HARARE – Zimbabwe Parks and Wildlife Management Authority (Zimparks) has won a US$258,000 rental arrears claim in respect of a restaurant leased to a business tenant in Victoria Falls’ famous Rainforest.
The tenant, Shearwater Adventures (Private) Ltd was sued after it failed to honour contractual obligations to paying rentals in foreign currency for over two years.
In its refusal, the company cited the Presidential Powers Act which put the local currency at par with the US dollar.
In his ruling, High Court Judge Bongani Ndlovu allowed Zimparks’ request ordering the tenant to pay the outstanding arrears in foreign currency.
“It is clear when the one-to-one rate will apply on those contractual obligations that were concluded or incurred before the first effective date and were valued and expressed in US dollars.
“The one-to-one rate was applicable on the first effective date.
“Had the lawmaker intended that the one-to-one rate be applicable in the future on those contractual obligations, it would have inserted the words ‘and after’ in the provisions to read.
“Accordingly, judgement is entered in favour of the Plaintiff and Defendant’s counterclaim is dismissed.
“Defendant shall pay Plaintiff; the sum of US$258,400 payable in RTGS at the prevailing rate at the time of settlement.
“Holding over damages calculated at the rate of US$11,760 per month from the date of summons to the date of full payment, payable in RTGS.
“Interest in the capital sum of US$258,400 calculated at the rate of 12% per annum from the date of summons,” the judge ruled.
Zimparks and Shearwater entered into a lease agreement 2018 whereupon Shearwater would rent a restaurant and Curio shop situated in the Rainforest at Victoria Falls National Park.
The lease agreement is still in existence, with the contract lasting until December 2027.
According to court papers, from January 1, 2018 to December 2022, Shearwater was to pay an annual lease fee of US$141,120, with the lease payments being made in monthly installments of US$11,760 on or before the 1st of each month.
However, between January and March 2020, Shearwater made payments totaling to ZW$773,333, arguing that the rental fees fell under the provisions of Statutory Instrument 33 of 2019.
The Statutory Instrument, made under the Presidential Powers Act adds a new section 44C to the Reserve Bank of Zimbabwe Act under which the Minister of Finance authorised the Reserve Bank to issue electronic currency and specify its exchange rate with any other currency.
This prompted Zimparks to approach the court arguing that the company should pay the rental fees in foreign currency.
Zimparks argued that the US dollar obligations in its contract were not amended by Section 22 (1) (d) as read with s22 (4) (a) of the Finance Act and remained reckoned in United States currency except for that the Defendant was not obliged to pay the US dollar equivalent in local currency at the official prevailing exchange rate in terms of the Exchange Control Act at the time of settlement.
“The Act did not amend private contracts or lease agreements in particular. It only crafted a mode of payment of existing liabilities prior to the effective date which is the cutoff date,” further read the court papers.
Shearwater filed a counterclaim, seeking a declaratory order that confirmed that it had paid more than what was due for the period in question by 46 months using the 1:1 exchange rate.
It further contended that the effect of s 22 (1) (d) as read with s22 (4) (a) of the Act was to change the contractual obligation it had toward Zimparks in respect of the lease from US$11,760 to ZW$11,760 per month.
