This is an appeal against the default judgment granted by the Labour Court on 2 November 2016.

The respondent was employed by the appellant as a till operator. On 30 June 2015, there was a scuffle between the respondent and a customer over an issue of change. A spot check was conducted and a shortfall of $45 was discovered in the respondent's till. The respondent was asked to write a report of the incident and the shortfall.

In the report, he stated, that, the shortfall was caused by $50 which he had given to a fellow till operator, Nancy Chawanza, who had forgotten to return the money. The respondent also stated, in the report, that, he had served a customer and given him $180 cash back instead of $130. He averred that the customer later returned the $50 after realising the error and he replaced the money in his till without notifying his supervisors.

The respondent was subsequently charged with the offence of deliberately giving untrue or incorrect information and for unsatisfactory work performance.

A disciplinary hearing was conducted, and he was found guilty, and was subsequently dismissed.

He appealed against the decision to the Local Joint Committee which upheld the determination and the dismissal. Aggrieved, the respondent appealed to the National Employment Council for the Commercial Sections (NEC) which upheld the determination and dismissed the appeal.

As a result, the respondent noted an appeal with the Labour Court on 1 June 2016.

The appellant failed to file a notice of response at the Labour Court within the stipulated time, only to attempt to do so some four (4) months later, on 18 October 2016, together with heads of argument. This was so despite the appellant having been favoured with a letter from the Registrar of the Labour Court calling on it to file a response.

At the hearing of the matter, the court a quo proceeded in terms of Rule 22(b)(1) of the Labour Court Rules, 2006 (SI59 of 2006) (heinafter referred to as “the Rules”) and entered default judgement against the appellant.

Aggrieved by the decision of the court a quo, the appellant noted an appeal to this Court on the following grounds:

(a) The court a quo erred, on a question of law, by proceeding to enter default judgment against the appellant in circumstances in which the appellant had filed a notice of response, albeit belatedly, as well as heads of argument which would have enabled the court to determine the matter on the merits.

(b) The court a quo erred, on a question of law, by failing to find, that, the explanation which was given by the appellant for the delay in filing the Notice of Response constituted good cause for the delay.

(c) The court a quo made an error, on a question of law, by not taking into account the nature of the case and failing to apply its discretion judiciously, more specially by not considering the evidence on record which demonstrated that the respondent had admitted to the offences with which he was charged, which offences attracted a penalty of dismissal.

(d) The court a quo, in any event, erred, on a question of law, by failing to give reasons for the judgment which is appealed against. A failure to give reasons constitutes a judicial irregularity.

At the hearing of the appeal, counsel for the appellant argued, that, the court a quo erred in not providing reasons for its decision, which was that of the default judgment.

Per contra, counsel for the respondent submitted, that, since what was being appealed against was a default judgement, it could only be set aside through an application for rescission of that judgment.

He further submitted, that, the appellant had not requested the reasons from the Labour Court.

This is an opposed application for condonation of late noting of an appeal and extension of time within which to file a notice of appeal. The applicant brings the application in terms of Rule 43 of the Rules of Court 2018.

The first applicant is a former employee of the third respondent (the company). He was employed as its Chief Executive Officer. He was dismissed from employment sometime in 2015 following disciplinary proceedings.

The first applicant claimed to own 30% shares in the third respondent through the agency of the second applicant, a duly incorporated company, and, to that extent, a juristic person.

His claim to the directorship of the company is in dispute. He claims to be duly authorised to represent the second applicant, a factor which is also disputed by the respondents.

The first and second respondents are natural persons bearing the same surname of 'Chingwena'.

The third to ninth respondents are duly incorporated companies.

The 10th, 11th, 15th-22nd, 29th, 33rd respondents are also duly incorporated companies clothed with juristic personality.

The remaining parties, though cited, did not appear to oppose the appeal.

The 4th to 38th respondents are companies in which the first appellant alleges the company has investments liable to his 30% claim of the shares allegedly held by the third respondent therein.

The law relating to applications of this nature is well known such that it cannot be the subject of any controversy. The requirements for the application to succeed were spelt out in Kombayi v Berckout 1988 (1) ZLR 53 (S). These are:

(a) The extent of the delay;

(b) The reasonableness of the delay; and

(c) The prospects of success on appeal....,.

The first applicant approached the court a quo in terms of section 196(1) as read with section 198 of the Companies Act [Chapter 24:03] complaining that the affairs of the company, Croco Holdings (Private) Limited are being, or have been, conducted in a manner that is oppressive or unfairly prejudicial to the interests of some part of the members including himself. The section provides as follows:

“196 Order on Application of Member

A member of a company may apply to the court for an order in terms of section one hundred and ninety-eight on the ground, that, the company's affairs are being, or have been, conducted in a manner which is oppressive or unfairly prejudicial to the interests of some part of the members, including himself, or that any actual or proposed act or omission of the company, including an act or omission on its behalf, is or would be so oppressive or prejudicial.”

The first applicant deposed to the founding affidavit wherein he averred, that, he owns 30% shares in the company whereas the first respondent owns the remaining 70%.

His complaint is that the first respondent has been, and is, abusing his position as the majority shareholder.

He alleged that the first respondent was conducting the company's affairs in an oppressive and prejudicial manner to its members including him.

He averred, that, the first respondent and he were the promoters and founding directors of the company. The first respondent had, however, fraudulently removed his name from the company's register of directors.

He proffered some documentary evidence tending to show that he was an initial subscriber of shares and Director of the company. To that end, he submitted, that, all the essential company records showed that he owned 30% of the shares in the company. He contended that he subscribed for the shares in terms of a shareholding agreement he signed on 27 May 2006.

The first applicant cast aspersions on the first respondent alleging that since 2014 he had conducted himself contrary to the Shareholders Agreement. He further accused the first respondent of making decisions outside the forum of the Board of Directors.

It was his averment, that, in frustration, he offered to sell his shares to the first respondent but he was evasive and non-committal. Eventually, the first respondent turned the tables against him and began to dispute his shareholding in the company. They, however, subsequently met and agreed that the shares be evaluated before disposal. Despite having ordered that evaluation of the shares be carried out, the first respondent, again, made an about turn and denied ever having entered into such an agreement with him.

Having failed to resolve their differences amicably, the first applicant alleged that the first respondent proceeded to suspend him from work leading to his dismissal from employment. He has since challenged his dismissal in the courts.

On that score, he complained, that, the first respondent had violated his rights as a shareholder which rights are protected by the Companies Act. Consequently, he implored the court a quo to provide him with the following relief:

“WHEREUPON after reading documents filed of record and hearing counsel;

IT BE AND IS HEREBY ORDERED THAT:

1. A forensic audit and valuation of the 3rd respondent and its investments in the 4th to 38th respondent be and is hereby ordered to be conducted by an accounting firm registered in terms of the Public Accounts and Auditors Act [Chapter 27:12] to be appointed by the 39th respondent within 5 days of granting this order, all fees and costs of the evaluation being paid by the 3rd respondent.

2. 3rd respondent be and is hereby ordered to pay the applicants the full value of thirty percent (30%) of its total issued ordinary shares and 30% of its investments in the 4th to the 38th respondents within 5 days of completion of the forensic audit and valuation; such value having been established in terms of paragraph 1 above.

3. 3rd respondent be and is hereby directed to reduce 3rd respondent's share capital once the full amount of its thirty percent (30%) issued ordinary shares have been paid by 3rd respondent.

4. The Sheriff of the High Court and/or his lawful deputies be and are hereby ordered to execute terms of paragraph 2 above.

5. The 1st respondent pays the costs of suit on a legal practitioner and client scale.”

The respondents opposed the application, arguing that the first applicant was never a shareholder of the company.

They accused him of relying on forged fraudulent documents and challenged him to prove how he had acquired the alleged company shares.

Riding on that challenge, they raised a point in limine disputing his locus standi.

They submitted, that, only a member of a company, in the form of a shareholder, can bring an application in terms section 196 as read with section 198 of the Companies Act. The first applicant, not being a shareholder of the company, was not a member of the company, and, therefore, not qualified to bring the application before the court a quo.

As a second point in limine, the respondents challenged the first applicant's authority to represent the second applicant.

The court a quo found, that, the application was founded on material falsehoods based on fraudulent documents. Both the Shareholders Agreement and the share transfer documents were adjudged to be fraudulent documents. It also found, that, in relation to the point in limine, the applicant was unable to explain two conflicting CR2 documents.

Thus, the court a quo upheld both points in limine.

Ultimately, the learned judge a quo upheld the two preliminary points, and, in the process, found, that, the application was bad at law in that it did not meet the requirements of section 95 as read with section 196 of the Companies Act.

In the result, he dismissed the application with costs....,.

For the sake of completeness, I however feel constrained to briefly deal with his other complaint, that, after finding that the first applicant had no locus standi, the court a quo ought to have struck the matter off the roll instead of dismissing it.

There is absolutely no merit in this submission for the simple reason, that, the court was clothed with an unfettered discretion.

It is trite, that, Appellate Courts are always loathe to interfere with the exercise of judicial discretion save where the exercise of such discretion is injudicious or contrary to public policy.

The learned judge a quo was alive to the fact that he had discretion whether or not to dismiss the application.

Having carefully examined the facts and the law he exercised his discretion with admirable efficacy. In dismissing the application, he placed reliance on the case of Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232 (HC) where McNALLY J…, had this to say:

“Where the facts are in dispute, the court has discretion as to whether to dismiss the application or allow the matter to go to evidence. The first course is appropriate where an applicant should, when launching his application, have realised that a serious dispute of fact was inevitable.”

The learned judge a quo took the view, that, the applicant took a conscious risk by taking the application route in the face of glaring facts pointing to a serious dispute of facts.

For that reason, he had to bear the consequences of the ineptitude of his lawyers who chose the wrong procedure.

The course of action taken by the learned judge a quo finds support in the dictum of MULLER JA in Tamarillo (Pty) Ltd v BN Aitken (Pty) Ltd 1982 (1) SA 398 (AD)…, quoted with approval in Masukusa v National Foods Ltd & Anor 1983 (1) ZLR 232 (HC) where he observed that:

“A litigant is entitled to seek relief by way of notice of motion. If he has reason to believe that the facts essential to the success of his claim would probably be disputed, he chooses that procedure at his peril; for the court, in the exercise of its discretion, might decide neither to refer the matter for trial nor to direct that oral evidence on the disputed facts be placed before it, but, to dismiss the application.”

The first applicant had previously engaged the first respondent and they had failed to reach an amicable settlement.

He therefore knew, as a matter of fact, that, the respondents were disputing his claim that he was the owner of any shares in the company. By extension, he knew, or ought to have known, that, they were also disputing his documentary evidence tending to prove that he had a 30% shareholding in the company otherwise they would not have disputed his claim.

The first applicant's conduct, in providing fraudulent evidence, as demonstrated elsewhere in this judgment, could only aggravate matters to his detriment.

This is, therefore, a proper case where the naivety of the applicants lawyers was properly visited on their clients as the applicants were not entirely free from blame.

In the final analysis, no fault or misdirection can be laid at the learned judge a quo's door in his treatment of the substantive issues and verdict.

This is an application for summary judgment in the sum of US$86,927=90 said to represent arrear rates for the period spanning from June 2012 to June 2014.

The statement for the bill for what the applicant contends is owed was attached to the founding affidavit as annexure “A”.

The founding affidavit was deposed to by one Spekiwa T. Guta, who, in paragraph 1 thereof stated:

“1. I am the city legal officer of the applicant in this matter and all the facts I depose hereto are to the best of my knowledge true and correct.”

Over and above the amount claimed stated above, the applicant, in the draft order, also seeks an order for collection commission on the said amount; interest at the prescribed rate; costs of suit on an attorney-client scale.

The application was opposed on the following grounds:

1. The deponent to the founding/supporting affidavit did not establish authority to depose to the affidavit or that the facts she deposed to are with her knowledge;

2. The relief sought for collection commission is incompetent;

3. In the draft order, the applicant is seeking interest at the rate of 5% per annum yet annexure “A” shows that interest was being charged on the account at 6% per month. In the result, the interest that was levied on the account was therefore unlawful; and

4. The claim is defective for want of compliance with Rule 13(4) of Order 3 of the High Court Rules 1971 in that it does not set out separately the interest component from the capital sum.

1. The respondent has a bona fide defence as advanced in the preceding points in limine;

2. Via publication in the press, the applicant offered a special dispensation whereby if the respondent paid off half the amount owed, the other half would be written off. The respondent accepted the offer and the arrangement became binding on the parties and the agreement is still to run its course;

3. The calculations in annexure “A” are flawed. They are effective from February 2009 to July 2014 yet the claim avers that the period runs from June 2012 to June 2014 and is for arrear rates only, but annexure “A” factored in water levy, rates, road levy, sewage, solid waste and monthly interest of 6%. This informs on the question of whether or not part of the claim has not prescribed as well as the accuracy of the computation of the amount due.

It is proposed to deal first with the points raised in limine....,.

This point should not have been raised as a point in limine. It goes to the root of part of the respondent's defence as it hinges on the merits.

The applicant's attempt to justify this rate of interest was convoluted.

It did not nail its colours to the mast, as, in one breath, it alleged the 6% rate of interest was per annum yet annexure “A” to the supporting affidavit clearly shows that it was being levied per month - which is clearly illegal.

In the heads of argument, in paragraphs 15 and 16, the applicant contended thus:

“15. The applicant is charging 6% interest per annum on outstanding arrears in terms of section 274(2) of the Urban Councils Act. Section 274(2) reads as follows:

“…, the council may charge and recover interest thereon reckoned from the due date at such rate as may be fixed by the Council which is not more than one per centum per annum above the rate of interest charged by the State in respect of loans made to local authorities at the time the rate was fixed in terms of subsection (1).”

16. In the premises, the applicant is charged 5% interest per annum by the State in respect of loans made to local authorities. Accordingly, it is entitled to charge 6% per annum on outstanding arrears.”

However, in paragraph 14 of its Heads, the applicant had contended, that, the 6% interest per annum was levied in terms of its by-laws.

Given the exitant contradictions regarding this issue, coupled with the fact that section 274(2) of the Urban Councils Act was never pleaded in the summons, and that the rate of interest levied by Government on loans advanced to the applicant is not trite, there is a material factual dispute which cannot be determined at this stage no matter how bold the approach the court takes.

The plaintiff and defendant got married on 18 September 2007. The plaintiff was a widower and the defendant was a divorcee at the time of the marriage. Each had two children from the previous marriage but they had no children together. They had started cohabiting two years before they got married.

Sadly, two years after solemnizing their marriage, the plaintiff instituted divorce proceedings on 19 November 2009 claiming an order for a decree of divorce and ancillary relief.

He alleged, that, the marriage had irretrievably broken down owing to the following reasons:

(a) The defendant had allegedly verbally abused and ill-treated his children from his former marriage.

(b) That the parties do not live together as husband and wife and they are not sharing conjugal rights which scenario is inconsistent with a normal marriage relationship; and

(c) That the parties quarrel verbally quite often and they have lost all love and affection for each other....,.

In her plea, the defendant..., denied any wrongdoing on her part and went on to allege that their marriage had been besieged by mistrust and unfaithfulness which made the parties intolerant of each other....,.

The parties appeared before a judge for a pre-trial conference whereat it was agreed that the issues for trial were these:

“(a) Whether or not the breakdown of the marriage was caused by the issues outlined by plaintiff in his declaration or by the issues outlined by the defendant in her plea;

(b) Whether the property listed by the defendant forms part of the matrimonial property or not; and

(c) What is the equitable sharing of the available matrimonial assets.”...,.

It was clear from their stories that their marriage had indeed irretrievably broken down although the defendant, at one stage, had told the court that she did not want the marriage to be dissolved. Her reason for that was that the plaintiff had infected her with the HIV virus in 2006 before they solemnized their marriage in 2007.

After the infection, she discovered that he was HIV positive and was taking ARVs.

When she also wanted access to ARV treatment at Mbizo Barracks Clinic she was told she could not as she was not a soldier or the plaintiff's wife. So, she decided to marry him in 2007 in order to access ARV treatment as the plaintiff's wife.

The marriage was a marriage of convenience.

She, however, conceded, that, ARV tablets are now easily available at hospitals and clinics. She further conceded that since their marriage had irretrievably broken down it should be dissolved.

The plaintiff denied infecting the defendant with the HIV virus.

It is difficult to make a finding on which of the parties brought the HIV virus into their new marriage as they both admitted that they did not go for an HIV test before they started to cohabit. One or both of them could have got the virus from the previous marriage.

This is an application wherein the applicant seeks a provisional order whose interim relief is couched as follows:

“(1) That the applicant shall be allowed unhindered access to the farm known as Lot 2 of Lot 36 Essexvale also known as Avalon Farm, Esigodini and to carry out thereupon all normal farming activities.

(2) That the respondents, its agents, assignees, associates, or employees be and are hereby interdicted and stopped from interfering with the applicant's operation of the farm known as Lot 2 of Lot 36 Essexvale also known as Avalon farm.”

The facts of the matter are that the applicant was allocated Lot 2 of Lot 36 of Essexvale (Avalon) in Umzingwane Matebeleland South Province by the Ministry of Lands in an offer letter dated 4 December 2014.

He then went to the farm and sought to occupy same.

He alleges that an agreement had been reached with the first respondent who had agreed to vacate the farm in January 2015, but, that, on 10 January 2015, the first respondent reneged on his word and stopped the applicant's workers from moving into the farm.

The applicant alleges, that, the first respondent then went on to evict the rest of his workers who were at the farm. He alleges that the first respondent has disturbed his peaceful possession of the farm.

The first respondent has raised points in limine in opposition to the urgent application:

(i) He avers, that, there is no urgency in this matter as evidenced by the fact that the applicant has never been in occupation of the farm in the first place.

He avers that he has always been in lawful occupation of the farm and that he never suggested that he would vacate the farm by 10 January 2015.

He alleges that the applicant sent his workers to the farm without the first respondent's consent thereto.

He avers, that, his legal practitioners then wrote to the applicant advising him that due process had to be followed in taking over the farm and that he could not forcibly dispossess him of the farm.

(ii) The first respondent also raises another point in limine which is to the effect that the relief sought in the provisional order is incompetent as the provisional order seeks interim relief that is the same as the terms of the final order sought and has in fact the import of a final order as opposed to interim relief.

Firstly, I will therefore move on to deal with the issue of the relief sought.

It is clear that the terms of the final order sought are similar to the interim relief and they are:

“(1) That the Provisional order set out herein be and is hereby confirmed.

(2) That the respondent shall pay the costs of suit at an attorney client scale.”

The interim relief itself, which I have alluded to earlier herein, has the import of a final order as it is to the effect that the applicant be given unhindered access to the farm and that he carries therein normal farming activities as well as that the respondent be interdicted and stopped from interfering with the applicant's operations on the farm.

This clearly is a final order couched as interim relief.

It is indeed undesirable to have such a state of affairs because the applicant virtually seeks to obtain final relief without having proved its case. This is because interim relief is obtained merely on establishing a prima facie case as opposed to a proven case: refer to the case of Kuvarega v Registrar General 1998 (1) ZLR 188 (H).

This is an irregularity; the applicant, in my view, wants to be granted final relief on a platform that requires that only a prima facie case be established.

This is not proper and the application cannot succeed by reason of this irregularity.

Again, on the issue of urgency, the problem is that the applicant seems to have sought to occupy the farm without following due process.

The applicant must wait for the law to take its course before creating an urgency for himself.

It would seem the applicant failed in his bid to despoil the first respondent, rather than that he was in peaceful and undisturbed possession as he clearly failed to obtain the possession in the first place.

Again, even if I were to overlook that irregularity; on the merits of the application, the applicant would still need to satisfy the three requirements for an interdict, these being;

“(1) A right which, though prima facie, is open to some doubt;

(2) A well grounded apprehension of irreparable injury;

(3) The absence of any other remedy.”

This is enunciated in the case of Zesa Staff Pension Fund v Mushambadzi SC57-02.

The applicant in this case has produced an offer letter, so, one could hold that the first requirement has been met; a prima facie right has been established, although it is open to some doubt when one looks at the first respondent's papers. The requirement is nonetheless satisfied.

The second remedy, of a well-grounded apprehension of irreparable injury…, is the second in line to be satisfied. I have underlined the words well grounded to emphasize the aspect of the foundation of the fear, it need not be just a fear but a well grounded fear.

In my view, the applicant, upon receipt of the offer letter, as annexed to his papers, should have followed due process in seeking to occupy the farm.

By due process, I mean, that, rather than confronting the first respondent and advising his imminent take over of the farm, he should have left it to the land authorities to notify the first respondent to vacate the land and give him a reasonable period within which to leave; this, moreso in light of the letter from the Ministry of Lands, dated 17 May 2007, acknowledging that the first respondent is at the farm, which is the subject matter of this dispute, and he has made an application to the Ministry of Lands for an offer letter.

Section 3(2)(a) of the Gazetted Land (Consequential Provisions) Act [Chapter 20:28] provides thus:

“Every former owner or occupation of Gazetted Land (a) referred to in paragraph (a) of the definition of 'Gazetted Land' in section 2(1), shall cease to occupy, hold or use that land forty-five days after the fixed date, unless the owner or occupier is lawfully authorized to occupy, hold or use that land.”

This then takes us to the next question of; what is lawful authority?

Lawful authority, in my view, is authority given by the land acquiring authority.

The letter that the first respondent understands to authorize him to remain in occupation of the farm is by the Chief Lands officer from the Ministry of Lands. The offer letter given to the applicant is by the Ministry of Lands.

It is my considered view, that, the Ministry of Lands cannot allow a party to occupy land, then offer the land to another without following the requirements of the rules of natural justice that demand that the one who understands has a right to remain in occupation, should be duly notified of the intention to take that right away, make representations, if any, and a decision be taken subsequently after all concerned have been heard.

It is not disputed, that, the first respondent has remained in occupation of the farm for years by virtue of the written assurance given to him by the same Ministry, which has now given the applicant an offer letter, without first duly notifying the first respondent of the current position.

In my view, administrative decisions should be taken within the ambit of the law.

Whilst the Lands Ministry, as the acquiring authority, is vested with all rights in relation to State land, such authority should be exercised with due consideration of the rules of natural justice.

They wrote to the first respondent and made him believe that he could remain in occupation of the land; they should have, at the time they took the decision to offer the land to someone else, advised the first respondent as such.

The first respondent also challenges the purported offer letter to the applicant as being fake, for the simple reason that it now offers the applicant what the first respondent believes he is rightfully occupying by virtue of authority from the Lands Ministry.

Unfortunately, the Ministry of Lands, as well as the Chief Lands officer who purportedly authored the letter dated 17 May 2007, were not cited as parties to these proceedings.

When I pointed this out to the applicant's counsel, he submitted, that, he chose to have the application proceed without the citation of and service of the application on the Ministry.

This creates difficulty in that we are now faced with two conflicting scenarios created by the same Ministry but they are not here to enlighten the court on which is which.

The court finds itself hamstrung in this situation as only the lands office could vouch for the authenticity of the offer letter that is being challenged.

The plaintiff issued summons for civil imprisonment against the defendant for failure to pay a debt in terms of an order granted against him.

On 29 November 2017, the plaintiff obtained judgment against the defendant for payment of US$360,000 together with interest at the rate of 12% per annum plus US$8,625 together with VAT thereon. Upon execution, the Sheriff returned a nulla bona return prompting the plaintiff to file for civil imprisonment.

The plaintiff's case is that the tobacco growing loan giving rise to this debt was financed using offshore funding and is payable in United States dollars in terms of applicable legal instruments. The plaintiff insists that the defendant ought to pay the outstanding debt in United States dollars and refutes that the defendant has paid back the loan in full.

The defendant has refused to pay the debt in United States dollars and insists that the loan ought to be paid in RTGS dollars.

The defendant resists civil imprisonment on the basis that he paid the debt in full.

According to the defendant, he has paid a sum of $426,325=69 and an additional $50,0000. He submitted that the plaintiff has sought to apply a rate of exchange to repayments made on 18 September 2019 and 18 June 2020 respectively in violation of the law which is that all debts that existed prior to 22 February 2019 are payable at the rate of 1:1 to the RTGS dollar and this includes judgment debts.

He contended, that, the claim for civil imprisonment is misguided as the plaintiff has no cause of action against him and urged the court ought to dismiss the summons for civil imprisonment.

A summons for civil imprisonment calls upon a debtor to show cause why he should not be imprisoned for failure to pay a debt.

The new High Court Rules 2021, published under Statutory Instrument 202 of 2021, SI202 of 2021, make provision for imprisonment for a debt in Rule 73.

In terms of Rule 73(4) of the High Court Rules, before a court makes an order for civil imprisonment, it should satisfy itself that the judgment debt has not been paid. In most civil imprisonment proceedings, liability is not an issue, in which case the court's enquiry is limited to the debtor's ability to service the debt and the appropriateness of civil imprisonment.

Where a debtor challenges civil imprisonment proceedings on the basis that he does not owe a contractual obligation or has cleared it, it is incumbent upon the court to resolve the dispute regarding liability first before delving into appropriateness of civil imprisonment.

In these proceedings, the issue is whether the balance due and outstanding by the defendant, as at 22 February 2019, was due in RTGS dollars at the rate of 1:1 and whether the respondent has discharged his liability for the debt.

The court must resolve, first, the question of the applicable currency and decide whether the defendant has cleared the debt. If this question is answered in the affirmative, that is the end of the matter.

If the court finds that the defendant owes in terms of the court order granted against him and has neglected and failed to pay in terms of the order, the court will be required to enquire into the respondent's ability and willingness to pay the debt in compliance with section 49(2) of the Constitution of Zimbabwe.

The new rules make specific reference to section 49(2) in Rule 73(1), unlike Rule 370, its predecessor, thereby giving guidance on the subject.

Section 49(2) of the Constitution stipulates as follows:

“(2) No person may be imprisoned merely on the grounds of inability to fulfil a contractual obligation.”

The Constitution bars imprisonment of a person simply on the basis of a failure to fulfil a contractual obligation. Section 49(2) of the Constitution protects the right to personal liberty and enjoins a court dealing with a summons for civil imprisonment, where it is satisfied that the debtor has not paid the amount due, to enquire into the question of the judgment debtor's failure to pay the amount due.

What this entails is that an indigent person will not be imprisoned for a debt simply because she owes.

In terms of Rule 73 of the High Court Rules, it must be shown, that, the debtor has the means to pay, earn the amount due, and that his failure or refusal to pay the amount due is wilful.

The fact that a debtor owes a contractual obligation does not necessarily call for his civil imprisonment.

Civil imprisonment is a drastic measure which should be resorted to only as a last resort and only in instances where a debtor is able to service the debt but has shown an unwillingness to discharge the obligation. It is for this reason that the court is enjoined to carry out an enquiry to establish the financial position of the debtor and attitude to payment of the debt. The manner in which the debt will be cleared is considered in a case where the debtor is able to service the debt and shows a willingness to settle it.

The plaintiff is in the business of financing tobacco growing projects. Sometime, in May 2013 and July 2014, the defendant was advanced money and crop inputs in terms of a tobacco grower contract agreement. It obtained exchange control approval for the 2013-2014 and 2014-2015 tobacco growing seasons and was able to source foreign currency and purchase inputs to advance to tobacco growers: see Annexure C1and C2.

The defendant failed to pay back the grower debt. The loan advanced to the respondent was offshore funds advanced in United States dollars and is a foreign obligation denominated in foreign currency.

There are a number of instruments that permit tobacco merchants to recover tobacco growing loans advanced in United States dollars.

Financing and repayment of tobacco production is regulated by section 4(1)(a) of the Exchange Control (Tobacco Finance) Order, 2004, SI61 of 2004 which states, that, all auction and contract tobacco shall be paid for in United States Dollars. Section 5(3) provides that where a contractor has financed a tobacco grower by accessing offshore funds for that purpose, the amount used to finance the grower may be set off against the price of tobacco sold to the contractor by the grower.

The purpose of the Exchange Control Order is to ensure that where offshore funds are used to finance tobacco production, the contractor is able to recover the money from growers, in foreign currency, to enable the contractor to repay the foreign loan. A repayment in United States dollars or set off against the price of tobacco sold to the contractor enables the tobacco merchant to recoup his United States dollar investment.

The Zimbabwean dollar was re-introduced on 24 June 2019 in terms of SI142 of 2019.

On 29 July 2019, the Reserve Bank issued the Clarification to the Tobacco Industry, Circular No.7 of 2019, states in section 2 as follows:

“2. Treatment of US$ Denominated Inputs Advanced to Growers:

2.1 Tobacco merchants have the option to use foreign currency sourced from local banks (through global facilities) or offshore financing to procure inputs for distribution to tobacco growers under contract arrangements.

2.2 Where tobacco growers receive US$ input loans, repayment to the tobacco merchant shall be in foreign currency in order to protect the tobacco merchant's investment.”

Circular number 7 was issued in terms of section 35(1) of the Exchange Control Regulations, SI106 of 1996.

Section 2 of Circular No.7 states, that, a tobacco grower who obtains USD denominated input loans from a tobacco merchant is obligated to pay back in foreign currency.

The purpose of the section is to provide clarification on payment to tobacco merchants, by growers, where a tobacco merchant has accessed offshore funding to finance the tobacco growing. The rationale of section 2 of the Clarification to the Tobacco Industry, Circular No.7 of 2019 is to protect a tobacco merchant's investment. It would be absurd to expect that the merchant recovers the loan in RTGS when he obtained a USD-denominated input loan himself to finance the tobacco growing.

The legal framework available entitles a tobacco merchant, who has advanced United States dollars denominated input loans to a tobacco grower, to recover the loan in foreign currency.

Section 4(1)(d) of Statutory Instrument 33 of 2019, SI33 of 2019 deems all assets and liabilities, including judgment debts denominated in United States dollars, immediately before 22 February 2019, to be valued in RTGS dollars at a rate of 1:1: see Zambezi Gas Zimbabwe (Pvt) Ltd v NR Barber (Pvt) Ltd SC03-20.

There was agreement over the import of this section.

The parties disagreed over the applicability of this section to this case.

The defendant 's contention, that, upon the introduction of the RTGS dollar, on 22 February 2019, all assets and liabilities that were expressed in United States dollars were converted to RTGS at the rate of 1:1 and therefore that this particular loan is payable in RTGS lacks merit.

The defendant lost sight of the fact, that, there are instances when this section does not apply.

Finance Act No.2 amended the Reserve Bank of Zimbabwe Act [Chapter 22:15] and introduced section 21(1) as section 44C. Section 21(1) of Finance Act No.2 of 2019 makes it clear that the conversion at the rate of 1:1 does not apply in the case of foreign loans and foreign obligations denominated in any foreign currency and stipulates as follows:

“(a) Foreign loans and foreign obligations denominated in any foreign currency, which shall continue to be payable in such currency.”

All these instruments ought to be read in harmony with the Finance Act.

The defendant submitted, that, Exchange Control (Tobacco Finance) Order, S.I.61 of 2004 being subsidiary legislation, has the undesirable effect of overriding the provisions of Finance Act No.2 of 2019, being the enabling legislation.

It is a fundamental rule of law that the purpose of subsidiary legislation is to supplement primary legislation. Subsidiary legislation must not be ultra vires the enabling Act. Subsidiary legislation must not conflict with, run counter to, or replace enabling legislation.

Whilst debts pre-existing 22 February 2019 are payable at the rate of 1:1 in RTGS, foreign obligations are ring-fenced under section 21 of Finance Act No.2 of 2019. Foreign loans and obligations are an exception.

The Exchange Control (Tobacco Finance) Order makes provision for foreign loans and foreign obligations denominated in any foreign currency and provides that these shall continue to be payable in the currency involved.

This setup is contemplated under the Finance Act.

Consequently, the Exchange Control (Tobacco Finance) Order, SI61 of 2004 supplements Finance Act No.2 of 2019 and has no effect of breaching its provisions or replacing it. The two pieces of legislation are not in conflict with each other and ought to be read in harmony.

In Zimbabwe Leaf Tobacco (Pvt) Ltd v Valentine T. Mushayakarara HH220-20, the court dealt with a matter with similar facts to this case. The court considered the implications of section 4(1)(d) of S.I.33 of 2019, Finance Act No.2 of 2019, the Exchange Control (Tobacco Finance) Order of 2004, and Exchange Control Circular No.7 of 2019 and held, that, where a tobacco contractor has utilised offshore funds to finance tobacco growers, he is entitled to recover the loan in United States dollars.

The decision of the court was upheld on appeal.

In casu, the plaintiff does not dispute, that, the plaintiff sourced offshore funds in United States dollars and advanced United States dollar-denominated inputs to the defendant. The respondent did not refute that the money advanced to the defendant was part of a foreign loan obtained by the plaintiff in accordance with the 2013-2014 and 2014-2015 tobacco farming season with exchange control approvals.

In Breastplate Service (Pvt) Ltd v Cabria Africa PLC SC66-20, the court zeroed in on issues regarding the intention of the parties in a contract and held, that, where the parties have agreed and expressed their intention that payment must be made in foreign currency, a court must give effect to that intention.

The defendant entered into an agreement well aware of the nature of the agreement he was binding himself to. The contract defines “grower debt as the value of the crop finance.''

It expressly states, that, payment to the plaintiff would equate to the crop finance.

The defendant signed an acknowledgment of debt, in June 2015, acknowledging owing sums in United States dollars.

The issue of value and recovery has always been within the parties minds.

The nature of the debt entitles the plaintiff to recover the loan in United States dollars. There is a correlating foreign obligation to repay a foreign loan in United States dollars. The loan advanced, being a foreign obligation, the defendant is expected to pay the money back in United States dollars. This obligation is payable in United States dollars and is an exception to section 4(1)(d) of S.I.33 of 2019 which is not applicable to the circumstances of this case.

I must conclude, that, based on Zimbabwe Leaf Tobacco (Pvt) Ltd v Valentine T. Mushakarara HH220-20, the defendant was required to pay back the loan in United States dollars because the tobacco growing contract was financed from off-shore funds. The defendant has an obligation to pay the debt in foreign currency. The plaintiff has an entitlement to insist on payment in United States dollars.

The plaintiff denied that the defendant has discharged the judgment debt in full and submitted, that, what appears on p13 of the record is a repayment plan and that the debt has not been discharged.

This assertion was not disputed.

The summons for civil imprisonment is for USD$360,000. The plaintiff's explanation for claiming the entire debt, despite that the defendant has been servicing the debt, is that the repayment plan is silent on the issue of interest, which has not been paid and hence claims the entire sum granted in terms of the order.

The repayment plan produced shows instalments due, payments made, and the balance outstanding.

It shows, that, the plaintiff continued to receive payments after the order was granted.

As at 23 July 2018, the balance outstanding was US$193,844=31. The defendant claims that he had paid a total of UD$161,355 as at this date. The defendant submitted, that, entries of Z$50,000 instalments of 31 December 2018 and 31 December 2019 were made in error.

The defendant needed to show that the payments made after this cleared the debt.

On 18 September 2019, the defendant paid Z$25,000 which was converted to US$1,804=34. On 18 June 2020, Z$190,000 (9,600) was paid. On 25 June 2020 the defendant paid Z$50,000 and it is not known how much this amount translated to in United States dollars as at that date. This amount does not, even if one takes into account the Z$50,000 paid later on and the Z$100.000 purportedly paid in error, clear the debt.

The amounts paid, albeit in RTGS dollars, reduce the balance but are not sufficient to discharge the debt in full.

The appearance is that the defendant still owes the plaintiff part of the debt which he has failed to pay.

According to the plaintiff, there is a balance of USD$182,414.

The defendant has failed to show that he settled the debt in full. The court has considered, that, in addition to the capital debt, it has not been shown that the interest, VAT, and additional sum of US$8,625 has been paid.

The defendant contended, that, because the plaintiff accepted payment in RTGS, it is estopped from claiming in United States dollars.

No authority was advanced for the proposition, that, because the plaintiff accepted payment in RTGS dollars, it is estopped from claiming payment in United States dollars.

The fact remains, that, the debt is a foreign obligation liable to be paid in foreign currency.

The law permits settlement of debts in RTGS dollars for obligations sounding in United States dollars at the interbank rate.

In any event, the applicant is amenable to receiving payment in RTGS dollars at the interbank rate.

The parties are to set down the matter for an enquiry to be carried out in terms of the Rules.

It is at this hearing that the court will determine how much has been paid so far, consider how much the interest component of the debt is, and determine the exact figure owed.

Accordingly, it is ordered as follows:

1. The parties are to set the matter down for an enquiry to be conducted in terms of Rule 370 of the High Court Rules, 1971.

2. Costs shall be in the cause.

This is an application for review of the Judicial Service Commission's decision to advise the President that the question of removing the applicant from the office of a judge ought to be investigated.

The applicant is a judge of the Supreme Court and the Constitutional Court of the Republic of Zimbabwe.

The first respondent, the Judicial Service Commission (JSC) is a corporate body established in terms of section 189 of the Constitution of Zimbabwe Amendment (No.20) Act 2013.

The second, third and fourth respondents are the members of the tribunal appointed by the President to enquire into the question of the removal of the Judge from office.

The fifth respondent is the Permanent Secretary of the Ministry of Justice Legal and Parliamentary Affairs, the Co-ordinator of the Special Anti-Corruption Unit in the Office of the President as well as the Secretary of the Tribunal.

The sixth, seventh and eighth respondents are the President of the Republic of Zimbabwe (the President), the Minister of Justice, Legal and Parliamentary Affairs (the Minister) and the Attorney General of Zimbabwe (the AG) respectively.

As an administrative authority, the Judicial Service Commission (JSC) has a responsibility to take administrative action which may affect the rights, interests or legitimate expectations of any person. In so doing, section 3(1)(a) of the Administrative Justice Act [Chapter 10:23] (AJA) enjoins the JSC to act lawfully, reasonably, and in a fair manner.

On 13 December 2019, the Judicial Service Commission (JSC) held an extraordinary meeting. It resolved at that meeting to advise the President that the question of removing the applicant from the office of a judge ought to be investigated. The JSC addressed a letter to the President tendering the advice.

As his obligation, in terms of section 187(3) of the Constitution, the President appointed a 3 member Tribunal to enquire into the matter. As already indicated, the members are the second to fourth respondents, with the fifth respondent as its Secretary.

In the Zimbabwean Government Gazette Extraordinary dated 17 March 2020, the President made Proclamation 1 of 2020 which was published as Statutory Instrument 70 of 2020, SI70 of 2020 wherein, among other things, he established the Tribunal, appointed its members, Secretary, and set out the Tribunal's terms of reference.

The applicant is aggrieved by the Judicial Service Commission's decision to advise the President that the question of removing the former from the office of a judge ought to be investigated.

Acting in terms of section 4(1) of the Administrative Justice Act, the applicant has applied to this court, on review, to set aside the Judicial Service Commission's decision on the basis that it failed to act lawfully, reasonably, and fairly in coming up with the decision to advise the President. In other words, the applicant takes issue with the procedure adopted by the Judicial Service Commission (JSC) in coming up with that decision.

He also seeks certain consequential relief.

I pause to set out the Tribunal's terms of reference. They are:

“(i) To investigate into the matter of the removal from office of Honourable Justice Francis Bere JA;

(ii) To investigate into the matter of Honourable Justice Bere's conduct, whether it can be deemed to have been tantamount to gross misconduct;

(iii) To investigate whether the Honourable Judge conducted himself or presided over matters where there was conflict of interest;

(iv) To investigate any other matter which the Tribunal may deem appropriate and relevant to the enquiry;

(v) To consider all information submitted by the Judicial Service Commission and any other relevant information in order to arrive at an appropriate recommendation to the President;

(vi) To recommend to the President whether or not the Honourable Judge should be removed from office in terms of section 187 of the Constitution; and

(vii) To report to the President, in writing, the result of the inquiry within a period of five (5) months from the date of swearing in of the members.”

The grounds on which the application for review is based are:

“1. The absence of any of the three jurisdictional grounds for the removal of Judge prescribed under section 187(1) of the Constitution and the incontrovertible facts and circumstances upon which this would be founded;

2. The absence of specificity and lack of particularity of the exact nature of the conduct, the identity of a complainant, and the prejudice or quid pro quo to confirm the nature and gravity of the case;

3. An objection to the appointment of the Permanent Secretary, as secretary of the Tribunal, on the grounds and basis that she was an actor in the process leading to the applicant's suspension and the establishment of the Tribunal, something which gives credence to the applicant's contention that the decision to refer his matter to the President was completely unreasonable;

4. There is no prima facie material that has been alluded to in the Proclamation that would form the basis for a referral of a matter involving a senior Judge;

5. Gross irregularity in that the JSC, having procedurally decided to take a second bite at the cherry, failed to afford applicant the right to be heard in relation to the subsequent reply from Mr Ndudzo, at or before its purported meeting of 13 December 2019 in violation of the audi alteram partem rule;

6. The JSC, having reached a decision on the subject matter from the same basis and circumstances on 21 November 2019, and having communicated this to the applicant, could not revisit the matter subsequently as it had become functus officio;

7. The JSC lacked a quorum to sit on 13 December 2019 and to reverse its earlier decision;

8. To the extent that the allegations are understood and based on the documents attached to the founding affidavit, the allegations made are petty and do not meet the elevated criteria of gross misconduct or gross incompetency.”

For the purposes of this application, the issue of the investigation on the question of the removal of the applicant from the office of a Judge arose from a phone call made to Mr Ndudzo, who is a legal practitioner, as well as a complaint raised against him by Mr Moxon. The latter related to the applicant presiding over a matter between Meikles Limited and Widefree Investments (Pty) Ltd trading as Core Solutions.

Since I am required to determine this application on procedural grounds, it is not necessary for me to delve into the substance and details of the phone call and Mr Moxon's complaint.

All the respondents opposed the application....,.

It was at this meeting of the Judicial Service Commission (JSC) that the decision was taken to advise the President that the question of the removal of the applicant from the office of a judge ought to be investigated.

The parties are agreed that the membership of the Judicial Service Commission (JSC) is 13, but, there was a single vacancy at the material time. The parties are agreed that the Constitution allows the JSC to function all the same provided it has a quorum. Its quorum is 7, being half of the membership of the JSC.

The applicant made a bare allegation that only 6 members were present at the 13 December 2019 meeting.

He does not mention the names of the members who were present and of those who were not in attendance. He does not attach any supporting affidavits from either those present or those whom he alleges were absent. He does not attach a copy of the minutes of the meeting of 13 December 2019.

It is trite that an application stands or falls on the averments made in the founding affidavit: see Muchini v Elizabeth Mary Adams & Others 2013 (1) ZLR 67 (S).

It also is trite that he who alleges must prove: see ZUPCO v Parkhorse Services (Pvt) Ltd SC13-17; Circle Tracking v Mahachi SC04-17.

Counsel for the applicant conceded, that, all that the applicant has done is to allege that there was no quorum.

He argues, that, on the basis of the importance of the matter that bare allegation must shift the onus to the Judicial Service Commission (JSC) to prove that there was a quorum.

It is clear that the applicant relies on rumours for his allegation that there was no quorum.

Matters are decided on the law, facts, and the evidence - and not rumours.

The Judicial Service Commission (JSC) says there was a quorum. It is not the applicant. It suffices that it challenges the applicant to prove its allegation. The JSC has no obligation to assist the applicant to prove the latter's allegation.

I find that the applicant has failed to substantiate its allegation that there was no quorum at the meeting of 13 December 2019.

It is apparent that the appellant made unsubstantiated allegations.

It is an accepted principle of our law that it is the duty of a person who makes an allegation to prove the allegation: see Mavrick Trading (Private) Limited v Double Services HH54-17; Macro Plumbers (Pvt) Ltd v Sheriff of Zimbabwe N.O. and Another HH57-15; ZUPCO Ltd v Pakhorse Services (Pvt) Ltd SC13-17.

In view of the well-grounded principles set out above, we find that the appellant's second and third grounds of appeal are devoid of merit.

This is an appeal against the judgment of the High Court dismissing, with costs on a legal practitioner and client scale, an application for condonation of the failure to apply for the rescission of a default judgment granted in Case No. HC2424/17 within the time stipulated by the High Court Rules 1971.

The appellant had simultaneously filed an application for the rescission of the default judgment. However, this part of the application was abandoned following strenuous opposition by the respondents and with the concurrence of the court a quo.

The respondents issued summons against the appellant on 21 March 2017, in Case No. HC2424/17, for the payment of $98,979=, together with interest, in respect of sums allegedly misappropriated by the appellant from the second respondent.

The appellant disputed the claim and denied owing any monies as alleged.

A pre-trial conference was set down for 9 October 2017 and was postponed to 26 October 2017. The appellant failed to appear at the pretrial conference because he was unaware that he was required to be present. His legal practitioner also did not appear himself but was represented by his colleague who was unable to explain the appellant's absence.

A default judgement in favour of the respondents was entered against the appellant who consequently filed the dual application for condonation and rescission referred to above through a different firm of legal practitioners.

As was noted by the court a quo, none of the appellant's erstwhile lawyers had filed any supporting affidavits explaining their conduct and the appellant's absence from the pre-trial conference. Furthermore, there was no supporting affidavit from the employee in that firm of lawyers who was said by the appellant to have called him belatedly on the day of the pretrial conference.

In his founding papers, the appellant lamented the “gross negligence” on the part of his erstwhile lawyers and the “great disservice” occasioned to him by their conduct.

The court a quo found, that, in view of the above evidentiary deficiencies, the appellant's averments remained unsubstantiated.

In the court's view, this was a typical case where the dereliction of professional duty, imputed by the appellant to his legal practitioners of choice, should be held against him personally.

The court observed that the pre-trial conference was postponed and that the appellant must have been aware of the postponement. There was therefore no reason why he did not attend the pretrial conference since any diligent litigant would attend unless excused from so doing.

Additionally, the fact that the appellant had accepted the wrong legal advice from his lawyers, in noting an appeal against the default judgement, did not justify his subsequent attempt to follow the correct procedure because, if he were allowed to do so, there would be no finality to litigation.

As regards the appellant's prospects of success, the learned judge a quo found, that, the appellant had not shown that the intended application for rescission had any merit. This was due to the fact that his defence to the claim instituted by the respondents was not articulated in his application.

As for costs, the learned judge took the view, that, the appellant had persisted with the application even though he knew that it had no merit. Consequently, the respondents had been unnecessarily put out of pocket for the costs of attendance by an advocate on two different days when the matter could have been argued in less than an hour.

In the event, the application for condonation of the failure to timeously apply for rescission of the default judgment was dismissed with costs on a punitive scale.

The grounds of appeal in this matter, as grammatically corrected, are as follows:

(1) The court a quo erred at law in finding, that, the appellant did not articulate his defence to the claim despite such defence being addressed in the application for condonation and the heads of argument. The failure to properly deal with prospects of success amounts to a failure to determine the matter according to law.

(2) The court a quo erred in not making a cumulative assessment on whether all the requirements had been satisfied as required by law. A court is bound, at law, to consider and evaluate all the requirements in conjunction with each other and not to place too much emphasis on the requirements individually.

(3) The court a quo grossly misdirected itself in extending the sins of the appellant's erstwhile legal practitioners to the appellant. The peculiar circumstances of the matter were that the appellant could not make an independent assessment or give a considered instruction on the remedies adopted, and, therefore, non-compliance should not have been extended to him.

(4) The court grossly erred at law in failing to find that the appellant had high prospects of success and in failing to exercise its discretion to grant condonation in the interests of justice.

The factors to be considered in an application for the condonation of any failure to comply with the rules of court are well-established. They are amply expounded in several decisions of this Court in which the salient criteria are identified. They include the following:

(a) The extent of the delay involved or non-compliance in question.

(b) The reasonableness of the explanation for the delay or non-compliance.

(c) The prospects of success should the application be granted.

(d) The possible prejudice to the other party.

(e) The need for finality in litigation.

(f) The importance of the case.

(g) The convenience of the court.

(h) The avoidance of unnecessary delays in the administration of justice.

See Forestry Commission v Moyo 1997 (1) ZLR 254 (S); Maheya v Independent African Church SC58-07; Paul Gary Friendship v Cargo Carriers Limited & Anor SC01-13.

As was observed in the latter case, the factors listed above are not exhaustive.

In its judgment, the court a quo found that “the applicant has not shown that the intended application for rescission has merits [because] the applicant's defence to the claim is not articulated in this application.”

Having regard to the contents of the applicant's founding affidavit a quo, the above finding is patently erroneous.

In that affidavit, the appellant not only attacks the order sought to be rescinded but also categorically articulates his defence to the main claim, to wit, that the alleged payments of salary were not made by the second respondent but by a different company run by the first respondent and that, therefore, the respondents had no cause of action against him.

In their opposing papers, the respondents did not challenge the appellant's averments as to his defence.

What this shows is that there was a dispute between the parties which required a determination on the merits.

The court a quo did not find that the appellant's defence was spurious or unsustainable. It simply declared that there was no defence whatsoever.

It is relatively clear, therefore, that, the court a quo failed to take into account the appellant's averments, and, consequently, made findings that were entirely inconsistent with the affidavits filed by the parties.

In this regard, it obviously erred and misdirected itself in the exercise of its discretion on the facts that were placed before it, by not dealing properly with the appellant's defence and his prospects of success.

An interesting point of law that arose in the course of submissions by counsel relates to the following question: which prospects of success must a court assess in considering an application for condonation of the failure to apply timeously for the rescission of a default judgment?

Is it the prospects of success in the application for rescission or the prospects of success in the main matter in which the default judgment was granted?

Counsel for the respondents insists, that, it is the former only, while counsel for the appellant contends that it is either the latter or both, the former and the latter.

In this context, the cases relied upon by both counsel do not afford any definitive answer to the question raised.

In Maheya v Independent African Church SC58-07, the Court was seized with an application for the reinstatement of an appeal. MALABA JA…, held…, that, the appellant could not escape the consequences of the lack of diligence on the part of her legal practitioners and that this, coupled with the absence of prospects of success on appeal, justified the dismissal of the application for reinstatement of the appeal.

In Chomurema & Anor v Telone SC86-14, the applicants sought leave to file a belated appeal against their dismissal from employment.

GWAUNZA JA…, noted…, that, there was nothing to prevent the Labour Court, in the interests of finality to litigation, from hearing a composite application for condonation of the late filing of an application for leave to appeal together with an application for leave to appeal to the Supreme Court.

Finally, the case of Hove v Zimphos Ltd & Ors SC08-18 concerned an application for condonation of the late noting of an application for the rescission of a default judgment.

ZIYAMBI AJA…, found that the applicant had to establish that the intended application for rescission enjoyed prospects of success. The learned judge then proceeded to find that it had not been shown that there were prospects of success on appeal on the grounds of appeal raised or that there was any impropriety in the manner in which the Labour Court exercised its discretion to dismiss the application for condonation. For these combined reasons, the instant application for condonation was dismissed with costs.

As I have already intimated, these decisions, rendered in chamber applications, do not decisively answer the question posed.

My tentative and obiter view is that it is the merits of the main matter and the prospects of success therein that the court is enjoined to consider in an application for the condonation of the late noting of an application for the rescission of a default judgement.

I take this view on the basis, that, it is necessary for the court seized with either application to grapple with the merits of the main matter in order to properly address the gravamen of the real dispute between the parties involved. Any other approach would tend to militate against the need for finality in litigation as well as the interests of justice.

In any event, my view on this question is rendered somewhat superfluous by the fact that the court a quo did not address any prospects of success whatsoever in disposing of the application before it.

The appellant does not dispute that his erstwhile legal practitioners displayed a flagrant disregard for the Rules in the manner in which they conducted themselves in the main matter. Nevertheless, he avers that he has a viable and bona fide defence to the respondents claim in that matter.

In this respect, counsel for the respondents submits, that, condonation for non-compliance may be refused even if the applicant concerned has demonstrated good prospects of success.

This submission is clearly correct as is illustrated by the case of Kodzwa v Secretary for Health and Child Welfare & Anor SC50-99…, where SANDURA JA remarked:

“Thus, in the case of a flagrant breach of the Rules, particularly where there is no acceptable explanation for it, the indulgence of condonation may be refused, whatever the merits of the appeal may be.”

While this approach is unassailable, it does not, whether expressly or impliedly, discount the need to consider, cumulatively, all of the factors to be taken into account, and to weigh them in a measured balancing exercise, before deciding whether or not condonation should be granted in any given case: see Maheya v Independent African Church SC58-07 …,.

This position is also aptly captured in Chiweza & Anor v Mangwana & Ors HH186-17 per DUBE J…, as follows:

“The court is required to consider the requirements for an application for condonation cumulatively and weigh them against each other.

The application for condonation is not decided on one exclusive factor.

The existence of strong prospects of success may compensate for any inadequate explanation given for the delay. Where the applicant proffers a good explanation for the delay this may serve to compensate for weak prospects of success in the main matter.

Good prospects of success and a short delay, albeit with an unsatisfactory explanation, may lead to granting of the application.

The court dealing with the application has a wide discretion which it must exercise judicially after considering all the circumstances of the case. The factors are not to be individually considered, but cumulatively considered with the strong making up for the weak. The court should endeavor [sic] to be fair to all the parties involved.”

In the instant case, it is evident that the court a quo focused solely on the reasons for non-compliance, i.e. the gross lack of diligence on the part of the appellant's erstwhile legal practitioners and the vicarious attribution of their incompetence to the appellant himself.

The court failed to assess all the other relevant aspects of the test for condonation.

In particular, it totally failed to evaluate the appellant's prospects of success, whether in respect of the intended application for rescission or in respect of the main matter. The court only considered the reasonableness of the explanation proffered by the appellant for the delay in applying for rescission of the default judgment.

Having found that the appellant's explanation was not reasonable, the court proceeded, without further ado, to dismiss his application for condonation.

However, it was imperative for the court to have assessed all the other salient factors to be considered, in a cumulative fashion, and then to have weighed them against each other, before declining to grant the application before it.

In failing to do so, it proceeded upon the wrong principle and consequently gravely misdirected itself.

Given my findings in respect of the first and second grounds of appeal in favour of the appellant, I do not deem it necessary to consider the merits of the third and fourth grounds which are essentially tangential to and dependent upon the first two grounds.

A determination of those grounds is also rendered otiose in light of the amended relief sought by the appellant at the hearing of this appeal, viz. that the matter be remitted to the High Court, before a different judge, to deal with the matter de novo.

The decision of the court a quo was based on the exercise of its discretion on whether or not to grant the application for condonation.

It is trite that an Appellate Court will not readily interfere with the exercise of discretion by a subordinate court. It should only do so, having regard to the oft-quoted test enunciated in Barros & Anor v Chimponda 1999 (1) ZLR 58 (S)…, per GUBBAY CJ:

“If the primary court acts upon a wrong principle; if it allows extraneous or irrelevant matters to guide or affect it; if it mistakes the facts; if it does not take into account some relevant consideration.”

In casu, I have earlier adverted to the errors made by the learned judge a quo in the exercise of his discretion:

(i) Firstly, he mistakenly found that the appellant had not articulated his defence to the main claim and thereby failed to take into account the relevant considerations underlying the appellant's prospects of success.

(ii) Secondly, he confined his attention to the reasonableness or otherwise of the explanation advanced by the appellant for the delay in applying for rescission of the default judgment.

By not having regard to all the salient factors to be considered in an application for condonation, in particular, the appellant's prospects of success in either the intended application for rescission or in the main matter, and by not balancing those factors against each other, the learned judge proceeded on the wrong principle and thereby incurably misdirected himself.

Consequently, the foregoing errors and misdirections, in the injudicious exercise of his discretion, operated to vitiate his decision to dismiss the application for condonation before him. It follows that the decision cannot be allowed to stand and must be set aside.

As regards the relief to be granted in casu, the most appropriate remedy would be to remit the matter to the High Court to enable a different judge to address and determine the application for condonation on a proper basis.

Furthermore, it also seems expedient, in order to expedite the finalisation of the matter, that the application for rescission be adjudicated at the same time as the application for condonation.

In my view, there is nothing, in principle, to preclude the composite adjudication of the two applications together, especially as the considerations to be applied in the determination of both applications are virtually identical.

As regards the costs of this appeal, there is no compelling reason why they should not follow the cause.

It is accordingly ordered that:

1. The appeal be and is hereby allowed with costs.

2. The judgment of the court a quo be and is hereby set aside.

3. The matter is remitted to the High Court, before a different judge:

(a) To determine the application in Case No. HC1067/18 for condonation of the late filing of the application for rescission of the default judgment granted in Case No. HC2424/17 on 26 October 2017; and

(b) Thereafter, in the event that the aforesaid application for condonation is granted, to determine the aforesaid application for rescission of the default judgment.

This is an action instituted by the plaintiff claiming the following relief which is set out in the summons:

“1. An order declaring that:

(i) The purported sale between first and second defendants for the sale of 100% shareholding in second plaintiff, on or about 12th February 2009, and all actions flowing therefrom, including but not limited to the removal of directors and appointment of new directors; and

(ii) The sale and transfer of Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare to 5th defendant represented by 4th defendant, are null and void;

(b) The minor children, Panashe Ralph Rushesha and Tivonge Sacha Rushesha, remain the sole shareholders in 2nd plaintiff; and

(c) The directors of 2nd plaintiff, as at 12 February 2009, remain directors unless lawfully removed or through resignation (sic).

2. An order that:

2.1 4th defendant, or, failing it, the Deputy Sheriff, takes all necessary steps to transfer Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare, back into the name of the 2nd plaintiff;

2.2 4th defendant and all those claiming occupation through it vacate 3 Justice McNally Close, Mount Pleasant, Harare within fourteen (14) days from the date of judgment; and

2.3 2nd to 5th defendants, jointly and severally, the one paying the others to be absolved: pay for an assessment and report, within fourteen (14) days of such report, by an independent property expert appointed by the High Court, of 3 Justice McNally Close, Mount Pleasant, Harare of any structural changes or damage, other than fair wear and tear, caused to 3 Justice McNally Close, Mount Pleasant, Harare since 12th February 2009 and the costs of repairs or reconstruction; and

(ii) Pay 2nd plaintiff the amount recommended within thirty days of such assessment.

3. An order barring 6th defendant from transferring the property referred to in 6 (sic) above to any third party until transfer to 2nd plaintiff is concluded.

4. In any event, costs of suit on an attorney and client scale to be paid by 1st to 5th defendants, the one paying the others to be absolved.”...,.

Turning to the merits of the claim, the background to the dispute may be summarised as follows:

The first plaintiff is a medical practitioner of Zimbabwean origin. He is presently resident in the United Kingdom together with his wife and children. He is married to the second witness, Aquilina Rudo Rushesha. They had two sons together before they moved to the United Kingdom, namely, Panashe Ralph Rushesha (hereinafter referred to as “Panashe”) and Tivonge Sacha Rushesha (hereinafter referred to as “Tivonge”).

The first defendant, Alexious Mashingaidze Dera, is his brother-in-law, being a brother to his wife.

When the trial commenced, Panashe Ralph Rushesha had attained majority age, and was, by consent, substituted as the third plaintiff.

The first plaintiff's evidence was that before he went to the United Kingdom he acquired an immovable property known as Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, also known as 3 Justice McNally Close, Mount Pleasant, Harare (hereinafter referred to as “the property”).

He asked the first defendant, who is an accountant by profession, to help him form a company in which the shareholders would be the two children mentioned above.

The second plaintiff is the company which was then established for the benefit of the children.

The reason for incorporating the company, according to the first plaintiff, was to have the immovable property registered in the name of the company.

The directors of the company were to be Acquilina Rudo Rushesha and the first defendant.

The property was duly registered in the name of the second plaintiff and was its only asset.

He stated that the name of the second plaintiff derives from the middle names of his two children. “Ra” is from the name 'Ralph; “Sa” is from the name 'Sacha'; while the “R” comes from their surname, Rushesha.

At the time that the property was acquired Panashe was ten years old while Tivonge was about a year old.

The witness paid the purchase price for the property using his own resources.

When the first plaintiff and his family moved to the United Kingdom, in 2003, they leased the property to the South African Embassy. The first defendant was their contact person on some matters relating to the property, but, the rentals were paid directly into his account.

Thus, the first defendant did not receive any rentals in respect of the property; neither did he spend any money on the property.

In or about June 2010, the first plaintiff and his family discovered that the first defendant had sold shares in the second plaintiff to the second defendant, represented by the third defendant. That discovery was only made when the first plaintiff's wife came to Zimbabwe from the United Kingdom.

They discovered that the shares had been sold for a sum of US$36,350.

Subsequent to the sale of the shares in the second plaintiff, the immovable property was then sold to the fourth defendant, represented by the fifth defendant.

The first plaintiff spoke to the fifth defendant by telephone. The fifth defendant advised him that he had purchased the property from the first defendant.

In that conversation, the fifth defendant admitted that he had known that the property belonged to the first plaintiff's wife.

The first plaintiff stated, that, different amounts were given as to the price at which the immovable property had been sold. Initially, a sum of US$90,000 was mentioned. Later on, a figure of US$125,000 was stated as having been paid for the immovable property.

The first plaintiff denied that he authorised the sale of the shares in the second plaintiff or the sale of the immovable property. He, in fact, still holds the original Deed of Transfer for the property.

The first plaintiff described the improvements on the property.

There is a house with three bedrooms. All three bedrooms have bathrooms and toilets; it has three lounges; a kitchen; and a garage on top of which is a tiled entertainment area. There are two rooms next to the garage which the witness stated that he intended to use as offices. The house is fully alarmed. There is a borehole on the property. The other amenities at the property include a gazebo; a swimming pool; a 75 metre driveway with lights; and car shades which can accommodate three motor vehicles.

The second witness for the plaintiff was Aquilina Rudo Rushesha, wife of the first plaintiff.

She is the mother of the two children, Panashe and Tivonge. She was one of the directors of the second plaintiff company at the time that it was incorporated. She never resigned her directorship. She came to Zimbabwe from the United Kingdom in June 2010. That was when she discovered that the immovable property had been alienated by her brother, the first defendant.

She approached the police to help her access the property. She also approached Gerald Mlotshwa, a legal practitioner. A meeting was held which culminated in an affidavit being prepared and sworn to by the first defendant.

The plaintiffs also called Fortune Tapiwa Chasi who is a relative of the first plaintiff's family.

He testified that he knew both the third and fifth defendants at a personal level. The witness was notified of the sale of the property to the Boka company by the first plaintiff. He spoke to the fifth respondent about the matter. From his conversation with the fifth defendant, the latter knew that the first defendant had borrowed money from the second plaintiff and used the immovable property as security for the loan.

The fifth defendant also stated to him, that, he was aware that the property did not belong to the first defendant but to the first plaintiff.

He also communicated to the third defendant, by telephone and e-mail, about the transactions relating to the immovable property. The third defendant stated to him, that, matters related to that were to be directed to his legal practitioners, and that his affairs should be separated from those of the second defendant.

The last witness called to testify for the plaintiffs was the first defendant, Alexious Mashingaidze Dera.

He was, at all material times, a director of the second plaintiff. As stated above, he is a brother to Aquilina Rudo Rushesha and a brother-in-law to the first plaintiff. Although he was cited as the first defendant he did not enter appearance to defend the matter. He only came as a witness at the instance of the plaintiffs after being subpoenaed to attend.

His testimony was that, in February 2009, he obtained a loan in the sum of US$36,350 from the third defendant in order to finance his business of purchasing sugar from Triangle for resale.

As security for the loan, the witness then entered into an agreement for the sale of the shares in the first plaintiff to the second respondent, a company in which the third defendant has an interest.

The agreement of sale was reduced to writing.

His name is recorded as the seller and beneficial owner of “the 2 issued shares in the company” the second plaintiff.

The memorandum acknowledges that the second plaintiff is the registered owner of the immovable property in dispute.

He stated that he repaid to the second and third defendants an amount of money between US$7,000 and US$10,000 in an attempt to liquidate the debt, but, could not catch up with the increasing interest which was being charged on the amount loaned.

He stated that he had known the fifth respondent as a friend prior to meeting the third defendant. He was introduced to the third defendant by the fifth defendant. He then approached the third respondent for a loan which he was duly given as stated above.

When he was having problems in repaying the loan, the third defendant approached the fifth defendant to inquire as to whether the witness had property which could be sold to raise money to repay the balance outstanding on the loan which had gone up to US$70,000.

Interest was being charged on the outstanding amount every month.

In his evidence, the fifth respondent then went and paid to the third respondent the amount outstanding. At the time that the fifth respondent paid off the amount, it had gone up to about US$90,000. The witness stated, that, the fifth defendant wanted to be paid US$100,000 for having settled the debt owed to the second and third defendants.

He deposed to an affidavit prepared by Mr Mlotshwa, a legal practitioner who had been instructed by the first plaintiff's wife, on 24 June 2010. The affidavit was produced as part of the plaintiff's documents.

The second defendant led evidence through one Simon Charehwa who is its Public Officer.

His evidence was that the second defendant, represented by Frank Buyanga, the third defendant, purchased shares in the second plaintiff from Alexious Mashingaidze Dera, the first defendant.

The witness stated, that, the person who dealt directly with the plaintiff was the third defendant.

He, the witness, was responsible for compilation of the information in the files of the second defendant.

He stated, that, Alexious Mashingaidze Dera handed over to Frank Buyanga share certificates relating to the shares as well as resolutions authorising the sale.

The share certificate, according to the witness, was taken to the United Kingdom.

The rest of the documents were kept in the file at the local office. The witness identified a document at page 7 of Exhibit 2 as the resolution which was given by Alexious Dera to the third defendant.

At the time that the transactions were conducted, he was a Clerk.

In cross-examination, he readily admitted that he was not involved when the agreement between the first defendant and the second defendant, acting through the third defendant, was concluded.

He stated that the shares in the first plaintiff were purchased for US$36,350.

He stated, that, the house in dispute, which was the only asset of the first plaintiff, was sold by the second defendant, to the fourth defendant, for a sum of US$110,000, in September 2009.

He stated, that, he knew the first defendant prior to the transaction relating to the shares of the first plaintiff as he used to render accounting services to the third defendant on a part-time basis.

The fifth defendant gave evidence on his behalf as well as on behalf of the fourth defendant.

He is a director of the fourth defendant which is a family company. He stated that he purchased the immovable property in dispute on 15 September 2009. At the time of the agreement, he was shown a Form CR14 and a Form CR6 and a resolution by one James Nqindi.

According to him, James Nqindi and Frank Buyanga were the directors of the second plaintiff at the time that he purchased the property.

He stated that he first knew the first defendant in 2007. He denied that they were friends, but that he was just someone he knew.

The witness stated, that, he had known the third defendant since 2004. He stated, that, the property was vacant at the time that he purchased it. He indicated to the Court, that, the fourth defendant was prepared to relinquish the property if it was paid back the money it had paid for the property. He stated that he purchased the property from the second plaintiff.

The fourth defendant took transfer of the property in 2010.

He described the main structure on the property as a four-bedroomed house, with four bathrooms, a kitchen, lounge, dining room and an additional lounge or office. There is an outbuilding for employees, as well as a swimming pool and a gazebo. At the time of the purchase, there was, according to him, a derelict tennis court. He removed the tennis court with the intention of resurfacing it. The property, which is about an acre, is walled and gated. The main house is partly a double storey, with a room upstairs. The main bedroom has a dressing area. There is a borehole.

The issues which were referred to trial are set out in the joint pre-trial conference minute as follows:

1. Whether or not a valid agreement of sale of shares, allegedly belonging to the minor children (herein represented by the first plaintiff), was entered into between the first and second and third defendants.

2. Whether or not the changes relating to second plaintiff's directors and shareholders, effected as a result of any such agreement, is valid. If not, whether or not such directors and shareholders should revert back (sic) to the period before the 12th of February 2009.

3. Whether or not the second defendant validly entered into an agreement for the sale of the immovable property, being Stand Number 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant with fourth and fifth defendants. If not, whether the registration of title into the fourth defendant (sic) must be set aside and the original deed reinstated.

4. Whether or not the plaintiffs have any claim for damages against the second to fifth defendants arising out of the structural alterations to the immovable property. If they have a claim, what the quantum of damages recoverable is.

5. Whether or not, if the plaintiffs succeed, the fourth defendant should remain in possession of the immovable property on the basis of a lien and until any such claim as it may have (has) been realized....,.

As regards issue number 4, no evidence was placed before the Court of the full extent of the damage to the property arising out of structural alterations to the property or the quantum of the loss occasioned by such damage.

Apart from the mention by the first plaintiff that the tennis court had been dug out, nothing more was said.

In the premises, the second to fifth defendants are absolved from the instance on that claim.

I do not believe, too, that this Court should order assessment of damage caused by any structural alterations to the property and/or payment of the amount assessed by such assessor as claimed in the plaintiffs' summons.

What would happen if his assessment is contested by any of the other parties?

The onus was on the plaintiffs to prove any loss occasioned by such alterations.

They failed to discharge that onus. It cannot be left to a third party to determine the loss.

This is an action instituted by the plaintiff claiming the following relief which is set out in the summons:

“1. An order declaring that:

(i) The purported sale between first and second defendants for the sale of 100% shareholding in second plaintiff, on or about 12th February 2009, and all actions flowing therefrom, including but not limited to the removal of directors and appointment of new directors; and

(ii) The sale and transfer of Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare to 5th defendant represented by 4th defendant, are null and void;

(b) The minor children, Panashe Ralph Rushesha and Tivonge Sacha Rushesha, remain the sole shareholders in 2nd plaintiff; and

(c) The directors of 2nd plaintiff, as at 12 February 2009, remain directors unless lawfully removed or through resignation (sic).

2. An order that:

2.1 4th defendant, or, failing it, the Deputy Sheriff, takes all necessary steps to transfer Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, commonly known as 3 Justice McNally Close, Mount Pleasant, Harare, back into the name of the 2nd plaintiff;

2.2 4th defendant and all those claiming occupation through it vacate 3 Justice McNally Close, Mount Pleasant, Harare within fourteen (14) days from the date of judgment; and

2.3 2nd to 5th defendants, jointly and severally, the one paying the others to be absolved: pay for an assessment and report, within fourteen (14) days of such report, by an independent property expert appointed by the High Court, of 3 Justice McNally Close, Mount Pleasant, Harare of any structural changes or damage, other than fair wear and tear, caused to 3 Justice McNally Close, Mount Pleasant, Harare since 12th February 2009 and the costs of repairs or reconstruction; and

(ii) Pay 2nd plaintiff the amount recommended within thirty days of such assessment.

3. An order barring 6th defendant from transferring the property referred to in 6 (sic) above to any third party until transfer to 2nd plaintiff is concluded.

4. In any event, costs of suit on an attorney and client scale to be paid by 1st to 5th defendants, the one paying the others to be absolved.”...,.

Turning to the merits of the claim, the background to the dispute may be summarised as follows:

The first plaintiff is a medical practitioner of Zimbabwean origin. He is presently resident in the United Kingdom together with his wife and children. He is married to the second witness, Aquilina Rudo Rushesha. They had two sons together before they moved to the United Kingdom, namely, Panashe Ralph Rushesha (hereinafter referred to as “Panashe”) and Tivonge Sacha Rushesha (hereinafter referred to as “Tivonge”).

The first defendant, Alexious Mashingaidze Dera, is his brother-in-law, being a brother to his wife.

When the trial commenced, Panashe Ralph Rushesha had attained majority age, and was, by consent, substituted as the third plaintiff.

The first plaintiff's evidence was that before he went to the United Kingdom he acquired an immovable property known as Stand 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant, also known as 3 Justice McNally Close, Mount Pleasant, Harare (hereinafter referred to as “the property”).

He asked the first defendant, who is an accountant by profession, to help him form a company in which the shareholders would be the two children mentioned above.

The second plaintiff is the company which was then established for the benefit of the children.

The reason for incorporating the company, according to the first plaintiff, was to have the immovable property registered in the name of the company.

The directors of the company were to be Acquilina Rudo Rushesha and the first defendant.

The property was duly registered in the name of the second plaintiff and was its only asset.

He stated that the name of the second plaintiff derives from the middle names of his two children. “Ra” is from the name 'Ralph; “Sa” is from the name 'Sacha'; while the “R” comes from their surname, Rushesha.

At the time that the property was acquired Panashe was ten years old while Tivonge was about a year old.

The witness paid the purchase price for the property using his own resources.

When the first plaintiff and his family moved to the United Kingdom, in 2003, they leased the property to the South African Embassy. The first defendant was their contact person on some matters relating to the property, but, the rentals were paid directly into his account.

Thus, the first defendant did not receive any rentals in respect of the property; neither did he spend any money on the property.

In or about June 2010, the first plaintiff and his family discovered that the first defendant had sold shares in the second plaintiff to the second defendant, represented by the third defendant. That discovery was only made when the first plaintiff's wife came to Zimbabwe from the United Kingdom.

They discovered that the shares had been sold for a sum of US$36,350.

Subsequent to the sale of the shares in the second plaintiff, the immovable property was then sold to the fourth defendant, represented by the fifth defendant.

The first plaintiff spoke to the fifth defendant by telephone. The fifth defendant advised him that he had purchased the property from the first defendant.

In that conversation, the fifth defendant admitted that he had known that the property belonged to the first plaintiff's wife.

The first plaintiff stated, that, different amounts were given as to the price at which the immovable property had been sold. Initially, a sum of US$90,000 was mentioned. Later on, a figure of US$125,000 was stated as having been paid for the immovable property.

The first plaintiff denied that he authorised the sale of the shares in the second plaintiff or the sale of the immovable property. He, in fact, still holds the original Deed of Transfer for the property.

The first plaintiff described the improvements on the property.

There is a house with three bedrooms. All three bedrooms have bathrooms and toilets; it has three lounges; a kitchen; and a garage on top of which is a tiled entertainment area. There are two rooms next to the garage which the witness stated that he intended to use as offices. The house is fully alarmed. There is a borehole on the property. The other amenities at the property include a gazebo; a swimming pool; a 75 metre driveway with lights; and car shades which can accommodate three motor vehicles.

The second witness for the plaintiff was Aquilina Rudo Rushesha, wife of the first plaintiff.

She is the mother of the two children, Panashe and Tivonge. She was one of the directors of the second plaintiff company at the time that it was incorporated. She never resigned her directorship. She came to Zimbabwe from the United Kingdom in June 2010. That was when she discovered that the immovable property had been alienated by her brother, the first defendant.

She approached the police to help her access the property. She also approached Gerald Mlotshwa, a legal practitioner. A meeting was held which culminated in an affidavit being prepared and sworn to by the first defendant.

The plaintiffs also called Fortune Tapiwa Chasi who is a relative of the first plaintiff's family.

He testified that he knew both the third and fifth defendants at a personal level. The witness was notified of the sale of the property to the Boka company by the first plaintiff. He spoke to the fifth respondent about the matter. From his conversation with the fifth defendant, the latter knew that the first defendant had borrowed money from the second plaintiff and used the immovable property as security for the loan.

The fifth defendant also stated to him, that, he was aware that the property did not belong to the first defendant but to the first plaintiff.

He also communicated to the third defendant, by telephone and e-mail, about the transactions relating to the immovable property. The third defendant stated to him, that, matters related to that were to be directed to his legal practitioners, and that his affairs should be separated from those of the second defendant.

The last witness called to testify for the plaintiffs was the first defendant, Alexious Mashingaidze Dera.

He was, at all material times, a director of the second plaintiff. As stated above, he is a brother to Aquilina Rudo Rushesha and a brother-in-law to the first plaintiff. Although he was cited as the first defendant he did not enter appearance to defend the matter. He only came as a witness at the instance of the plaintiffs after being subpoenaed to attend.

His testimony was that, in February 2009, he obtained a loan in the sum of US$36,350 from the third defendant in order to finance his business of purchasing sugar from Triangle for resale.

As security for the loan, the witness then entered into an agreement for the sale of the shares in the first plaintiff to the second respondent, a company in which the third defendant has an interest.

The agreement of sale was reduced to writing.

His name is recorded as the seller and beneficial owner of “the 2 issued shares in the company” the second plaintiff.

The memorandum acknowledges that the second plaintiff is the registered owner of the immovable property in dispute.

He stated that he repaid to the second and third defendants an amount of money between US$7,000 and US$10,000 in an attempt to liquidate the debt, but, could not catch up with the increasing interest which was being charged on the amount loaned.

He stated that he had known the fifth respondent as a friend prior to meeting the third defendant. He was introduced to the third defendant by the fifth defendant. He then approached the third respondent for a loan which he was duly given as stated above.

When he was having problems in repaying the loan, the third defendant approached the fifth defendant to inquire as to whether the witness had property which could be sold to raise money to repay the balance outstanding on the loan which had gone up to US$70,000.

Interest was being charged on the outstanding amount every month.

In his evidence, the fifth respondent then went and paid to the third respondent the amount outstanding. At the time that the fifth respondent paid off the amount, it had gone up to about US$90,000. The witness stated, that, the fifth defendant wanted to be paid US$100,000 for having settled the debt owed to the second and third defendants.

He deposed to an affidavit prepared by Mr Mlotshwa, a legal practitioner who had been instructed by the first plaintiff's wife, on 24 June 2010. The affidavit was produced as part of the plaintiff's documents.

The second defendant led evidence through one Simon Charehwa who is its Public Officer.

His evidence was that the second defendant, represented by Frank Buyanga, the third defendant, purchased shares in the second plaintiff from Alexious Mashingaidze Dera, the first defendant.

The witness stated, that, the person who dealt directly with the plaintiff was the third defendant.

He, the witness, was responsible for compilation of the information in the files of the second defendant.

He stated, that, Alexious Mashingaidze Dera handed over to Frank Buyanga share certificates relating to the shares as well as resolutions authorising the sale.

The share certificate, according to the witness, was taken to the United Kingdom.

The rest of the documents were kept in the file at the local office. The witness identified a document at page 7 of Exhibit 2 as the resolution which was given by Alexious Dera to the third defendant.

At the time that the transactions were conducted, he was a Clerk.

In cross-examination, he readily admitted that he was not involved when the agreement between the first defendant and the second defendant, acting through the third defendant, was concluded.

He stated that the shares in the first plaintiff were purchased for US$36,350.

He stated, that, the house in dispute, which was the only asset of the first plaintiff, was sold by the second defendant, to the fourth defendant, for a sum of US$110,000, in September 2009.

He stated, that, he knew the first defendant prior to the transaction relating to the shares of the first plaintiff as he used to render accounting services to the third defendant on a part-time basis.

The fifth defendant gave evidence on his behalf as well as on behalf of the fourth defendant.

He is a director of the fourth defendant which is a family company. He stated that he purchased the immovable property in dispute on 15 September 2009. At the time of the agreement, he was shown a Form CR14 and a Form CR6 and a resolution by one James Nqindi.

According to him, James Nqindi and Frank Buyanga were the directors of the second plaintiff at the time that he purchased the property.

He stated that he first knew the first defendant in 2007. He denied that they were friends, but that he was just someone he knew.

The witness stated, that, he had known the third defendant since 2004. He stated, that, the property was vacant at the time that he purchased it. He indicated to the Court, that, the fourth defendant was prepared to relinquish the property if it was paid back the money it had paid for the property. He stated that he purchased the property from the second plaintiff.

The fourth defendant took transfer of the property in 2010.

He described the main structure on the property as a four-bedroomed house, with four bathrooms, a kitchen, lounge, dining room and an additional lounge or office. There is an outbuilding for employees, as well as a swimming pool and a gazebo. At the time of the purchase, there was, according to him, a derelict tennis court. He removed the tennis court with the intention of resurfacing it. The property, which is about an acre, is walled and gated. The main house is partly a double storey, with a room upstairs. The main bedroom has a dressing area. There is a borehole.

The issues which were referred to trial are set out in the joint pre-trial conference minute as follows:

1. Whether or not a valid agreement of sale of shares, allegedly belonging to the minor children (herein represented by the first plaintiff), was entered into between the first and second and third defendants.

2. Whether or not the changes relating to second plaintiff's directors and shareholders, effected as a result of any such agreement, is valid. If not, whether or not such directors and shareholders should revert back (sic) to the period before the 12th of February 2009.

3. Whether or not the second defendant validly entered into an agreement for the sale of the immovable property, being Stand Number 671 Mount Pleasant Township 20 of Lot 57 of Mount Pleasant with fourth and fifth defendants. If not, whether the registration of title into the fourth defendant (sic) must be set aside and the original deed reinstated.

4. Whether or not the plaintiffs have any claim for damages against the second to fifth defendants arising out of the structural alterations to the immovable property. If they have a claim, what the quantum of damages recoverable is.

5. Whether or not, if the plaintiffs succeed, the fourth defendant should remain in possession of the immovable property on the basis of a lien and until any such claim as it may have (has) been realized....,.

The last issue to be determined is whether the fourth defendant has a lien over the immovable property pending compensation.

A lien is a right of retention, ius retentionis, which a party has over the property of another person in respect of which he or she or it has incurred expenditure on: see Nexbak Investments (Pvt) Ltd & Anor v Global Electrical Manufacturers (Pvt) Ltd & Anor 2009 (2) ZLR 270 (S)…,.

Such ius retentionis is pleaded in paragraph 13 of the plea filed on behalf of the fourth and fifth defendants.

However, no evidence was led of any improvements which were effected on the property by the fourth respondent. Indeed, neither the fourth nor fifth defendants indicated an intention to make any claim based on improvements during the course of the trial. There was also no mention of a claim to retain possession of the property in order to secure payment of compensation by the fifth defendant when he gave his evidence.

Even in the closing submissions, the fourth defendant did not make any reference to the lien.

In the circumstances, there is nothing to sustain ius retentionis over the property by the fourth defendant.

At the hearing of this matter, I granted the application for registration of an arbitral award with costs on an ordinary scale.

I gave brief reasons for the judgment, being of the view, that, the law that governs the question of whether the noting of an appeal against an arbitral award suspends the operation of the award is settled and that there was no evidence that the respondent could successfully rely on to challenge the registration applied for.

I have now been asked to provide detailed reasons for judgment. These are they.

The applicant sought the registration of a Labour arbitral award handed down in compulsory arbitration proceedings on 23 November 2012, by Ms E. Maganyani.

In terms of section 98(14) and (15) of the Labour Act, any party to whom an arbitral award relates may submit it for registration to a court of corresponding monetary jurisdiction.

The applicant was awarded various sums of money totalling US$19,125 plus interest thereon at the prescribed sum, calculated from the date of the arbitral award to the date of payment in full.

In his founding affidavit, he averred, that, as at the date of his application for registration of the arbitral award, 7 December 2012, the respondent had failed, refused or neglected to pay this sum. Registration of the arbitral award was sought for purposes of enforcement. The application was served on the respondent on 10 December 2012.

The respondent filed a notice of opposition on 19 December 2012. The grounds of opposition were;

(i) Firstly, that the applicant was never its employee, but a mere contractor;

(ii) Secondly, that there was need for oral evidence from both parties;

(iii) Thirdly, that no quantification was done by both parties.

(iv) The last reason for opposing the registration of the arbitral award was that the respondent had since appealed to the Labour Court against the decision of the arbitrator, on points of law.

The details of the appeal were attached to the notice of opposition.

The applicant filed his answering affidavit on 16 April 2013. He attached copies of both parties written submissions which had been submitted to the arbitrator, to counter the allegation by the respondent that it had been denied an opportunity to be heard by the arbitrator. He denied having been a contract worker, and reiterated that he fitted the statutory definition of employee, as set out in the Labour Act.

He averred, that, the respondent had deliberately chosen not to attend the date of the hearing by the arbitrator, despite being notified of it. He reiterated that the arbitrator was asked to determine the matter on the basis of the papers filed of record when the respondent failed to respond to the notice of set down of the hearing.

He alleged, that, the respondent's appeal to the Labour Court was fatally defective, being filed out of time, and alleged that the opposition to the registration of the arbitral award was an attempt by the respondent to frustrate him and delay in paying him his dues.

At the hearing of the matter, both parties abided by their heads of argument and had nothing of value to add.

The applicant submitted, that, the issue that the court ought to determine was whether the arbitral award, made on 23 November 2012, can be registered as an order of this court for purposes of enforcement.

I agree with that submission, and note, that, the issue is purely one of law....,.

In regards to the merits of the matter, the applicant contended, that, an arbitral award which has not been set aside, or in respect of which execution has not been stayed, must be registered as a matter of course.

He relied on the case of Greenland v Zimbabwe Community Health International Research Project HH93-13 as authority for that proposition where the court stated that…,:

“Where an award is not stayed or suspended, in terms of section 92E(3) of the Labour Act, the court will, as a matter of principle, register the award unless there are grounds, as provided for in Article 36 of the Model Law contained in the Arbitration Act [Chapter 7:15].

Article 36 of the Model Law, a schedule to the Arbitration Act [Cap 7;15] provides the grounds on which challenges to the registration of arbitral awards may be mounted.

Article 35 provides that arbitral awards shall be recognized as binding and shall be enforced subject to its provisions and to the provisions of Article 36.”

The respondent challenged the registration of the arbitral award on the basis that it was denied an opportunity to be heard, which falls under Article 36(1)(a)(ii) of the Model Law: that is:

“(1) Recognition or enforcement of an arbitral award, irrespective of the country in which it was made, may be refused only at the request of the party against whom it is invoked, if that party furnishes to the court, where recognition or enforcement is sought, proof that —

(i)…,.

(ii) The party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or”…,.

And/or Article 36(3) of the Model Law which provides that:

“(3) For the avoidance of doubt, and without limiting the generality of paragraph (1)(b)(ii) of this article, it is declared, that, the recognition or enforcement of an award would be contrary to the public policy of Zimbabwe if the making of the award was induced or effected by fraud or corruption; or a breach of the rules of natural justice occurred in connection with the making of the award.”

In my view, it was open to the respondent to argue, that, the registration of the arbitral award was contrary to public policy because there was a breach in the rules of natural justice in the making of the award: see Article 36(3)(b) of the Model Law.

The respondent, unfortunately, did not make specific reference to Article 36.

The respondent contended, that, it was not afforded an opportunity to present oral evidence on the quantification of the entitlements awarded, in clear breach of the rules of natural justice, rendering the decision making process unprocedural.

This implies, that, the respondent was invoking the provisions of Article 36(1)(a)(ii) of the Model Law.

It is trite, that, the onus of proving that inadequate notice of the hearing was not given is on the respondent.

The respondent is required to furnish the court with proof that it was not given adequate notice of the set down of the arbitration proceedings, resulting in an inability to present its case. The onus was on the respondent to furnish the court with proof, that, the arbitrator breached the rules of natural justice.

In my view, the respondent failed to provide any such proof in its papers filed of record.

There was no averment made in the opposing affidavit, that, the arbitrator proceeded without affording the respondent an opportunity to be heard.

In paragraph 3, Leipeng Wang, the deponent to the opposing affidavit, states that:

“The arbitrator erred in her finding; the quantification was not done by both parties, besides, the fact that there is need for viva voce evidence from both sides…,.”

This is the only averment made which remotely resembles the allegation that the arbitrator proceeded contrary to the rules of natural justice.

In my view, this bald assertion is insufficient and does not even amount to prima facie evidence that the rules of natural justice were breached.

No attempt is made to explain why the arbitrator proceeded on the basis of the parties written submissions, or to refute the allegation that the respondent failed to attend two scheduled hearings before the arbitrator and did not provide any explanation as to why they failed to attend.

The applicant filed a Statement of Claim, a copy of which is attached to the papers filed of record, dated October 2011, and which contains a breakdown of its claim. On 12 October 2011, the respondent filed written submissions with the arbitrator. The applicant, then the claimant, filed his written submissions in August 2012. The applicant wrote a letter to the arbitrator, dated 11 October 2012, confirming that the arbitration had been determined on the 28th of September 2012, in default of appearance by the respondent.

Paragraph 2 of that letter stated that:

“I confirm that you have informed us that respondent's legal practitioner wrote a letter on the same day of hearing requesting for a postponement, but, it was received by yourself after the day of the hearing. I therefore request you, honorable, that this matter be determined on written submissions. This request is made in view of the fact, that, respondent has made requests to postpone the matter twice now and to avoid these postponements which I view as delaying tactics, if you may give them time to file their written submissions….,.”

The letter was copied to the respondent's legal practitioners of record, and served on them on 11 October 2012.

The applicant wrote to the respondent and attached a copy of the arbitral award on 27 November 2012.

The respondent appealed against the arbitral award on 15 January 2013.

The dilemma that arises in this case is that the respondent did not place any evidence before the court which it could rely on to determine the veracity of its contention that it was denied an opportunity to be heard.

The applicant averred, that, the respondent deliberately failed to attend two hearings set down before the arbitrator, resulting in the applicant and the arbitrator agreeing that the matter simply be disposed of on the basis of the papers filed of record.

This averment, unfortunately, was not denied by the respondent in its opposing papers.

The respondent was not heard orally, but, it had placed its written submissions before the arbitrator. The applicant was also not heard, orally, on the merits of the matter.

Article 19 of the Model Law provides that:

“ARTICLE 19 Determination of Rules of Procedure

(1) Subject to the provisions of this Model Law, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting the proceedings.

(2) Failing such agreement, the arbitral tribunal may, subject to the provisions of this Model Law, conduct the arbitration in such manner as it considers appropriate.

The power conferred upon the arbitral tribunal includes the power to determine the admissibility, relevance, materiality, and weight of any evidence.”

Based on the provisions of Article 19 of the Model Law, I find, that, it was entirely proper and permissible for the arbitrator and the applicant to agree on the procedure to be followed.

The arbitrator was even at liberty to conduct the arbitration in such manner as it considered appropriate if the parties failed to agree on which procedure could be used (Article 19(2)).

The power conferred on the tribunal included the power to: “determine the admissibility, relevance, materiality, and weight of any evidence.”

There is nothing in the papers filed of record which suggests that the arbitrator did not have these powers.

A reading of the arbitral award will show, that, the arbitration proceeded by way of written submissions. The reason why this happened is clearly endorsed on page 2 thereof. The basis of the claim is clearly set out, as well as details of the entitlements and the calculation of dues. The arbitrator considered the question of whether the applicant was an employee of the respondent, and, if so, the extent of what he was entitled to.

If the arbitrator erred in any way in these findings and calculations, the Labour Court will determine that on appeal.

The High Court does not concern itself with the merits or otherwise of the appeal.

It will register the arbitration award unless a defence, in terms of Articles 35 and 36 of the Model Law is pleaded and proved, or the arbitral award is suspended by the Labour Court, or stay of execution has been granted by the Labour Court.

I have already found, that, the respondent is not entitled to invoke any of the provisions of Articles 35 and 36 of the Model Law in order to prevent the registration of the arbitral award.

In March 2016, the applicant, Grandwell Holdings (Grandwell), which owns a 50% shareholding in Mbada Diamonds [Private] Limited (Mbada), a joint venture initiative for diamond mining in Chiadzwa, obtained an interim order under HC1977/16 (HH193-16).

The other 50% shareholding in Mbada is owned by Marange Resources [Private] Limited (Marange), a Government-owned company.

According to the applicant, the elements of the order which was granted entitled its security personnel, and its entire chain, to return to Chiadzwa in order to safeguard its assets. Among these are said to be diamond ore and unprocessed diamonds that are kept in a vault. The diamond ore, which has been crushed, awaits removal of diamonds.

What is not in dispute is that from March last year, the applicant's security personnel went on site as per the order by the court in HC1977/16.

What has brought the applicants back to court, on an urgent basis, is its allegation that their security personnel at the diamond site have now been removed and that massive looting of their diamond ore has taken place at the instance of the first respondent, Zimbabwe Consolidated Diamond Company Limited (ZCDC), and continues to take place - aided and abetted by the Zimbabwe Republic Police (the police), as the second respondent.

The ore is said to being loaded without any recording or chain of command making it impossible to ascertain what is being taken.

With the core mingling of the diamond ore with that being mined by the Zimbabwe Consolidated Diamond Company Limited (ZCDC), the fear is that it would be impossible to tell which diamonds come from which ore and that therein lies the irreparable harm.

Mbada Diamonds [Private] Limited's security personnel have been sterilised by these actions of ZCDC.

To compound the problem, the Zimbabwe Consolidated Diamond Company Limited (ZCDC) is said to have brought onto the mining site security personnel previously hired by Mbada Diamonds [Private] Limited who know how to open the vault locks. As such, a real fear is that of the diamonds being stolen.

Further, if the ore and the diamonds are taken, an equally real fear is that the pending appeal before the Supreme Court would be rendered nugatory.

Having invested US$100m in Mbada Diamonds [Private] Limited, Grandwell Holdings says it has a real and substantial interest in protecting the interests of Mbada Diamonds and its own investment.

An attempt is said to have been made to file the application on behalf of Mbada Diamonds [Private] Limited, but, it had failed to secure the signatures of representatives on the Board of Mbada Diamonds who represent Marange Resources [Private] Limited.

Grandwell Holdings, being a 50% shareholder in Mbada Diamonds [Private] Limited had therefore brought a derivative action to enforce the rights of Mbada Diamonds and to seek a possessory remedy to restore possession.

The basis upon which Grandwell Holdings says that Mbada Diamonds [Private] Limited has been despoilt is paragraph 7 of the Order that was granted in HC1977/16. The paragraph was couched as follows:

“Paragraph 7

For the purposes of safeguarding assets, all of the fifth respondent's security personnel, with all their chain of command, shall be entitled, authorised, and empowered to remain at the fifth respondent's mining site at Chiadzwa Diamond Concession, as directed in paragraph 2 of the order of this court on 29 February 2016, until the resolution of this matter.”

The police, as second respondents, were said not to have appealed against the order, whilst the Zimbabwe Consolidated Diamond Company Limited (ZCDC) which had indeed appealed, had only done so against the finding that it had committed acts of spoliation.

The appeal was therefore said to be in part, leaving paragraph 7, in essence, extant.

In addition, the fact, that, there was no appeal against the presence of security personnel, as per the court order, which is said to be extant, was said to be supported by the fact, that, for almost a year Mbada Diamonds [Private] Limited's security personnel remained firmly on site even as the appeal was pending.

However, the Zimbabwe Consolidated Diamond Company Limited's position is that any removal that has taken place has been as per the court order and arises from the fact, that, the mining grants which were acknowledged to have expired in the said order of the court have not been renewed.

Spoliation per se is denied.

The police say they are there in terms of their constitutional mandate, in section 219 of the Constitution, to maintain peace and order and safeguard property. They have asserted, that, they cannot be interdicted from carrying out a lawful mandate. Furthermore, their standpoint is that no police report was made regarding any theft to diamonds.

They too, essentially, deny despoiling Mbada Diamonds [Private] Limited.

Several technical points in limine were raised on behalf of the Zimbabwe Consolidated Diamond Company Limited (ZCDC) and the Commissioner of Police....,.

Counsel for the applicant also raised an objection on the failure by the counsel of the Commissioner of Police to serve his affidavit on time despite it having been attested to on 15 February well before the hearing which was on the 20th.

This was said to reinforce malafides on the part of the respondent and was said to justify a special order as to costs.

The explanation given by counsel for the second respondent, for the delay, in my view, raised sufficient doubt as to whether the delay was intentional or even malafide.

He had been out of town at the time that it had been filed.

All in the love of a pet! Many linguistic authors have described a pet to include “favourite, preference, darling, idol, jewel, apple of one's eye, matinee, or, in French, enfante gâte.”

Having been frustrated or failed by human friends, whether male or female, humans all over the world from time immemorial had experimented with the animal world to find a real mate or friend. These animal friends stretch from domestic to wild animals, felines, bovines, canines, serpents, birds, fish and others, the list is endless. Some of the pests are fiery and dangerous to accommodate in a residential environment, but all has been done in the name of pet love.

These pets, to some of the humans, evolved into both great and false friends, and, as the saying goes “false friends are like migratory birds, they fly away in the cold weather.”

But, to the appellant in this case, he had managed to show a true character of a friend.

It may seem superfluous to say anything more since good friends are among life's greatest blessings and the lack or loss of them the saddest of deprivations, anything which reminds them of the value of a good friend does not come amiss.

The appellant bought a canine pet when it was young and cared for it for a considerable period which ran into years. During that period, a great alliance developed. As usual, friendship is a hard, strong, slow growing beautiful thing. The soul in which friendship grows is the social set up in which one lives.

Friends are made through the heart not the eye.

The appellant was not the only one who won the heart of the dog, but, his sons and the whole family became a total symbiosis to the dog - that is, from the photographs which were produced in the court a quo, filed of record.

The photographic images depict a real charming togetherness.

The Hebrew Scriptures accurately captures that “A faithful friend is a sure shelter. Whoever finds one has found a rare treasure. A faithful friend is something beyond price, there is no measuring his worth.”

If the dog could have been asked, during its life time, it could have equally vividly described how glorious its life was in the company of the appellant's family.

Friendship begins with a long standing invitation. It says to the other you get on well with; let us tear down the barriers between us, let us pledge ourselves not to fight one another, but rather to comfort, challenge and support.

One has to use a mirror to see one's face. You use a friend to see your soul. Thus, friendship is a union of one mind with another.

Men become like those they associate with.

Experience globally shows, that, pet lovers from the western world go to the extent of sharing their beds and relaxing rooms with their pets, and the majority in the orient dismiss their dogs to the outside when they retire, and, in most instances, the pet or dog has to find a warm place for the night; and, for the merry makers, they “patrol” the environment exposing themselves to the local authority shenanigans, who, in the spirit of controlling infested dogs, end up shooting residents pest - as what happened in this case.

On 15 March 2018, the appellant issued summons against the local authority, and its employees, claiming:

“(a) Payment of the sum of $2,800 being special damages;

(b) Payment of the sum of $200 being general damages;

(c) Interest a tempore morae from the date of judgment to date of payment; and

(d) Costs of suit.”

According to the synopsis of the appellant's particulars of claim filed in the Magistrate's Court, the first respondent is the local authority, the second respondent is the Town Secretary, and the third respondent is the Chief Security Officer.

On 16 July 2017, and at 21:25 hours, the respondent's employees wrongfully and unlawfully shot and killed the appellant's dog at the appellant's House No.1187 Mabvazuva Suburb, Rusape.

As a result of the respondent's wrongful and unlawful conduct, the appellant suffered damages, detailed as follows:

(a) Special damages for money spent on the dog: purchase money as a puppy, its upkeep, castration, dipping chemicals and treatments the dog received for the continuous 9 years the appellant had the dog all totalling to $2,500; the dog's market value of $300. Total $2,800.

(b) General damages for trauma, pain and suffering which includes: sentimental value, loss of companionship, love and affection: $1,000.

Emotional distress, that is to say, seeing the dog die, the time it is going to heal the wound left in the appellant's heart and mind caused by the sight of a loved pet dying after being heartlessly butchered, which dog the appellant had not anticipated would die in that manner. As he was in the process of getting ready to feed it with a meal, it died, having never tasted: $1,000.

In the respondents plea filed on their behalf, they contended, that, they were working with the Zimbabwe Republic Police and other interested persons.

On the day in question, Sunday was a working day, stray and feral dogs spread diseases and attack people - even on Sundays. The dogs, in general, including the appellant's, were shot after all necessary legal steps have been taken, and were shot by a police detail.

Hence, the respondents conduct was lawful and guarded by the police.

The appellant did not suffer any damages at all, or, even if the appellant suffered any damages, he did not suffer damages shown on the pleadings.

The respondents denied that any of the dogs shot belonged to the appellant. The appellant was put to strict proof.

The matter proceeded to trial, and, after the court a quo heard all the parties, proceeded to dismiss the appellant's claim.

The appellant noted an appeal against the learned magistrate's judgment on 9 January 2019.

The grounds of appeal cover 10 paragraphs. They are not specific, and they cover both fact and law stretching from statutes and by-laws.

I will try to decipher from this thicket what the appellant sought to frame as grounds of appeal.

(1) The learned magistrate was biased against the appellant who was a self-actor, and, in so doing, she erred.

(2) The learned magistrate erred by making a finding based on a document which was not produced.

(3) The learned magistrate erred in refusing to go for an inspection in loco.

(4) The learned magistrate erred in justifying the killing of the dog; the respondents should have been found liable of the wrongful shooting of the dog.

(5) The learned magistrate erred in dismissing the appellant's claim for damages.

These five grounds, I conclude, may form the pith of the appellant's appeal.

In future, litigants are encouraged to seek the advice of legal advisory centres, like the Legal Aid Clinic, to prepare grounds of appeal so as to crisply outline issues for determination by the court.

The appellant went on to write a long essay and labelling such as heads of argument.

Throughout all the pleadings and what he termed the pleadings and what his story is consistent. The local authority killed an innocent dog which was at its owner's stead. The respondents ought not to have resorted to killing the dog but should have captured it.

The appellant submits, that, the trial magistrate was biased, selective, and generally did not treat him fairly simply because he was a self-actor during the proceedings.

The allegations are not explained by the appellant.

On one occasion, the appellant made an application to have a witness for the defendants recalled, and explained why the witness had to be recalled. The defendants counsel opposed the application; the trial magistrate gave a ruling why such procedure was not available to the appellant.

Later, whilst assessing the parties evidence, the court a quo preferred to believe the evidence of the defendants to that of the appellant and went on to point out areas of discontent in the appellant's case.

The appellant was not happy at all about that evaluation and analysis.

The appellant proceeded to label the learned magistrate as a “player and umpire” at the same time and the appellant labels himself a victim and villain.

An examination of the proceedings reflect, that, the appellant was allowed to present his matter freely and was afforded adequate time to cross examine the witnesses without interference.

He was allowed to prepare closing submissions at the end of the trial.

His main grievance is that he lost the claim, but, that should not form the basis of calling a trial court biased and partial.

The allegations are serious, but, in this court's view, baseless.

This ground of appeal borders on contempt of the trial magistrate, moreso where no particulars of such bias are provided.

Judicial officers deserve every respect wherever possible and do not deserve to be labelled partial without providing details of such. The learned magistrate patently looked at the whole matter and gave reasons for its decision or judgment.

I am also of the view that this matter is fraught with material disputes of facts. The matter cannot be resolved on papers. Viva voce evidence ought to be led to establish the facts.

At the commencement of the trial, the plaintiff sought an amendment to its claim by the deletion of the amounts of fourteen billion eight hundred million and six hundred and sixty six billion dollars and their substitution with the amounts of US$ twenty two thousand five hundred and sixty dollars and one million fifteen thousand four hundred and seventy dollars, respectively; the first amount being the replacement cost of one vehicle and the second amount being the global sum for forty-five brand new trucks.

I granted the application to amend in the face of opposition from counsel for the defendants and indicated that I would furnish my reasons together with the reasons for judgment....,.

I turn now to the determination of the matter on the merits.

The plaintiff in this matter is a commercial bank which is primarily involved in lending to persons, both corporate and individuals, engaged in agricultural pursuits. It is a statutory corporation.

In 2006, it flighted an invitation for the tender of supply of trucks of an engine capacity ranging from 1.8 to 2 litres.

The invitation to tender, the tender by the first defendant, and the contract itself were the main documents produced before me by the parties.

The invitation is dated 2 November 2006, and calls upon established companies to urgently tender for the supply and delivery of brand new trucks within the range of 1.8L to 2L. Certain other specifications not germane to this dispute are listed. The invitation then spells out information that is 'mandatory' to enable the plaintiff to make a concrete acceptance of the quotation and contract decision.

Firstly, it is stated, that, prices quoted shall be in Zimbabwe dollars, which price shall be fixed during the bidder's performance of the contract and not subject to any variation of any account.

The invitation also spelt out, that, a bid submitted with an adjustable price condition would be treated as non-responsive and would be rejected.

Prices were required to be inclusive of value added tax.

The invitation to tender also required the company profile of the bidder as well as a list of major clients and contactable references.

Added to this was the requirement of payment schedules, delivery, and fallback position should delivery not be effected as anticipated.

Other stipulated requirements are not germane to this dispute and will consequently not be referred to.

The first defendant was amongst the companies that responded to the tender. After an adjudication process, it was decided to award the tender to the first defendant and a contract for the supply of the vehicles was concluded between the parties.

Two days after the signing of the contract, the plaintiff paid an amount in excess of $1.8 billion Zimbabwe dollars into a current account operated by the first respondent with a commercial bank.

The contract provided for specific dates for delivery of the vehicles to the plaintiff.

Needless to say, the delivery schedule stated in the delivery clause was not adhered to, as the defendant defaulted; and, in fact, it has not made any delivery up to today necessitating the plaintiff issuing summons for relief from this court.

In its summons, the plaintiff prays for the delivery of the vehicles in question, or, in the alternative, for payment of the value of the vehicles as at the time of judgment.

The second and third defendants are husband and wife and the only directors of the first defendant.

The plaintiff has prayed, as against the two, for an order lifting the corporate veil and for judgment against them jointly and severally with the first defendant, on the basis that they cannot be divorced from the latter.

At the pretrial conference, three issues were extracted for trial. I will therefore dispose of the dispute on the basis of those issues.

The first issue for trial was whether the agreement made and entered into by and between the parties was conditional upon the first defendant obtaining foreign currency from the Reserve Bank of Zimbabwe.

It is pertinent, therefore, in resolving this issue, to examine the contract documents and other documents have a bearing on the relationship between the parties.

The tender bid document from the first defendant focused on the Ford Ranger 1800 STD.

A brief description of the vehicle is given, which description is on the physical features of the vehicle not its mechanical capacity. The quoted price is Z$37,500,000 per unit with a total price of Z$1,687,500,000 for the forty-five vehicles.

The quotation confirms that the price is inclusive of Value Added Tax.

A warranty is given for three years or 100,000kms whichever comes first.

The first respondent also confirmed an ability to supply and deliver at a stipulated time.

There were no indications of conditions that required to be met before delivery could be effected.

Next, the first defendant provides, in the tender document, a list of vehicles and motor cycles, that are presumably available.

There is no caption with the list to state whether these are readily available or whether the first defendant is able to easily source the same.

Pictures of the vehicles and motor cycles, together with specifications, are provided in detail.

Included in the tender documents is a letter written by the second defendant. The letter, written on 27 November 2006, opens with the sentence:

“We, the undersigned, hereby tender and should this letter be accepted in whole or part, undertake to supply Motor Vehicles as per the requirement of the tender, and in conformity with the Fund's General Conditions of Tender, and the specifications, the articles described or referred to in this document or such said articles as may be ordered by the Fund in consideration of the prices as Nickstate Investments (Pvt) Ltd are concerned.”

The contract was then concluded on the basis of these documents.

Clause 3 of the contract is in the following terms:

“It is agreed that the seller sells forty five (45) brand new Ford Ranger, pick up trucks….,. It is further agreed that the pick up trucks shall comply with the following specifications -

(i) They shall be long wheel base.

(ii) The engine capacity shall be 1.800 litres.”

Clause 4 provides that “the vehicles are bought with the following accessories on each one of them” and a list of the accessories is then provided….,.

Clause 5 of the contract reads:

“The purchase price of the vehicles is the sum of (Z$1,687,500,000) (One billion six hundred and eighty seven million, five hundred thousand Zimbabwe dollars) based on a unit price of ZW$37,500,000 (thirty seven million five hundred thousand).”

Clause 7 reads as follows:

“It is agreed that the price referred to in clause 5 above is fixed and not subject to any variation whatsoever.”

Delivery is covered in clause 9 which is in the following terms:

“The motor vehicles shall be delivered to the customer's premises, that is to say, Hurudza House No.14-16 Nelson Mandela Avenue, Harare duly registered in two batches as follows:

(i) 15 (fifteen) vehicles by 31 January 2007.

(ii) 30 (thirty) vehicles by 28 February 2007.”

In its declaration, the plaintiff alleged, that, the first defendant had breached the terms of the agreement and that despite being paid in full for the vehicles the first defendant had failed to deliver any of the vehicles, and further, that, despite numerous requests by the plaintiff, the first defendant had failed and/or neglected to deliver the said vehicles.

In response to this averment, the defendants had denied that they had failed, neglected, or refused to deliver and that the plaintiff was aware that the defendants had applied to the Reserve Bank for the allocation of foreign currency.

It was further averred by the defendants, that, the allocation was approved on 9 February 2007 but the Bank did not have the required foreign currency to avail to the defendants to fulfill the terms of the contract.

The contract concluded by the parties does not make mention of the need for the defendants to source for foreign currency to purchase the vehicles.

This is accepted by the defendants.

Their contention, however, is that the fact that the vehicles had to be imported should be presumed and it did not need to be written down.

It was contended, that, the vehicles could not be purchased in Zimbabwe dollars and payment had to be made in a currency acceptable to the manufacturer; and it is precisely because the defendants had to import the vehicles that they had approached the Reserve Bank for the allocation of foreign currency.

Although accepting that the written contract was never varied in writing, it is suggested, by the defendants, that, the parties communicated through correspondence which clearly established that there was an understanding between the parties that the defendants needed to source funds, through the Reserve Bank of Zimbabwe, in order to import the vehicles to be delivered to the plaintiff by the first defendant.

The defendants produced to court a number of letters written by the second defendant explaining or seeking to explain the delay in delivery of the vehicles.

The first letter is dated 29 January 2007 which was a mere two days before the date scheduled for the delivery of the first batch; and the explanation given for the anticipated delay in delivery is the late approval of the allocation of foreign currency.

An assurance is given, in the letter, that everything was under control.

The second letter, dated 15 February 2007, again speaks of the delays in obtaining foreign currency allocation (approval?).

The writer goes further to state, that, arrangements had been made for the first batch of fifteen vehicles to be in the country by 28 February 2007.

It was stated further, that, the supplier had refused to accept an advance payment that had been arranged due to the fact that it had come from a bank in South Africa.

The last sentence in the letter is to the effect, that, correspondence from the Reserve Bank was being attached and the defendants were vigorously pushing for payment and the vehicles would be released 'soon'.

Attached to the letter in question was a Reserve Bank approval for the defendants to pay for the vehicles through their Bank. There was no allocation of funds on the certificate produced.

The letters addressed to the plaintiff were not responded to.

The plaintiff's witness, Mrs Chinodya, explained that when the defendants started coming up with excuses on the delivery of the vehicles, they were requested to put their explanations in writing.

The witness told the court, that, the position of the plaintiff was that the contract was for the supply and delivery of vehicles and not for the importation of the same.

The plaintiff was hopeful that the endevours by the defendants would succeed, but, when the contract was concluded, it was never a term of the contract that the defendants would require an allocation of foreign currency from the Reserve Bank of Zimbabwe in order for them to perform their obligations on the contract.

The contract was never varied - a position accepted by the defendants.

I was unable to accept the contention by counsel for the defendants, that, the fact that the vehicles would be imported was presumed and it did not need to be written in the contract.

He did not cite any authority for this submission, and I am not persuaded that this is a correct principle of the law of contract.

Apart from the letters written by the second defendant, after the contract was concluded, I have not seen any evidence pointing to a condition that the defendants had to obtain foreign currency from the Reserve Bank of Zimbabwe in order to comply with their obligations under the agreement.

The plaintiff's witness, Mrs Chinodya, emphasized, that, what was concluded was in fact an agreement of sale of the stated number of vehicles and that tenders were invited for supply of the vehicles in the local currency.

She was adamant, that, any tenders that were quoted in foreign currency were turned down.

She also said, that, the issue of the need for foreign currency arose after the first defendant failed to meet the delivery dates, and, in her view, it was nothing but an excuse.

I find no reason to doubt the veracity of her evidence on this issue.

I find for the plaintiff.

Her evidence was given in a straight forward manner and she made a better impression on the court than did the second defendant who was very evasive and unwilling to answer difficult questions under cross examination.

Overall, looking at the evidence of the two witnesses against the backdrop of the documents which preceded the contract, and the contract itself, it is my view that the contract was not conditional upon the first defendant being allocated foreign currency by the Reserve Bank as pleaded by the defendants.

I find that, therefore, that performance by the defendants was not conditional upon obtaining foreign currency from the Reserve Bank.

The first defendant was incorporated as a company in 2006 and commenced operations in full in 2007.

When the contract, which is the subject matter of this dispute, was concluded, the first defendant had been operational for just a year.

The second and third defendants, who are husband and wife, are the only directors of the first defendant and the second defendant indicated to the court that he is, in fact, the alter ego of the first defendant.

The plaintiff averred in its declaration, that, the second and third defendants, where the contract with the plaintiff was concerned, had, instead of ensuring that due compliance by the first defendant of its obligations to the plaintiff, wrongfully, unlawfully, and fraudulently diverted funds paid by the plaintiff, in terms of the agreement, for their own purposes.

Counsel for the defendants, in his submissions at the close of the trial, did not seek to address the question of whether or not the corporate veil should be lifted as prayed for by the plaintiff.

He in fact conceded, that, the second defendant was the alter ego of the first defendant. He did not mention the third defendant.

Per contra, it is contended by counsel for the plaintiff, that, the shares in the company are all owned by the second and third defendants and that therefore judgment should be entered against all the defendants jointly and severally.

It is a fundamental and trite principle of law that a registered company is a legal persona in its own right and endowed with its own separate legal persona which is distinct from its shareholders: see Salomon v Salomon & Co. Ltd [1887] AC 22.

It is also settled law, that, in certain exceptional circumstances, where the company is controlled, in terms of activities and decisions, by another person, the courts have allowed the corporate veil to be lifted to reveal the real person behind the company.

I will respectfully refer to a passage by MARGO J in Gering v Gering & Anor 1974 (3) SA 358…, where the learned judge stated:

“There are three companies, apart from Lauren Lyn (Pty) Ltd, in which the first defendant has a 100 per cent interest in the shareholding. It is true, that, in the case of these companies, their records are not stricto sensu in the possession, custody or control of the first defendant in his personal capacity. However, on the facts, these companies are his creatures and his instruments. He is conducting business through them, or holding assets through them, and, they are separate juristic personalities; they are, in substance, merely part of the machinery by which he alone conducts his business affairs.”

In certain cases, courts have gone as far as stating that a company is the agent of the controlling shareholder.

In the English case of Wallersteiner v Moir (No.1) (1974) 3 All ER 217 (CA) LORD DENNING had this to say…,:

“I am prepared to accept that the English concerns, those governed by English company law or its counterparts in Nassau or Nigeria, were distinct legal entities. I am not so sure about the Liechtenstein concerns such as Rothschild Trust, the Cellpa Trust or Stawa AG. There was no evidence before us of Liechtenstein law. I will assume too, that they were distinct legal entities, similar to an English limited company. Even so, I am quite clear that they were just the puppets of Doctor Wallersteiner. He controlled their every movement. Each danced to his bidding. He pulled the strings. No one else got within reach of them. Transformed into legal language they were his agents to do as he commanded. He was the principal behind them. I am of the opinion that the court should pull aside the corporate veil and treat these concerns as his creatures - for whose doings he should be and is responsible. At any rate, it was up to him to show that any one else had a say in their affairs and he never did so…,.”

I have been urged by the plaintiff's counsel to enter judgment against all three defendants jointly and severally.

This is, however, despite a concession from counsel that the third defendant played a minimal role in the affairs of the first defendant.

The extent of her shareholding in the company was not established in evidence.

I did not hear counsel for the defendants argue against the lifting of the corporate veil.

The second defendant was candid enough to admit that he was the alter ego of the first defendant.

The evidence of the extent of personal control of the company on his part could not be disputed: he controlled its finances; he personally responded to the offer to tender from the plaintiff; he attended the meetings with the representatives of the plaintiff to decide the terms and conditions of the contract; he signed the contract for the supply of the vehicles to the plaintiff; he wrote every single letter that was addressed to the plaintiff regarding the contract; he personally made commitments to assist the plaintiff in disposing of the Ford trucks at a good price when they would have been delivered in an effort to persuade the plaintiff into purchasing alternative vehicles from Willowvale Motor Industries because the first defendant had not delivered in terms of the contract.

More telling, however, is the manner in which the money deposited into the first defendant's bank was treated by him - if I accept the contention by him that a billion dollars was deposited into an investment account of the company to secure the value of the deposit.

Although he was quizzed on the whereabouts of the billion dollars, the second defendant was unable to state how much was in the investment account - his response being that he would have to check with the Bank.

It is not in dispute that the second defendant drew cheques, in his personal name, against the account into which the purchase price paid by the plaintiff was deposited.

It is further not in dispute, that, within a week from the date of such money being deposited, almost the entire amount had been consumed.

When the purchase price was deposited, the account held an amount of $177,107,578=64. After the deposit, the balance shot to $1,864,607,578=64. By 11 December 2006, the balance in the account stood at $218,294,649=64.

Of the amount withdrawn from the account, $2,200,000 went into the second respondent's account.

The evidence adduced by the investigator of the plaintiff was to the effect, that, the defendants purchased an immovable property and a motor vehicle from the deposit.

It cannot be gainsaid that the entire amount has been consumed but the vehicles have not been purchased.

The first defendant itself has no assets, and it is obvious, from an examination of the transactions on the bank account, that it is the vehicle through which the second defendant mobilized funds with which to enhance his estate.

The two million odd dollars that he paid himself, soon after the plaintiff deposited money into the business account of the second defendant, cannot be justified.

The second defendant was unable to explain why this money had been paid to him.

It is worth noting, that, in the summary of evidence filed on behalf of the defendants, that, the contention is made that there is nothing prohibiting the first defendant from accessing or investing any money paid into the business account.

It is also not disputed, that, an amount of $180 million was used from the account to pay for a property in Marlborough, although it is contended that the purchase of the property had been planned well before the plaintiff paid any money into the account.

The point is made, that, the $180 million constitutes the 10 per cent deposit that the defendants had paid to the plaintiff in terms of the contract.

It is very obvious that the second defendant did not differentiate between himself and the company and he felt, clearly, that, whatever was in the account of the company belonged to him to deal with as he pleased.

In fact, he admitted that the company was solely his, and his counsel described the company as his alter ego.

It is only appropriate, therefore, that the corporate veil be lifted where he is concerned and that whatever liability may found to attach to the company should also attach to the second defendant.

The third defendant's position, in relation to the activities of the company, is not so clear.

She did not attend and give evidence on her own accord despite the fact that an order was sought against her jointly with the first and second defendants.

The question exercising my mind is whether or not the plaintiff is entitled to obtain an order against her jointly with the other two.

She is undoubtedly a shareholder, although the extent of her shareholding in the first defendant has not been stated. She chose not to enlighten the court.

In its declaration, the plaintiff made the averment, that, the purchase price paid by it had been diverted by the second and third defendants and used in purchasing luxury items, such as vehicles. Specific mention of an immovable property in Marlborough was made.

The purchase was not denied nor was it denied that it was purchased for the second and third defendants.

Apart from the issue of the properties purchased with the funds belonging to the plaintiff, there is no other reason advanced before me justifying my uplifting the corporate veil.

Is this sufficient reason in the absence of control on the part of a defendant?

The authorities from this jurisdiction that I was referred to do not touch on this aspect of the dispute, and, in my research, I was able to find a South African case which may assist me in determining whether or not the corporate veil should also be lifted in relation to the third defendant.

I wish to quote, with respect, a few excepts from the judgment of LE ROUX J in Lategan & Anor NNO v Boyes & Anor 1980 (4) SA 191. At 200E-F the learned judge stated:

“In his admirable work, Modern Company Law, LCB Gower devotes a full chapter [Chap 10] to the subject 'Lifting the Veil'(3ed at 189-217). He deals with it as exceptions to the principle of Saloman v Saloman & Co. 1897 AC 22 HL, which finally enshrined the sanctity of a separate corporate personality distinct from its members.”

And at 200H-201C he stated:

“I was also referred to an interesting article in the Tydskrif vir Heden-daagse Romeins Reg vol 30 (1967) at 216 et seq by M L Benade, where the author pleads for a more realistic view of corporate identity in South Africa to bring it in line with the 'positive' approach of American courts, which may be summed up in the words of JUDGE SANBORNE in US v Milwaukee Refrigerator Transit Co. (1905) 42 Fed 247 at 255, where he held that a company should be seen as an entity 'but when the notion of a legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, the law will regard the corporation as an association.'

This approach appears to be in line with that in modern England (as sketched by Gower (supra)) and is based on common sense and a developed sense of equity.

An excellent example is afforded by the case of Gilford Motor Co. v Horne 1933 Ch 935 (CA) where the defendant, who was a former employee of the plaintiff, had contracted with the latter not to approach its customers. He promptly formed a company and it proceeded to contravene the contract. The court interdicted both the defendant and the company which it described as a device with a stratagem, a mere cloak and a sham, which it considered an instrument in the defendant's hands.”

And further on, at 210F-H, the learned judge concluded;

“A true precedent for this principle does exist in our case law, namely, the case of Orkin Bros Ltd v Bell 1921 TPD 92, where the directors of a company were held personally liable to a seller who sold goods to a company, at the instance of its directors, when they knew the company to be insolvent circumstances and completely unable to pay for the purchase and it appeared that the sole purpose of the transaction was to diminish the personal liability of the directors under a contract of suretyship. This was held to constitute a fraud on the seller and he obtained judgment against the directors personally.

I have no doubt that our courts would brush aside the veil of corporate identity time and again where fraudulent use was made of the fiction of legal personality. In the present case, however, there is no evidence that the second defendant fraudulently failed to mention the position of the sureties….,.”

The authorities are agreed, that, where there has been fraudulent or improper use of a company, a court is entitled to disregard the separate corporate personality of a company and pierce the veil.

The first defendant herein was the vehicle through which the second and third defendants acquired property to enhance their estate.

The two are husband and wife, and, although the title of the immovable property was not produced to court, there was no denial from the defendants to the allegations in the declaration that the plaintiff's purchase price had been used to buy luxury items for themselves.

The improper use of the money paid towards the purchase of the vehicles is evident from the manner in which the account was virtually depleted within a week of almost the entire sum.

No reasonable explanation was forthcoming from the second defendant, and the third defendant offered no explanation at all.

An allegation of fraud is serious and it would have been in the interests of all the defendants if the third defendant had come to court to try and dispel the accusations by the plaintiff on the alleged use of the money.

I can therefore only go by the bank account submitted to the court which showed improper usage of the money deposited by the plaintiff into the first the defendant's bank account.

It would not be uncharitable to describe the first defendant as a shell.

It has no assets in its own name, this much being admitted by the second defendant. It operates a bank account which is at the sole disposal of the second defendant to deal with as he pleases. He does as he pleases with money in the account, which apparently is the only asset that could be said to be in the name of the company; but, that said, even the money does not remain long in the account as it is utilized almost as soon as it is credited to the account and such usage is not in the business of the company but for the benefit of its shareholders.

It does not have on its books any of the vehicles it tendered to supply.

It actually required payment in full of the purchase price in advance from the plaintiff in order to source for the vehicles, and, once that payment was made, the second defendant dealt with it in a manner that would result in enhancement of the estate of the second and third defendants.

This is an example of a fiction of separate corporate entity of a registered company.

The second and third defendants, in the manner in which they make use of the first defendant, might as well have described themselves as a partnership - as that is in effect what they are. The enterprise, that is the first defendant, is a mere tool for their exclusive use.

In my view, the company exists for the convenience of its shareholders.

The fiction of a separate corporate entity does not in fact exist in this case, and it would only be just and proper for me to order that the corporate veil be lifted and judgment entered against all the defendants - including the third defendant who is clearly benefiting from the existence of the company.

In my view, the plaintiff has therefore established a proper case for the lifting of the corporate veil in relation to both the second and the third defendants.

On 22 May 2019, the plaintiff issued summons against the seven (7) defendants (The International Apostolic Ejuwell Jekenisheni Church, Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya, Andrew Mashamaire, Chief Zimunya and Mutare Rural District Council) claiming the following:

“(a) That, the plaintiff be declared the legitimate legal and bona fide holder of a lease of a piece of land measuring seventeen (17) hectares at Garai Village, Mabiya, Chief Zimunya under Mutare Rural District Council;

(b) That, plaintiff and its members regard and hold the said land as its sacred religious shrine;

(c) That 1st defendant and its members have no right or claim to the Mabiya Shrine;

(d) That the 2nd- 5th defendants pay the costs of this action.”

On 4 June 2019, the first to fifth defendants (the International Apostolic Ejuwell Jekenisheni Church, Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) filed their appearance to defend the matter.

In the plaintiff's declaration, the plaintiff is an Apostolic Ejuwell Jekenisheni Church, a religious and Christian Church. The first defendant is The International Apostolic Ejuwell Jekenisheni Church. The plaintiff describes the first defendant as an off-shoot of the plaintiff.

The second to fifth defendants (Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) are the church leaders of the first defendant.

The sixth and seventh defendants (Chief Zimunya and Mutare Rural District Council) were cited in their official capacities.

Sometime in 2013, Bishop Elijah Dzingai Nyikambaranda formed the first defendant constituted by the second to fifth defendants (Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) as its co-leaders.

The first to fifth defendants (The International Apostolic Ejuwell Jekenisheni Church, Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) registered its own Constitution, and, from the date of the first defendant's formation, in 2013, the plaintiff and the first defendant existed as two distinct entities.

The plaintiff contends, that, it holds a lease with the sixth defendant (Chief Zimunya) for a 17 hectare piece of land situated in the communal area of Chief Zimunya under Village Garai where Mabiya is situated.

The plaintiff regards that place as its shrine and sacred for its religious ceremonies since 1985.

After the formation of first defendant (The International Apostolic Ejuwell Jekenisheni Church), the second to fifth defendants (Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) and the first defendant (The International Apostolic Ejuwell Jekenisheni Church) congregation incidentally also regards the same 17 hectare shrine as sacred and clash with the congregants of the plaintiff during festivities.

The parties ended up in court; involved the police; and had had clashes pertaining to the use of the shrine.

The first to fifth defendants (The International Apostolic Ejuwell Jekenisheni Church, Bishop Shatirwa Mafukidze, Bayiso Chakanyuka, Munetsi Ngwenya and Andrew Mashamaire) filed their plea, and, in addition, filed a counter claim.

In their plea, the first to fifth defendants deny that the first defendant is an off-shoot of the plaintiff to the first to fifth defendants. It is the plaintiff who is a renegade and the first defendant is the mother church.

To the first defendant, it's the plaintiff who broke away from the first defendant in 2018.

The first to fifth defendants deny that Bishop Elijah D. Nyikambaranda did not form the first defendant as a breakaway church but that the original church only changed its name and Constitution to add the word “International.”

Otherwise, the first defendant retained the same membership of the original church; as such, the first defendant is the appropriate lessee of the 17 hectares piece of land at Garai Village which is its shrine.

The plaintiff should be the organisational church body which must be barred from interfering of the shrine, not the first defendant.

The first defendant adds, in its pleadings, that, it is the one which had been paying lease rentals to the sixth defendant (Chief Zimunya).

The first defendant admits that the parties have been both to this court as well as to the Magistrate's Court relating to the dispute over the use of the shrine during the church's festivities.

The first defendant also concedes that there have been wrangles and hostility amongst members of the plaintiff and the first defendant.

It prays for a declaratory order identical to the relief being sought by the plaintiff, and that the defendant be declared the appropriate user of the sacred place at Garai Village.

On 7 November 2019, the minutes of the joint pre-trial conference identified two issues for trial:

(i) Between the plaintiff and the first defendant, which one is the main church or the splinter group?

(ii) Between the plaintiff and the first defendant, which one is the holder of rights of Mabiya Shrine?

These two issues constitute issues for trial and for this court to decide.

The plaintiff opened its case by calling Mr Gwinyai Gabriel Banganwa of House No.983 Chikanganwa, Mutare.

He was born in the plaintiff church.

The plaintiff and the first defendant's congregants used to belong to one religious organisation called Jekenisheni Church stretching from 1932 until 2013 when High Priest, Zabron Chitakatira, had died. According to the church's norm, after the death of a leader, they have to have time to search for a new leader of the church.

The witness used to be a Secretary for Mutare Centre.

After the death of a leader, members have to have a mourning period of a year before they choose a new leader.

According to Mr Banganwa's evidence, in 2013, one Dzingai Elijah Tom Nyikambaranda returned from Botswana where he had been staying since 1957, and, upon his return, he went to the church and announced his intention to transform the plaintiff church. His return and ordination as an Archbishop resulted in a dispute, dividing the congregants into two warring factions.

In 2015, in July, during a passover, Dzingai Elijah Tom Nyikambaranda was ordained by ACCZ from Harare, and, in terms of the first defendant's constitutional provisions, he was ordained as the leader of the first defendant with a position of an Arch-bishop.

After the ordination of Archbishop Nyikambaranda, part of the congregants refused to recognise him as a leader; allegedly because of the Arch-bishop's autocratic leadership.

The group approached Chief Zimunya, the sixth defendant, and lodged a complaint.

The faction had previously consulted the local traditional leadership but could not get assistance.

The witness stated, that, contrary to the plaintiff's Constitution, the post of Arch-bishop was new to them; the regalia had been altered; the insignia/badge given to Archbishop was alien to the plaintiff; and the very process of having ACCZ coming to ordain a church leader was foreign to the plaintiff.

The plaintiff's name came into being in 2009 when a new Constitution was introduced and the church abandoned the Jekenisheni Church name.

He disagreed that the plaintiff church consented to the new name by the first defendant's title.

As a result of the formation of the first defendant, some of the leadership crossed the bridge and joined the first defendant where they were given leadership posts.

The plaintiff, according to the witness, is the legitimate beneficiary of Mabiya Shrine.

According to legend, High Priest Luke Mutendamambo, the founder, was led by the Holy Spirit to this hill in Garai Village, under Chief Zimunya, and was shown, in a vision, that the place was holy; even members of the other church denominations acknowledge the sanctity of the place.

This is the place which had triggered the dispute as to who should use it during Passover annually held in July.

They have to go and worship until Jesus comes, as the witness said in court.

The shrine is compared to Jerusalem in Israel and the members of the church believe that they get their salvation and healing at Mabiya Shrine. Without Mabiya Shrine, one cannot state that he is a member of Jekenisheni Church.

The witness appeared in court to be well indoctrinated and added, that, even the teachings of the church centralises Mabiya Shrine.

Mabiya Centre was previously leased to Jekenisheni Church measuring 4,000 square metres.

The place was identified after the church leaders had visited the village head, headman, and chief.

Later, the church was given a lease agreement by the local authority, now called Mutare Rural District Council.

Given the growth of the church, the area was extended to cover an expanse of 17 hectares.

The witness produced receipts in court which are marked exhibit 3. The lease agreement, as well as the plaintiff's Constitution, were produced as exhibits 2 and 1 respectively.

The witness denied the contention by the first defendant, that, the plaintiff is the one which broke away from the first defendant.

During cross examination by counsel for the first defendant, Mr Banganwa admitted, that, in 2015, members belonging to the plaintiff and the first defendant were present when Archbishop Nyikambaranda was ordained; however, the factional group did not recognise him as a leader to them, he was an ordinary person. To them, their leader was Phillip Changonona.

He was also asked as to how leaders were chosen, and he indicated, that, upon the death of a leader, his deputy succeeds.

He repeated, that, when Dzingai Elijah Tom Nyikambaranda was ordained, he was the leader of the first defendant, and, as far as the witness is concerned, the plaintiff and the first defendant are two distinct church entities.

He also added, that, that was the reason the first defendant was holding service at a different centre when Arch-bishop Nyikambaranda summoned the leadership of the plaintiff, who were assembled at Mabiya Shrine, to go and explain to the Archbishop the meaning of the two gatherings.

The second witness called by the plaintiff was Chief Zimunya (Kibben Bvirindi).

He is a member of the Seventh Day Adventist Church. He knows both the plaintiff and the first defendant. He also knows the sacrilege of Mabiya Shrine and that the plaintiff worships there.

The chief allocated Mabiya place to Jekenisheni as a worship centre.

When the dispute between the plaintiff and the first defendant erupted, he was accompanied by police and local legislator to go there and ordered that none of the two should use the shrine until the dispute between them had been resolved.

He later on summoned Archbishop Nyikambaranda to his court and instructed the church leader to resolve the impasse.

Arch-bishop Nyikambaranda later on reported back to the Chief his unwillingness to change his council; he bade farewell to the Chief and indicated to the witness that he was going to establish his own centres at Chaseyama in Chakohwa in Chipinge District, one in Mutasa, and the other one in Masvingo.

When the Archbishop died, he opted to be interred at Mutasa Centre.

He also told the court, that, when the founder of Jekenisheni Church died, his sons formed their own churches whilst originating from Mabiya Shrine. They left the shrine and established themselves in Chipinge; the other son went as far as Mozambique and established his centre in Manica Province.

The Chief added, that, the plaintiff and the first defendant operate in his jurisdiction and his desire is to see peace between them - if the first defendant wishes. Its leaders are free to approach the Chief and be allocated a place for worship.

According to him, the plaintiff is the legitimate user of the shrine. To him, the first defendant must relinquish Mabiya and find a different centre as in 2019 they held their Passover at Chaseyama.

Under cross-examination by the defendant's counsel, the Chief told the court, that, the reason he summoned Archbishop Nyikambaranda to his court was that the Arch-bishop was the one who had caused the violence at Mabiya Centre.

Archbishop Nyikambaranda, to the witness, was the leader of the first defendant and not leader of the plaintiff.

The plaintiff then called Peter Sigauke as its witness.

He resides at 3318 Domboramwari Epworth, Harare. He is now on pension. He is aged 66 years and was born in Jekenisheni Church.

He was present when the plaintiff and the first defendant separated.

He was the one who spearheaded the separation and was the chairman of the splinter group. He participated in the organisation and registration of the first defendant with the ACCZ and arranged for the drafting of the first defendant's Constitution in consultation with the ACCZ.

After registration of the first defendant, Archbishop Nyikambaranda was ordained, in 2015, as the leader of the first defendant.

He later on decided to leave the first defendant because the first defendant's principles had drastically deviated from those of the founding father and he went back to his roots at the plaintiff.

All the three witnesses for the plaintiff impressed the court as credible witnesses who gave their evidence very well, more particularly the Chief.

Before he gave evidence, the court was advised by both counsel to take note that the Chief had been seen talking to some people belonging to the plaintiff church but no details of the discussion was revealed.

The court noted the observation, but, looking at the nature of his evidence, the court detects no bias or otherwise on the part of the Chief.

I will treat his evidence as untainted and basically administrative in a way.

He knows the original church and the leaders who approached him for a place to worship (by this the court infers to his predecessors) and when he became Chief it was the plaintiff who was worshipping at the Mabiya Shrine.

The defence opened its case by calling Bishop Shatirwa Mafukidze, aged 82 years. He succeeded Archbishop Nyikambaranda after the latter's death.

According to him, the plaintiff and the first defendant parted when Arch-bishop Nyikambaranda called for a meeting and the plaintiff's group did not attend.

The first defendant also worships at Mabiya Shrine on 17 July of each year. He told the court that there are, however, other centres belonging to the first defendant.

The witness alluded to the lease agreement produced by the plaintiff as the first defendant's as well.

Although Archbishop Nyikambaranda was ordained, the church remained united.

During cross-examination by counsel for the plaintiff, the witness clarified, that, these people who did not heed the call by Arch-bishop Nyikambaranda did not congregate with him.

He admitted, that, the first defendant has its own Constitution, an Arch-bishop, a badge, and could have its leader ordained by people outside the church.

He refused to leave Mabiya Shrine.

The defendants then called Munetsi Ngwenya as its witness. In 1932, the Holy Spirit visited both Luke Mutendamambo and John Marange instructing them to form an apostolic church.

According to the witness, the dispute between the plaintiff and the first defendant commenced in 2018, on 2 March. Archbishop Nyikambaranda called for a convention at Chinenga but members of the plaintiff rebuffed the meeting. The leader of the church sent four people to go and find out why the members had absconded. The four emissaries found the plaintiff's members assembled at Mabiya holding their own convention.

The witness told the court, that, Nyikambaranda was nominated leader among the four apostles chosen by the Holy Spirit long back in 1951 and was destined to succeed Zabron Chitakatira; also blessed Nyikambaranda when the former was ill, so, after the death of Zabron, it was logical that Nyikambaranda had to take over.

The witness stated further, that, the first defendant's shrine is Mabiya.

From 1970, the original church was Jekenisheni up to 2006. Mr Mutanga was the leader; he also reiterated that the lease agreement produced by the plaintiff is the lease given to the church by Mutare Rural District Council.

To the witness, there is no distinction between the plaintiff and the first defendant.

The reason the name of the church was changed was to protect it from being claimed by the sons of the founding father. All the people agreed to the choice of Nyikambaranda as the new leader and all agreed to change the Constitution and adopt the word “International” to be suffixed to the existing name of the church.

He pointed out that the people who broke away belong to the plaintiff.

During cross-examination, he denied participating in the registration and formation of the first defendant - contrary to what is indicated in the first defendant's summary of evidence.

To him, the plaintiff is still the same as in the first defendant formation but had gone through transformation.

He also blamed the Chief as causing problems between the plaintiff and the first defendant.

The first defendant then called Andrew Mashamaire. He resides at 2020, Phase 12 Eastview, Harare.

According to him, the dispute between the plaintiff and the first defendant started when the Archbishop and his council was summoned by the Chief. To the witness, there is no distinction between the plaintiff and the first defendant to talk about, they are one no matter what names are being used.

Arch-bishop Nyikambaranda succeeded Zabron Chitakatira according to the church's succession policy.

The suffix “International” or prefix to the first defendant was proposed by ACCZ to distinguish the first defendant from previously registered churches with the name “Jekenisheni” he added. However, besides the addition of 'International' nothing changed; the first defendant is the same as the plaintiff.

According to this witness, the plaintiff is the breakaway church. The first defendant is still paying rentals to the local authority and uses Mabiya Shrine as its centre, he concluded.

The defence witnesses relied much on the history of the church and deliberately avoided the issues in dispute as spelt out in the joint pre-trial conference minute.

Maybe that was due to the questions led by their legal practitioners when they were leading their evidence.

However, the witnesses were evasive and argumentative when they were giving evidence; they avoided critical evidence, more particularly the effect of registration of the first defendant relating to its identity vis-a-vis the plaintiff.

Whether, by registering a new name and creating a new Constitution, they were still within the old traditional norm maintained previously by the leadership of the plaintiff and its predecessors?

The witnesses for the first defendant chose to underscore those nagging questions and pretended as if the introduction of the first defendant was a non-event.

The plaintiff's Constitution provides that the church's headquarters shall be at Mabiya in Zimunya Communal Lands in Mutare District and the headquarters is called “The Regiment.”

Clause 6 of the Constitution spells out the five (5) major gatherings per year and prominent among those days is 17 July, the Anniversary and Holy Communion Celebration day; after that day, the Passover is then spread to different centres and to those centres outside Zimbabwe.

Clause 7 of the Constitution is also important to mention, dealing with the holding of an Annual Conference; this is where an Annual General Meeting for all members of the church shall be held to review the operations and laws of the church, amend and recommend any changes to the Constitution.

The leader of the church is called Church Leader, below him is his deputy followed by the Twelve Disciples, below them are Priests and Levities, the least on the hierarchy is the General Membership.

Clause 12(b) of the Constitution provides, that, the church leadership goes by order of hierarchy and seniority as approved by the Holy Spirit.

Clause 1 of the first defendant's Constitution defines the name of the church, it has its Headquarters at Mabiya as well. The aims and objectives, provisions relating to Membership, Creed, Funds and Succession are similar, word by word, to the plaintiff's clauses.

However, the first defendant's Constitution introduces new clauses:

In clause 13 'Roles of Women' clause 14 'Roles of the Youth' clause 15 'Marriage' clauses 16 and 17 on 'Expansion and Growth' and on 'Amendments' briefly spell out the factors for growth and that the Constitution is open to amendments.

It is important to note, that, the first defendant's Constitution, in clauses 13-15, creates totally new provisions as compared to the plaintiff's Constitution.

The clause dealing with church leadership hierarchy is not included at all.

The following issues are common cause to this matter:

1. The plaintiff and the first defendant have different constitutions and the earlier formed church is the plaintiff, formed in 1932, and the first defendant, whose Constitution was introduced in 2013.

2. Currently, the two, the plaintiff and the first defendant have distinct leadership; the plaintiff is led by Bishop Changonona and the first defendant is led by Bishop Mafukidze.

3. The dispute started in 2013 when Tom Dzingai Elijah Nyikambaranda returned from Botswana after the death of Bishop Zabron Chitakatira.

4. Both church entities regard Mabiya as their shrine and refer to it in their constitutions as the headquarters of the church.

5. Both parties have irreconcilable differences relating to the way the church must be managed.

6. The lease agreement, relating to Mabiya Shrine, registered with the Mutare Rural District Council, was initially applied for and registered in the predecessor of the plaintiff, Jekenisheni Church - up to now, the registered name had not yet changed.

7. The receipts produced by the first defendant, for payment of lease rentals to the local authority, relates to the year 2018 only.

There are two issues outlined by the parties for this court to decide:

(a) Between the plaintiff and the first defendant, which is the splinter group from the main church?

(b) Who, between the plaintiff and the first defendant, is the legitimate holder of rights and custodian of Mabiya Shrine?

Jekenisheni Church was formed long back in 1932, by Luke Pferedzai Mutendamambo; and, using that name, the leadership approached traditional leaders as well as the local authority to secure a lease for Mabiya Shrine.

The lease, exhibit 1, is still in the name of Jekenisheni Church; that aspect is uncontroverted.

In 2009, the name of Jekenisheni was introduced is not disputed by the first defendant. In 2013, the first defendant was introduced, born out of the Constitution whose provisions have already been alluded to hereinabove.

However, of great importance to this matter, the first defendant brought in a new design to the uniform as compared to the one worn by congregants of the plaintiff church.

There was now a new title to the leader of the church, by the name of Archbishop; he now wore an emblem or badge; and, as already highlighted in the Constitution of the first defendant, there were clauses addressing women, youth, and marriages - these aspects were totally alien to the plaintiff.

To quote the evidence of the defendant's witnesses, Archbishop Nyikambaranda had come to transform the original church, so he was a transformational leader.

Unfortunately, there is no evidence led by the first defendant to the effect of the plaintiff's Constitution was repealed and replaced by the first defendant.

The plaintiff still uses that Constitution as its supreme law.

There is no evidence led by the first defendant, in the form of recorded minutes, recorded during an Annual Meeting, where the plaintiff's Constitution was amended or repealed.

There is virtually no connection between the plaintiff's Constitution vis-a-vis the first defendant's.

In the matter of Province of Central Africa v The Diocesan Trustees of the Diocese of Harare SC48-12, His Lordship MALABA DCJ…, defined the word “CHURCH”:

“By a definition, a church is a voluntary and unincorporated association of individuals united on the basis of an agreement to be bound in their relationship to each other by certain religious tenets and principles of worship government and discipline. The existence of a Constitution is a testimony to the fact that those who are members of the church agree to be bound and guided in their behaviour, as individuals or office bearers, on ecclesiastical matters by the provisions of the Constitution made under its authority. It is the words and actions of the individual, as members and office bearers, that indicate whether there is conformity with the articles of faith.”…,.

Earlier on, on p17 of the cyclostyled judgment, the then Learned Deputy Chief Justice stated that:

“The belief of a Christian Church must be founded, in general, upon Holy Scriptures. What differentiates one church from another is the accepted and crystallised definition of what they hold those scriptures to contain; in other words, their creed. If an association of Christians adopt one creed as the basis of their association, no one can cut and carve it without altering the foundation upon which that body has been associated: see Free Church of England v Lord Overtoun [1904] AC 515 at 577.”

On the same page of the same judgment, His Lordship added:

“Great light is in fact thrown on what are the essential doctrines of a church by reference to the declarations made by those who founded it as to what their view was fundamental.”

The plaintiff took over from Jekenisheni Church, founded by Luke Mutendamambo, and virtually maintained the founded values through and through up to this date. Nothing materially changed except leadership of the church, when such a leader dies.

The introductions of the Constitution, in 2009, was done by consent; that is why there was never a dispute in the plaintiff church.

Indeed, in 2013, ArchBishop Nyikambaranda introduced a new Constitution which clearly defined the realm and spectrum of its congregants.

As already mentioned above, the first defendant's Constitution borrowed some clauses from the plaintiff's; and the first defendant went on to add some new clauses relating to youth, women, and marriages.

It is not in dispute that the first defendant has its own Constitution distinct from the plaintiff.

In Province of Central Africa v The Diocesan Trustees of the Diocese of Harare SC48-12…, it was held that:

“A person who is responsible for the creation of a schism cannot be heard to say he or she has not withdrawn membership from the former church.”

I am convinced, on a balance of probabilities, that, the conduct of the first defendant; the badge; the Constitution it introduced; as well as the new title for its leader pointed to one conclusion - Archbishop Nyikambaranda formed a breakaway church which he named International Apostolic Ejuwel Jekenisheni Church, distinct from the mother church, which is the plaintiff.

The new Constitution constitutes an agreement between its members, that, the faith by which all those people who choose to take up membership of the church and the standards in accordance with which they undertake to act as revealed to them by the church leaders.

The plaintiff is the root, the first defendant is an off-shoot - albeit with the church doctrine well founded upon that of the plaintiff.

The first defendant's Arch-bishop, Nyikambaranda, seceded from the plaintiff; consecrated and enthroned by ACCZ as Archbishop of the first defendant.

I cannot accept the first defendant's argument, that, the plaintiff and the first defendant are one; nor can it be said that there are factions in the church.

The truth proved before me is that the first defendant was formed as a new church by Archbishop Nyikambaranda and enjoys total autonomy from the plaintiff.

The plaintiff is a co-operative society engaged in the noble business of providing housing for its members; one of whom was, until he was unceremoniously dismissed from membership, by letter dated 4 June 2015, the defendant in this matter.

Following the expulsion of the defendant, the plaintiff sued out a summons against him seeking an order for his eviction from a property known as Stand 5486 of 315 Retreat Township, Waterfalls, Harare (the Stand) on the pain of legal practitioner and client costs.

In its declaration, the plaintiff made the averments, that, the defendant had been admitted as a member of the co-operative in 2005 in terms of Clause 7 of the plaintiff's By-Laws. When he failed to meet his membership obligations, in terms of the same By-Laws, the defendant was initially suspended and subsequently expelled in terms of Clauses 21 and 23 of the By-Laws, thereby forfeiting the Stand which had been allocated to him by virtue of his membership.

As the defendant has refused to vacate the Stand, the plaintiff craved the grant of an eviction order aforesaid.

The action is contested by the defendant, who, after entering appearance to defend, also filed a special plea in the following:

“The defendant pleads to the claim as follows:

1.1 This Honourable Court does not have jurisdiction to hear this matter as it is a matter between a registered housing co-operative, namely, Nehanda Co-operative Society Limited and one of its members.

1.2 In terms of section 115 of the Co-operative Societies Act, the plaintiff should have first attempted to have the matter resolved by the housing co-operative. Failure of which the plaintiff would then have approached the Registrar in terms of section 115 of the Co-operative Societies Act.

Wherefore, the plaintiff's claim ought to be dismissed with costs on a legal practitioner and client scale.”

The plaintiff holds a different view.

According to the plaintiff, the matter was indeed dealt with by the co-operative, which first suspended and later expelled the defendant for his indiscretions in violation of the Bye-Laws. The defendant's fate was communicated to him by letter dated 4 June 2015. It reads:

“REF: NOTIFICATION OF SUSPENSION AND EXPULSION

You are hereby notified that at a special general meeting held at:
Venue: Nehanda Housing Co-operative site offices
Date: 30 May 2015
Time:1300hrs

You were suspended and expelled from being a member of the above-mentioned housing co-operative. You are therefore advised to visit the co-operative offices as soon as possible for a way forward in connection with your refunds as well as the necessary administrative issues, failure of which will result in the co-operative taking a legal route at your expense. Your co-operation will be greatly appreciated.”

The expulsion letter was signed by both the Secretary and the Chairperson of the co-operative.

As it turns out, subsequent to that outcome, the defendant was given an opportunity by the plaintiff to make representations on his expulsion. This was communicated to him by letter dated 15 May 2015 which notified him of the date of hearing for that purpose, namely, 30 May 2015.

What brought the defendant to that predicament was his failure to pay subscriptions for more than three (3) months; failure to attend meetings; and insubordination.

Apparently, the affliction of failing to attend meetings continued to bedevil the defendant, because, despite being notified of the date of the special general meeting to consider representations on his expulsion, the defendant still failed to attend that meeting and make representations as appears from the minutes of that meeting.

On a vote of 42 to 5, the members resolved to uphold the defendant's expulsion.

Counsel for the plaintiff insisted, that, the provisions of section 115 of the Co-operative Societies Act [Chapter 24:05] were complied with, because, subsequent to that, the dispute was indeed referred to the Registrar of the Co-operative Societies who delegated the responsibility of resolving the dispute between the parties to two (2) of his or her officials, namely, Ms Mutumhe and Ms Mutepfa.

By consent of the parties, I allowed counsel for the plaintiff to produce proof of such attendance which then necessitated the postponement of the matter for that purpose.

In doing so, it was hoped that proof that the dispute was referred to the Registrar would resolve the matter given that the defendant sought to bar the plaintiff from approaching this court on the single ground that it had not exhausted domestic remedies provided for in the Co-operative Societies Act.

The applicants justification for bringing the same application before another judge, TAGU J, in a space of less than a month was that, as I understood it, and in my own words, they had appealed to the Supreme Court against the decision of MATANDA-MOYO J.

It was argued, that, in accordance with the common law rule that an appeal suspends the decision appealed against, the judgment of Her Ladyship had automatically been suspended and that the status quo ante obtained.

Counsel for the applicants submitted, that, the pendency of an appeal finds a prima facie right. For support, he referred to the case of Timothy Sean White v Zenzo Ntuliki HB147-15.

The applicants position was, that, unless the respondents were barred, they would continue to purport to run the affairs of the first applicant, yet, the judgment of MATANDA-MOYO J had been suspended by the appeal. Unless they obtained leave to execute, the argument concluded, the respondents had no business purporting to be the management committee of the first applicant.

The applicants argument on this point was manifestly scrambled.

The respondents claim to office was not by virtue of the judgment of MATANDA-MOYO J. It was by virtue of the vote of no confidence on 25 April 2015. The learned judge, TAGU J, did not decide the issue. Neither have I.

It was simply not before us.

I accept, that, in paragraph 7 of their notice of opposition, the respondents stated unequivocally that they had been voted into office following the passing of the vote of no confidence. I am also aware, that, the applicants purported to refute that claim in their answering affidavit. But, they merely made a fleeting reference to it. Through the fourth applicant, Andrew Marauka, here is how the applicants responded:

“4. AD PARA 7–12

The purported mandate of the 1st to 5th respondents was later revoked at a meeting of 1st Respondent's [sic] members: see Annexure A; and, this position remains the true position to date and unchallenged clearly putting pad [sic] to the issue of whether or not the Respondents have a mandate to run 1st Applicant's affairs.”

But, there was no Annexure A attached. There was nothing more said about the so-called meeting of “…, the 1st Respondent's members…,.” that allegedly had revoked the respondents mandate and had put paid to the respondents ambition to control the affairs of the first applicant.

But, most importantly, an application stands or falls by its founding papers.

In Bayat v Hansa 1955 [3] SA 547 [N] the principle was summarised as follows…,.:

“[A]n applicant for relief must [save in exceptional circumstances] make his case and produce all the evidence he desires to use in support of it, in his affidavits filed with the notice of motion, whether he is moving ex parte or on notice to the respondent, and is not permitted to supplement it in his replying affidavits [the purpose of which is to reply to averments made by the respondent in his answering affidavits], still less make a new case in his replying affidavits.”

It is quite clear, that, the applicants in this case had no interest in the court prying into the propriety of the vote of no confidence.

The case of Timothy Sean White v Zenzo Ntuliki HB147-15 that counsel for the applicants referred to was irrelevant.

The issue there was quite different. Therein, the respondents had wanted to execute a certain order of the Magistrate's Court despite an appeal that was pending against it. This court barred them pending the determination of the appeal.

In casu, the respondents were not at all trying to execute any court order.

Even if one accepts, that, the operation of the judgment of MATANDA-MOYO J was automatically suspended by the appeal against it, and that the status quo ante obtained, the question is: what was this status quo ante?

Counsel for the applicants conceded, quite correctly, that, it was the vote of no confidence.

When the parties appeared before Her Ladyship, the vote of no confidence was the one obtaining. Evidently, the applicants did not wish to have it adjudicated upon. They concealed it from the court. However, the court picked it up, and, on the basis that it existed, but that it had been deliberately concealed, the urgent chamber application was dismissed.

So the appeal, and the resultant suspension of Her Ladyship's judgment, had no practical effect on the status quo ante.

On this basis alone, namely, that, even if it were to be accepted that one's election into the management committee of a co-operative society is a right accruing to oneself, in one's personal capacity, for the purposes of an interdict, I would dismiss the application because no such right has been established.

The four applicants are the fathers and guardians of their respective minor daughters, all four of whom are pupils at Arundel School, a private girls school situated in Harare.

The first and second respondents are the Trustees and Headmistress of the School.

The third respondent is the Minister of Primary and Secondary Education, cited in his official capacity, and the fourth respondent is the Attorney-General, also cited in his official capacity.

The applicants seek various declarators and consequential relief in respect of the alleged violation of their daughters constitutional rights. They also seek an order for costs against the first and second respondents on a legal practitioner and client scale.

The first and second respondents are opposed to the application and aver that it be dismissed with costs.

The third and fourth respondents have indicated that they will abide by the Court's decision.

Before 2015, the long-established practice at the School was to commence the day with prayers in the School chapel. Pupils were free to attend if they so wished and a separate room was set aside for those of other faiths who did not attend chapel on religious grounds. This inter-denominational position was confirmed by the School's website on the internet.

The applicants and their daughters are all practising Jehovah's Witnesses. Their beliefs are not similar to those of other Christian denominations.

Upon application to the School for the admission of their daughters, each of the applicants completed a standard application form in which they indicated that they were Jehovah's Witnesses. Their daughters were duly accepted for admission.

At the beginning of 2015, a new Headmistress was appointed to run the School.

She sought to introduce compulsory chapel attendance for all pupils at the School in order to reinforce its collegiality. The applicants wrote several letters to the Headmistress as well as the School's lawyers to register their complaints. On 17 March 2015, after taking legal advice, the Headmistress wrote to the applicants insisting that their daughters were required to attend chapel and that, if they failed to comply, they would be deemed to have been voluntarily withdrawn and removed from the School.

On 19 March 2015, after the girls refused to attend chapel and surrendered their books, they were told to go home.

The applicants then filed an urgent application to the High Court, in Case No.2717/15. Following a consent order granted on 27 March 2015, the girls were allowed to continue to attend the School, without being compelled to attend chapel, pending the determination of the present application.

The applicants aver, that, freedom of conscience includes the right to practice and propagate one's religion as well as the right not to be compelled to subscribe to any religion.

In this respect, the actions of the Headmistress violate their daughters freedom of conscience and their right to protection against discrimination on the ground of religion.

Moreover, although any person is entitled to establish and maintain an independent educational institution, he or she cannot discriminate in the manner in which the institution is administered. Thus, the conduct of the Headmistress also violates their daughters right to education.

The applicants, accordingly, seek declarators that the respondents actions are in violation of their daughters freedom of conscience and religion, right to protection against discrimination, and right to education.

They also seek an order precluding the respondents from refusing the admission of their daughters to Arundel School on the basis of their religious beliefs and failure to attend chapel.

On behalf of the School, the Headmistress relies upon the standard enrolment form signed by the applicants upon the admission of their daughters into the School.

She avers, that, this agreement, which constitutes a binding contract, expressly provides, that, any latitude from chapel attendance is at her sole discretion and that her decision in that regard is final and binding.

The agreement also provides, that, any changes to the School rules must be observed and followed by the signatory parents and their daughters.

One of her functions is to articulate the values of the School, and, morning chapel is the only time when pupils come together in an environment most conducive for the values and ethos of the School to be properly impacted upon them.

It is not compulsory for any pupil to participate in any activity, such as singing or praying, or to abandon her beliefs during chapel. What is compulsory is that all pupils attend and evince respectful behaviour in chapel.

The applicants were not forced to enrol their daughters at the School.

They should respect the rights of the School's founding members who established an educational institution that conforms with and pursues their own values and beliefs. The School authority is constitutionally entitled to establish and maintain the School and impose reasonable rules to be followed at the School. It should not be precluded from pursuing its religious beliefs and insisting on anyone who joins the School to respect its views.

Such policy is reasonable and those who agree to join the School, despite their religious views, must be taken to have necessarily waived their own constitutional rights....,.

It is common cause, that, the religious status of the applicants children was known from the outset and that the previous policy of the School was one of religious tolerance and accommodation.

In this respect, I am unable to accept the submission by counsel for the respondents, that, the applicants acted fraudulently in signing the contract of admission simply to gain the admission of their daughters into the School. This is because the previous policy was highlighted in the School's website which, although out-dated, appears to have been relied upon by the applicants.

In this context, therefore, it cannot be said that their daughters refusal to attend chapel is unreasonable.

This will be the fourth judgment in a series of applications that have been filed by the parties to this dispute.

The Chamber Application before the court has been styled as a Chamber Application or leave to “litigate” and “institute” action against the first respondent, a company under judicial management.

Whilst on the merits the application may have succeeded, the respondents have raised a number of procedural matters which require consideration by the court before going into the merits of the application.

The applicant prays for an order couched in the following terms:

“(i) That Applicant be granted leave to execute against first respondent's attached 800 harrows.

(ii) That the Applicant be granted leave to institute legal proceedings against 1st Respondent for any further outstanding levies due in terms of section 3 of the Manpower Planning and Development (Levy) Notice, Statutory Instrument 74/99 and any such surcharge imposed from the period starting from August 2011 to the date of this order.

(iii) That 1st Respondent and 2nd Respondent, Mr. Christopher Masani, pay costs of this application jointly and severally each paying the other to be absolved on an attorney and client scale.”

In case number HC3078/11, the applicant sued and obtained judgment against BMA Fasteners for US$9,350=13. The judgment was obtained on 12 January 2012 and a Writ of Execution was issued out of this court on 14 March 2012.

The Deputy Sheriff subsequently placed under judicial attachment harrows belonging to BMA Fasteners.

Efforts to execute the writ were fruitless as the respondents made various applications to stay the sale in execution.

The first respondent has now obtained an order of this court placing it under judicial management. Paragraph (c) of the Order provides as follows:

“All actions and applications and executions of all writs, summons, and other process against the respondent company shall be stayed and not proceeded without the leave of the Honourable Court.”

The application before the court is for leave of this court to execute the Writ issued by this court and to institute further proceedings to recover all due and outstanding levies.

The applicant contends, that, the provisional judicial manager is abusing the due process of the court to frustrate execution of the writs.

The respondents have raised the following points in limine:...,.

The founding affidavit was deposed to by one Nyasha Njowa, who is a Regional Manager employed by the Zimbabwe Manpower Development Fund.

The deponent claims to derive his authority from a letter dated 23 July 2002. The letter is signed by Dr Washington Mbizvo, the Permanent Secretary in the Ministry of Higher and Tertiary Education.

The said letter purports to confirm that the deponent is authorised to represent the Minister in any litigation for the recovery of outstanding training levies.

The letter is not written by the Minister, who, in terms of the Act, is authorised to act on behalf of the Ministry.

No proof was placed before the court to establish that the said Nyasha Njowa was authorised by the Minister to institute legal proceedings.

There was equally no proof to show, that, the Permanent Secretary in the Ministry was authorised by the Minister to act in the manner he did.

It seems to me to be quite clear, that, the founding affidavit was improperly secured in that there was no legal basis upon which Nyasha Njowa could purport to represent the Minister in these proceedings.

The maxim delegatus non potest delegare would apply to the circumstances of the matter before the court: in other words, the Permanent Secretary could not delegate authority to sue even if it were proved that he was himself properly authorised.

See Mhanyami Fishing and TSPT Co-op Soc Ltd v Director General, Parks and Wildlife Management Authority and Others 2011 (1) ZLR 555.

The applicant failed to prove, that, Nyasha Njowa was properly authorised to depose to the founding affidavit, and, for that reason, the application cannot survive this second preliminary point.

This is an appeal and cross-appeal against parts of the judgment of the Special Court (for Income Tax Appeals) dated 11 October 2019 dismissing some of the appellant's objections against the respondent's amended assessments, and setting aside some of the respondent's amended assessments.

In this judgment, I will refer to the appellant as the main appellant and the respondent as the cross appellant.

The detailed facts of the case can be summarised as follows:

The main appellant is a company registered in terms of the laws of Zimbabwe and a subsidiary of Delta Corporation (the Holding Company). The two companies are separate and distinct from each other but share the same acronym. The holding company carries on business in the beverages and agro-industrial sectors of the Zimbabwean economy.

The cross-appellant is, in terms of the Income Tax Act [Chapter 23:06], the authority responsible for the collection of taxes in Zimbabwe.

In 1958, the predecessor to the holding company entered into an exclusive franchise agreement with a Canadian Company which owned the LL beverage trademark.

In 1970, two further trademarks, CB and CBL were included in the franchise agreement.

The last trademark, EL, was added to the franchise agreement in 2004.

The franchisee is the owner of four local beverage trademarks CL, BL, ZL and GPL. The parties interchangeably referred to trademarks as brands in their franchise agreements.

In terms of the 1970 agreement, the holding company had the right, subject to the terms and conditions of each agreement, to transfer, assign and sub-licence its subsidiaries to manufacture and sell the trademarked beverages. The holding company was obliged to pay to the franchisor royalty fees for the trademarks computed against prescribed sales and technical fees for the technical assistance provided and calculated on a cost-recovery basis.

Before the court a quo, evidence was led to the effect, that, in 2002, the Canadian Company was taken over by the Dutch company, International Management BV, which, in turn, executed an undated and unsigned Technical Support and Assistance (“TSA”) agreement with the holding company retrospectively to 1 January 2002.

The Dutch company was a subsidiary of SAB Miller International BV, an English public company.

The Dutch company undertook to provide, in person or by proxy, to the local holding company, its accumulated international expertise and know-how in the manufacture, management and distribution of beverages.

The Group of the holding company was defined as the holding company and “any existing and future subsidiaries.”

Know-how was elaborately defined to include all aspects of purchasing raw materials, product manufacture and brand development, plant and waste management, packaging and distribution, consumer research, and performance management systems.

The term subsidiary carried five different meanings which ranged from majority shareholder control, to majority votes garnered by agreement with other shareholders in financial policy, management, and supervision of the holding company by the Dutch company.

The term turnover encompassed Group gross sales revenue from all beverages and malt inclusive of taxes and excise duties.

Clause 3 contemplated the provision of know-how to the Group and “the relevant company in the Group” under the direction of the Board of the holding company.

The holding company undertook to do all such things and pass all such resolutions necessary to effect the terms of the agreement. It also agreed to ensure that its subsidiaries adopt, ratify, or confirm any lawful support rendered by the Dutch company to such subsidiaries.

In terms of clause 5, the holding company was responsible for the payment of an annual fee equal to 1.5 percent of the total Group turnover payable quarterly, on a pro rata basis, within 30 days after the end of each quarter.

The payment was to be in United States dollars, at the best available market rate in Zimbabwe, but, subject to the necessary exchange control and other Governmental approvals.

In the absence of foreign currency, the holding company would apply the fee to purchase its ordinary shares on behalf of the Dutch company in the name of an affiliate.

A new agreement was concluded on 1 September 2006 and renewed on 1 August 2011.

The Dutch company continued to provide know-how in the production, distribution, and management of beverages in the Group and the relevant company in the Group.

In the interim, on 30 April 2007, the holding company executed a royalty agreement with the Dutch company, International BV, which replaced the royalty agreement of 14 December 2001.

On 1 February 2008, the main appellant's Board of Directors resolved to execute an administrative and contractual services agreement with the holding company authorising the holding company to enter into administrative, technical, and contractual services arrangements with third parties on its behalf.

It resolved to be bound by such agreements and to bear the costs and benefits arising therefrom.

The contemplated Administrative, Technical and Contractual Service Agreement was concluded on 8 February 2008.

The main appellant bound itself to assume all royalty and exploitation of user rights and brands and trademarks agreements, services agreements, lease agreements, bonds, supplier contracts, employment contracts, and any other routine matters authorised for execution by the Board or its management executed by the holding company as its own.

On 19 August 2011, the exchange control authority granted authority to the holding company to pay royalties of up to 5 percent to the Dutch company less withholding tax.

Again, on 18 March 2013, the exchange control authority granted the main appellant authority to renew the Technical Services Assistance agreement and make payment of fees of up to 1.5 percent of the Group's annual turnover excluding sales of CBL, LL and EL less withholding tax and an additional 1 percent of the holding company's turnover less withholding tax on another product, CL, in recognition of the invention, design and know-how of the franchisor.

The turnover and fees were to be certified by a reputable firm of auditors.

On 14 April 2016, the cross appellant issued six (6) amended manual Notices of Assessment for Income Tax to the main appellant. The amended assessments related to the tax years ending on 31 December 2009, 2010, 2011, 2012, 2013 and 2014. The cross-appellant levied a payment by the main appellant of over US$42 million, including penalty and interest.

By letter dated 20 April 2016, the main appellant objected to the assessments.

In response, the cross appellant issued revised assessments and sent these to the main appellant without an explanation.

In its revised assessments, the cross-appellant conceded several issues raised by the main appellant in its objection and reduced the total amount claimed to around US$30 million.

By letter dated 9 May 2016, the main appellant revised and re-lodged further objections.

The cross appellant disallowed all grounds of the main appellant's further objections.

Aggrieved by that decision, the main appellant appealed to the Special Court for Income Tax Appeals.

The issues placed before the court a quo for determination, as per the joint pre-trial conference minute, are as follows:

“1. Whether or not the respondent was correct in disallowing royalties pertaining to the brands/trademarks?

2. Does the fact that a written technical services agreement exists between Delta Corporation and SAB Miller Management BV prevent the appellant from deducting such fee payments as expenses?

3. Did the appellant incur technical fees, which it sought to deduct as expenses?

4. Was the respondent correct in disallowing technical fees, which are expressed as a percentage of turnover?

5. Had Delta's tax affairs, relating to the tax year ending 31 December 2009, prescribed as at the date of the assessment?

6. If not, whether the respondent correctly disallowed the expenditure apportioned by the holding company as management charges?

7. Whether or not the respondent was correct in disallowing consumable stocks claimed by the appellant.

8. Whether or not the respondent was correct in disallowing prepaid expenses claimed by the appellant?

9. Is appellant entitled to deduct the inventory revaluation in question?

10. Whether or not the respondent was correct in disallowing expenses described as computer software cost in the tax computation?

11. Is respondent's imposition of penalties of 50% justified?

12. Whether or not interest should be payable by the appellant.”

After hearing the parties and perusing documents filed of record, the court a quo ordered that:

“1. The revised manual assessments numbers 0006754, 0006755, 0006756, 0006757, 0006758 and 0006759 issued by the Commissioner on 5 May 2016 for the tax years ended 31 December 2009, 2010, 2011, 2013 and 2014 respectively be and are hereby set aside.

2. The Commissioner is directed to issue further revised assessments that incorporate the contents of this judgment. He shall specifically:

(a) Allow in full the deductions claimed by the appellant for royalties and technical fees in respect of the 2009, 2010, 2011, 2012, 2013 and 2014 tax years.

(b) Reopen the 2009 assessment and add back the sum of US$150,722 in respect of head office expenses, to the appellant's taxable income.

(c) Add back all the deductions, if any, made by the appellant in respect of head office expenses to the appellant's taxable income for the years 2010 to 2014.

(d) Add back the deductions for consumable stock, in their respective amounts, to the appellant's taxable income in respect of each tax year in issue.

(e) Add back the prepayments, in their respective amounts, in each tax year in issue.

(f) Allow the deduction in the sum of US$603,792 in respect of the stock revaluation adjustment in the 2010 tax year.

(g) Add back the computer software deductions of US$2,059,238 in their respective amounts, in the 2013 and 2014 tax years.

(h) Charge a penalty of 10% on the additional tax payable in each respective tax year.

(i) Waive in full any interest from the additional tax.”

Aggrieved by the decision of the court a quo, the main appellant noted an appeal against part of the judgment to this Court. The cross appellant cross-appealed against part of the same decision.

The appeals were noted on the following grounds:

“1. The court a quo erred in law by holding, that, the legislative intent behind the Income Tax Act [Chapter 23:06] was clearly to match the expense incurred to the income produced in the same tax year.

2. The court a quo erred in law by holding, that, when determining the deductibility of the expense of unused consumables the relevant question was whether 'the appellant had an unconditional legal obligation to purchase' them.

3. The court a quo erred in law by finding, that, the appellant decided to 'purchase consumables in excess of its annual requirements' in circumstances where there was no evidence warranting such a finding before the court.

4. The court a quo erred by disallowing all deductions for consumable stocks in circumstances where it has found that deductions for consumables are allowed in the year when they were consumed.

Relating to issue 5: 'Prepaid expenditure'

5. The court a quo erred in law by apparently expecting opinion evidence, on a question of law relating to the requirement of paying excise duty, from a witness of fact.

6. The court a quo erred in law by appearing to hold, without expressly stating its finding, that, the appellant's obligation to pay excise duty on clear beer removed from the excise bonded warehouse constituted a 'premature discharge of a contingent liability.'

7. The court a quo erred in law by appearing to hold, without expressly stating its finding, that, the appellant's obligation to pay for an annual insurance premium that straddled two tax years constituted a 'premature discharge of a contingent liability.'”

“1. The Special Court for Income Tax Appeals erred in allowing as a deduction, in terms of section 15(2(a) of the Income Tax Act [Chapter 23:06], expenses relating to royalties in respect of each tax year in issue when the cross-respondent was not a party to the agreement in terms of which such royalties were payable.

2. The court a quo further erred in finding that payments made in respect of trademarks or brands were expenditure incurred for the purposes of the cross-respondent producing income.

3. The court a quo further erred in finding, that, the cross-respondent was entitled to pay fees in terms of the Technical Services Agreement which was concluded between Delta Corporation Limited and SAB Miller Management BV to which the cross-respondent was not a party.

4. The court a quo erred in finding, that, the cross-respondent was entitled to pay fees in terms of the Technical Services Agreement at the rate of 1.5% of turnover when it was clear that SAB Miller itself was charged fees on a cost-plus mark-up basis by its South African sub-contractors and when the Group policy was that the cost plus mark-up basis was the method of charging such fees.

5. The court a quo further erred in finding, that, the cross-respondent was entitled to pay and deduct the amount of US$603,792 in respect of inventory revaluation, as an expense incurred against its income in terms of section 15(2)(a) of the Income Tax Act when the value of the stock adjusted had already been factored into the computation of the gross profit which was subject to the income tax.

6. The court a quo further grossly erred in finding, that, the cross-appellant was not correct in imposing a penalty of 50% of the taxes due upon the assessments on the cross-respondent.

7. The court a quo further grossly erred in setting aside the interest imposed upon the cross-respondent when it was not shown that the Commissioner of the cross-appellant had been grossly unreasonable in imposing such interest at 10%.”

Counsel for the main appellant, in the main appeal, submitted, that, the appellant bought consumables which did not run out in the first year and were carried into the second year. He further submitted, that, deductions could only be made in the first year and that the matching principle did not apply.

Counsel for the appellant submitted, that, the matching principle cannot be used as it apportions costs over two tax years as there were un-utilised consumables carried over from the year of purchase.

He contended, that, the cause of action arose when the consumables were bought and the expense was incurred in year one. To that end, he argued that the appellant has to deduct the expenses of the purchases in year one and that there should be no splitting of the expenses into both years.

Counsel for the main appellant asserted, that, the statutory prepaid expenditure on record, establishes that the expenditure was incurred in terms of statute and cannot therefore be a prepayment as alleged by the respondent. He submitted, that, the court a quo was correct in allowing the deductions but it was not clear how it went on to make a finding in favour of the respondent.

Counsel for the main appellant submitted, that, the court a quo erred by disallowing all deductions for consumable stocks in circumstances where it had found that deductions for consumables are allowed in the year when they were consumed.

Concerning the fifth ground of appeal, relating to stock and trading stock, counsel for the main appellant argued, that, deductions were meant for stock in general to avoid double deductions.

On the imposition of penalties, counsel for the main appellant averred, that, the matter would have to be remitted to the court a quo for it to determine whether or not section 98 of the Income Tax Act applies.

In relating to the cross appellant's grounds of appeal number six and seven, on penalty and interest, counsel for the main appellant argued, that, the proceedings were neither an appeal in the strict sense nor a review, as the court a quo can consider evidence placed before it and come up with a decision on penalty and interest based on its own discretion.

On whether or not brands and trademarks contribute towards the making of income, counsel for the main appellant submitted, that, they significantly contribute in the making of income.

In respect of inventory revaluation, he submitted that they were correctly allowed in terms of paragraph 4 of the Second Schedule of the Income Tax Act.

In respect of the technical services, he argued that the court a quo correctly found that they were deductible.

Counsel for the cross appellant submitted, that, the consumables the main appellant sought to deduct were not utilized in the year of purchase, therefore, in terms of section 15(2)(a) of the Income Tax Act, one cannot interpret the section without taking into consideration the purpose for which the expense was incurred.

He argued, that, the matching principle applied as the purchase of consumables should be for the purpose of making an income in the tax year in which the purchases were made.

Counsel for the cross-appellant contended, that, the consumables were bought in excess and could not all be deducted in the same tax year. He submitted, that, the excess consumables were not consumed and did not generate income.

He further submitted, that, it is by the reasonable interpretation of the law that the matching principle must be applied.

He argued, that, the deduction for payments of royalties should not be allowed as there is no nexus between the main appellant and the holder of the royalties.

Concerning ground of appeal number two, he submitted, that, trademarks, brands, and the know-how generate little money unless advertised.

He further submitted, that, the advertising costs are deductible and that it is the advertising that generates income and that if the products are not advertised they remain as stock.

Counsel for the cross appellant asserted, that, there was no evidence proving that brands and trademarks contribute towards the making of income.

In relation to the main appellant's third and fourth grounds of appeal, he submitted, that, the court a quo found that the main appellant's witness was not a credible witness.

He contended, that, it was the SAB Miller policy to pay on a cost-plus mark-up basis, but, the court a quo found that the appellant was obliged to pay the holding company on a turnover basis of 1.5 percent.

Concerning prepayment of excise duty insurance premiums, counsel for the cross-appellant averred that the court a quo did not hear evidence on this issue as none was placed before it.

On technical fees, counsel for the cross-appellant submitted, that, the court a quo should have determined whether or not the agreement between the Dutch company and Delta Corporation (Private) Limited and that between the main appellant and Delta Corporation was not aimed at tax avoidance.

In respect of inventory revaluation, he submitted that the deduction should not have been allowed as that would amount to a double deduction.

Counsel for the main appellant submitted, that, the question of whether or not the main appellant was a party to the agreement was a factual finding on which the cross appellant had made a concession to the effect, that, the agreement was genuine.

He averred that the cross appellant's case was whether or not a deduction could be allowed, and, on the other hand, its case was that deductions were justified if there was an obligation to pay.

He therefore argued, that, the cross-appellant was approbating and reprobating.

In respect of the use of trademarks to make an income, counsel for the main appellant submitted, that, one can make an income from brands or trademarks, which is a sign of the quality of the product. He argued that section 8(1) of the Income Tax Act defines gross income and income in a way which establish that income can be generated by a brand or a trademark.

Counsel for the main appellant averred, that, the Exchange Control Act allowed the charging of these fees and sets an upper limit of 3 percent.

The appeals raise the following issues for determination:

1. Whether or not the court a quo correctly found, that, the legislative intent behind the Income Tax Act was to match the expenses incurred to the income produced in the same tax year and to allow the deduction of statutory prepayments which cover a period beyond the year of taxation in the tax year of payment.

2. Whether or not the court a quo erred in ordering the Commissioner to add back to the main appellant's taxable income deductions for consumables used to make an income in the year of taxation.

1. Whether or not the court a quo erred in allowing the deduction of royalties by the main appellant when it was not a party to the agreement between the Dutch company and its holding company for the use of the Dutch company's brands and trademarks.

2. Whether the court a quo erred when it allowed the main appellant's deduction of payments of technical services without resolving whether or not such deductions contravened section 98 of the Income Tax Act.

3. Whether the court a quo erred when it allowed the main appellant's deduction of US$603,792 for inventory revaluation.

4. Whether or not the court a quo was correct in reducing to 10 percent the 50 percent penalty imposed and waiving in full the interest charged.

It must be stressed, that, the Special Court for Income Tax Appeals is not a court of appeal in the strict sense because when it hears these appeals, it is a re-hearing of the matter and it exercises its own discretion. It can even hear and rely on evidence and submissions which were not placed before the Commissioner.

This position was stated in Sommer Ranching (Pvt) Ltd v Commissioner of Taxes 1999 (1) ZLR 438 (SC)…, where GUBBAY CJ emphasized that:

“Presently, it is well settled that in an appeal against a decision where the Commissioner exercised a discretion, the Special Court is called upon to exercise its own original discretion. Nor is it restricted to the evidence which the Commissioner had before him. The appeal to the Special Court is not only a rehearing, but, can involve the leading of evidence and the submission of facts and arguments of which the Commissioner was unaware: see also Commissioner for Inland Revenue v da Costa 47 SATC 87 (A) at 95; 1985 (3) SA 768 (A) at 775B-G; K v Commissioner of Taxes 1993 (1) ZLR 142 (S) at 147B-F; 55 SATC 276 (ZS) at 281.”

The appeal before the court a quo was therefore not merely a review of the correctness of the Commissioner's determination, but, the court was required to exercise its own independent discretion unaffected by that of the Commissioner.

The main appellant's counsel submitted, that, the court a quo erred in law by holding that the legislative intent behind the Income Tax Act was to match the expense incurred to the income produced in the same tax year. It is the main appellant's contention, that, the court a quo used the matching principle, which is a principle of accounting and not of law, in its determination.

In its judgment, the court a quo commented on this issue as follows:

“I am satisfied, that, the Commissioner correctly disallowed the deduction of the expenses related to the excess consumables that were not utilised in the tax year in which they were purchased. My finding is based on two grounds:

(i) The first is that the expenditure on the excess consumables did not constitute necessary expenditure for the production of income in the particular tax year in which such excess consumables were purchased. Such expenditure was not required for the purposes of trade or production of income in the relevant tax year.

(ii) The second is that the excess consumables expenditure could not be matched to any income produced in the tax year of purchase.

In my view, the matching principle constitutes part of our income tax law.”

The findings of the court a quo are supported by section 15(2)(a) of the Income Tax Act which provides as follows:

“(2) The deductions allowed shall be -

(a) Expenditure and losses to the extent to which they are incurred for the purposes of trade or in the production of the income…,.”

Section 15(2)(a) of the Income Tax Act provides for deduction of expenditure incurred for the purposes of trade or in the production of income during the income tax year under consideration.

Section 2 of the Income Tax Act defines trade as anything done for the purposes of producing income.

Section 8(1) of the Income Tax Act provides as follows:

“'Gross income' means the total amount received by or accrued to or in favour of a person or deemed to have been received by or to have accrued to or in favour of a person in any year of assessment from a source within or deemed to be within Zimbabwe excluding any amount (not being an amount included in 'gross income' by virtue of any of the following paragraphs of this definition) so received or accrued which is proved by the taxpayer to be of a capital nature, and, without derogation from the generality of the foregoing.”…,.

It is apparent that gross income is accrued from a source which is used in making it.

In the circumstances of this case, it is the expenditure spent on materials used to make the gross profit which should be deducted in assessing the tax to be paid by the tax payer in the tax year for the income raised in that tax year.

Section 8(1) of the Income Tax Act further defines income as follows:

“'income' means the amount remaining of the gross income of any person for any such year after deducting therefrom any amounts exempt from income tax under this Act.”…,.

Income, in respect of any tax year, is established by deducting allowable deductions from gross income. It is also apparent that the gross income, income, and deductions are linked to a specific income tax year.

Sections 15(2)(a) as read with section 8(1) of the Income Tax Act limits whatever amount received or accrued in favour of a person to “any year of assessment.”

It is therefore only that which relates to a particular year of assessment that is taken into account.

The inclusion of expenditure not consumed in the tax year, and which does not relate to the production of income in that particular year, is not permissible.

In this regard, un-utilized consumables should not have been included in deductions made in the year of purchase. The expenditure, not being linked to the production of income in that tax year, could therefore not be deductible in that year.

The main appellant further contends, that, the court a quo erred in determining the deductibility of the expense of un-used consumables by holding that the relevant question was whether “the appellant had an unconditional legal obligation to purchase” them.

In my view, these words were stated in orbiter and were not the reason for the court's determination on the issue of excess consumables.

The reason for the court's decision is in the interpretation of section 15(2)(a) and section 8(1) of the Income Tax Act.

I am therefore satisfied, that, the court a quo correctly determined this issue.

In determining whether or not statutory prepayments can be deducted in the year of payment the court a quo said:

“The witness indicated two types of prepayments made by the appellant in respect of which the claim for the deduction was disallowed. These were insurance premium payments that straddled the current and subsequent tax years. The second payments were in respect of excise duty paid at the time the beverages were removed from the appellant's factory to its storage warehouses.

The witness did not explain how they came to be treated as prepayments if it was a legal requirement that the excise duty be paid on removal.

If that was the legal requirement, then, the excise duty would have been incurred, by operation of the law, on the date of removal and would be deductible as an expense in the tax year in which such removal took place.

In those circumstances, it would have been remiss of the Commissioner to disallow such a deduction.

However, if the excise duty was required, by law, to be paid on the removal of the beverages from the appellant's warehouses on a date in a subsequent tax year, payment of excise duty in the tax year in which the beverages were removed from the factory would constitute a prepayment. By operation of law, the payment could only be incurred on removal from the appellant's storage warehouse and not from the factory.

In both, the insurance and excise duty prepayments, the date on which the appellant was required by law to pay the insurance and excise duty would be the date on which the appellant had an unconditional obligation to discharge such a liability.

The premature discharge of a contingent liability in the preceding tax year simply meant, that, the appellant was discharging a liability that had not yet been incurred. In those circumstances, the Commissioner correctly disallowed the payments in question.”…,.

The determinant words in the quotation are: “the witness did not explain” and the subsequent use of the words 'if' and 'would'.

What is apparent is that the court a quo was left without information by a party which had the onus to prove the issue.

The comment counsel for the main appellant sought to rely on appeared to be a favourable finding by the court a quo when it was, in fact, a supposition based on the court commenting on what would have been the correct legal position if the main appellant's witness had explained the correct position.

The court was dealing with two opposed positions.

The cross appellant's assertion, that, these were prepayments in terms of statutory provisions and the main appellant's unclear position on why it was saying they are not statutory prepayments.

This led the court a quo into stating what the correct position at law would have been if the main appellant had proved that they were indeed statutory prepayments, and what the correct position would have been if the payments were, at law, prematurely made.

Based on the evidence placed before it, the court a quo held, that, the Commissioner correctly disallowed the deduction of the prepayments in question. It therefore did not find in favour of the main appellant as alleged by counsel for the main appellant.

I am therefore satisfied, that, the main appellant's appeal on issue number one has no merit.

This is an appeal against the whole judgment of the High Court handed down on 8 September 2020, declaring “that payment by the applicant (respondent) of the sum of RTGS$235,620=99 together with interest at the prescribed lending rate calculated from 19 February 2020 to the date of final payment shall be the full and final settlement of the respondent's (appellant's) debt.”...,.

The appellant is Homelink (Private) Limited, a registered money-lender in terms of the law. The respondent is a Zimbabwean national living in the diaspora.

On 17 August 2018, the parties entered into a loan agreement which came into effect on 30 October 2018. In terms of the agreement, the respondent was granted a loan in the sum of US$450,000 to purchase an immovable property, being a certain piece of land situate in the district of Salisbury called the remainder of Stand 251 Helensvale Township measuring 8,242 square metres in extent also known as 2 Denys Close, Helensvale, Harare.

The same Stand was also to be used as security for the loan. A mortgage bond was accordingly registered in favour of the appellant in the sum of US$450,000.

The parties also agreed that the interest applicable to the loan “shall be at a variable rate currently pegged at 10 percent per annum or at such rate as shall be determined by the Lender from time to time.”

Furthermore, that the interest “shall be calculated on the outstanding balance (at all times expressed in United States Dollars) at the prevailing interest rate.”

It was also agreed that repayments would commence on 30 October 2018 and that “the principal balance, interest, and charges accruing thereon shall have been paid in full by 30 September 2033.”

The parties also agreed, in clause 10, as follows:

“10 CHANGES IN CIRCUMSTANCES

10.1 If by reason of:

10.1.1 The introduction of any change in any applicable law or regulation, or any change in the interpretation or application thereof; or

10.1.2 Compliance by the Lender with any directive, request or requirement (whether or not having the force of law) of any Central Bank, Government, fiscal, or other authority;

10.1.3 It becomes unlawful or it is prohibited or it is contrary to such directive, request or requirement for the Lender to maintain the Loan or to give effect to any of its obligations, as contemplated by this Agreement, then, the Lender may notify the Borrower and the Borrower shall promptly prepay the Loan, together with all interest costs and expenses accrued thereon.”

At the time that the loan agreement was concluded, the United States dollar was the dominant legal tender along with other multi currencies.

Although the loan was expressed in United States dollars, it was disbursed in two parts or tranches.

US$5,685=85 was disbursed on 13 September 2018. The greater part of the loan, in the amount of US$444,341=15 was disbursed on 16 November 2018 - after the separation of the RTGS dollars and nostro foreign currency bank accounts and it was disbursed in RTGS dollars or local currency at the rate of one-to-one to the United States dollar.

The reason for disbursement of the greater part of the loan in RTGS dollars is unexplained in the papers.

In its opposing affidavit a quo, the respondent merely states as follows:

“The correct position is that S.I.33 of 2019 came into force on 22 February 2019. The sum of US$444,341=15…, was disbursed on 16 November 2018 as stated above.”

In his application in the court a quo, the respondent stated the crisp issue before the court as follows:

“The legal issue is whether or not the loan agreement, or the liability arising therefrom, falls within the ambit of section 4(1)(d) of S.I.33/2019 now incorporated in terms of section 22(1)(d) the Finance (No.2) Act 2019 and is therefore deemed to be in RTGS dollars at a rate of one-to-one to the United States dollar.”

As stated at the commencement of this judgment, the court a quo found in the respondent's favour. The court stated, at p8 of its judgment:

“The difficulty of the dispute of the parties is exacerbated by the fact that neither the Principal Act nor the Finance (No.2) Act of 2019 appears to have defined the phrase foreign loan and/or obligation.

However, insights into the same can be gleaned from what the Cambridge Dictionary states on that issue: dictionary.cambridge.org defines a foreign loan as a loan to, or from, a Government or an organisation in another country. The Longman Business Dictionary defines foreign loan as a loan to a country or organisation made by a foreign Government or financial institution.

It is evident, from the definitions which have been examined, that, the loan which the respondent advanced to the applicant does not fall under the definition of a foreign loan. Nor can the obligation which arises from the contract of the parties be classified/defined as a foreign obligation to the applicant. The loan has all the characteristics of a domestic loan which falls under the ambit of the provisions of the Act.”

The court found, at p9:

“The loan cannot, by any stretch of imagination, be defined as a foreign loan. It is, to all intents and purposes, a local loan which is classified as such because of the characteristics which are apparent on its face. It is, accordingly, properly covered under the provisions of the Act.”

The appellant was aggrieved by the court a quo's decision granting the declaratur sought by the respondent and it filed this appeal on the following grounds:

“1. The court a quo erred and misdirected itself in not giving effect to the parties agreement, namely, that, all repayments would be made in United States Dollars. Consequently, the court a quo made a contract on the parties behalf;

2. The court a quo erred and misdirected itself in not finding that the parties loan agreement was a foreign obligation within the contemplation of section 21(2)(b) of the Finance (No.2) Act 2019 and therefore continued to be payable in foreign currency.”

The appellant prayed for the success of his appeal and for the setting aside of the decision of the court a quo and the substitution thereof with an order dismissing the application with costs.

Counsel for the appellant submitted, that, the issue arising from the appellant's second ground of appeal is dispositive of this matter; the narrow issue being whether the court a quo was correct in finding that the loan agreement was not a foreign loan, within the contemplation of section 21(2)(b) of the Finance (No.2) Act of 2019, that continued to be payable in foreign currency.

It was his submission, that, the first ground of appeal will either be upheld or fall away depending on the finding thus made regarding the nature of the loan agreement. If it is a foreign loan, the first ground of appeal must succeed, but if not, then the first ground falls away, so he contended.

Counsel sought to buttress the appellant's stance, that the loan is a foreign obligation, by submitting that the loan in casu was issued on the strength of exchange control approval given by the Reserve Bank of Zimbabwe. He referred the court to a document at p65 of the record.

It is a letter dated 2 August 2019 authored by the Deputy Director, Foreign Investment, at the Reserve Bank of Zimbabwe and addressed to the Managing Director of the appellant. The body of the letter reads:

“Thank you for your letter dated 09 July 2019 regarding the request to continue issuing diaspora mortgages in foreign currency. We wish to advise that Homelink (Pvt) Ltd can continue to issue mortgages denominated in foreign currency to diaspora clients as authorised under Exchange Control authority GR4268 dated 26 October 2016.”…,.

To his credit, counsel readily conceded that the appellant's failure to attach to its papers the authority referred to as GR4268 placed the court a quo, and, by extension, this Court, in an invidious position as its contents are and remain unknown.

This is an appeal against the whole judgment of the High Court of Zimbabwe handed down on 14 July 2022 under judgment number HB188-22.

After hearing the parties, the court dismissed the appeal with costs. The reasons therefor appear hereunder.

The parties filed a statement of agreed facts before the court a quo. The statement was reproduced by the court a quo in its judgment and may be summarised, materially, to the following effect:

(a) Sometime in November 2014, the first respondent and the appellant entered into a written agreement of sale over Stand Number 6505 Bulawayo Township of Stand 6541 Bulawayo Township, situate in the district of Bulawayo.

In their papers, the parties refer to it as “the initial agreement”.

The appellant took occupation of the property immediately upon the signing of the agreement in accordance with the terms thereof. The terms of the agreement also provided that the appellant was to pay the purchase price of the property in the sum of USD105,000 as follows:

(i) A deposit in the sum of USD25,000 upon the signing of the agreement.

(ii) The balance of USD80,000 by way of three equal instalments commencing on the 28th of February 2015, and, subsequently on or before 28 April 2015 and finally on or before 31 July 2015.

(b) The said purchase price was as per the then prevailing fair market value of the property.

The appellant paid a deposit of USD37,000 “by 12 March 2015.”

The appellant however breached the agreement of sale by failing to pay the balance of the purchase price of USD68,000 in the manner stipulated in the agreement.

The notice of termination of the initial agreement of sale, authored by the first respondent, was, according to the Sheriff's return of service, served upon the appellant at No.43 Aberdeen Road, Fortunes Gate, Bulawayo on 12 August 2015, by handing a copy thereof to the appellant's worker.

In terms of the notice of termination, the initial agreement was cancelled on 4 September 2015.

(c) An action was instituted by the first respondent on 16 February 2017, under case number HC446/17, seeking the following relief:

(i) An order confirming the cancellation of the initial agreement.

(ii) An order evicting the appellant and all those claiming occupation from the property in question.

(iii) An order that the appellant pays “occupational damages” to the first respondent in the sum of USD800 per month or USD26.67 per day from the 4th of September 2015, being the date of the cancellation of the initial agreement to the date of eviction.

(d) A default judgment was granted on 19 May 2017, confirming the cancellation of the initial agreement and granting the relief as prayed for in the summons in HC446/17. In terms of the writ of execution and ejectment issued on 8 February 2018 pursuant to the default judgment, the appellant was evicted from the property in question.

(e) On 22 November 2018, the default judgment under HC446/17 was rescinded and set aside under HC1576/18. On 26 November 2018, the appellant entered an appearance to defend the action under HC446/17. On 18 February 2019, he filed a special plea but had not (as at the time of the filing of the statement of agreed facts) pleaded over to the merits.

(f) During the period when the order (in default) in HC446/17 was extant, the first respondent entered into a written agreement of sale over the same property (second agreement) with the second respondent. In terms of the second agreement, the second respondent was to pay the full purchase price in respect of the property being the sum of USD130,000 as follows:

(i) A deposit in the sum of USD70,000 upon the signing of the agreement.

(ii) The balance of USD60,000 to be paid between 31 April 2018 and 31 July 2018.

(g) The purchase price prescribed in respect of the property in terms of the second agreement was also per the then prevailing fair market value. In accordance with the terms of the second agreement, and by the 18th of July 2018, the second respondent had paid the full purchase price in the sum of USD130,000 to the first respondent.

(h) The third respondent was made aware of the second agreement of sale in terms of a report by the first respondent and he duly recorded such sale in his minutes in respect of a creditors meeting held on 21 June 2018. The minutes of the said meeting are contained in the third respondent's final liquidation file under CRB2/10.

I interpose at this juncture, for the sake of clarity, to explain that the first respondent acts in his official capacity as the liquidator of a company, Tabs Avon Lighting (Pvt) Ltd (in liquidation), the seller of the property in issue, hence the involvement of the third respondent.

(i) On 21 March 2018, the only secured creditor of Tabs Avon Lighting (Pvt) Ltd (in liquidation), being NMB Bank Limited, approved of the second agreement of sale and the third respondent was duly made aware of such approval. The letter by this sole creditor is also filed in the third respondent's final liquidation file under CRB2/10.

(j) In the aftermath of the granting of the order under HC1576/18, and after the conclusion of the second agreement of sale and the payment by the second respondent of the full purchase price in respect of the property, the appellant took steps aimed at remedying his breach of the initial agreement of sale. He did so by depositing USD68,000 into the first respondent's legal practitioners trust account, being the balance of the purchase price.

(k) The steps taken by the appellant, aimed at remedying his breach of the initial agreement, were not accepted by the first respondent. The first respondent's legal practitioners tendered back to the appellant the said amount of USD68,000 that had been paid into its trust account.

(l) By way of an order granted under HC3144/18, the second respondent (being the purchaser in the second agreement) was joined to the main proceedings. He duly entered an appearance to defend the action and filed his plea thereto.

(m) As at the date of the Statement of Agreed Facts, and following the appellant's eviction therefrom in terms of the writ of execution and ejectment issued against him under HC1576/18, neither of the parties were in physical or lawful occupation of the property nor had any party taken transfer thereof.

In the Statement of Agreed Facts, the parties listed the following as the issues for determination by the court a quo:

(i) Whether the initial agreement of sale over Stand 6505 Bulawayo Township of Stand 6541A Bulawayo Township, situate in the District of Bulawayo, between the plaintiff (appellant) and first defendant (first respondent), was lawfully terminated.

(ii) Whether there existed any legal impediment to the conclusion of the second agreement of sale entered into between the plaintiff (first respondent) and the second defendant (second respondent) at the material time.

(iii) To whom should the property, being Stand 6505 Bulawayo Township of Stand 6541A Bulawayo Township, situate in the District of Bulawayo be transferred.

On the second issue, the first respondent contended, that, the second agreement was concluded after the cancellation of the first agreement and also at the time the default judgment confirming cancellation was extant. It was also submitted, on his behalf, that, the fact that the default judgement confirming the cancellation was later rescinded was of no moment.

Per contra, the appellant argued that the preamble to the agreement between the first respondent and the second respondent described the property as Stand 6512 Bulawayo Township. It was submitted, that, it therefore followed that the parties in the second agreement had in mind Stand 6512 and not Stand 6505, the subject matter of the initial agreement. Furthermore, that there was thus no privity of contract between the first respondent and second respondent concerning the property the subject of this appeal....,.

The court found, that, the property referred to in the agreed facts was Stand Number 6505 Bulawayo Township, situate in the District of Bulawayo. It found that there was no factual dispute as to the identity of the property in issue, the subject matter of the agreement between the first and second respondents....,.

It was contended by counsel for the appellant, that, there was “a serious dispute of fact” in that the initial and the second agreements related to two different properties. Thus, the appellant purchased a different property from that purchased by the second respondent....,.

It was also counsel's submission, that, the reflected or implicit position in the Statement of Agreed Facts, that the property the subject matter of the initial agreement was the same property sold in the second agreement, was agreed to by mistake on the appellant's part because the two agreements related to two different properties.

He submitted, that, the issue of the two agreements relating to two different properties was brought to the attention of the court a quo which ought to have asked for an explanation why it was being asked to award to the second respondent property that had been bought by the appellant. He submitted that the court a quo ought to have advised that the matter should go to trial.

With regard to the alleged dispute of fact, counsel argued, that, the appellant's argument would only carry the day where, as in Leathought Investments (Pvt) Ltd v Chirangano and Others SC60-21, such dispute of fact appears on the face of the Statement of Agreed Facts itself and in the pleadings.

He submitted that in casu, the parties decided to forgo preliminary issues and that the real issue that they placed before the court was the question: “who is entitled to take transfer of the property?”

Furthermore, the appellant should have followed the proper channels to resile from the Statement of Agreed Facts.

Without having done so, the appellant must be held to the facts as reflected in the Statement of Agreed Facts.

The issue of the Stand Number is thus overridden by the Statement of Agreed Facts which the parties signed.

Further to that, after so signing, the appellant had, as agreed, filed a plea in which the issue of the Stand Number did not arise.

The issue only arose during the hearing.

He argued, that, the parties were bound to the facts in the Statement of Agreed Facts and that the court only assists the parties by determining issues of law that arise therefrom. The appellant cannot therefore start alleging disputes of fact at the stage where the parties are addressing the court on issues of law....,.

On the alleged dispute of fact, counsel for the second respondent submitted, that, there was no merit in the allegation as the parties are all in agreement that the Stand in issue is Stand No. 6505....,.

Counsel for the second respondent further highlighted that the appellant had re-occupied the property and was benefitting from it...,.

Considering the grounds of appeal, as well as the submissions made before this Court, the following issues emerge for determination:

1. Whether or not service on the appellant's gardener, of the notice to remedy the breach, was proper service.

2. Whether or not the appellant was entitled to specific performance.

This is an appeal against the whole judgment of the Fiscal Appeal Court HH20-20 dated 8 January 2020. The court a quo dismissed the appellant's appeal against the decision of the Commissioner in respect of assessed tax and confirmed its amended income assessment made by the Commissioner on 2 September 2015.

The appellant is a company, with limited liability, duly incorporated in terms of the laws of Zimbabwe. It carries on the business of mining platinum in an area known as Middleridge Claims in Zimbabwe.

The appellant and a related company, known as Southridge Limited, are subsidiaries of a registered company known as AmZim Holdings Limited Group ('Amzim'). Amzim is, in turn, a member of the Anglo American Group ('Amhold').

Anglo American Group (Amhold) is not a trading or operating entity and is also not a Zimbabwean company. It merely holds all the shares in the appellant.

The respondent is a statutory body established in terms of section 3 of the Zimbabwe Revenue Authority Act [Chapter 23:11]. Its mandate is, amongst others, to assess and collect revenue on behalf of Government.

The appellant is the holder of a Special Mining Lease issued to it in March 2008 by the Government of Zimbabwe ('GOZ') in respect of the mining of platinum in an area known as Middleridge Claims. The appellant and Southridge Limited, for the purpose of facilitating the participation of other players in the platinum industry, ceded platinum claims (Bougai and Kironde) to the Government of Zimbabwe (GOZ) in an agreement signed between the relevant parties on 25 March 2008 (the 'cession agreement').

On 1 November 2012, the Government of Zimbabwe (GOZ), the National Indigenisation and Economic Empowerment Fund, Anglo American Platinum Limited, AmZim Holdings Limited Group (Amzim), Southridge Limited and the appellant entered into an agreement to implement the indigenisation implementation plan and indigenisation transaction.

The agreement also provided for the 51 per cent equity ownership in Anglo American Group (Amhold) being issued to Indigenous Entities.

The founding document of the agreement was termed the Heads of Agreement ('Heads of Agreement'). The Heads of Agreement are part of an agreement in fulfilment of the indigenisation laws of Zimbabwe and was consequent upon the cessation agreement signed on 25 March 2008.

In 2007, the Government of Zimbabwe (GOZ) enacted the Indigenisation and Economic Empowerment Act No.14 of 2007 [Chapter 14:33] ('the Indigenisation and Economic Empowerment Act'). The Act came into operation on 17 April 2008.

On 23 November 2011, a Deed of Trust for the Tongogara Rural District Community Share Ownership Trust ('the Trust') was founded. The founders of the Trust were Saviour Kasukuwere, the then Minister of Youth Development, Indigenisation and Empowerment representing the Government of Zimbabwe (GOZ), July Ndlovu duly authorised to represent Anglo American Group (Amhold), Collin Chibata duly authorised to represent the appellant, Gilbert Dhaidhai, Christmas Ndanga, Toendepi Banga, Walter Nemasasi, and James Pasipano Maposa as founding trustees.

The Trust Deed was to be read together with the Indigenisation Implementation Plan signed on 12 August 2012.

On 15 April 2010, Anglo American Group (Amhold) submitted its initial indigenization implementation plan under the Indigenisation and Economic Empowerment (General) Regulations, 2010 Statutory Instrument 21 of 2010 ('the Regulations'), which also covered its local subsidiaries, to the Minister of Youth Development, Indigenisation and Empowerment for approval.

The indigenisation implementation plan was revised, initially on 7 June 2012, and finally approved on 10 August 2012.

In terms of the final approved indigenisation implementation plan, Anglo American Group (Amhold) committed to donate US$10 million as seed capital to the Tongogara Rural District Community Share Ownership Trust through the appellant, its subsidiary.

The actual payment of the US$10 million donation was thus made by the appellant.

On 30 May 2011, the appellant submitted its self-assessment for the tax year ending 31 December 2011 wherein it claimed, inter alia, the US$10 million as a deduction against its taxable income in terms of section 15 of the Income Tax Act [Chapter 23:06] (the 'Income Tax Act') as read with paragraph 4(1)(a) of the Twenty-Second Schedule to the Income Tax Act, thereby reducing its taxable income by that amount.

The assessment by the appellant showed an assessed loss of US$41,652,575.

The total expenses, excluding interest and tax, were in the sum of US$30,254,951 which included the sum of US$10 million donation categorised in its financial statements for the year ended 31 December 2011 as “Contribution to Community Share Trust”.

The respondent then carried out an investigation on the tax compliance of the appellant on 12 November 2012 for the period January 2009 to December 2012.

On 2 September 2015, the respondent issued to the appellant an amended Manual Notice of Assessment for income tax (Assessment Number 1/5114) for the year ending 31 December 2011, in which, inter alia, the respondent disallowed as a deduction the said sum of US$10 million donation.

A dispute arose between the appellant and the respondent as both parties disagreed over the nature of the appellant's payment of the US$10 million donation.

The appellant filed a notice of objection, on 11 November 2015, to the amended notice of assessment dated 2 September 2015.

In making the objection, the appellant argued that it had made the US$10 million payment in compliance with the Indigenisation and Economic Empowerment Act and the Indigenisation and Economic Empowerment Regulations.

The appellant alleged that it had an indigenisation implementation plan approved by the Minister of Youth Development, Indigenisation and Empowerment in terms of which it was obliged to make a payment of US$10 million to the Tongogara Rural District Community Share Ownership Trust. Consequently, the appellant contended that the payment was of a revenue nature, as it was incurred for the purpose of trade or in the production of income.

On 13 April 2016, the respondent disallowed the objection and reasoned that the US$10 million payment was not made wholly and exclusively for the purposes of the special mining lease operations but largely for obtaining approval of the indigenisation implementation plan. It also determined that the expenditure of the US$10 million was of a capital nature.

Aggrieved by the decision of the respondent, the appellant lodged an appeal with the court a quo on 11 July 2016.

The parties filed a Statement of Agreed Facts on 30 November 2017.

The parties were in agreement that the appellant paid the sum of US$10 million to the Tongogara Rural District Community Share Ownership Trust. The parties were also agreed that the appellant contended that the payment was made in part fulfilment of its legal obligation to indigenise in terms of the Indigenisation and Economic Empowerment Act, and, as such, the payment was a deduction against its taxable income in terms of section 15 of the Income Tax Act. It was agreed that the respondent, on the other hand, contended that the appellant did not have any legal obligation to pay the money to the Tongogara Rural District Community Share Ownership Trust, and, as such, the payment was of a capital and not revenue nature.

On 20 March 2017, a Pre-Appeal Meeting was held and a pre-appeal minute was agreed between the parties wherein the issue for determination was stated as follows:

“(a) Whether the expenditure (payment of US$10 million to the Tongogara Rural District Community Share Ownership Scheme made in 2011) claimed as a deduction is allowable as such.”

On 8 January 2020, the court a quo, in determining the appeal, found that the donation of US$10 million was not designed to establish, improve, or add to the income earning capacity nor did it generate any income for the appellant hence it was not of a revenue nature but capital. The court a quo agreed with the respondent, that, the disbursed US$10 million was designed to preserve the appellant's income-earning structure hence it was expenditure of a capital nature and not of a revenue nature.

The court a quo also dismissed the appellant's contention, that, the US$10 million was paid in compliance with the indigenisation implementation laws of Zimbabwe and on the provisions of the indigenisation implementation plan.

The court a quo found, that, the disbursement was a donation which had been made by the appellant on behalf of its holding company, Anglo American Group (Amhold), which was a separate legal entity, and, as such, the appellant could not claim a deduction of the same.

The court further found that the provisions of the Indigenisation Act, and its Regulations, did not require the appellant to make any donation in order to be indigenous compliant as it was a Zimbabwean company.

In the result, the court made the following order:

“1. The appeal be and is hereby is (sic) dismissed in its entirety.

2. The amended assessment issued by the Commissioner, on 2 September 2015, be and is hereby confirmed.

3. Each party shall bear its own costs.”

Dissatisfied by the decision of the court a quo, the appellant noted the present appeal on the following grounds of appeal:

“1. The learned Judge erred at law in finding, in the main, that the payment of US$10 million to a Community Share Ownership Trust was a donation to such trust. He ought to have found that the payment was made to satisfy Appellant's legal obligation to comply with Zimbabwe's indigenous laws.

2. The learned Judge erred at law in making the following incidental/ancillary findings against Appellant:

(a) The Appellant was not obliged to comply with indigenisation despite it being a business as defined and obliged to be indigenous compliant in terms of the law.

(b) Having earlier found, that, the Appellant's parent company had submitted an indigenisation plan for itself and its subsidiaries (including Appellant), later contradicted himself in finding that:

'Appellant could not rely on an indigenisation implementation plan that did not relate to it to claim the deduction in question.'

3. The learned Judge erred at law in finding that the payment of US$10 million to the Trust was expenditure of a capital and not of a revenue nature.”

The appellant's grounds of appeal, in my view, raise the following issues for determination:

1. Whether or not the appellant was obliged, at law, to donate the sum of US$10 million to the Community Share Ownership Trust?

2. Whether or not the court a quo erred in finding that the payment of US$10 million to the Tongogara Rural District Community Share Ownership Trust was expenditure of a capital and not of a revenue nature?

Counsel for the appellant submitted, that, the US$10 million donated by the appellant to the Tongogara Rural District Community Share Ownership Trust was not a donation in the strict sense considering the context in which the payment was made. He insisted that the appellant was obligated to make the donation in order to be compliant with the requirement for indigenisation in accordance with the indigenisation laws of Zimbabwe.

Counsel further submitted, that, the payment was a deductible expenditure of a revenue nature because it was for licensing purposes in order for the appellant to trade. He contended, that, had the appellant not made the donation, its mining license would have been revoked.

He thus urged the Court to allow the appeal.

Per contra, counsel for the respondent submitted, that, the donation was a donation proper which is not deductible in terms of part 4(a) of the Twenty Second Schedule of the Income Tax Act.

He contended, that, the donation did not benefit the appellant but was designed to benefit Anglo American Group (Amhold), its parent company, a third party.

In any event, it was his contention that there was no legal obligation on the appellant to make the donation or to be compliant with the indigenisation laws of Zimbabwe.

Counsel explained, that, no consequence would have befallen the appellant had it not made the donation, and, even if there would have been any such consequence, it would have befallen the parent company, Anglo American Group (Amhold), which had the obligation to indigenise and not the appellant.

He also submitted, that, the amendment to the Income Tax Act allowing deductions of payments made to Community Share Ownership Trusts was only made on 1 January 2013, hence, the appellant could not claim a deduction in its tax assessment report compiled in 2011 in relation to the donation as the amendment did not apply retrospectively.

The appellant's contention is that the payment of US$10 million to Tongogara Rural District Community Share Ownership Trust was made in compliance with the indigenisation laws of Zimbabwe to enable it to continue operating its special lease mining operations.

Further, that the payment was for purposes of trade or in production of income and not of a capital nature.

On the other hand, the respondent maintained that the payment of US$10 million by the appellant was strictly a donation as there was no legal obligation on it to make the donation.

Further, that the legal obligation to be compliant with the indigenisation laws was on the parent company, Anglo American Group (Amhold), and not the appellant.

It was also submitted, for the respondent, that, the payment could only have been of a capital nature as it was not paid for the purpose of trade or production of income.

The resolution of this appeal, in my view, revolves upon the determination of whether or not the appellant had a legal obligation to make the payment of US$10 million. In the event that it did, then, the court must then determine whether the payment was of capital or revenue in nature.

It should be borne in mind, from the onset, that, the relationship between the Government of Zimbabwe (GOZ), AmZim Holdings Limited Group (Amzim) and its subsidiary companies has always been regulated by different laws and agreements.

The Heads of Agreement were signed between the Government of Zimbabwe (GOZ), Anglo American Platinum Limited, Amzim Holdings Limited, Southridge Limited, and the appellant.

Clause 1.4 of the agreement provides for Amzim Holdings Limited, which is a member of the Anglo American Group ('Amhold'). The appellant and Southridge Limited are in turn members of the Anglo American Group.

Clause 2.15 of the agreement further defines 'Amhold Group' means “Amhold and all its direct and indirect subsidiaries including Unki Mine…,.”

Clause 4.2 of the agreement provides for the nature of the indigenisation transaction as follows:

“…,. 51% equity ownership of Amhold shall be issued to the indigenous entities, utilising a notional vendor funded mechanism to be facilitated by Amhold. The implementation of the Indigenisation Transaction will result in the Amhold Group being in compliance with the indigenisation Requirements for the duration of the Indigenisation Compliance Period.”

Clause 9.2.1 of the agreement is also worth quoting as it provides as follows:

“…, following the implementation of the Indigenisation Implementation Plan, through the Indigenisation Transaction, each member of the Amhold Group shall qualify as, and shall for the duration of the Indigenious Compliance Period continue to qualify as, an Indigenous Entity in compliance with the Indigenous Act…,.”…,.

An Indigenous Entity is further defined in the agreement, under clause 2.1.49, as follows:

“means a company in which issued shares are owned, directly or indirectly, by Indigenous Zimbabweans in the percentage proportion no less than that prescribed from time to time under the Indigenisation Act as the 'minimum indigenisation and empowerment quota'…,.”

Lastly, clause 3.4 of the agreement provides for the indigenisation implementation plan which was submitted by Anglo American Group (Amhold) and approved by the Minister of Youth Development, Indigenisation and Empowerment in accordance with the Indigenisation and Economic Empowerment Act.

The collective effect of the provisions of the Heads of Agreement show that Anglo American Group (Amhold) is the parent company which has subsidiary companies, being the appellant and Southridge Limited.

Further, it can be deduced that it is the parent company which submitted an indigenisation implementation plan which was approved by the Minister.

It should also be noted, that, it was an agreed provision between the parties to the agreement that the parent company was obligated to issue 51 per cent of its shares to indigenous entities in compliance with the Indigenization and Economic Empowerment Act.

The Heads of Agreement further make it clear, that, during the implementation of the indigenisation plan, the subsidiary companies of Anglo American Group (Amhold) were to be treated as indigenous companies owned by indigenous Zimbabweans.

It is thus apparent that the indigenisation laws and agreements placed an obligation on Anglo American Group (Amhold) to issue 51 per cent of its shares in order to comply with the indigenisation laws of Zimbabwe.

It was the parent company that was given that legal mandate as it is a foreign entity and not its subsidiary companies.

It thus follows, that, the Heads of Agreement and indigenous implementation plan were made for and on behalf of Anglo American Group (Amhold) so that it is able to fulfil its legal obligations, as a foreign company.

Having arrived at this conclusion, the Court must determine whether or not the appellant, as a subsidiary of Anglo American Group (Amhold), had a legal obligation to make the payment of US$10 million.

Clause 5.3 of the Heads of Agreement provide as follows;

“5.3 It is hereby recorded, that, as part of the indigenisation implementation plan, Amhold has donated US$10,000,000 to the Community Trust for purposes, inter alia, funding community projects.”

The Heads of Agreement show that the US$10 million was donated by Anglo American Group (Amhold), the holding company of the appellant, to the Tongogara Rural District Community Share Ownership Trust for purposes of funding community projects.

It is quite apparent from the record that Anglo American Group (Amhold) is a separate company from its subsidiary companies. Consequently, the appellant could not claim a deduction, based on the donation, because it was not incurred by it but by the holding company.

It is trite, that, a holding company is a separate legal entity for income tax purposes: see GC (Pvt) Ltd v Commissioner-General ZIMRA 2015 (2) ZLR 116.

In the Anglo American Group (Amhold) revised indigenisation implementation plan, dated 5 June 2012, it was stated that:

“…, in November 2011, Unki donated US$10 million as seed capital to the Tongogara Rural District Community Share Ownership Trust ('TSOT').”

The revised plan further showed that Anglo American Platinum Limited (through its subsidiaries, the appellant and Southridge Limited, together being AmZim Holdings Limited Group (Amzim)), donated US$10 million and further implemented a phase allocation of shares which would amount to 51 per cent.

In the implementation of the phase allocation of the shares, the appellant retained 100 per cent of its shares and Southridge Limited retained 88.8 per cent.

It is thus clear, from the revised plan, that, the US$10 million payment made by the appellant was made on behalf of its parent company.

In GC (Pvt) Ltd v Commissioner General ZIMRA 2015 (2) ZLR 116, the principle was laid down that a taxpayer is not entitled to make deductions in respect of expenses incurred by other companies in the same Group.

Each individual company must be assessed according to its own taxes.

Thus, the argument that the appellant paid the US$10 million to comply with the indigenization laws of Zimbabwe is without merit as it had no legal obligation to do so. It was Anglo American Group (Amhold), the holding company, that was required, by law, to transfer 51 per cent ownership shares, as a foreign-owned company, to indigenous entities.

The fact that the appellant paid the money on behalf of Anglo American Group (Amhold) is of no moment.

There was no legal obligation on the appellant, in any way, for it to donate US$10 million to the Tongogara Rural District Community Share Ownership Trust.

If there was, the appellant has not provided the basis mandating it to do so.

This is an appeal against the whole judgment of the High Court (court a quo) dated 18 October 2018. The court a quo granted an application for absolution from the instance made jointly by the respondents, granted claims in reconvention, and ordered the appellant to pay costs of the counterclaims on a legal practitioner and client scale.

The court a quo erred in this regard and the appellant was correctly aggrieved by the judgment of the court a quo.

There is no evidence in the record that the first, third, fourth, fifth, sixth, and seventh respondents (Formscaff (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) had filed counterclaims and the court a quo erred in granting counter claims that were not before the court.

Although the second respondent was properly before the court a quo, the requirements for the grant of absolution from the instance were not met.

Accordingly, the judgment must be vacated. I set out hereunder the reasons for this finding.

The appellant is a registered commercial bank operating in Zimbabwe. The first respondent is a private company registered in accordance with the laws of Zimbabwe. The third to seventh respondents (Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) are private individuals who bound themselves as sureties and co-principal debtors in respect of a loan granted to the first respondent. The second respondent is a private limited company duly incorporated in Zimbabwe.

The appellant issued summons against the respondents on 13 March 2017 for the payment of US$368,706=62 being capital and US$20,654=10 being interest on the sum of US$368,706=62 at the rate of 18% per annum, which rate was subject to change from time to time, with effect from 26 November 2016 to date of payment in full and costs of suit on a legal practitioner and client scale.

At the commencement of trial, by consent of the parties, the claim was amended to read as follows:

“(i) By deletion of the capital amount of US$368,706=62 and the substitution thereof with the amount of US$361,034=23.

(ii) By deletion of the interest amount of US$20,654=10 and the substitution thereof with the amount US$28,246=49.”

The total amount claimed by the appellant amounted to US$389,362=72.

In its particulars of claim, the appellant averred that in or around November 2015, the appellant and the first respondent entered into an agreement in terms of which the appellant extended to the first respondent a loan for the sum of US$373,000.

The loan was accessed through the first respondent's operating account and was for the purpose of assisting the first respondent in financing its working capital requirements.

Interest was to accrue on the facility at the rate of 12% per annum subject to change from time to time and 18% per annum in the event of default by the first respondent in making due and punctual payment of any instalment.

The loan advanced was repayable to the appellant as follows:

“(a) US$2,000 on the 30th November 2015;

(b) US$1,500 on the 30th December 2015;

(c) US$2,000 on the 30th January 2016; and thereafter

US$15,200 per month with effect from the 28th of February 2016 until full payment.”

It was a term of the agreement, that, in the event of the first respondent defaulting in making due and punctual payment of any instalment, the total outstanding amount would immediately become due and payable.

The second, third, fourth, fifth, sixth and seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) bound themselves jointly and severally as sureties and co-principal debtors with the first respondent for payment of any and all monies due to the appellant.

The respondents defaulted in making due payment of the loan under the agreement giving rise to the total outstanding amount claimed by the appellant of US$389,362=72.

All the respondents jointly entered an appearance to defend, and, in their plea, denied that the amount claimed by the appellant arose from the agreement dated 2 November 2015.

The first respondent denied owing the appellant any money as it argued that the loan advanced through the loan agreement was repaid in full on the 30th of December 2015. The first respondent further denied owing the appellant any interest under the loan facility and maintained that the appellant actually recovered more interest from it than was lawfully due.

The second to the seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) averred that all the suretyship deeds held by the appellant were void for vagueness as they covered an unlimited liability. They contended, that, a suretyship deed must contain a limit in monetary terms so as to be valid.

The second respondent (Penniwill (Pvt) Ltd) averred that the deed of suretyship between it and the appellant was void as it was not authorised by its Board of Directors.

The first respondent (Formscaff (Pvt) Ltd) further stated, that, the acknowledgment of debt executed by it in favour of the appellant was unenforceable as it was not signed by its representatives.

The second respondent (Penniwill (Pvt) Ltd) also averred, that, it never authorised the registration of a mortgage bond in favour of the appellant over its property known as Subdivision A of Subdivision H of N'Thaba of Glen Lorne situate in the District of Salisbury held under Deed of Transfer number 1998/95 ('the property').

Together with its plea, the second respondent (Penniwill (Pvt) Ltd) filed a claim in reconvention against the appellant and averred, that, the appellant fraudulently procured a suretyship and mortgage bond in its favour over the second respondent's property. The second respondent prayed that the suretyship deed and mortgage bond be cancelled.

The appellant entered a plea against the claim in reconvention and denied all the averments made by the respondents.

On 30 May 2017, the third to seventh respondents (Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) indicated their intention to apply to amend their pleas and file a claim in reconvention at the pre-trial conference.

The amendments sought alleged that all the respondents purported suretyships had expired by effluxion of time, having been signed more than three years before the loan was granted. It was also averred, that, the suretyships were in contravention of section 12 of the Moneylending and Rates of Interest Act [Chapter 14:14] ('the Moneylending Act') and, as such, were invalid and unenforceable.

In the proposed claim in reconvention, the third to seventh respondents sought an order that their respective suretyships be declared null and void.

The second, third and fourth respondents (Penniwill (Pvt) Ltd, Rodney Callaghan and Millicent Callaghan) prayed that the mortgage bonds in their names be cancelled.

There is, however, no evidence in the record that the amendment was ever granted at the pre-trial conference or at the trial.

On 27 July 2017, the parties signed a Joint Pre-Trial Conference Minute and the issues for determination by the court a quo were stated as follows:

“1. Whether 2nd, 3rd, 4th, 5th, 6th, and 7th Defendants Deeds of Suretyship are valid and enforceable.

2. Whether 2nd Defendant's 1st and 2nd Mortgage Bonds (numbers 1557/13 and 1656/13) in favour of Plaintiff are valid and enforceable or whether they should be cancelled.

3.Whether 1st Defendant is indebted to Plaintiff under the Loan Agreement dated 2 November 2015 in the sums of US$368,706=62 as capital and US$20,654=10 as interest, and, was there novation or termination of the loan agreement.

4. Whether 1st, 2nd, 3rd, 4th, 5th, 6th and 7th Defendants, jointly and severally, one paying the others to be absolved, are indebted to Plaintiff as alleged or at all.”

At the trial, the appellant led evidence through two witnesses, namely, Mr. C. Gunundu (Gunundu) the appellant's Account Relationship Manager and Mr. V.S. Nyangulu (Nyangulu) a registered legal practitioner and conveyancer.

Mr. C. Gunundu testified, that, the appellant and the first respondent had a long business history spanning many years. They agreed that the Bank would advance a loan to the first respondent which loan would, in turn, re-finance the existing loan already held by the first respondent.

He further testified, that, the first respondent and its sureties had failed on numerous occasions to fulfil the loan obligations which it owed to the appellant. The new arrangement was meant to assist the respondents.

Gunundu maintained, that, the surety deeds and mortgage bonds made by the second to seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) in the appellant's favour were all valid and properly constituted. He further maintained, that, the sureties were open and unlimited, and, as such, covered all the money obtained through loans by the first respondent from the appellant.

The second witness, Mr. V.S. Nyangulu, testified that the mortgage bonds he registered on behalf of the second respondent (Penniwill (Pvt) Ltd) in favour of the appellant were valid and were registered after due process and Board resolutions had been passed.

At the close of the appellant's case, the first to seventh respondents (Formscaff (Pvt) Ltd, Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) made an application for absolution from the instance.

In making the application, the first and third to seventh respondents (Formscaff (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) averred that the appellant sued the respondents on a cause of action which had already been discharged on 31 December 2015.

They also alleged that their sureties were not valid.

In making its application, the second respondent (Penniwill (Pvt) Ltd) averred that the appellant failed to prove a valid cause of action that the mortgage bonds against its property, registered in favour of the appellant, were valid.

In response to the applications for absolution from the instance, the appellant argued that the applications were frivolous.

It vehemently denied receiving any payment from the first respondent in repayment of the loan. It also maintained that all the documents in respect of the security for the loan were valid and that the obligation of the sureties had not been extinguished by prescription or on any other basis.

The court a quo, in dealing with the matter, found that the appellant's first witness Mr. C. Gunundu (Gunundu) was not a credible witness and that he contradicted himself on material issues.

The court further found, that, the appellant failed to prove a prima facie case against the respondents.

The court went on to find, that, the first respondent repaid the loan of US$350,000 on 31 December 2015 as evidenced by the appellant's own books of account and statements.

The court a quo also found, that, the suretyships made in favour of the appellant by the second to seventh respondents were invalid and unenforceable as they were not in compliance with section 12 of the Moneylending and Rates of Interest Act. Further, that, the sureties did not relate to the 2 November 2015 loan facility, and, as such, could not be relied upon by the appellant in making a cause of action for the repayment of a loan under that facility.

The court a quo further held, that, the mortgage bonds executed in the second respondent's name were invalid as they were not made in compliance with the law and that the sureties and mortgage bonds could not be held to have an unlimited clause to their operation as such a clause was contrary to public policy.

The court concluded, that, as the appellant had failed to prove a prima facie case against the respondents, the respondents claims in reconvention had merit and that there was no need to put the respondents to their defence.

In the result, the court made the following order:

“1. The application for absolution from the instance, made by the defendants, succeeds with costs.

2. The surety ships (sic) in favour of the plaintiff entered into by 2nd, 3rd, 4th, 5th, 6th and 7th defendant and plaintiff be and are hereby cancelled.

3. The mortgage bonds passed by 2nd, 3rd and 4th defendants in favour of plaintiff, namely, Numbers 2416/2011, 4889/2011, 1557/2013 and 1656/2013 be and are hereby cancelled.

4. The plaintiff to pay costs of counterclaim to the defendants on attorney-client scale.”

Dissatisfied with the decision of the court a quo, the appellant noted the present appeal on the following grounds of appeal:

“1. The court a quo erred in holding that any amounts which were due to Appellant under the agreement dated 2 November 2015 were repaid in full and that Plaintiff sued on a cause of action that was discharged in full on the 30th of December 2015, in so doing, the court a quo failed to appreciate that the agreement (dated 2 November 2015) was entered into to enable the 1st respondent to settle previously existing debts.

1.1 The court a quo erred in strictly evaluating and rejecting the appellant's evidence and effectively demanding of it more than a prima facie (sic) as if it had (sic) evidence from defendants.

1.2 The court a quo erred in granting respondents 1, 3 to 7 counter-claims which were not before it.

1.3 The court a quo erred in granting the counterclaims by respondents 1, 3 to 7 when those respondents had not moved it to grant same as at that stage.

1.4 The court a quo erred in itself cancelling the parties agreements when it was not a party thereto and in violation of the sanctity thereof.

2. The court a quo erred in holding that:

(a) The Suretyship agreements executed by 2nd, 3rd, 4th, 5th, 6th and 7th Respondents did not relate to the agreement dated 2 November 2015, and that neither did they cover any amounts due thereunder.

(b) The Suretyship agreements had prescribed. In so holding, the court a quo grossly failed to appreciate that, at law, a Surety's obligations only arise upon demand.

(c) The 2nd, 3rd, 4th, 5th, 6th and 7th Respondents were released from their Suretyship due to material variation of the principal obligation, when this was not pleaded and no evidence proving actual prejudice was placed.

(d) That 2nd, 3rd, 4th, 5th, 6th and 7th Respondents suretyship agreements were void for being contrary to public policy.

3. In agreeing with 2nd, 3rd, 4th, 5th, 6th and 7th Respondents entire submissions on the application for absolution from the instance, the court a quo grossly erred in holding 2nd to 7th Respondents averment that the suretyship agreements are invalid for violation of Section 12 of the Money Lending (sic) and Rates of Interest Act [Chapter 14:14].

4. The court a quo erred in holding that the Mortgage Bond passed by 2nd Respondent, and 3rd and 4th Respondents are invalid and grossly failed to appreciate, that, at law, the Mortgage Bonds are valid as an instrument of both debt and hypothecation.

5. Consequent to the gross misdirection referred to in Paragraph 1, 2, 3 and 4 above, the court a quo erred in granting 1st to 7th Respondents application for absolution from the instance and entering Judgment in favour of Respondents as per their claim in reconvention for cancellation of the suretyship agreements and Mortgage Bonds.

6. The court a quo erred in awarding costs against Appellant in respect of the Respondents claim in reconvention on a higher scale, when there was no legal basis for so doing.”

On the merits, counsel for the appellant argued that it was improper for the court a quo to grant counterclaims that were not filed in terms of Rule 121 of the High Court Rules 1971 ('the High Court Rules').

Counsel further argued, that, the judgment of the court made factual findings without hearing the evidence of the first respondent. The factual findings could only have been made after hearing the defence case.

He also argued, that, the inference drawn by the court in respect of the statement of account was not the only inference in the circumstances of the case, and, in any event did not prove that the debt owed by the respondents had been repaid.

It was also counsel's argument, that, the appellant proved a prima facie case in establishing that the loan facility was disbursed to the first respondent and it was for the respondents to prove that the loan was repaid in full.

He prayed that the appeal be allowed with the matter being remitted to the court a quo for continuation of trial and an order for costs.

Per contra, counsel for the first, third to seventh respondents argued that the court a quo correctly found that the appellant failed to establish a prima facie case as there was no valid cause of action.

Counsel further argued, that, the documentary evidence produced before the court a quo showed that the loan was repaid in full on 31 December 2015, and, as such, the appellant had no basis to sue.

He also argued, that, the appellant's witness, Gunundu, contradicted himself in his evidence, and, as such, a prima facie case could not have had been established by the appellant.

Counsel further argued, that, the purported sureties made in the names of the third to seventh respondents were invalid and void.

Counsel prayed for the dismissal of the appeal.

Counsel for the second respondent also prayed for the dismissal of the appeal and argued, that, the appellant had no cause of action against the second respondent as no loan facility was ever advanced to it.

Counsel submitted, that, the loan was repaid on 31 December 2015 and that the appellant had admitted that this was the position in evidence.

He further submitted, that, there was no valid mortgage bond in the name of the second respondent upon which the appellant could execute. The mortgage bond made by the second respondent, in favour of the appellant, related to a 2011 loan facility and not the 2015 loan facility.

Counsel further maintained, that, the second respondent had only one director in Zimbabwe, and, as such, no valid resolution could have been made in the absence of the second director. As such, counsel argued that the power of attorney and mortgage bond were not properly executed.

It is my view, that, the appellant's grounds of appeal raise a single issue, i.e. whether or not the court a quo erred in granting the application for absolution from the instance.

The cause of action of the appellant, against the first respondent (Formscaff (Pvt) Ltd), was based on a credit facility dated 2 November 2015. It was alleged that the first respondent had failed to repay the loan advanced to it under that facility.

The cause of action as against the second to seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) was based on the various surety and mortgage bonds filed of record which were made in favour of the appellant by the respondents at different times.

The court a quo, in granting the respondents application for absolution from the instance, found that the loan advanced to the first respondent was repaid on 31 December 2015. The basis of this finding was an accounting entry made by the appellant in its statement of accounts, which showed a credit entry in the sum borrowed as having been paid.

On the basis of this entry, the court reasoned that there was no cause of action upon which the appellant could claim as there was no outstanding debt.

The law to be applied in an application for absolution from the instance is well settled. In United Air Charters (Pvt) Ltd v Jarman 1994 (2) ZLR 341 (S)…, the Court held that:

“The test in deciding an application for absolution from the instance is well settled in this jurisdiction. A plaintiff will successfully withstand such an application if, at the close of his case, there is evidence upon which a court, directing its mind reasonably to such evidence, could or might (not should or ought to) find for him:” see also Oesthuizen v Standard General Versekeringsmaa & Kappy BPK 1981 (A) 1035 (H)).”

In Gordon Lloyd Page & Associates and Rireira & Another 2001 (1) SA 88 (SCA)…, it was held that:

“The test for absolution to be applied by a trial court at the end of plaintiff's case was formulated in Claude Neon Lights (SA) Ltd v Daniel 1976 (4) SA 403 (A) at 409G-H in these terms:

'…, when absolution from the instance at the close of plaintiff's case, the test to be applied is not whether the evidence led by the plaintiff established what would finally be required to be established, but, whether there is evidence upon which a court applying its mind reasonably to such evidence could or might (not should or ought) find for the plaintiff…,.'

This implies that the plaintiff has to make out a prima facie case in the sense that there is evidence relating to all elements of the claim…,.”

Absolution from the instance is thus granted by the court when an application has been made by a defendant at the close of a plaintiff's case who fails to prove a prima facie case.

A prima facie case was noted in Fillieks and Others v S [2014] ZAWHC 34 as follows:

“Prima facie evidence, in its more usual sense, is used to mean prima facie proof of an issue, the burden of proving which is upon the party giving that evidence. In the absence of further evidence from the other side, the prima facie proof becomes conclusive and the party giving it discharges his onus…,.”

In granting the application for absolution from the instance, the court a quo thus had to be guided by the question of whether or not the appellant made out a prima facie case against the respondents on the basis of which the court could or might have found for the appellant.

The appellant's cause of action was based on the credit facility which it advanced to the first respondent on the 2nd of November 2015 for the sum of US$350,000. The purpose of the facility was to assist the first respondent in financing its working capital requirements.

The facility further provided, under clause 6, that, the security for the amount advanced as the loan was secured by sureties and mortgage bonds registered in the names of the respondents in favour of the appellant.

Under clause 12 of the facility, all previous facility letters advanced to the first respondent, by the appellant, were cancelled.

The accounting statements of the appellant, filed of record, show that on 17 November 2015, under transaction number LD1532460482, and described as “Loan Drawdown” the appellant credited the first respondent's account with the sum of US$350,000. On the 30th of December 2015, under transaction number LD1532460482 and described as “Payment of Principal” the sum of US$350,000 was reversed from the first respondent's account into the appellant's account.

The first respondent remained with a debit balance of US$375,671=35.

The appellant's witness, Gunundu, explained that the first entry meant that the appellant was crediting the first respondent with the proceeds of the loan. The second entry showed that those proceeds were meant to pay off an existing debt that the first respondent already had with the Bank.

It is important to quote the exchange between counsel for the appellant and the witness where he states that:

“Q. If you move further down, you will see that the same $350,000 appears on that page?

A. Yes, the second entry for $350,000 which in this instance now appears as a debit on the borrowers account, was passed on 30th December 2015. The second entry that was passed by the Bank on the 30th of December 2015 for 350,000 entailed that the Bank was now debiting the customer's account to confirm that this was now a new loan agreement with terms as contained in the facility letter offer of 2nd November 2015.”

The first respondent however maintained the argument a quo, and before this Court, that, the loan was repaid on the 30th of December 2015 under the transaction description of “Payment of Principal”.

On the basis of the above exchange, the court a quo found that the witness of the appellant did not establish its claim at all. The court concluded that Gunundu was not a credible witness and found that the appellant had failed to make out a prima facie case upon which the respondents could be placed on their defence.

It is our view, however, that the court a quo fell into error in arriving at this finding.

It should be noted from the onset, that, the appellant and the first respondent have had a long standing relationship of a banking nature.

The record shows, that, from 2011 to 2015, when the credit facility which is the subject of this appeal was entered into, the appellant was advancing the first respondent different loan facilities and overdrafts.

These loan facilities were advanced on the basis of the securities which were made by the second to seventh respondents.

For over five (5) years, the appellant was advancing money to the first respondent on the basis of those securities with no issues arising.

Emails filed of record further show correspondence between the third respondent (Rodney Callaghan), the first respondent's Finance Manager, one Jill Ngwerume Gunundu, on behalf of the appellant, and Nyangulu, which correspondence shows how some of the securities were registered.

Emails between Rodney Callaghan and Darryn Blumears (acting on behalf of the second respondent) are also part of the record which shows the parties acknowledging that certain sums of money were owed and that the respondents would raise money to pay the debts.

Although these emails were written in 2013 to 2014, this confirms the nature of the relationship between the appellant and the respondents, and that, as at 2014, there was a debt owed to the appellant.

Having found that there existed a banking relationship between the appellant and the respondents, the next question relates to the credit facility advanced to the first respondent on 2 November 2015 and whether or not that facility was repaid.

There is no documentary evidence in the record which shows that the first respondent wrote to the appellant seeking a refinancing loan to cover its existing debts.

However, given the history between the parties on how the appellant advanced several loans to the first respondent over the years, it can be taken that the first respondent must have approached the appellant seeking a loan to repay its outstanding debts.

A reading of the appellant's accounting statement shows, that, before the “loan drawdown” was made to the first respondent's account, the account showed a debit balance of US$367,981=74. When the loan sum was deposited, the balance was reduced to US$17,981=74. This means that the loan reduced an existing debt. When the loan was reversed back to the appellant's account on 30 December 2015, the balance returned to US$375,671=35.

This summary shows, that, the loan was advanced by the appellant to refinance an existing debt.

The credit facility, though not clearly labelled as a refinancing loan, appears to have been made in order to give the first respondent time to repay the loan. This explains the creation of a repayment plan on how the first respondent would repay its debt.

In my view, the credit facility, though not specified as a re-financing loan, must have been made for the purpose of extending the period in which the first respondent had to repay its debts.

It is important to borrow the words quoted with approval by GUBBAY CJ in Chikoma v Mukweza 1998 (1) ZLR 541 (SC)…, wherein the Court noted that:

“Not to be overlooked, as well, are the wise words of Lord Wright in Hillas & Co. Ltd v Arcos Ltd [1932] All ER Rep 494 (HL) at 503I; (1932) 147 LT 503 (HL) at 514:

'Businessmen often record the most important agreements in crude and summary fashion; modes of expression sufficient and clear to them in the course of their business may appear to those unfamiliar with the business far from complete or precise. It is, accordingly, the duty of the court to construe such documents fairly and broadly, without being too astute or subtle in finding defects; but, on the contrary, the court should seek to apply the old maxim of English Law, verba ita sunt intelligenda ut res magis valeat quam pereat.'

See also Burroughs Machines Ltd v Chenille Corp of SA (Pty) Ltd 1964 (1) SA 669 (W) at 670G-H.”

Thus, essentially, what was before the court a quo was a claim for the repayment of a loan.

The appellant had a duty, after all the evidence had been led by both the appellant and the respondents, to prove its case on a balance of probabilities.

The argument in the respondents plea, that the loan was repaid in less than a month, does not carry much weight and is an argument which the respondents had to prove in evidence.