MTSHIYA J: The delay in the determination of this matter
requires explanation.
This
application was first heard on 28 September 2009. At that time Advocate Mandizha and Mr Mahlangu represented the applicants and first respondent
respectively. The matter was then postponed to 30 September 2009 for continued
hearing. However, the matter was only heard again on 21 October 2009 whereupon
the applicant's legal practitioner indicated the intention to apply for leave
to file a supplementary affidavit. The respondent clearly indicated its
intention to oppose the application. I then postponed the matter sine die in order to allow the
applicants to file a formal application which could then be served on the
respondents. A chamber application was then placed before me on 9 November
2009. I directed that the matter be placed on the opposed roll and on 25 March
2010 my sister CHATUKUTA J. granted the applicants leave to file supplementary
affidavit(s). The record reveals that different supplementary affidavits were
in fact filed on 22 September 2009 and 1 October 2009. The first respondent
filed its response to the supplementary affidavit(s) on 14 May 2010.
The
record also shows that initially the applicants were represented by Messrs
Musamirapamwe and Associates. There is no notice of renunciation of urgency by
the said law firm but on 9 November 2009 Messrs Muvingi Mugadza & Mukome
filed a notice of assumption of agency on behalf of the applicants.
The
matter was, at the request of the respondent's legal practitioners finally set
down on 8 July 2010. This was after the applicants had obtained leave to file
supplementary affidavits. I must also mention that when the matter was first
set down on 28 September 2009, it was at the instance of the first respondent's
legal practitioners who wanted finality in the matter. I, however, take full responsibility
for the delay in preparing judgment for the period commencing 8 July 2010 to
the date of delivery of this judgment. The delay is sincerely regretted.
This
application was filed on 2 March 2009 for the following relief:-
“(a) The writ of execution issued under HC
11569/98 be and is hereby set aside.
(b)
The
judgment of this court granted under HC 11569/98 is hereby held to have been
fully paid and settled by the applicants”.
Going through the papers, I also
found the following document:
______________________________________________________________________
Before the Honourable Mr/Mrs Justice
……………………………..
Mr Musamirepamwe For the Applicant
Mr/Mrs/Ms For
the Respondent
WHEREUPON, after reading documents filed of
record and hearing Counsel:
IT IS ORDERED THAT:-
(a)
The
Writ of Execution issued under HC 11569/98 be and is hereby set aside
(b)
The
judgment of this Court granted under HC 11569/98 is hereby held to have been
fully paid and settled by the Applicants.
(c)
Within
seven (7) working days of service of this Order, the Respondent shall release
the Title Deeds.
(d)
In
the event of failure to comply with ( c) above, The Registrar of Deeds is
hereby Ordered to replace the Title Deeds.
DATE: ……………………… …………………………………
JUDGE/DEPUTY
REGISTRAR”
There was no reference to the above
document in the relevant papers and in the
submissions by the applicants' legal
practitioners. I shall therefore ignore the document.
This
matter has a long history dating back from 1997. The relevant brief background,
which I deem necessary for the purposes of the determination required in this
judgment, is as follows;
On
5 June 1997 applicants were granted a loan facility by the first respondent
(then operating as the Zimbabwe Development Bank) in the sum of ZWD 6200000 in
foreign currency. The salient parts of the Finance Agreement read as:
“Whereas Southend Cargo Airlines
(Private) Limited has applied to the Bank for loan finance and the Bank has
approved of said application. It is hereby agreed by the parties as follows:
Amount: Up to ZWD6 200 000 in foreign currency (Six
Million Two hundred thousand Zimbabwe
dollars) to be spent as follows:
Down payment to secure the
plane Z$6 200 000
TERM AND INTEREST: Over a period of 60 months
including up to 12 months Grace in respect of principal and payable monthly at
an interest rate of 10.5% per annum at a variable rate for Risk Class C. Any
amount past due attracts said interest rate plus an additional interest charge
of 4% per annum and capitalised monthly until cleared:
FEES: A commission of 1% flat to be paid on or
before loan signature and a commitment fee of 2%. Any additional fees and
charges which may become payable as provided for in the General Conditions of
the Finance Agreement will be advised when the event occurs.
REPAYMENT: Instalments of principal amount to
be repaid in 48 equal monthly instalments beginning from 30 May 1998. Interest
to be billed and paid monthly as from the beginning of 30 June 1997. The Bank
may at its sole discretion levy a penalty to be advised on application for
voluntary early repayment of the loan amount. The entire outstanding loan
amount to be repaid in the event of the cancellation of lease. Stop order to be
established through the client's commercial Bank
SECURITIES:
The loan amount shall be secured as follows:
At all times and for the validity of
this loan, a First Mortgage Bond valued at Z$1 700 000 over lot 2 of lot 381,
Highlands and a Notarial General Covering Bond valued at Z$5 200 000 (Five
Million Two hundred thousand Zimbabwe dollars) over the company's moveable
assets, together with shareholders sureties of Stephen Jackson Chituku and
Patience Fadzai Chituku.
DISBURSEMENT:
Delivery to the Bank of signed
original of this agreement, payment of the commission, delivery of signed
resolutions of the company granting specific authority to raise this loan and
authorising the signatory to enter into this agreement, signed surety and
signed power of attorney shall be satisfied before the first disbursement of
this loan.
REPORTING: The Bank shall from time to time
seek financial and operational information from the company and in order to
assist in this process, the following standard reports shall be prepared and
submitted:
During implementation, a monthly
report of progress and problems encountered and implanted as per the attached
implementation schedule.
Within 30 days of each calendar
quarter, income statement and balance sheet and cashflow of the company.
Within 60 days of the company's
financial year end, an income statement and balance sheet in draft to be
followed by a final set thereafter. Audited accounts may be requested if the
need arises.
No future borrowings by the Borrower
shall be entered into without the prior written consent of the Bank which
consent shall not be unreasonably withheld.
SPECIAL CONDITIONS: Client to clear all the Mortgage
Bonds on the property before disbursement of the funds.
GENERAL CONDITIONS: The conditions attaching to this
loan are more fully explained in clauses 1 through to 36 of the attached”.
In
pursuance of the above agreement the applicants, who are husband and wife,
registered a mortgage bond valued at Z$1 700 000 over their property known as
Lot 2 of Lot 381 Highlands and an NGCB valued at Z$5 200 000 on all their
movable assets.
The
purpose of the loan that was granted to the applicants was to enable them to
lease a plane from an American company known as Interject Leasing Corporation. However,
the American company went into liquidation and the applicant(s)' project
collapsed. The collapse came after the first respondent had already paid the
proceeds of the loan directly to the American company as per arrangements.
It
is common cause that the applicants defaulted in servicing the loan. The first
respondent then resorted to litigation which resulted in the following consent
order from this court.
“1. That judgment be entered for the
plaintiff against the defendants jointly and severally the one paying the
others to be absolved as follows:-
1.1.
In
the sum of United States Dollars 590 470,68
1.2.
Interest
on the sum of US$506 200-00 at the rate of 14.5% per annum from the 1st
June 1988 to the date of payment.
1.3.
In
the sum of $54 917-68
1.4.
Interest
on the sum of $49 688-99 at the rate of 14.5% per annum from 31st
March 1999
1.5.
Costs
of suit including the wasted costs of two days.
1.6.
Defendants'
claims are dismissed with costs”.
It is important to note that the
relief granted in the above order was in foreign currency (i.e. United States
Dollars). The relief prayed for in this application is in actual fact a stay of
execution of the above court order. This is so because the first respondent has
since proceeded to execute against the consent order.
In May 2003 an attempt was made by
the applicant(s) to have the consent order set aside. In her judgment, HH 123/2004,
delivered on 16 June 2004, MAKARAU J, as she then was, dismissed the
application for rescission. The papers before me indicate that an appeal against
that judgment, filed in 2004, still awaits prosecution – leading to the
argument that the said appeal was filed merely for purposes of delay.
In its opposing affidavit to this
application the respondent states the following:
“The suggestion that the first respondent (sic) overpaid its liability to the first respondent is not accepted. It is interesting to note that in
its papers in case number HC 5054/04 it was claimed on its behalf that as early
as April 2004 the first applicant had settled its liability to the first
respondent in full. This was a false claim. The letter from the Sheriff of
Zimbabwe in this connection annexure “E” is incorrect. In fact I would point
out that the Sheriff of Zimbabwe has been most unhelpful in dealing with this
matter. Pursuant to a Writ of Execution against movable and immovable property
issued in this matter and based on the judgment of this court granted by
consent, the Deputy Sheriff auctioned the immovable property of the second and
third applicants. Because the prices offered at the time were unreasonably low
and the immovable property was in any event mortgaged to the first respondent,
the first respondent made what in considered a reasonable offer for the
purchase of the property at the auction. This offer was accepted and all the
requirements of both the auctioneer and the Sheriff were satisfied. This
notwithstanding the Sheriff refused to transfer the property to the first
respondent. In this connection I point out that the sale of the immovable
property of the second and third applicants was in fact effected by public
auction on 30 April 2004 and the first respondent's bid at the time was $110
000 000-00, which was quite reasonable. The first respondent was required to
pay the auctioneer's commission of $5 500 000-00, and paid this but the Sheriff
simply refused to confirm the sale and instruct, as is normal practice, the
transfer of the property to the auction-purchaser which in this case was the
first respondent. Accordingly therefore annexure “E” does not come as a
surprise to the first respondent because it is consistent with the very
unhelpful attitude exhibited for a long time by the Sheriff”.
It is the execution referred to
above that the applicant(s) seek to have set aside … (see page 2 of this judgment where the relief sought is captured in
full).
How do the applicants' founding
affidavit justify the relief sought? The main founding affidavit deposed to by
the second applicant gives a background of the loan facility. Among other
things, the founding affidavit then makes the following conclusions on the
dispute:
“9.1
Against the background of this
unpleasant history and what would properly qualify as a case for judgment
entered in error, the applicants took steps to settle in full the judgment debt
of US$590 470-68 plus interest by paying the equivalent of the said amount to
the first respondent. The payment of the equivalent amount in Zimbabwe dollars was purely on the
basis of the trite position of our law as set out in the Makwindi Oil Procurement case supra.
Further the clear history of this matter shows that the Zimbabwe dollar
equivalent is what was due to the first respondent in any event.
9.2
Attached marked “D” is a copy if the
schedule showing the copy of the various amounts paid in Zimbabwe and how there
were appropriated against the judgment debt in United States dollars at the
official exchange rate.
9.3
In fact annexure “D” shows that the
first respondent has been overpaid to the extent of US$2431219-62. Even clearer
is annexure “E” a letter from the Sheriff of Zimbabwe advising the first
respondent that the judgment debt had been fully settled according to the
records available to the Sheriff.
9.4
The first respondent is however
adamant and has not accepted the full payment as advised by the Sheriff.
Consequently it is important that an order be made upholding the position taken
by the Sheriff and setting aside the writ of execution issued by the first
respondent on the clear basis that the same has been satisfied.
It is clear that the first respondent
has received more than what is due to it. What is also clear is this debt has
since long been paid.
In the circumstances, the position
taken by the Sheriff should be upheld and consequently the writ of execution
issued pursuant to the judgment under case number 11569/98”.
It is my view that all the issues
raised in the founding affidavit were dealt with in MAKARAU J's judgment (HH
123/2004). That judgment remains extant. It will therefore be unnecessary to
revisit the same issues in this judgment. That judgment, in part, reads as
follows:-
“In or about June 1997, the
applicants intended to lease a jet airliner from a company in the United States.
A deposit was required for the lease. The deposit was to be paid in foreign
currency. The applicants approached the respondent for a loan of the foreign
currency. The respondent did not have the foreign currency that the respondent
required. It purchased the foreign currency from the bank, which in turn made
the payment directly to the applicants' creditor in the United States of America.
The respondent utilised the sum of $6 200 000-00 to purchase the sum of foreign
currency that the applicants needed. The loan agreement was reduced to writing
and it indicated that the capital amount borrowed was the sum of “$6 200 000-00
in foreign currency”. When the applicants defaulted, the respondent sued for
with interest, the sum of US$590 470-68 as representing the capital debt.
It is trite that this court, in an
appropriate case, may grant a judgment expressed in foreign currency, provided
the amount of the judgment debt is converted to local currency on the date of
execution of the judgment. The position has been settled since 1988 when the
Supreme Court established it for the first time in Makwindi Oil Procurement (Pvt)
Ltd v National Oil Co of Zimbabwe 1988 (2) ZLR 482 (S). See also AMI Zimbabwe (Pvt) Ltd v Casalee Holdings (Successors) (Pvt) Ltd 1997 (2) ZLR 77
(S)
The applicants argue that this was
not a proper case in which to grant a judgment expressed in foreign currency.
In support of this argument, the applicants raise three main arguments.
Firstly, it is argued that the loan agreement expressed the amount borrowed in
local currency. Secondly, it is argued that the repayments, to be deducted from
the applicants' account by way of a stop order, were to be made in local
currency. Thirdly, it has been argued that the surety bond executed as security
for the loan was denominated in local currency.
In raising these three arguments, it
is my view that the applicants are playing on form and not relying on the
substance of the agreement between the parties. The substance of the agreement
between the parties is to be ascertained from the common intention of the
parties as embodied in the agreement. It appears to me that the common
intention of the parties was to enter into a loan agreement for the sum of the
foreign currency that the applicant required to pay a deposit to its creditor
in the United States of
America. The respondent purchased this money
for the applicant, using the sum of $6 200 000-00. There is no doubt in my mind
that the amount of the foreign currency is what the applicants borrowed from
the respondent. The loan agreement was inelegantly drafted and referred to the
capital debt as “$6 200 000-00 in foreign currency”. The intention of the
parties was however quite clear as to what had been borrowed and was to be
repaid. That this was the common intention of the parties is further shown in
the statement of account that was sent to the applicants, showing the reduced
balance of both the local currency and its equivalent in foreign currency. What
was being paid was the local currency bur what was being reduced was the debt
in foreign currency.
On the basis of the foregoing, the
applicants do not have a defence to the respondent's claim. This court did not
err in granting the judgment in foreign currency as the applicants' obligation
to the respondent was to be measured in foreign currency while the discharge of
the obligation was to be through payment in local currency. See Mawere v Mukuna 1997 (2) ZLR 361 (HC)”.
I
have deliberately quoted the above at length from MAKARAU J's judgment in order to
demonstrate the fact that the judgment indeed settles the issue of whether or
not foreign currency should be paid to clear the debt. I found it strange that
the applicants could use the same arguments in casu for the relief they seek.
In order to decide whether or not
the relief sought should be granted, all I need to do is to determine whether
or not the debt was satisfied as reported by the Deputy Sheriff. The
applicants' argument, in my view, is anchored on that report.
The Deputy Sheriff's letter dated 13
February 2009 reads as follows:
“1. The judgment debtor paid the debt in full
(see copy of confirmation to the Sheriff's Office dated 20th January 2009 attached hereto).
Since payment was done in full I am
not in a position to re-auction the property in execution by private treaty.
On the Sheriff's side it appears
there is no cause of action now.
R. Matore
for:
MASTER/REGISTRAR/SHERIFF FOR ZIMBABWE”
On 18 February 2009, the first
respondent, through its legal practitioners, reacted to the above in the
following terms:-
“Our records indicate that the
judgment debt has not been paid at all. As you would have seen from the
Sheriff's file the judgment was expressed in the currency of the United States
and payable in that currency. We have no record of any payment and a matter of
fact as recently as October 2008 the judgment debtors were still attempting to
effect payment unfortunately this was in the incorrect currency.
If the Sheriff for Zimbabwe is
adamant that payment of the judgment debt has been effected in full we should
be grateful if we could be furnished with details of such payment including:
1.
The
date or dates when payments were made;
2.
The
place and persons or entities to whom payment was effected including copies of
the relevant receipts; and
3.
The
currency in which the payments were made.
Our file and the correspondence in
it indicates quite clearly that the Sheriff's office has refused to co-operate
in a proper disposal of this matter. In the event that we do not receive a
response from your office within the next 14 days and upon instructions from
our client we will apply for an appropriate court order. In the event the
Sheriff and your office will be cited as parties and orders for costs will be
sought against yourselves.
M P Mahlangu
GILL GODLONTON & GERRANS”
The above sets out the respondents' position and
that position remained unchanged up to the date of the hearing of this matter.
A document filed in support of the applicant's supplementary affidavit and
alleging that the debt had been paid in full, was abandoned at the hearing of
this matter. I therefore need not repeat its contents.
Mr Phiri, for the applicant(s) submitted that there were two issues
for determination namely:
- whether
or not the applicants( )should settle the debt in foreign currency and
- whether
or not the applicant(s) had fully paid the loan.
As has already been indicated, I
need not deal with the issue relating to the justification of settling the debt
in foreign currency. That was fully and adequately covered in MAKARAU J's
judgment quoted at length at pp 7 and 8 of this judgment. I totally associate
myself with the findings and ruling in that judgment.
On the issue of confirmation by the
Deputy Sheriff that the debt was cleared. I make the following observation. As
an officer of this court and in executing the judgment, the Deputy Sheriff was
primarily doing it for the benefit of the judgment creditor who happens to be
the first respondent. It was, in my view, incumbent upon the Deputy Sheriff to
verify payment figures with the first respondent before making a pronouncement
as he/she did on 13 February 2009. Failure to seek verification resulted in the
first respondent's negative but most probably correct response of 18 February
2009.
The first respondent denied
knowledge of any payments made after June 1998 when a balance of US$506 200-00
was reflected as outstanding. Furthermore the first respondent stated that if
payments had indeed been made the offer of US$1000 000-00 placed before the
first respondent on 8 October 2008 could not have been made. I agree with that
observation.
Upon Advocate Morris, for the first respondent, having queried why the supporting
letter to the supplementary affidavit, written on 21 April 2004, was not
produced before MAKARAU J in May 2004, the applicant's legal practitioner
appeared to admit that the letter was indeed a forgery as alleged by the first
respondent. He quickly abandoned relying on same. The attempt to use that
letter, in my view, totally discredited the applicant's claim that the loan was
fully paid. The desperate move to manufacture evidence clearly proves that the
applicants had no case at all.
Given the foregoing, my view is that
the first respondent has, on a balance of probabilities, proved that it is
still owed money by the applicant(s). The first respondent has advanced a
credible story that throws out any possible merit in the applicant's case.
I cannot help but agree with
Advocate Morris when he says:
“It is not for this honourable court
to entertain a debate as to what payments have been made by the applicants and
exactly how much is still owed, this honourable court has been asked to stay
execution and it is respectfully submitted that if it is found that money is
still due by the applicants, no matter in what sum, then this application has
to fail”.
It should not generally be this
court's duty to embark on a reconciliation exercise of figures for
litigants. However, where the court
attempts to do so, it shall be guided by the most probable truth. In casu the first respondent's story is
credible and offers the most probable truth.
All in all, the application for stay
of execution has no merit and cannot succeed. (See also Lowveld Leather Products (Pvt)
Ltd v IFC & Anor 2003 (1) ZLR 78).
I therefore order as follows:
1.
The
application be and is hereby dismissed.
2.
The
applicants shall pay costs of suit.
Muvingi,Mugadza
& Mukome, applicants' legal practitioners
Gill,
Godlonton & Gerrans, first respondent's legal practitioners
