MTSHIYA J: This is an opposed application for summary
judgment wherein the applicant prays for judgment in the sum of US$1 514
762-20.
It
is common cause that following a credit facility agreement dated 22 April 2004,
the applicant offered the respondent an offshore loan facility of US$1 514
762-20. The repayment plan was agreed as follows.
"REPAYMENT PLAN
(a) An initial instalment of a minimum
of USD 25 000 is to be paid by 30 June 2004.
(b) Thereafter quarterly repayments of a
minimum of USD 60 000 are to be effected until 31 March 2005.
(c) This repayment plain is to be reviewed
at the end of 6 months from the date of this letter - vis 31 October 2004.
(d) Notwithstanding the provisions in
a,b and c, the outstanding amount remains due and payable on demand a the Banks
discretion".
As
at 29 March 2005, the whole loan amount was still outstanding and thus
prompting the issuance of a summons with the following claim:- 'payment of the
sum of US$1 514 762-00 due and payable in respect of money lent and advanced at
your specific instance and request, with interest thereon at the rate of 5% per
annum, converted into Zimbabwe dollars as at the date of payment, and
Collection commission calculated in accordance with By Law 70 of the Law
Society of Zimbabwe By Law 1982; and Costs of suit on the legal practitioner
and client scale to the extent that such costs are permitted in proviso (iii)
to By Law 70(2) of the Law Society of Zimbabwe By Laws'.
On
24 May 2005 the respondent filed a notice of appearance to defend.
On
23 June 2005 the respondent filed a request for further particulars. In
response to the request for further particulars, on 2 November 2005 the
applicant forwarded a copy of the credit facility Agreement to the respondent.
That did not excite any response from the respondent.
On 22 May 2006 the applicant filed
this application for summary judgment. In its founding affidavit, sworn to by
Collins Chikukwa a Manager Advances (Recoveries Unit) (Chikukwa) in the
Zimbabwe Allied Bank Group Limited (ZABG), the applicant stated that the
respondent had no bona fide defence
to the action/claim and had indeed accepted its indebtedness in the amount
stated in the summons. However, notwithstanding its undertaking to pay the
amount, the respondent had not made any payment whatsoever-hence the
justification for summary judgment.
On
7 June 2006 the respondent filed a notice of opposition to this application.
Its opposing affidavit was sworn to by its Administration Manager, Mr R.D.
Chagwinya, who stated, in part;
"In opposition, it my respectful
view that the application has been brought by the wrong party. As is clear from
paragraph 1 of the affidavit sworn to by Mr Collins Chikukwa, he is the Manager
Advances (Recoveries Unit) of the Zimbabwe Allied Banking Group (ZABG). The
Zimbabwe Allied Banking Group (ZABG) is a banking institution registered and
licensed in its own right.
I annex marked 'A' a copy of an
agreement entered into between the Curator Trust Bank in which the said Curator
surrendered to Zimbabwe Allied Banking Group all claims including the claim in
this matter. On this basis, I respectfully believe that the summons and or this
application for summary judgment could only be brought by the Zimbabwe Allied
Banking Group.
On the basis of this preliminary
point, I pray that the application be dismissed with costs"
In
its Heads of Argument the applicant maintained that the respondent had no
defence to its claim. It argued that the respondent had entered an appearance
to defend only for purposes of delay.
Relying
on the case of Barme Marais & Seuns v Eli Lilly 1995 (SA) 469,
the applicant argued that it (applicant) could as cedent lawfully institute
action for the recovery of the loan. At page 8 of its Heads of Argument, the
applicant went on to argue as follows:-
"In this instance, Trust Bank
Corporation Limited is under Curatorship. It ceded various rights and
obligations to Zimbabwe Allied Banking Group Limited, including the claim
against respondent. In terms of the agreement between Trust Bank Corporation
Limited and Zimbabwe Allied Banking Group Limited, Trust Bank and its curator
have pursued some litigation to recover various sums due, as agents of Zimbabwe
Allied Banking Group Limited, and handed over the amounts due to the latter in
terms of the cession agreement. This is permissible, as confirmed in the judgment
of the court in the Barrie Marais case."
It
was applicant's view that admission by the respondent that it indeed owed the
applicant the money in question was tacit admission that it owed the money to
ZABG under whose authority it had filed the application for summary judgment.
Whilst
disputing the existence of a cession, in contrast to the passage quoted above,
in court Counsel for applicant submitted that the parties (Curator/Applicant
and ZABG) had agreed to work together to recover outstanding moneys. It was in
this spirit that the applicant had issued summons in its own name. Furthermore,
the founding affidavit, it was argued, clearly indicated that Chikukwa was duly
authorised by the Curator to verify the cause of action. The fact that the said
Chikukwa was an employee of ZABG, confirmed that the parties were working
together. There was therefore no question of the application being improperly
before the court, it was argued.
On
its part the respondent maintained that the applicant had no locus standi. It had lost that capacity
on 20 January 2005 when it ceded all its claims to ZABG. In order to regain
that capacity, there was need for the Curator to grant it permission. It was
further argued that there was no evidence of such permission. The Curator's
authority had not been filed (see Air
Zimbabwe Corporation & Others v ZIMRA
HH 96/03.
To further back up its argument, the
respondent cited s 54(1) of the Banking Act [Chapter 20:24] (the Act) which provides as follows:
"The issue of a direction in terms
of section fifty three shall have the effect of suspending the powers of every
director, officer and shareholder of the banking institution concerned, except
to the extent that the Curator may permit them to exercise their
powers". (My own underlining for
emphasis)
There was no evidence of permission
to sue having been granted by the Curator under
s 54(1) of the Act.
The
position of the law, it was argued, had been confirmed by the Supreme Court in Turst Bank Holdings Limited v Reserved Bank of
Zimbabwe
& Others SC 36/05.
Counsel for respondent argued that
the case of Marais (supra) could not be relied on because the law in Zimbabwe
is clear i.e. where cession has taken place 'the cedent relinquishes all their
rights to institute or continue with legal proceedings over the subject of the
cession' (See Syfrets Mervhant Bank v
Jardine & Others 1999(1) ZLR 124 (H).
The
position in casu, it was argued,
clearly indicated that summary judgment, could not be granted where there was a
good defence against the drastic relief sought by the applicant. The defence was
that, in law, the applicant had no locus
standi. After the cession the
right to sue went into the hands of ZABG.
Given
the fact that the respondent admits owing the applicant the sum of money as
claimed in the summons, the issues that need to be answered are:
- whether or not the applicant ceded its
rights to ZABG; and
-
whether
or not if applicant ceded its rights to ZABG, it could legally make this
application in its own name - i.e does applicant have locus standi.
I shall first deal with the question
of cession. It is not denied that the applicant was
under Curatorship. It is also not
denied that following Curatorship the applicant went into agreement with ZABG.
Under that agreement ZABG assumed liability for all the applicant's obligations,
including suing for moneys owed to the applicant. This was an agreement of sale
whereby the applicant would sell all its assets to ZABG. The preamble to the
agreement, which preamble was specifically stated to be part of the agreement,
provides great assistance in understanding the intentions of the parties. The
agreement should be read together with the provisions of the Act relating to
the issue of Curatorship. The applicant acknowledges the impact of Curatorship
in paragraph 8 of its Heads of Argument quoted herein at pages 2-3. The
applicant confirms that it 'ceded various rights and obligations to ZABG
including the claim against respondent'. I think that admission alone settles
the issue of cession.
I
now turn to the issue of capacity to sue whilst under Curatorship. The answer
to that issue is found in s 54(1) of the Act quoted at page 3 herein. Clearly
that provision in the Act takes away the applicant's ability to bring an action
or application such as this one without the permission of the Curator. There is
no evidence of such permission from the Curator in casu.
Counsel
for the applicant almost persuaded me to accept that such permission was given through
Chikukwa as claimed in the founding affidavit. However, apart from the need for
such authority to be filed, a careful reading of s 54(1) of the Act will reveal
that the permission/authority referred to is that given to 'the director,
officer and shareholder of the cedent' and not a director/shareholder/officer
of the cessionary (ZABG). Chikukwa was an officer of the cessionary (ZABG).
Furthermore
the cession does not automatically confer agency powers to the cedent. There
must, in my view, be a deliberate and visible act by the Curator to create
agency. Failure to do so will lead to the Curators legal control and management
of the entity placed under Curatorship in terms of the Act being compromised.
The
foregoing clearly points to the fact that the applicant, without the permission
of the Curator, cannot bring this application before this court. Indeed this
point in our law has been confirmed by the Supreme Court in the following two
cases:-
1.
Jeffrey Mshimbi & Others v
Reserve Bank of Zimbabwe
SC 35/05, and
2.
Trust Bank Holdings Ltd v Reserve
Bank of Zimbabwe
& Others SC
36/05.
The fact that the
respondent admits its indebtedness should not be allowed to cloud the
fact that the applicant has, in
bringing this application in its own name, failed to follow the law. The
applicant has no locus standi.
Accordingly
my finding is that the application is not properly before the court and is
therefore dismissed with costs.
Coghlan, Welsh & Guest, applicant's legal practitioners
Dube
Manikai & Hwacha,
respondent's legal practitioners