Enforcement of registered notices relating to security interests in Zimbabwe

Section 8 of the Movable Property Security Interests Act [Chapter 14:35] deals with the enforcement of registered notices relating to security interests in Zimbabwe. A security interest in Zimbabwe is defined as a property right in a movable asset which is created by way of a written agreement to secure payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and regardless of the type of asset, the status of the debtor or secured creditor, or the nature of the secured obligation.

A security interest in Zimbabwe may be in the form of a charge, chattel mortgage, hypothec, financial lease agreement, notarial bond, note of hand, trust indenture, trust receipt, pledge, secured debenture or other transaction that secures payment or performance of an obligation.

Every registered notice of a security interest in Zimbabwe is regarded as a liquid document. The term liquid document is not defined in the Moveable Property Security Interests Act [Chapter 14:35]. However, the courts have defined the term liquid document to mean an amount, either ascertained or capable of speedy and prompt ascertainment.

In Sibanda v Mushapaidze 2010 (1) ZLR 216 (H) 218E-F it was held that:

“The term liquid document is not defined in the rules. This court has however held that any clear, unequivocal and unambiguous written promise to pay a debt constitutes a liquid document. Thus, any letter, to the extent that it is clear, unequivocal and unambiguous and contains an acknowledgement of debt, can constitute a liquid document for the purposes of the rules on provisional sentence.”

In Twee Jonge Gezellen (Pty) Ltd v Land and Agricultural Development Bank of SA 2011 (3) SA 1 (CC) para 15 it was held that:

“In principle, however, a document is liquid if it demonstrates, by its terms, an unconditional acknowledgement of indebtedness in a fixed or ascertainable amount of money due to the plaintiff. Many different sorts of documents have been found to qualify as “liquid” in terms of this definition and therefore sufficient to found provisional sentence. They include acknowledgments of debt, mortgage bonds, covering bonds, negotiable instruments, foreign court orders and architects’ progress certificates.”

Where the term of a security agreement in Zimbabwe creating a security interest permit, the secured creditor may seize and take custody of any of movable asset subjected to the security agreement pending the granting of provisional sentence in relation thereon. Furthermore, if an obligation is secured by both a movable and immovable property of a debtor, a secured creditor in Zimbabwe may elect to enforce:

The security interest in the movable asset under the provisions on enforcement of a security interest in a movable asset and the encumbrance on the immovable property under the law governing enforcement of encumbrances on immovable property; or

Both rights under the law governing enforcement of encumbrances on immovable property.

The failure to pay by a debtor or failure to perform secured obligation, the debtor and the secured creditor in Zimbabwe are entitled to exercise:

Any right under the provisions of the Movable Property Security Interests Act [Chapter 14:35];

Any right provided in the security agreement; or

Any right provided under any other law, except to the extent that it is inconsistent with the provisions of the Movable Property Security Interests Act [Chapter 14:35].