misconception that she laboured under, that the tractor was one of the two that she saw at his farm, which were in a bad state of repair. Also by his own admission, the respondent used the tractor that he had meant to give to the appellant throughout the period of the dispute and in the end sold it and kept the proceeds. When the appellant communicated that she was not interested in either of the two tractors she had seen, the respondent did not, as one would have expected him to do had he been honest and genuine in his dealings with her, correct the misconception she suffered under, nor inform her about the existence of the other tractor – presumably in good condition – that he said he meant to give to her.

The other defence that the respondent proffered, that the transaction contravened the Exchange Control Act, was another attempt to evade the payment in question.

As if to make sure no stone was left unturned in his efforts to avoid having to pay, the respondent, much later in the proceedings, came up with a counter-claim relating to storage and accommodation fees, respectively, for the appellant’s goods and for the appellant and her relatives. The quantum of the counter-claim was calculated to exceed the balance that the respondent still owed the appellant. The court a quo found that the respondent failed to prove any agreement between the parties concerning the storage and accommodation fees and, in my view, correctly dismissed the counter-claim.

The respondent did not give up. After the set-off was agreed upon, he came up with the defence, correctly found by the trial court to have no legal basis, that by agreeing to the set-off the appellant had compromised her entire claim and was therefore not owed anything by him. It is not in dispute that through the set-off only a part of the amount owed to the appellant was applied towards repayment of her company’s debt to the respondent.

Taken together, all these efforts by the respondent paint the picture of a calculated and sustained campaign to avoid repaying a loan that was advanced, in good faith and with good intentions, by the appellant to and on behalf of the respondent. It is not disputed that without such payment the respondent’s son would have been expelled from the university and deported to Zimbabwe. While it is acceptable for a litigant, as contended for the respondent, to argue points in his defence, a line must be drawn between this and a deliberate attempt to abuse the court process in an endeavour to evade one’s legal obligations. It is abundantly clear that from the time he was requested, and refused, to reduce this obligation to writing (if not before), right up to the time of this appeal, the respondent never intended to repay the loan in question. This was despite the fact that he admitted he had an obligation to repay it. Because of his conduct, the appellant was undoubtedly put through unnecessary stress and the high cost of this litigation.

The respondent, in any case, has failed to disprove this lack of bona fides on his part. Contrary to what was contended for him, the appellant was, in the event, within her rights to claim payment of the amount owed to her, in Zimbabwe currency converted from pound sterling at the exchange rate prevailing at the time of payment. Nor did she persist with her original claim of £5 490, having conceded the set-off and reduced her claim accordingly. The appellant’s claim for interest has turned out to be justified, albeit not from the intended date. The respondent’s attitude was to deny any obligation to pay interest on the amount owed, even though proper demand for it was made as long ago as 1995, and even though he himself demanded interest from the appellant in relation to what she owed him.

The effect of all this is to remove any doubt in my mind as to the respondent’s lack of bona fides in his entire relationship with the appellant, and in his dealings with the courts of law that have considered this dispute.

I am satisfied that the respondent’s conduct in this whole affair calls for an award against him of costs on the higher scale.

It is accordingly ordered as follows –

1. The appeal is allowed with costs.

2. The order of the court a quo is set aside and is substituted with the following –

(i) Judgment is entered against the respondent in favour of the appellant for the payment of –

(a) the equivalent in Zimbabwe dollars of £1 124.13, calculated at the exchange rate applicable at the time of payment, with interest on that amount at the prescribed rate of 25% per annum with effect from 15 August 1995 to the date of payment; and

(b) interest on the Zimbabwe dollar equivalent of £5 490, calculated at the exchange rate of £1 : Z$10, at the prescribed rate of 25% per annum, with effect from 7 April 1995 to 14 August 1995.

(ii) The respondent will pay the costs of this action on a legal practitioner and client scale.

CHIDYAUSIKU CJ: I agree.

CHEDA JA: I agree.

Wintertons, appellant's legal practitioners

Kawonde & Co, respondent's legal practitioners