Documentary Evidence re: Caveat Subscriptor Rule iro Plea of Rectification and Defence of Retraction

SC48-20 : EMMA KUNDISHORA vs ZIMBABWE RED CROSS SOCIETY
Ruled By: HLATSHAWO JA, MAKONI JA and BERE JA

This is an appeal against part of the judgment of the Labour Court setting aside an arbitral award in terms of which the respondent was ordered to pay the appellant the sum of US$17,500.THE BACKGROUNDThe appellant was employed by the respondent as a Secretary General. On 2 June 2012, the ...

This is an appeal against part of the judgment of the Labour Court setting aside an arbitral award in terms of which the respondent was ordered to pay the appellant the sum of US$17,500.

THE BACKGROUND

The appellant was employed by the respondent as a Secretary General. On 2 June 2012, the National Governing Council (the Council) of the respondent held a meeting in which Council members expressed concerns regarding the performance, by the appellant, of her work. As a result, it was recommended that the appellant be suspended from work pending investigations into her conduct, or, alternatively, that she be given the option to resign.

The appellant elected to resign and did so by letter dated 3 June 2012.

On the same date the resignation was acknowledged, in writing, by the respondent's Acting President. The following was set out in the letter;

“The Board resolved that in the event of you resigning, instead of a suspension with pay, that you will be entitled to all your benefits. Outlined hereunder are all your benefits; Leave days accrued; Gratuity One month's notice salary; Toyota Prado registration number ABH3278 that you have been using; Phone handset; Laptop you are currently using.”

On 6 June 2012, the Honorary Treasurer of the respondent, one Mr Gotora, who was tasked with overseeing the handover takeover process between the appellant and the new office bearer, wrote a letter to the appellant stating that the respondent was to meet the costs related to the change of ownership of the vehicle.

As a result, the appellant made a claim of US$17,500, being the residual duty payable to ZIMRA upon the disposal of the vehicle by the respondent, that is, the cost of the change of ownership.

On 2 March 2013, the Council convened a meeting to deliberate on the appellant's claim.

Mr Gotora was reprimanded for generating the communication as he had no authority to do so. It was stated that considering the level of the employee in issue, communication was to be done by either the President or the Secretary General.

On 5 March 2013, Mr Gotora wrote a letter to the Acting President and copied same to the appellant, retracting the statement that he had made regarding the respondent meeting the change of ownership costs for the motor vehicle. He also conceded that he had acted without the mandate of the Board.

Following the retraction, the appellant referred the matter to a Labour Officer claiming the sum of US$17,500 from the respondent.

Conciliation failed and the matter was referred to an arbitrator who ordered the respondent to honour the undertaking made on its behalf by the Honorary Treasurer. The arbitrator held that the Honorary Treasurer's undertaking remained valid and binding on the respondent. He referred to the case of Royal British Bank v Turquand (1856) 6 E & B 327, ER 886 and reasoned that the appellant was not supposed to know the legitimacy of the undertaking made by the Honorary Treasurer on behalf of the respondent. As such, the Honorary Treasurer bound the respondent.

Aggrieved by the arbitral award, the respondent appealed to the Labour Court.

It challenged the decision of the arbitrator on the basis that the communication in issue had been made without the approval of the Board, and that, in any event, the communication had been retracted and could not be given effect to. The respondent further argued that there was no basis for the arbitrator to rely on the letter by Mr Gotora as it could not give benefits not outlined in the initial letter by the Acting President wherein all the benefits due to the appellant had been expressly stipulated. Further to that, the practice was that employees who received such a benefit would meet their own costs of transfer.

The respondent also expressed the view that the Turquand Rule was inapplicable because the appellant knew or ought to have reasonably known that the Honorary Treasurer was not an executive member and could not make binding decisions on behalf of the respondent.

The respondent also averred that, should the amount be due, it was payable to the Commissioner or ZIMRA and not to the appellant.

The respondent also contended that the arbitrator had cast upon it an obligation cast by law on a transferee of property.

The appellant opposed the appeal.

She contended that the respondent sought to interfere with the findings of fact made by the arbitrator. She argued that the arbitrator correctly found that the undertaking was never retracted and remained valid. The appellant further contended that the undertaking to pay the transfer costs was an employment benefit, and, as such, arguments on the law of transfer or taxation were irrelevant.

DETERMINATION OF THE COURT A QUO

The court a quo found that the appellant was not entitled to the transfer costs of the motor vehicle. It held that the communication by the Honorary Treasurer could not bind the respondent. It found that the turquand rule was in-applicable and neither could it be said that Mr Gotora had ostensible authority to bind the respondent.

The court reasoned that the appellant was not some innocent third party but occupied the highest post in the respondent and was aware or ought to have been aware of the authoritative communications in the organisation.

The court further explained that even if it was to be assumed that Mr Gotora was acting under delegated authority, there was no evidence of such delegation.

In any event, Mr Gotora had also confirmed that he had made the communication without the required authority.

The court also noted that the letter of 3 June 2012, by the Acting President, which set out all the benefits the appellant was to get, made no mention of transfer costs. As such, Mr Gotora's letter could not be read to vary or supplement the package already offered to the respondent by the Board and properly transmitted to the respondent by the Acting President.

The court further held that the transfer costs were payable to the Zimbabwe Revenue Authority and not the respondent.

It also found that there was no law that precluded parties to deviate from the provisions of the Customs and Excise Act [Chapter 23:02] by paying another's transfer costs since what the law requires is that the transfer costs be paid.

The appellant, dissatisfied with the outcome, launched the present appeal based on the following grounds:

GROUNDS OF APPEAL

1. That the court a quo erred in granting the respondent's appeal as regards the award of US$17,500 and thus upsetting, without legal basis, the arbitrator's factual finding that the evidence furnished by the respondent to prove the Treasurer's lack of authority was stage-managed.

2. That the court a quo grossly erred in interfering with the arbitrators discretion to award the appellant US$17,500 as evidence placed before him showed that there was never any valid retraction on the respondent's commitment to pay the US$17,500.

3. That the court a quo grossly erred in granting the respondent's appeal with respect to award of US$17,500 as the finding by the arbitrator that the undertaking to meet the costs of transfer was validly made cannot be faulted given that the respondent accepted provisions in the letter of undertaking by the Honorary Treasurer.

4. That the court a quo grossly erred in granting the respondent's appeal with respect to the award of US$17,500 as it erroneously made a finding that the mention of ZINARA cost instead of transfer costs in the letter of retraction by the Honorary Treasurer was an error by the respondent when no such evidence of a mistake or error was alleged or argued before it by the respondent or any of the parties.

5. That the court a quo erred by making a finding that the US$17,500 should have been paid to the Zimbabwe Revenue Authority and not to the appellant when such issue was not properly before the court a quo in terms of the grounds of appeal that were before it, and, when such issue did not affect the appellant's eventual entitlement to the benefit.

SUBMISSIONS IN THIS COURT

I now turn to the arguments of the parties on the merits.

Counsel for the appellant made the following submissions;

The court a quo dealt with the matter afresh and re-assessed the evidence and made its own determination. The court a quo, in setting aside the arbitral award, upset the arbitrator's factual findings. In particular, the arbitrator's finding that the treasurer had the authority to make the communication as the treasurer's lack of authority was stage-managed. The arbitrator's finding could only be upset on the basis of gross unreasonableness. Once the arbitrator held that the turquand rule applied in the circumstances of the matter, the court a quo was not at liberty to re-hear the matter but to assess whether the factual findings of the arbitrator were grossly unreasonable. This does not feature anywhere in the judgment of the court a quo.

In considering the turquand rule, the court a quo ignored one fundamental aspect - that the employer communicated through its Honorary Treasurer. Thereafter, the organisation was silent for a year. It then retracted the offer after a meeting where the appellant did not attend. The respondent allowed the appellant to have no doubt that the transfer costs would be met by the respondent. The turquand rule was designed to protect the appellant in the circumstances. The appellant was now an outsider on the basis of her resignation. Her ability to relate to the internal mechanism had been cut.

Counsel for the respondent, on the other hand, contended that there were no factual issues which arose in the appeal before the court a quo. She argued that the full list of benefits due to the appellant were approved by the Board and communicated by the Acting President. These benefits did not include transfer costs of the motor vehicle. She also contended that the court a quo properly identified the issue for consideration as to whether the turquand rule was applicable in the circumstances of the case. Counsel for the respondent further submitted that a person in the position of the appellant could not claim the benefits of the turquand rule since the appellant knew how the respondent was run. Had the benefits been revised, the Acting President, being the person who had communicated the benefits, was the one to communicate the change in those benefits.

ISSUES FOR DETERMINATION

From the grounds of appeal, and the submissions above, two issues fall for determination and these are;

1. Whether or not the court a quo's finding that the Honorary Treasurer lacked authority to make the undertaking unduly interfered with the arbitrator's factual findings.

2. Whether the undertaking made by the treasurer is binding on the respondent by virtue of the provisions of the turquand rule.

THE LAW

It is settled law that an Appellate Court can only interfere with the findings of fact made by a lower court in exceptional circumstances.

In Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S)…, KORSAH JA remarked:

“The general rule of the law, as regards irrationality, is that an Appellate Court will not interfere with a decision of a trial court based purely on a finding of fact unless it is satisfied that, having regard to the evidence placed before the trial court, the finding complained of is so outrageous in its defiance of logic that no sensible person who had applied his mind to the question to be decided could have arrived at such a conclusion….,.”

In Susan Rich v Jack Rich SC16-01, EBRAHIM JA cited with approval the remarks in HOFFMAN and ZEFFERT, The South African Law of Evidence, 4th ed…, that:

“There are no rules of law which define circumstances in which a finding of fact may be reversed, but, as a matter of common sense, the Appellate Court must recognize that the trial court was in some respects better situated to make such findings. In particular, the trial court was able to observe the demeanor of the witnesses, and courts of appeal are therefore very reluctant to disturb findings which depend upon credibility.

The Appeal Court has rather more latitude in criticizing the reasons which the court a quo has given for its decision.

The reasons given for accepting certain evidence may be unsatisfactory, eg. they may involve a clear non sequitur. Alternatively, it may be plain from the record that the reasons are based upon a false premise, eg. a mistake of fact, or that the trial judge has ignored some fact which is clearly relevant. Errors of this kind are generally referred to as misdirections of fact.

Where there has been no misdirection of fact by the trial court, the Appeal Court will only reverse it when it is convinced that it is wrong.”…,.

In Reserve Bank of Zimbabwe v Granger and Anor SC34-01…, the court held that if an appeal is to be related to the facts “there must be an allegation that there has been a mis-direction on the facts which is so unreasonable that no sensible person who had applied his mind to the facts would have arrived at such a decision; and, a misdirection of fact is either a failure to appreciate a fact at all, or a finding of fact that is contrary to the evidence actually presented.”

In Zvokusekwa v Bikita Rural District Council SC44-15 this Court clarified this obvious but often misunderstood position. It said;

“[20] It is correct, as submitted by the appellant, that an appeal to this Court must be based on a point of law.

What constitutes a point of law has been stated and restated in a number of decisions of this Court. See for example Muzuva v Limited Bottlers (Pvt) Ltd 1994 (1) ZLR 217 (S); Hama v NRZ 1996 (1) ZLR 664; RBZ v Granger & Anor SC34-01.

[21] It is also correct that in RBZ v Granger & Anor (supra), this Court stated that if an appeal is to be related to the facts, 'there must be an allegation that there has been a misdirection on the facts which is so unreasonable that no sensible person who has applied his mind to the facts would have arrived at such a decision. And a mis-direction of fact is either a failure to appreciate a fact at all, or a finding of fact that is contrary to the evidence actually presented.'

[22] In my view, the remarks made in Granger's case (supra) need to be qualified, to the extent that they may be interpreted as saying that, to constitute a point of law, in all cases where findings of fact are attacked, there must be an allegation that there was a misdirection on the facts which was so unreasonable that no sensible person properly applying his mind would have arrived at such a decision.

One must, I think, be guided by the substance of the grounds of appeal and not the form.

Legal practitioners often exhibit different styles in formulating such grounds. What is important at the end of the day is that the grounds must disclose the basis upon which the decision of the lower court is impugned in a clear and concise manner.

If it is clear that an appellant is criticising a finding by an inferior court on the basis that such finding was contrary to the evidence led, or was not supported by such evidence, such a ground cannot be said to be improper merely because the words 'there has been a misdirection on the facts which is so unreasonable that no sensible person…, would have arrived at such a decision' have not been added thereto.

If it is evident that the gravamen is that an inferior court mistook the facts and consequently reached a wrong conclusion, such an attack would clearly raise an issue of law and the failure to include the words referred to above would not render such an appeal defective. After all, there is no magic in the above stated phrase and very often the words are simply regurgitated without any issue of law being raised. See, for example the case of Sable Chemical Industries v David Peter Easterbrook SC18-10 where it was noted that the words 'erred on a question of law' are sometimes included in grounds of appeal but without any question of law actually being raised.”

See also Kukwenge v Clan Transport Co. 2001 (1) ZLR 199 (S) and Mutsuta and Another v Cagar (Pvt) Ltd 2009 (2) ZLR (S).

APPLICATION OF THE LAW TO THE FACTS

The court a quo properly identified the issue to be determined as follows:

“The issue that falls for determination in this appeal is whether the Honorary Treasurer of the appellant had ostensible authority to bind the appellant. In other words, the issue is whether the Turquand Rule applies in the circumstances of this matter.”

This was an issue of law which the court a quo dealt with based, as it is, on facts that are essentially common cause.

In light of the authorities cited above, one can conclude that failure to appreciate a fact at all or a finding of fact contrary to evidence actually presented constitutes a misdirection which warrants interference by an appellate body.

The arbitrator found that the treasurer had authority by virtue of occupation of that post; his attendance in meetings involving important decision making by the respondent; that the authority had been delegated to him by the Acting President; and that the letter of retraction was 'stage managed', as it came nine months after the initial letter, in anticipation of a civil suit.

These findings were not based on evidence presented before him but were based on suppositions.

The fact that someone occupies what he termed an important position in the organisation does not clothe that person with authority to make decisions on behalf on the organisation. No evidence was led to confirm that the Acting president had delegated his functions to the Honorary Treasurer. His finding regarding the letter of retraction is a clear indication that he did not appreciate that the respondent was run by a Board which met when the need arose.

It is my view that the arbitrator's findings, that the treasurer had authority, in light of the evidence presented before him, was a misdirection.

In making that finding, he completely ignored the fact that it was not in dispute that “all the benefits” due to the appellant upon her resignation were outlined by the Acting President in a letter dated 3 June 2012 as follows:

(i) Leave days accrued.

(ii) Gratuity.

(iii) One-month notice salary.

(iv) Toyota Prado that you have been using.

(v) Phone handset.

(vi) Laptop you are currently using.

It is apparent that the benefits did not include the costs of transfer.

It is also not in dispute that, the letter by which the Honorary Treasurer stated that the respondent was going to meet the cost relating to change of ownership of the motor vehicle awarded to her was not authorised. This emerged from the meeting of 2 March 2013. The Honorary Treasurer acknowledged that he had no authority to do so and took “full responsibility” of the mistake.

Once the statement was duly retracted, its validity and enforceability necessarily fell away.

The communication made by the Honorary Treasurer could not bind the respondent neither could it be enforced against it.

Further to that, no Board meeting was convened neither is there a resolution on record authorizing Mr Gotora to make the undertaking he made.

The subject matter of the communication being a significant financial undertaking by the respondent, it was obligatory for Mr Gotora to obtain the approval of the Board. Further to that, Mr Gotora's letter highlighted that the communication was a “follow up” on the Acting President's letter of 3 June 2013. There was no approval by the Board or the Acting President who had initially communicated to the appellant nor was there ratification after it had been made. He also rejected the established precedent, that the respondent did not pay for such costs, without any justification.

Accordingly, it is my view that the decision of the court a quo was well founded. The arbitrator's decision was a misdirection in that he made findings contrary to evidence actually presented.

WHETHER THE UNDERTAKING MADE BY THE TREASURER IS BINDING ON THE RESPONDENT BY VIRTUE OF THE PROVISIONS OF THE TURQUAND RULE

Having found that the undertaking by the Honorary Treasurer was not binding on the respondent, it is necessary to determine whether the turquand rule can aid the appellant's case.

I am of the view that it cannot.

The arbitrator invoked the principles of the turquand rule to show that the respondent was liable to pay the costs of transfer. It is also the appellant's argument that where a person is dealing with another, in fair dealing, the turquand rule should apply.

In Mills v Tanganda Tea Company Ltd HH12-13, which is almost on all fours with this case, in the following instructive dictum, it was stated…,;

“…,. I do not think that there is any basis for invoking ostensible authority in relation to Beaumont's actions. Firstly, the fact that he was the Group Chief Executive of Meikles Limited does not mean that he had the requisite ostensible authority, by virtue of that position, to negotiate and conclude severance packages on behalf of respondent. There is nothing in the papers to suggest that he normally exercised that function in that particular capacity…, the applicant was not some third party dealing with an agent or employee of the respondent. He was its Managing Director, and, given that position, I can see no justification for extending the doctrine of ostensible or apparent authority to the facts of this case.”

The turquand rule is a company law principle emanating from the old case of Royal British Bank v Turquand (1856) 6E & B327. Simply put, the rule states that where a person conducts the affairs of the company in a manner which appears to be perfectly consonant with the Articles of Association, those so dealing with him, externally, are not to be affected by irregularities which may exist in the internal management of the company.

The turquand rule was aptly captured in the case of Victoria Falls Steam Train Co (Pvt) Ltd v Wankie Colliery Co Ltd HH03-04, where the court stated the following:

“The rule in Royal British Bank v Turquand (1856) 6E & B327, 119 ER 886, which prevents a corporation from relying on non-compliance with its internal procedures to avoid contractual liabilities towards a third party, applies only where the third party was a genuine outsider acting in good faith, and where the transaction was carried out in good faith and was a legitimate one within the powers of the corporation though lacking completeness in terms of the corporation's internal arrangements.

The rule does not apply in cases where there has been a forgery, nor should it apply in the analogous case where the transaction has been carried out in deliberate violation of the internal procedures of the corporation.”…,.

H.S CILLIERS and M.L BENADE in their book Company Law, Practitioner's edition…, state the rationale behind the rule as put across in Royal British Bank v Turquand (1856) 6E & B327 as follows:

“For third parties, it is an impossible task to investigate all the internal proceedings of a company in order to ascertain whether someone, who could potentially be a representative in terms of the Articles, in fact had the necessary authority. He would not find any prohibition of the relevant act - an authority to act subject to compliance with certain formalities but nevertheless a clear authority.”

The turquand rule has since been codified in our company law as section 12 of the Companies Act [Chapter 24:03] which provides that:

“12. Presumption of Regularity

Any person having dealings with a company or with someone deriving title from a company shall be entitled to make the following assumptions, and the company and anyone deriving authority title from it shall be estopped from denying their truth;

(a) That the company's internal regulations have been complied with;

(b)…,.

(c) That every person whom the company, acting through its members in general meeting or through its board of directors or its manager or secretary, represents to be an officer or agent of the company, has been duly appointed and has authority to exercise the functions customarily exercised by an officer or agent of the kind concerned;

(d)…,.

(e)…,.

Provided that -

(i)…,.

(ii) A person shall not be entitled to make such assumptions if he has actual knowledge to the contrary or if he reasonably ought to know the contrary.

(iii)…,.”

From the above cited authorities, it is clear that the turquand rule is meant to protect genuine outsiders who deal with a company in good faith, and where the transaction was carried out in good faith and was a legitimate one within the powers of the corporation.

In casu, the appellant was clearly not some third party dealing with an agent or employee of the respondent but occupied the highest post in the respondent as its Secretary General.

As at 6 June 2012, the appellant was still an employee given that her contract terminated on 8 June 2012. She knew how the respondent was run. She had the letter from the Acting President outlining all the benefits approved by the Board. She could not have assumed, and had no basis, for assuming that the Board had met again inside the two days to revise the benefits as already offered. Even if it did, the revision would have been communicated by the person who communicated the benefits to her in the first place.

In any event, in her position as Secretary General, she must have known that any decision in that regard would require a Board resolution from the respondent authorising the Honorary Treasurer to generate the communication to her.

Further to that, the rule does not operate where the transaction has been carried out in deliberate violation of the internal procedures of the corporation.

What can be derived from the papers filed of record is that the communication was carried out in breach of the internal procedures of the corporation in that, the Honorary Treasurer had no mandate to generate such communication, which role was the preserve of the Acting President or the Secretary General pursuant to a Board meeting.

By virtue of this, the binding nature of the communication fell away.

What further militates against the application of the rule is the fact that the Secretary General had actual knowledge, or was reasonably expected to know, that the internal procedures of the company had not been met. This is so because having worked for the respondent for a period of eleven years, the appellant was well aware of how the internal procedures of the respondent were carried out. It therefore follows that, due to the fact that the Honorary Treasurer had not been given the mandate to make the communication, there is no justification for the application of the turquand rule.

I also associate myself with the court a quo's decision that there is no basis for invoking ostensible authority in relation to the Honorary Treasurer's actions.

(a) Firstly, the fact that he was the Honorary Treasurer did not confer him with the requisite ostensible authority, by virtue of that position, to make an offer for the payment of the transfer costs on behalf of the respondent without the mandate from the Board to do so.

(b) Secondly, there is also nothing on the papers to suggest that he normally exercised that function in that particular capacity. See Mills v Tanganda Tea Company Ltd HH12-13.

In light of the above, the court a quo cannot be faulted for holding that the appellant was not entitled to the transfer costs as the Honorary Treasurer's undertaking did not bind the respondent. It had no legal effect.

Neither the turquand rule nor the principle of ostensible authority aid the appellant's case.

The appellant has failed to establish a basis for interfering with the decision reached by the court a quo. The appeal must fail.

Both parties prayed for costs but the respondent put a rider that “to the extent that the appeal is indubitably vexatious, the court is at large to consider an award of costs on the higher scale.”

The appeal cannot be described as indubitably vexatious. There is therefore no basis for awarding costs on a higher scale.

In the result, l make the following order:

The appeal be and is hereby dismissed with costs.

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: PATEL JA, BHUNU JA and BERE JA

This is an appeal against the judgment of the Fiscal Appeal Court dismissing an appeal against the determination of the respondent requiring the appellant to pay value added tax (VAT) on the importation of certain goods into Zimbabwe.BackgroundThe appellant is a foreign company incorporated in the British Virgin Islands and ...

Background

The appellant is a foreign company incorporated in the British Virgin Islands and operating from Guernsey in the Channel Islands. The respondent is a body corporate responsible for the collection of VAT and other imposts in Zimbabwe.

The appellant was a supplier of basic commodities to local companies, including the West Group of Companies (West Group). In 1992, it concluded an agency agreement with Douglas and Tate (Pvt) Ltd (Douglas & Tate), a subsidiary of West Group. By 1999, it was supplying basic commodities to West Group and other local customers under a US$10 million line of credit registered with the Reserve Bank of Zimbabwe (the RBZ).

On 1 October 2007, the Reserve Bank of Zimbabwe (RBZ) unveiled the Basic Commodities Supply Side Intervention (BACOSSI), a facility designed to end the chronic shortages of basic commodities in Zimbabwe. After negotiations between the appellant and the RBZ, the latter purchased certain non-BACOSSI goods, valued at US$7,987,207=54, that were in the Douglas & Tate warehouse. The appellant also supplied BACOSSI goods, valued at US$11,698,174, to the RBZ in 2008.

After conducting investigations, the respondent raised taxation schedules against the appellant for outstanding value added tax (VAT), on both BACOSSI and non-BACOSSI transactions, initially on 17 March 2009 and later on 15 July 2009. The total charge raised was US$6,302,712=13, inclusive of interest and penalties. This was subsequently corrected, on 13 October 2009, by reducing the charge to US$6,249,496=70.

The appellant lodged an objection to the assessment on 25 September 2009. It also applied for condonation for the late filing of the objection.

The respondent dismissed the application for condonation and disallowed the objection.

The appellant appealed against both decisions to the Fiscal Appeal Court on 12 October 2009. The respondent filed its reply on 12 November 2009. At a pre-trial hearing on 17 September 2014, the delay by the appellant in filing its Notice of Objection as well as the failure by the respondent to file its documents timeously were both condoned by consent.

Judgment of the Fiscal Appeal Court

At the hearing of the matter, the appellant called the evidence of one Kenneth Sharpe, who was the founder and Chairman of West Group and a director of Douglas & Tate.

He confirmed the foreign status of the appellant. His evidence was that West Group, Douglas & Tate, and the appellant were not related companies.

The court a quo found that he was not a credible or reliable witness. This was because he contradicted material parts of his evidence-in-chief under cross-examination. Furthermore, his evidence left gaps that could only be filled by the directors, employees, officials, or agents of the appellant itself.

On the merits, the court a quo relied on the documentary evidence, i.e. the unsigned agreement between the appellant and the Reserve Bank of Zimbabwe (RBZ) and the relevant documents generated in South Africa, to find that it was the appellant that imported the goods in question into Zimbabwe. It was the appellant who beneficially owned and possessed the goods before they entered Zimbabwe and brought or caused them to be brought into the country.

It was accordingly held that the appellant was the importer of both the BACOSSI and non-BACOSSI goods.

The court further found that the activities of the appellant in Zimbabwe, from 2004 onwards, which were carried on continuously and regularly, constituted trading in the country for the purposes of VAT liability. The appellant was not a registered operator, but, every trader is liable to be registered for VAT purposes and is deemed to be a registered operator as the principal for goods supplied or imported on its behalf by its agent.

The appellant was carrying on the business of supplying goods through the agency of Douglas & Tate, which released the goods only on the instructions of the appellant after the latter had received payment in accordance with the relevant waybills and invoices.

The court held that the appellant was the importer of the goods in question and was therefore liable for the payment of VAT in both the pre-BACOSSI and BACOSSI eras when it supplied goods in furtherance of its business activities.

Furthermore, the appellant was required to be registered and had to be treated as a registered operator. Its failure to charge or receive VAT did not exonerate the appellant as VAT is deemed to be included in the purchase price. Additionally, it bore the obligation to remit VAT in foreign currency in accordance with the legislation in force at the relevant time.

As regards the appointment of the Chief Executive Officer (CEO) of West Group as the public officer of the appellant, the court found that this was above board. In terms of the governing provisions, the respondent was allowed to compulsorily appoint the CEO of West Group, the holding company of Douglas & Tate, which was the agent of the appellant in Zimbabwe, as its public officer and representative registered operator for the collection of VAT.

With respect to the appellant's argument that the respondent had used an arbitrary exchange rate to convert Rand denominated transactions to United States dollar values, the respondent averred that the relevant invoice values, together with the appropriate conversions, were supplied by the appellant's own agents.

The court found that the onus was on the appellant to establish that the conversions were arbitrary. However, it did not lead any evidence in this regard and the respondent's averments were not denied.

In the event, the court held that the appeal before it was not sustainable in its entirety. However, the appellant's objections raised important legal points and its grounds of appeal were not frivolous. The appeal was accordingly dismissed with no order as to costs.

Grounds of Appeal and Relief Sought

There are six grounds of appeal in casu. They impugn the judgment of the court a quo in the following respects:

(i) Rejecting the evidence given on behalf of the appellant as being unreliable.

(ii) Holding that the appellant, and not the Reserve Bank of Zimbabwe (RBZ), was the importer of the goods in question.

(iii) Holding that the respondent was entitled to go behind the contents of the bills of lading which it had processed and approved to find that the appellant was the importer of the goods into Zimbabwe.

(iv) Finding that the appellant operated a business in Zimbabwe.

(v) Holding that the appellant was to be treated as a registered operator and finding that the appellant was liable to pay VAT on the imported goods.

(vi) Considering the issue of whether or not any company had been lawfully appointed as an agent to pay any tax due by the appellant, and in finding that such an appointment had in fact been lawfully made.

The appellant prays that the appeal be allowed with costs and that the judgment of the court a quo be set aside and substituted with an order allowing the appeal a quo with costs and directing the respondent to withdraw the contested VAT assessments issued by it against the appellant in this matter....,.

Identity of Importer: Zimtrade or Reserve Bank of Zimbabwe (RBZ)

The second and third grounds of appeal pertain to the identity of the importer of the goods in question. Was it the Reserve Bank of Zimbabwe (RBZ), as is contended by the appellant, or was it the appellant itself?

Also relevant in this context are the contents of the bills of entry that had been submitted for processing and approval by the respondent's Department of Customs and Excise.

Counsel for the appellant submits that a bill of entry is a document that is filed by the importer.

In casu, one such bill of entry filed and approved in August 2008 identifies the appellant as the exporter/consignor, based in Guernsey. The importer/consignee is identified as the Reserve Bank of Zimbabwe (RBZ). All the other relevant bills of entry in this case contain the same information as to the identities of the exporter and the importer.

The bills of entry were issued in terms of the Customs and Excise Act.

Counsel for the appellant relies on the provisions of sections 37(1)(e), 39(1) and 40(1) of the Customs and Excise Act in support of his submission that the entries in question were made by the Reserve Bank of Zimbabwe (RBZ) as the importer.

The respondent incorrectly took the position that the appellant was the importer of the goods concerned because it owned the goods before they entered into Zimbabwe from South Africa.

The respondent, which bore the evidentiary burden in this respect, did not place any evidence before the court a quo to disprove the correctness of the bills of entry.

Counsel for the appellant also relies on other documentary evidence to buttress the appellant's position.

In particular, he refers to an opinion by the Reserve Bank of Zimbabwe's lawyer, dated 17 June 2009, a letter of 1 July 2009 from the Reserve Bank of Zimbabwe (RBZ) to the appellant's lawyers, and the minutes of a meeting held on 7 October 2009 between the RBZ and representatives of West Group. These documents, so he submits, make it clear that the Reserve Bank of Zimbabwe (RBZ) was the importer, the only unresolved issue being the currency in which VAT was to be paid....,.

With reference to the alleged admissions of liability by the Reserve Bank of Zimbabwe (RBZ), counsel for the respondent argues that the opinion tendered by its lawyer on 17 June 2009 is not binding. Again, the letter from the RBZ, dated 1 July 2009, was rejected by the Advisor to the RBZ Governor at a meeting held with the respondent's officials on 20 August 2009. Furthermore, the RBZ's expression of its willingness to pay the VAT invoices in Zimbabwe dollars, at its meeting with West Group, on 7 October 2009, was conditional on seeking legal opinions on the matter....,.

Counsel for the appellant submits that the opinion of the Reserve Bank of Zimbabwe's lawyer, dated 17 June 2009, were based upon facts given to him by the RBZ itself. The Reserve Bank of Zimbabwe (RBZ) clearly relied upon that opinion in order to accept liability to pay the VAT claimed in Zimbabwe dollars....,.

The next issue concerns the legal opinion submitted to the Reserve Bank of Zimbabwe (RBZ) and its subsequent stance relating to the payment of VAT claimed by the respondent.

In their letter to the Reserve Bank of Zimbabwe (RBZ), dated 17 June 2009, its lawyers took the following position:

“From the documentation we were shown, the Reserve Bank imported the Bacossi goods. The imported goods are VAT taxable and the tax is charged on the importer (RBZ in this case)…,. The VAT payable on the importation of goods into Zimbabwe is payable by the importer and not by the supplier of those goods. Accordingly, if ZIMRA were to rely on the provisions dealing with imports, the Reserve Bank would have to pay the VAT….,. We therefore advise the Reserve Bank to urgently pay Zimra in local currency. This should be done before Parliament resume [sic] and pass the Finance Bill which may have changes on the currency to be paid on all outstanding taxes….,. Government departments cannot take each other to court…,. We do not therefore believe that ZIMRA can go to court against the Reserve Bank.”

Three things emerge from the legal advice contained in this letter:

(i) The first, based on the importation documents, presumably the relevant bills of entry, is that the Reserve Bank of Zimbabwe (RBZ) was the importer of the BACOSSI goods and was therefore liable for any VAT leviable on those goods;

(ii) The second is that the Reserve Bank of Zimbabwe (RBZ) should pay that tax in local currency before any legislative change was introduced; and

(iii) Thirdly, even if the Reserve Bank of Zimbabwe (RBZ) were to be levied for payment of the VAT due, ZIMRA would not be able to pursue its claim against the RBZ through the courts.

Pursuant to this opinion, its addressee (Dr Mombeshora) wrote on behalf of the Reserve Bank of Zimbabwe (RBZ) to the appellant's lawyers. The nub of this letter, dated 1 July 2009, was to confirm that the RBZ “imported BACOSSI goods” from the appellant and that the Reserve Bank of Zimbabwe (RBZ) “accepts liability to ZIMRA for this VAT.”

However, this purported admission of liability to pay the VAT was subsequently condemned and rejected at a meeting held on 20 August 2009 between officials of the Reserve Bank of Zimbabwe (RBZ) and ZIMRA.

The lead Reserve Bank of Zimbabwe (RBZ) representative (Dr Kereke) “opposed the writing of the letter by Dr Mombeshora; in fact, it was shocking to him and the Governor…,. It was not proper to write such a letter to take responsibility of payment of tax of a supplier….,. The letter was not RBZ policy….,. The Bank will revoke point number three of the letter which gave liability of Afritrade International to RBZ.”

Following this volte-face by the Reserve Bank of Zimbabwe (RBZ), a meeting was held between the RBZ and representatives of West Group.

The meeting, held on 7 October 2009, was chaired by the Reserve Bank of Zimbabwe (RBZ) Governor. It was noted that “a Bank employee erred in assuming the liability on behalf of the Bank without the express authority of the Governor.”

It was further noted that “there could perhaps be some business transactions held between Dr Mombeshora and Afritrade that he [the Governor] could not verify or vouch for.”

At any rate, “the Governor had no problem paying the VAT invoice as long as it was stated in Zimbabwe Dollars….,. However, he had asked Dr Mombeshora to seek legal opinion on the matter internally and externally.”

At the conclusion of the meeting, “the Governor suggested to West Group to obtain all the invoices and have them assessed by an accounting firm and advise on the correct VAT due. The records should cover pre-bacossi and bacossi importations.”

What is evident from all of the foregoing is that the Reserve Bank of Zimbabwe's acceptance of liability to pay the VAT due on the BACOSSI goods, albeit in Zimbabwe dollars, was not unequivocal or unqualified. It was conditional upon the re-assessment of the relevant records and the need to seek further legal opinion.

Very significantly, this qualified acceptance of liability was largely predicated on the legal advice given to the Reserve Bank of Zimbabwe (RBZ) on 17 June 2009 - not all of which advice was necessarily correct.

The basic premise of that advice hinged upon the contents of the importation documents that were shown to the RBZ's lawyers.

SC61-07 : AGRICULTURAL BANK OF ZIMBABWE LIMITED t/a AGRIBANK vs CLEMIO MACHINGAIFA AND CHENJERAI MUTAMBISI
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

This is an appeal against the judgment of the High Court, Harare handed down on 13 July 2005 in which the High Court granted with costs an application by the respondents declaring, inter alia, that they were entitled to payment of a mileage allowance of 4,000 kilometres per month calculated at the Automobile Association of Zimbabwe (AAZ) rates.

The facts of this case are these:

The respondents were employed by the appellant as Assistant Director, Credit Risk and Assistant Director, Debt Recovery, respectively. Both respondents signed revised contracts of employment in the year 2000 which stipulated their conditions of employment. The contract of employment provided, in paragraph 3, as follows:

“3. Motor Vehicle Use

You are entitled to the use of an Agribank company car under the prevailing terms and conditions. You are required to familiarize yourself with the existing rules and regulations for the use and disposal of the motor vehicle.

Or

You are entitled to purchase a motor vehicle under the prevailing motor vehicle scheme. You will use the car for business and claim in accordance with the existing rules and as amended from time to time. You are also entitled to a mileage allowance based on a mileage of 4,000 kilometres per month at the applicable standard AAZ rates.”…,.

The underlined portion of paragraph 3 is at the centre of the dispute in this matter.

By letter dated 30 August 2001, the appellant's Human Resources Manager wrote to the respondents advising them that, following the restructuring of management grades, the appellant's Board had approved the conversion of the company car scheme to a personal car scheme under the managers and field staff motor vehicle scheme with effect from 1 September 2001.

The conversion to a personal car scheme was done without reference to the respondents.

The conversion meant that the use of a company car was being done away with and the respondents would no longer access fuel and other facilities previously offered by the Bank in this regard. The respondents were offered a loan equivalent to the purchase price of their existing company vehicles and a monthly allowance of $30,300 to assist in “the cost of running the motor vehicle.”

It appears the respondents were not happy with the conversion to the new scheme, and, on 3 September 2001, wrote a letter to management raising various issues on the matter and threatening legal action because of what they perceived as a breach of contract.

One of the issues raised was their entitlement to an allowance based on a monthly mileage of 4,000 kilometres.

The response by the Managing Director of the appellant was that such an allowance “would ultimately be too expensive for the Bank to sustain” and that the change had been “influenced by the magnitude of the vehicle allowance cost and its sustainability.”

Thereafter, the parties engaged in considerable exchange of correspondence on the matter. The respondents continued to insist that they were entitled to the allowance. The appellant maintained that it could not justify payment of such a huge allowance.

The appellant eventually stated, by letter dated 14 April 2004, that the allowance had been included by mistake and that the intention had been to allow the respondents to use their personal vehicle and submit claims for such use under the Bank's prevailing terms and conditions.

In June 2004, the respondents then filed a court application seeking, inter alia, a declarator that they were entitled to payment of the allowance.

After hearing both parties, the High Court granted the application with costs. It is against that decision that the appellant has appealed to this Court.

The decision of the court a quo is attacked on four bases. These are:

(i) Firstly, that the court a quo erred in finding that the inclusion of the allowance in question was not the result of a mistake;...,.

THE DEFENCE OF MISTAKE

It is the appellant's contention that the allowance was never intended and that it was inserted by mistake.

If, so the appellant argues, the allowance were to be paid, this would result in the respondents being paid twice in the sense that they would be entitled to motor vehicle loans to purchase motor vehicles, and, at the same time, receive allowances for the use of the same vehicles based on a monthly mileage of 4,000 kilometres at standard Automobile Association of Zimbabwe (AAZ) rates.

A party to a contract relying on an error of judgment, who can go further and show that, at the time of the contract, he was labouring under some mis-apprehension, may escape liability under a contract.

The onus, however, is not easy to discharge. As stated by R H CHRISTIE in the Law of Contract in South Africa, 3ed, p353:

“Unless the mistaken party can prove that the other party knew of his mistake, or that, as a reasonable man, he ought to have known of it, or that he caused it, the onus of showing that the mistake was a reasonable one justifying release from the contractual bond will not be easy to discharge.”

The learned author continues at p354:

“However material the mistake, the mistaken party will not be able to escape from the contract if his mistake was due to his own fault. This principle will apply whether his fault lies in not carrying out the reasonably necessary investigations before committing himself to the contract…, and, in fact, in any circumstances in which the mistake is due to his own carelessness or inattention, for he cannot claim that his error is iustus.”

In responding to concerns by the respondents that the appellant had breached the contract of employment, the Managing Director of the appellant made it clear that the appellant had made a mistake as it could not justify these allowances or sustain them. He went on to state that the allowance was almost equivalent to the respondents' monthly salary and was, by implication, too high.

The trial court observed that during a period of two years and eight months the appellant had not, at any stage, alluded to the possibility of such an allowance having been included by mistake. He noted that the appellant made this assertion for the first time on 14 April 2004.

The trial Judge remarked as follows on pp3-4 of the judgment:

“As can be seen from the above memorandum, the respondent was then being categoric that it had made a mistake - a thing it failed to do during the couple of times the matter had been brought up since 3 September 2001.

The matter would not have dragged this far if the respondent had stated, the first time the matter was raised, that the inclusion of the allowances was a mistake.

The suggestion, in the memorandum, that the allowances whose payment the applicants sought, were not intended, and the Bank did not regard them as part of the applicants' contract, is simply untenable. If the respondent did not intend the allowances to be part of the contract, it would have removed them from the contract document at the time it amended the contract by removing the first option which related to the use of company vehicles.

Further, when one examines the contract document filed of record, it reveals that 4,000 kilometres was handwritten while about 99% of the document was type-written. There are also some figures that were hand-written, such as the salary, annual bonus, clothing allowance, the vacation and occasional leave etc. There can be no doubt that these were inserted into the blank spaces after careful thought. It seems to me that the same applies to the 4,000 kilometres.

The suggestion, therefore, that the inclusion of the entitlement of a mileage allowance based on mileage of 4,000 kilometres per month at the applicable standard AAZ rates, was inserted by mistake, is equally untenable.

If at all it had been a mistake, the respondent would have immediately realized it and would have said so when the applicants first raised the issue on 3 September 2001 failing which the respondent would have realized and said so at any other subsequent occasion the applicant raised it in 2001 or early 2002 or even 2003.

It therefore seems to me that if at all the respondent had made a mistake then such mistake was grossly unreasonable.”

I am inclined to agree with the above observations.

It is apparent, in this case, that when the appellant made provision for this allowance in the contract of employment there was no question of mistake at that stage. That allowance was what the appellant was prepared to offer the respondents. Later, however, the appellant had a change of heart because of the amounts involved which were calculated using Automobile Association of Zimbabwe (AAZ) rates. It considered the allowances as too high and unsustainable.

The position is now settled that an offeror cannot escape liability by establishing that he has made a wrong offer which was accepted: University of Zimbabwe v Gudza 1996 (1) ZLR 249 (S)…,.

The offeror will not be permitted to rely on the absence of the consensus if the mistake was due to his own carelessness: University of Zimbabwe v Gudza 1996 (1) ZLR 249 (S)…,.

I accordingly reject the appellant's argument that the court a quo erred in rejecting its claim that the allowance had been inserted by mistake.

Appealed
SC43-19 : AFRASIA BANK ZIMBABWE LIMITED (IN LIQUDATION) vs THE RIGHT INVESTMENTS (PVT) LTD and OPIUM INVESTMENTS (PVT) LTD and PHILLIPA COUMBIS
Ruled By: GWAUNZA JA, GARWE JA and MAVANGIRA JA

This is an appeal against the entire judgement of the High Court handed down on 11 May 2016.The factual background to the matter is as follows.Kingdom Bank Limited advanced overdraft and loan facilities to an entity referred to as Stir Crazy Group of Companies ('the Stir Crazy Group'). This was ...

This is an appeal against the entire judgement of the High Court handed down on 11 May 2016.

The factual background to the matter is as follows.

Kingdom Bank Limited advanced overdraft and loan facilities to an entity referred to as Stir Crazy Group of Companies ('the Stir Crazy Group'). This was done through a series of offer letters. In acceptance of the facilities offered, the offer letters were signed on behalf of 'Stir Crazy Group of Companies' by Ronald John Coumbis and Phillipa Ann Coumbis (third respondent in casu), whose designations were given as 'Director.' On 28 January 2010, 23 February 2010 and 4 May 2009, the first to the third respondents respectively bound themselves as sureties and co-principal debtors for the repayment of all the sums advanced to the Stir Crazy Group. The court a quo aptly elaborated on all the agreements entered into between the parties, as well as related documents as follows:

“(a) Loan agreements:

They were all in the name Stir Crazy Group of SA Companies.

(b) Unlimited guarantees:

There is none by the first defendant. Second defendant's is in favour of Stir Crazy Investments (Pvt) Ltd. Third defendant's is in favour of Stir Crazy Group of Companies.

(c) Surety Mortgage Bonds:

They are all in favour of Stir Crazy Investments (Pvt) Ltd.

(d) Company Resolutions to take up the plaintiff's loan offers:

They were all on behalf Stir Crazy Group of Companies.

(e) Powers of Attorney to pass security mortgage bonds:

They were all in favour of securing the loans advanced to Stir Crazy Group of Companies.”

The respondents failed to honour the guarantees in question, and, on 9 January 2014, Kingdom Bank Limited issued summons against them, as sureties and co -principal debtors, for the repayment of the outstanding capital and interest arising out of the advances made to the Stir Crazy Group.

The first and second respondents, in their plea, raised a preliminary point to the effect that the appellant had no cause of action against them. The third respondent also defended the claim on the ground that the unlimited guarantee that she purportedly signed was not enforceable against her because the facility or loan in question was advanced to a non-existent entity.

It is not in dispute that Stir Crazy Group of Companies does not exist.

This circumstance having been brought to its attention in the respondents' pleas, Kingdom Bank Limited, in its replication, did not deny the erroneous citation of the Stir Crazy Group as the principal debtor. It however averred that the defect was a non-material error common to the parties, which did not vitiate the various agreements entered into between them. Without attending to the rectification of the principal loan documents that cited the Stir Crazy Group, Kingdom Bank submitted that, as a matter of fact, Stir Crazy Investments (Pvt) Ltd (“Stir Crazy Investments”) was the principal debtor with respect to all the agreements in terms of which it had extended overdraft and loan facilities. On this basis, the Bank took the position that the respondents had effectively bound themselves as sureties and co-principal debtors in respect of the loans and facilities advanced, in reality, to Stir Crazy Investments (Pvt) Ltd.

After the commencement of litigation, Kingdom Bank Limited was taken over and substituted as the appellant, by Afrasia Bank Limited which was subsequently placed under liquidation. The respondents also filed a notice of intention to amend their plea as they wished to incorporate the plea of prescription. The respondents aver, correctly, that the amendment sought was granted without opposition from the appellant.

At the pre-trial conference, the parties agreed that the issues that fell for determination in the court a quo were the following:

(i) Whether the appellant's claims against the first and second respondents had prescribed;

(ii) Whether the appellant had locus standi to continue with proceedings in view of the fact that it went into liquidation after the close of pleadings; and

(iii) Whether the appellant had a cause of action against the respondents in view of the fact that the guarantees and surety mortgage bonds that it relied on were premised on loan agreements with Stir Crazy Group of Companies - a non-existent entity.

The court a quo found in favour of the respondents on the last two issues.

In relation to locus standi, the court relied on the case of Allied Bank Limited v Caleb Dengu and Anor HH583-15, and held that the appellant lacked the requisite locus standi because it did not seek the leave of the court to continue with the proceedings after it went into liquidation.

On the issue of whether the appellant had a cause of action against the respondents, the court a quo held that since the specified principal debtor (Stir Crazy Group) did not exist, the principal debt could not be enforced against any alleged surety and co-principal debtor thereto. The court further found that the guarantee, and any security mortgage bond based thereon, were invalid. Further, that the mistake common to the parties, as alleged by the appellant, had not been established.

On the issue of prescription, the court a quo held that the respondents had not proved to its satisfaction that the appellant's claims had prescribed in terms of section 15(d) of the Prescription Act [Chapter 8:11].

The appellant was aggrieved by the whole decision of the court a quo and noted this appeal on grounds that, in the court's view, raise two issues for determination, viz:-

(a) Whether the plaintiff had a cause of action against the respondents, and, if so;

(b) Whether the issue of prescription was properly raised and considered….,.

WHETHER OR NOT THE APPELLANT HAD A CAUSE OF ACTION AGAINST THE RESPONDENTS

Of the two main issues for determination before this Court, the court a quo dealt, first, with the question of whether or not the appellant had a cause of action against the respondents.

The record of proceedings a quo shows that the court heard argument on this and the other issues listed for determination from counsel representing the parties, considered the evidence contained in the papers before it, and found against the appellant. The appellant charges, in light of this, that the court a quo misdirected itself in fact and law in not recognising that the point in limine relating to the cause of action, was actually an exception subject to its own procedural strictures (this is according to the appellant's grounds of appeal. In elaborating on this ground, in its Heads of Argument, however, the appellant refers to the special defence in question as a special plea and argues on that basis. The court will consider the reference to 'exception' as an error).

It is the appellant's further contention that in a special defence such as one pertaining to cause of action and prescription, the party raising such defence is regarded as the claimant 'quoad that defence' and bears the onus to prove its case on a balance of probabilities. Authority for this is cited as MB Investments (Pvt) Ltd v Oliver 1974 (1) RLR 169.

The appellant avers that the objection relating to the absence of a cause of action on the basis that the relevant loan documentation referred to the Stir Crazy Group, a non-existent entity, was essentially a special plea requiring evidence. In its view, that evidence would have led to a rectification of its pleadings and the documentation concerned based on the error it says was common to all parties.

The appellant argues, on the basis of a number of authorities, that special pleas involve the averment of a new fact, and, therefore, were susceptible of replication and of a hearing at which evidence on this new fact alone may be led. See for instance Doelcam v Pichanick & Others 1999 (1) ZLR 390 H; HERBSTEIN and Van WINSEN's 'Civil Practice of the Superior Courts of South Africa', 3^rd Ed…,.

The appellant submits, in view of this, that the court a quo, by determining the matter otherwise than by trial, had deprived it of the opportunity to “amend and rectify” as necessary.

The respondents dispute that the appellant was not afforded the opportunity to submit evidence in rebuttal of the special defence that they raised. They argue, essentially, that the special plea regarding cause of action was taken “initio litis” since it was raised in the respondents' plea by consent, replicated to by the appellant and included among the issues for determination as set out in the joint Pre-trial Conference Minute. Further, that the facts relied upon appeared ex facie the pleadings and were therefore common cause and not open to any challenge.

The third respondent refers specifically to the fact that the appellant itself had attached to its papers copies of the principal loan agreements that cited the principal debtor as the Stir Crazy Group.

For their contentions, the respondents relied on the following dictum taken from a decision of this Court in National Employment Council for the Construction Industry v Zimbabwe Nantong International (Pvt) Ltd SC59-15: -

“There are instances where the defence relied upon is not evident ex facie the declaration and involves the averment of some new fact or facts to be proved with fresh matter. The procedure by way of special plea enables the plaintiff to rebut the defence raised by replication and the adduction of further evidence where necessary. In exceptional cases, however, where the special defence in question is apparent ex facie the declaration itself, the court may allow the matter to be decided on exception. This is subject to the qualification that the plaintiff has nothing to adduce in rebuttal and will not be prejudiced by a decision being taken on exception.”…,.

I am persuaded by the respondents' contentions, as outlined, and find that the remarks of PATEL JA in National Employment Council for the Construction Industry v Zimbabwe Nantong International (Pvt) Ltd SC59-15 are fully applicable to the circumstances of this case.

The remarks clearly articulate an exception to the general rule regarding special pleas and the adduction of fresh evidence, that the appellant argued for. The special defence regarding the appellant's lack of a cause of action against the respondents was apparent ex facie the appellant's declaration a quo to the extent that the appellant attached to it copies of the founding loan documents as well as the sureties and guarantees relied on. These cited the principal debtor as the Stir Crazy Group - a non-existent entity.

The special defence, in my view, therefore, did not require the averment, by the respondents, of some new fact or facts needing to be proved with fresh evidence. The appellant, in my view, properly took the opportunity, in its replication, to advance argument aimed at rebutting the special defence.

It is significant that the appellant did not suggest it wished to adduce new evidence to prove that the Stir Crazy Group existed and had been properly cited in the founding loan agreements as well as some of the guarantees signed by the respondents. Rather, the appellant's aim was to itself adduce what could only have been new evidence aimed at persuading the court to allow it to amend its pleadings or to rectify the loan agreements and guarantees so as to cite Stir Crazy Investments (Pvt) Ltd as the principal debtor.

This would, in my view, be irregular.

As the appellant itself correctly submitted, the party that raises a special defence is in that respect regarded as the claimant and bears the burden of proving it on a balance of probabilities. This would place the other party, in this case the appellant, in a position akin to that of a respondent. The latter, is, in terms of civil law and procedure, expected to adduce evidence in rebuttal of the claimant's special defence.

He would not be expected to adduce evidence constituting a new case against the claimant. The appellant, in my view, accordingly sought to improperly and un-procedurally initiate a claim for rectification of the founding loan agreements and guarantees under the guise of rebutting the respondent's special defence. On this basis, the court a quo cannot be faulted for assuming the attitude that the appellant had nothing to adduce in rebuttal of the respondent's special defence regarding its lack of a cause action against them.

The court a quo was, in any case, and, in my view, quite correctly, dis-inclined to rectify the loan documentation and guarantees in question, for the reasons it set out, as follows:

“My disinclination to amend the loan agreements, and all subsequent security documents to guarantee these loans, are further influenced by the fact that neither Stir Crazy Group of Companies nor Stir Crazy Investments (Pvt) Ltd are before me. Therefore, for me to interfere in agreements wherein I have not heard some of the parties involved is not, in my view, proper.”…,.

The court also expressed itself on the salutary principle of our law to the effect that a court cannot correct an agreement between the parties as if it were pleadings as that would amount to making a contract for the parties. See Ballantyne Butchery (Pvt) Ltd v Chisvinga and Others SC06-15; CHRISTIE, The Law of Contract in South Africa (5th ed)…,.

Clearly, the appellant could not have properly moved for an amendment to its pleadings, nor to the relevant loan and security guarantees, without the joinder of Stir Crazy Investments (Pvt) Ltd to the proceedings a quo. There is no doubt that the company had substantial interest in the subject matter of the dispute and was therefore entitled to be heard before a decision affecting it could be considered.

I am satisfied, in the light of all this, that the court a quo properly allowed the matter to be determined on evidence and facts that were evident ex facie the pleadings before it. It falls to reason, given that the appellant's intended evidence would not have rebutted the special defence in question, that no prejudice to it could have ensued based on the procedure adopted by the court a quo in its determination of the matter.

I find, accordingly, that there is no merit in the appellant's ground of appeal in that respect.

The appellant's two grounds of appeal against the court a quo's finding on cause of action read as follows:

“1. The court a quo misdirected itself in fact and in law in determining the matter on the points in limine rather than by trial, thereby depriving the appellant of the opportunity to amend or rectify as necessary; and

2. The court a quo misdirected itself in fact and law in not recognising that the point in limine relating to the cause of action was actually an exception subject to its own procedural strictures.”

It is evident that these grounds of appeal confine themselves to impugning the procedural aspects of the court's determination on the special defence raised by the respondents rather than its substance. This is despite the appellant's assertion, in its heads of argument, that it had, a quo, filed a replication on the merits of the special defence itself.

The appellant seeks an order setting aside the judgment of the court a quo and substituting it with one dismissing the “points in limine” and allowing the trial to continue.

Given the relief sought by it, one would have expected the appellant to have articulated and motivated grounds of appeal that challenged the lower court's decision on the merits. Despite not having done so in both its ground of appeal and heads of argument, the appellant nevertheless implores this Court to set aside a fully reasoned and considered decision of the court a quo on the point in question. Quite evidently this is not the manner that appeals, by their nature, are meant to be determined. The relief sought by the appellant is, on that score, incompetent.

Accordingly, the court a quo's judgment, to the effect that the appellant had no cause of action against the respondents, not having been challenged on appeal, remains extant….,.

DISPOSITION

The appellant in this appeal restricted itself to challenging the procedure followed by the court a quo in determining the respondents' special defence of lack of a cause of action against them. The court having found against the appellant on this issue, their appeal is devoid of merit and stands to be dismissed.

It is in the result ordered as follows:

The appeal be and is hereby dismissed with costs.

Appealed
SC21-19 : RONALD BAKARI vs TOTAL ZIMBABWE (PRIVATE) LIMITED
Ruled By: GARWE JA, GUVAVA JA and BHUNU JA

It is not in dispute that the appellant signed a surety document. It is also not in dispute that it was the appellant who wrote his name and that of Shadreck Mawire on the surety document. Further, the appellant is the one who entered the name Nyamapanda Service Station on ...

It is not in dispute that the appellant signed a surety document.

It is also not in dispute that it was the appellant who wrote his name and that of Shadreck Mawire on the surety document. Further, the appellant is the one who entered the name Nyamapanda Service Station on the document.

Having done so, the appellant went on to put his contact details and signature to the document….,.

It seems to me that the appellant could only have escaped liability if, having realized that he had signed a document on behalf of someone he had not intended, he had sought to rectify the surety document. The remedy for persons who find themselves in a position that the appellant purports to have been, that of signing a document thinking that it is meant for one thing when in actual fact it means another, is the defence of rectification. According to CANEY LR, FORSYTH CF and PRETORIOUS JT, Caney's The Law of Suretyship in South Africa, (Juta and Co, 2010)…, “extrinsic evidence…, in regard to the central issue of consensus may be admissible when one of the parties seeks rectification of the suretyship document.”

In the case of Northern Cape Co-operative Livestock Agency Ltd v John Roderick and Co Ltd 1965 (2) SA 64 (O) it was stated that, with rectification, the party seeking to have the contract rectified claims that the contract does not reflect what the parties agreed on and seeks to have the matter put right.

Clearly, this is a matter of evidence….,.

The appellant could have led evidence in order to rectify the agreement but chose not to do so….,.

In the case of Tesoriero v Bhyjo Investments Share Block (Pty) Ltd 2000 (1) SA 167 the court held as follows:

“Where a party who has signed a contract wishes to escape liability on the ground of justified error as to the nature or contents of the document he must show that he was misled as to the nature of the document or as to the terms of which it contains by some act or omission of the other party.”

In the case of Langeveld v Union Finance Holdings (Pty) Ltd 2007 (4) SA 572 (W), the court held that the onus was on a surety to prove that he was not aware that he was signing a document as a surety.

The court further held that there was a strong praesumptio hominis that anyone who has signed a document, has the animus to enter into the transaction, and, this person was burdened with the onus of convincing the court that he or she had not in fact entered the transaction.

HH305-14 : FAIRDROP (PVT) LTD vs CAPITAL BANK CORPORATION LTD and JOURNET TRADING PL and ELSPENCE INVESTMENTS PL and OTHERS
Ruled By: MATHONSI J

At the request of the parties to these two (2) applications, I agreed to hear both of them simultaneously given that the matters are related and arise from the same issue.In the first application, namely, HC3020/13, the applicant seeks to join the 15th respondent, the Eastern and Southern African Trade ...

At the request of the parties to these two (2) applications, I agreed to hear both of them simultaneously given that the matters are related and arise from the same issue.

In the first application, namely, HC3020/13, the applicant seeks to join the 15^th respondent, the Eastern and Southern African Trade and Development (PTA) Bank (“the PTA Bank”) as a party to the proceedings brought by the first respondent (“Capital Bank”) in HC999/13. In the second application, namely, HC3114/14, the same applicant seeks leave to serve process in HC999/13 upon the PTA Bank at Chaussee du Prince Loise Rwangasore, Bujumbura in Burundi, by edictal citation.

This judgment therefore disposes of both applications….,.

For completeness, I must mention that the action in HC999/13 is still to be set down for trial.

Capital Bank sued the applicant and 13 others on the basis of agreements entered into on 19 July 2010, 2 September 2010 and 9 December 2010 in terms of which the applicant was loaned sums of money, the balance of which allegedly stood at US$2,575,038=70 as at 31 March 2012. The other defendants in that matter, who are also respondents herein, were sued as sureties and co-principal debtors in that action.

The defendants contested that suit, and, in due course, the applicant, who is the first defendant in that action, filed a plea in which, pleading rectification, prayed that the action be stayed pending the determination of its counterclaim for the rectification of the contract upon which Capital Bank sued as well as the determination of another matter, being HC5427/12, in which it had sued Capital Bank and others for certain damages.

The applicant then filed a counterclaim in that matter wherein it cited the PTA Bank as the 15^th defendant. It averred that itself and Capital Bank had executed the loan agreements I have already referred to but that such agreements do not correctly record the agreement of the parties in that it records Capital Bank as the lender, when, in actual fact, the lender was the PTA Bank which granted the applicant a loan facility of US$2.5 million. It averred, further, that the PTA Bank could not register the loan in its books because Munyaradzi Kereke, who is the 13^th defendant in that matter, and is associated with the applicant, was on the European Union sanctions list. The PTA Bank had then appointed Capital Bank's predecessor, Renaisance Merchant Bank Limited, as its escrow or disbursement agent as a sanctions bursting measure.

The applicant then sought an order rectifying the contracts by the substitution of the PTA Bank in the place of Renaisance Merchant Bank and costs of suit on the legal practitioner and client scale….,.

Meanwhile, the applicant has brought these two (2) applications. In HC3020/13, Munyaradzi Kereke reiterated what is contained in the plea in HC999/13 in his founding affidavit; that the applicant applied to the PTA Bank for an offshore line of credit of US$2.5 million. He attached a copy of the application which is headed “PTA Bank, $2.5 Million Loan Application” dated 21 July 2010. He deposed that the PTA Bank granted the facility, and, as proof of that, he attached what is termed “Indicative Term Sheet; Proposed Structured Amortized Medium Term Import Financing Facility for Fairdrop Trading (Private) Limited Trading as Rock Foundation Medical Centre July 2010.”

Munyaradzi Kereke stated that although Capital Bank has issued summons as the principal lender, there is no privity of contract between the parties. As the applicant has pleaded rectification and counterclaimed for it and cited the PTA Bank as a defendant, leave was being sought to join the PTA Bank in the proceedings. In the event of the counterclaim being granted, the dispute in the claim in convention cannot be decided without the PTA Bank. For that reason, the applicant sought to invoke third party procedure to join the PTA Bank as a party.

The application is strongly opposed by Capital Bank, and, in the opposing affidavit of Lawrence Tamayi, its Managing Director, it denied the allegation that it was the escrow or disbursing agent of the PTA Bank. He stated that Clause 19 of the credit facility letters specifically excludes any other terms or conditions or agreements which are not recorded in the credit facility letters. The said clause reads:

“This offer, once accepted, constitutes the entire agreement between the parties who acknowledge that there are no other oral or written undertakings or agreements between them relating to the subject matter of this agreement. No amendment, consensual cancellation or other modification of this agreement shall be valid or binding on a party hereto unless reduced to writing and executed by both parties hereto.”

As Munyaradzi Kereke signed the agreement on behalf of the applicant, he, being an accomplished Banker, he knew the import of that provision and it bound the applicant to the agreement and nothing else. Lawrence Tamayi vehemently denied that the application form to the PTA Bank, relied upon by the applicant, is a binding contract between the applicant and the PTA Bank as it makes it clear that the PTA Bank was not making any undertaking to legally bind itself to lend on the terms set out therein and that any agreement reached would be subject to the written approval of the PTA Bank.

In any event, Lawrence Tamayi argued, the document the applicant relies on makes it clear that it is governed by the laws of England.

In addition, the applicant and sureties provided security to Capital Bank in the form of mortgage bonds, notarial bonds and unlimited guarantees. These securities were not given in favour of the PTA Bank. Significantly, the applicant made loan payments amounting to US$634,794=95 to Capital Bank and not the PTA Bank. According to Capital Bank, the application is designed to delay the finalisation of the action and nothing else. It accessed funds from the PTA Bank by a separate arrangement and lent the funds to its clients, including the applicant, which explains why its predecessor made reference to the “PTA Bank credit facility” in correspondence…..,.

The issues for determination in this matter are whether this is a proper case in which the PTA Bank should be joined as a party to the proceedings and whether this court does have jurisdiction over the PTA Bank and the agreement, if any, which was entered into between the applicant and the PTA Bank, which is an entity cherishing its domicile in Burundi.

View Appeal
HH273-16 : KINGDOM BANK LIMITED vs THE RIGHT INVESTMENTS (PVT) LTD and OPIUM INVESTMENTS (PVT) LTD and PHILLIPA COUMBIS
Ruled By: CHAREWA J

The plaintiff, through a series of offer letters commencing 30 March 2009 to 25 July 2011, advanced overdraft and loan facilities to Stir Crazy Group of Companies (Annexures D, E, G, H, J and L to its particulars of claim refers).It is an undisputed fact that Stir Crazy Group of ...

It is an undisputed fact that Stir Crazy Group of Companies does not exist.

It was not put into contention that the benefits of these overdraft and loan facilities were in fact enjoyed by Stir Crazy Investments (Private) Limited (the principal debtor insofar as the plaintiff is concerned). As a consequence of these loan agreements;

1. Third defendant purportedly provided security to the plaintiff, through an unlimited guarantee dated 4 May 2009, in favour of Stir Crazy Group of Companies, for the loan advances.

2. Second defendant provided similar security, but with respect to Stir Crazy Investments (Private) Limited, a legal entity, on 23 February 2010.

3. On 23 February 2010, the second defendant gave power of attorney to any duly authorised employee of the plaintiff to pass a surety mortgage bond over its property, being Stand 2729 Salisbury Township Lands, held under Deed of Transfer number 11285/2002 dated 04 October 2002 in favour of the plaintiff as security for facilities granted to Stir Crazy Group of Companies (Private) Limited - the non-existent entity aforesaid.

4. Under power of attorney in favour of the plaintiff dated 31 March 2009, the plaintiff registered a surety mortgage bond on 5 November 2010 against both the third and second defendants to secure Stir Crazy Investments (Private) Limited's indebtedness to the plaintiff in the amount of $300,000=…,.

5. First defendant also provided security, passed under power of attorney dated 28 January 2010, amounting to $1,050,000=, by way of a Surety Mortgage Bond registered against Stand 9064 Salisbury Township Lands held under Deed of Transfer number 8776/03 dated 31 October 2003, with respect to Stir Crazy Investments (Private) Limited.

The plaintiff issued summons on 9 January 2014 against the defendants, as sureties and co-principal debtors, for payment of outstanding capital and interest arising out of advances made on 30 March 2009, 22 February 2010, 27 October 2010 and 3 August 2011, to Stir Crazy Investments (Private) Limited, which had gone into voluntary liquidation. The summons was served on 17 January 2014. The plaintiff itself was subsequently taken over by Afrasia Bank Limited which has, after the commencement of this litigation, also since gone into liquidation. A notice of substitution in these proceedings was filed for Afrasia Bank Limited (in liquidation).

Three preliminary points of law arising out of these facts were raised and argued before me as follows:

1. Whether the plaintiff's claims have prescribed.

2. Whether the plaintiff has locus standi in view of the fact that it went into liquidation after the close of pleadings viz-a-vis the provisions of section 221(2) of the Companies Act [Chapter 24:03].

3. Whether the plaintiff has a cause of action in view of the fact that of the guarantees and surety mortgage bonds that it relies on are premised on loan agreements with Stir Crazy Group of Companies; a non-legal entity.

To its credit, the plaintiff did not contest that these points were properly taken. Rather, it confined its arguments to the fact that they lacked merit. Indeed, it is trite that points of law can be raised at any stage of the proceedings, provided that they go to the root of the matter and were not required to be specifically pleaded. See Muchakata v Netherburn Mine 1996 (1) ZLR 153 (S)…,; Muskwe v Nyajina & Ors SC17-12; and Gold Driven Investments (Private) Limited v Telone (Private) Limited & Anor SC09-13….,.

DOES PLAINTIFF HAVE A CAUSE OF ACTION?

In the event that I am wrong in finding that the plaintiff lacks the locus standi to be before the court, it is necessary to consider the second point of law: that the plaintiff does not have a cause of action.

The first and second defendants asserted that:

“The allegations apparent throughout the pleadings are that the guarantee upon which the Plaintiff sued was executed by and on behalf of a non-existent entity who is not before the Court.” (See paragraph 7 of their heads of argument).

The third defendant, on her part, submitted that:

“…, the plaintiff must, in any event, fail on the merits because it bases its claim against her on an invalid guarantee.” (See paragraph 6 of her heads of argument).

The defendants base their positions on the fact that the plaintiff asserts that the principal debtor is Stir Crazy Investments (Private) Limited, in circumstances where the loan agreements and some of the guarantees upon which the plaintiff's claims are based are all in favour or in the name of Stir Crazy Group of Companies.

The factual position with these documents is as follows:

(a) Loan Agreements:

They are all in the name of Stir Crazy Group of Companies.

(b) Unlimited guarantees:

There is none by the first defendant. The second defendant's is in favour of Stir Crazy Investments (Private) Limited. The third defendant's is in favour of Stir Crazy Group of Companies.

(c) Surety Mortgage Bonds:

They are all in favour of Stir Crazy Investments (Private) Limited.

(d) Company Resolutions to take up the plaintiff's loan offers:

They were all on behalf of Stir Crazy Group of Companies.

(e) Powers of Attorney to pass security mortgage bonds:

They were all in favour of securing the loans advanced to Stir Crazy Group of Companies.

The plaintiff does not deny that all the loan agreements state that the principal debtor is Stir Crazy Group of Companies but avers that this was a non-material error common to the parties and which does not vitiate their consensus. Further, the defendants are the authors of the error and cannot use it to their own benefit, and, in any event, one Ronald John Coumbis, who signed the agreements, had the express authority of Stir Crazy Investments (Private) Limited to do so. Except by extension of its argument that this was a mistake common to all the parties, the plaintiff does not advance any explanation why the guarantee by the third defendant was in favour of Stir Crazy Group of Companies, or why surety mortgage bonds were registered on behalf of Stir Crazy Investments (Private) Limited on the strength of resolutions and powers of attorney in favour of Stir Crazy Group of Companies.

It is trite that a party must have a cause of action against the party it seeks judgment against.

Case law has settled that cause of action pertains to those facts that a plaintiff must prove to support its right to judgment by the court. See Peebles v Dairibord Zimbabwe (Private) Limited 1999 (1) ZLR 41 (H).

I must point out that the first and second defendants are obviously wrong, on the facts, when they assert that “the guarantee upon which the plaintiff sued was executed by and on behalf of a non-existent entity who is not before the Court.” The first defendant did not, in fact, execute any guarantee at all, and the second defendant executed a guarantee against an existing entity - Stir Crazy Investments (Pvt) Ltd.

However, the plaintiff's cause of action is still fraught with challenges.

Firstly, it arises out of the loan agreements it entered into with Stir Crazy Group of Companies, an entity which does not exist. It then executed guarantees and surety mortgage bonds to secure its cause as circumscribed by those loan agreements. Some of the guarantees are in favour of the non-existent entity (for the third defendant). Other guarantees (for the second defendant) are in favour of an existing legal person which is not party to the loan agreements. And the security mortgage bonds are in favour of an existing legal person which is not party to the loan agreements. All these issues raise real questions as to the validity of these security documents. If a principal debtor does not exist or has never existed, the principle debt cannot arise as against the surety. In my view, therefore, the guarantee and any security mortgage bond based thereon is invalid. See Muchabaiwa v Grab Enterprises (Pvt) Ltd 1996 (2) ZLR 691 (S). See also CF FORSYTH and JT PRETORIUS, Caney's Law of Suretyship (4ed)…,.

It cannot be denied that, on the face of the documents in the record, the loan agreements were between the plaintiff and the non-existent Stir Crazy Group of Companies. I did not see, on the record, or hear a denial, by the plaintiff, that it was not solely responsible for drawing up all the documents pertaining to these loan agreements. This was therefore not a matter of an innocent misrepresentation by the directors of Stir Crazy Investments (Pvt) Ltd. Now, the plaintiff has sued on a principal debt it alleges is owed by Stir Crazy Investments (Pvt) Ltd, contending that, by an error common to the parties, the loan agreements and all security documents referring to Stir Crazy Group of Companies, ought, instead, to have referred to Stir Crazy Investments (Pvt) Ltd.

In my view, what the plaintiff seeks this court to do is to amend the agreements between itself and Stir Crazy Group of Companies to refer to Stir Crazy Investments (Pvt) Ltd.

CHRISTIE: The Law of Contract in South Africa (5ed)…, has this to say on the powers of a court to amend contracts between parties:

“The fundamental rule that the court may not make a contract for the parties is a salutary one, the principle of which has probably never been seriously questioned. It is unthinkable that the courts should not only tell the parties what they ought to have done but then makes them do it by enforcing the court's idea of what the contract ought to have been.”

The question then is whether the court should tell the parties that the loan agreements ought to have been between the plaintiff and Stir Crazy Investments (Pvt) Ltd, and all the security documents also ought to have referred to that company, and order the parties to so change the documents.

The plaintiff seems to suggest so, while the defendants say no.

I am inclined to agree with the defendants, as ordering such correction of the documents would, in my view, amount to making of a contract for the parties. It would seem to me the defendants were presented with papers by the plaintiff and instructed where to sign, which they did. For all the court knows, the defendants may have intended to group all their companies under a yet to be formed Stir Crazy Group of Companies. Nor is it far-fetched, even, to consider that they may have noticed the plaintiff's error and decided to go ahead with a view to doing exactly what they are doing now - claim that the plaintiff had no cause of action against them as it dealt with a non-existent company. In either case, I do not think that this is a case where I can safely agree that there was a mistake common to the parties and amend the various loan agreements the plaintiff entered into.

In reaching this conclusion, I am mindful of the settled principle that the court cannot correct an agreement between parties as if it were pleadings, as that would amount to making a contract for the parties. See also Dr Jane Mutasa v Telecel International and Anor HH331-14; Delta Operations (Private) Limited v Origen Corp (Private) Limited 2007 (2) ZLR 81 (S)…,; Ballantyne Butchery (Private) Limited v Chisvinga & Ors SC06-15.

Rather, it seems to me that the plaintiff was grossly negligent in the manner that it prepared its documentation for the loans it advanced. My disinclination to amend the loan agreements, and all subsequent security documents to guarantee these loans is further influenced by the fact that neither Stir Crazy Group of Companies nor Stir Crazy Investments (Pvt) Ltd are before me. Therefore, for me to interfere in agreements wherein I have not heard some of the parties involved is not, in my view, proper.

I do not find that the fact that Stir Crazy Investments (Pvt) Ltd is suing the plaintiff on the same agreements, in HC10569/14, is a bar to the sureties and guarantors to raise the defences that they have, particularly, since the defendants in this case are not party to the action between the plaintiff and Stir Crazy Investments (Pvt) Ltd. These are separate legal entities mandated to protect their separate interests. In any event, that Stir Crazy Investments (Pvt) Ltd may have established a cause of action against the plaintiff does not directly translate to a cause of action by the plaintiff against the defendants in this case. The plaintiff must establish its own cause of action against the defendants, which, in my view, it has failed to do….,.

DISPOSITION

In the result, it is ordered that:

1….,.

2. The plaintiff's claim is, in any event, dismissed for want of a cause of action against the defendants;

3….,.

4. The plaintiff shall pay the defendants' costs of suit.

SC40-15 : INDIUM INVESTMENTS (PVT) LTD vs KINGSHAVEN (PVT) LTD and DANIEL SHUMBA and LINDA SHUMBA
Ruled By: CHIDYAUSIKU CJ, GWAUNZA JA, GOWORA JA, HLATSHWAYO JA and MAVANGIRA AJA

On 28 February 2008, under case no. HC1239/08, the appellant caused summons to be issued against the respondents seeking an order for the cancellation of a lease, and, consequent thereto, the eviction of the respondents from the leased premises.

On 10 December 2008, a second summons was issued by the appellant under case no.6969/08 wherein it sought the eviction of the respondents due to the expiry of the lease.

The High Court dismissed the claims with costs.

The appellant was aggrieved by the dismissal and has noted this appeal.

THE FACTUAL BACKGROUND

The basic facts surrounding the dispute are the following:

The appellant (hereinafter referred to as “Indium”) is the registered owner of certain immovable property, being Stand 450 Avondale West Township of Stand 390 Avondale West, also known as 108 West Road, Strathaven, Harare, (hereinafter referred to as “the premises”). The first respondent (hereinafter referred to as “Kingshaven”) is a private company registered as such under the laws of Zimbabwe. The second respondent (hereinafter referred to as “Shumba” and the third respondent, his wife, are the only shareholders of and directors in Kingshaven.

Kingshaven carries on business in the hospitality sector and is in occupation of the premises by virtue of a lease concluded on 14 December 2007 with Indium. Notwithstanding the date of signing, the agreement was to come into force on 10 December 2007 and was to endure for a period of 365 days, terminating automatically on 9 December 2008.

Shumba and his wife are shareholders in a Close Corporation, ERF Bryanstan Cc, which is duly registered as such under the laws of South Africa.

ERF Bryanstan is the registered owner of an immovable property, being Portion 2 of ERF 825 Bryanstan Township also known as 17 Portman Road, Bryanstan Sandton, Johannesburg.

In 2007, ABSA Bank, in whose favour ERF Bryanstan had registered a mortgage against the property, called up the mortgage and executed against the same.

In an effort to save the property, Shumba approached Jayesh Shah (hereinafter referred to as “Shah”) for financial assistance, and this culminated in a number of agreements.

The first agreement consists of a loan between Shah, on the one part, as lender, and Shumba and ERF Bryanstan Cc, on the other, as borrowers. The loan amount is UD$500,000.

The second agreement is for the sale of the entire shareholding in Indium concluded by Shumba and his wife, on the one part, as sellers, and Jayesh Shah and Shaleetha Mahabeer, on the other, as purchasers.

The last agreement is the lease agreement concluded between Indium, as lessor, and Kingshaven, as lessee on 14 December 2007.

The two matters instituted by Indium were, by consent of the parties, consolidated for trial before the High Court.

In dismissing the claims, the court a quo stated:

“He intended to secure a windfall by all means legally possible. His legal practitioner advised a web of agreements to ensure he remained within the realms of the law. A loan here, a purchase of shares there and a lease with a buy-back option to crown it all, was all it took to secure apparent control of the debtor's immovable property in Zimbabwe without any reference to its true value.

Clearly, whatever the parties decided to call it, the agreement to take over control of the plaintiff company from Shumba, without paying for it, amounted, in my view, to a pactum commissorium.

It is the substance, not the form, to which the court looks when deciding the true nature of an agreement.

Consequently, therefore, the second issue, whether annexure “C” amounts to a pactum commissorium is determined in defendants' favour.

I have already found that the payment, in South Africa, by Shah, was intended as a loan, as pleaded by plaintiff; therefore, there is no evidence to suggest that the same payment doubled as payment for shares in Indium Investments (Private) Limited.

That issue is resolved in favour of the defendants as well.

The transactions were clearly in fraudum legis. The law in this jurisdiction is clear. Where the contract which is in fraudum legis is performed, the court cannot come to either party's assistance.”

The appeal is premised on the following grounds:

1. That, the court a quo erred in not finding, that, in the absence of a plea for rectification of a contract, the parole evidence rule operates to exclude extrinsic evidence to disprove the contents of a written contract. (sic)

2. The court a quo erred in not finding, that, returns lodged with the Registrar of Companies are prima facie proof of the correctness thereof, and the same cannot be impugned without the joinder of the Registrar of Companies.

3. Consequently, and for the stronger reason in view of grounds of appeal 1 and 2 above, the court a quo erred in holding that the respondents had discharged the onus of justifying possession of the appellant's property within the context of the actio rei vindicatio.

4. The court a quo erred in fact and in law in holding that the agreements in question were simulated agreements which “mimicked” the South African agreements.

5. The court a quo erred in any event in holding, that, the agreements the subject of the litigation were in fraudem legis in that they sought to evade the exchange control legislation, in view of the fact that free funds were paid to the credit of a South African resident, and in not finding, that, the fact that such South African resident was a citizen of Zimbabwe and did not give rise to the need for exchange control approval.(sic)

6. The court a quo erred in fact and in law in holding, that, the agreements the subject of the litigation a quo were a pactum commissorium.

Counsel for the appellant urged us to find, that, the learned judge in the court a quo had not dealt with the case that was placed before him.

It was his contention, that, the matter before the court was principally for the cancellation of the lease agreement between Indium and Kingshaven and consequential relief. He argued that it was essentially a rei vindicatio.

What the court a quo did, however, it is argued, was to turn its focus on a completely different issue which it could not competently determine and made findings which cannot be supported.

It is contended, that, the court thereby misdirected itself.

In my view, the dispute can be resolved by this court having regard to the manner in which the court a quo dealt with what it referred to as the simulated agreements, and, secondly, dealing with the actio rei vindicatio in accordance with the claims in the summons.

THE ALLEGEDLY SIMULATED AGREEMENTS

In answer to the claim for the eviction of Kingshaven from the premises, the respondents raised various defences, namely, that Shumba and his wife had borrowed a specified sum of money from Shah, and that, as security for their due performance thereon, the latter had demanded security in Zimbabwe in the form of shares in Indium. They pleaded, further, that the parties entered into a simulated agreement for the sale of shares in Indium which ultimately resulted in the lease agreement providing for a buy-back option in favour of Shumba and his wife.

There is no suggestion on the papers that Indium participated in any of the agreements except the lease.

It then begs the question which parties the court a quo referred to when it concluded that the agreements were fraudum legis.

It is common cause, that, the loan agreement was between ERF 825 Bryanston Cc, in which Shumba and his wife owned shares, and Shah.

ERF Byanston Cc was not cited as a party to the proceedings before the court a quo.

Shah only appeared in the proceedings in the court a quo as a witness on behalf of Indium.

In the circumstances, the court could not have properly considered the loan agreement, or its legality, in the absence of the parties thereto.

I turn next to the “share sale” agreement in relation to the shares in Indium.

The parties to the sale of the shares were, on the one part, Shumba and his wife, as sellers, and, on the other part, Jayesh Shah and Shaleetha Mahabeer.

The last two were never before the court as parties and the agreement for the sale of shares could therefore not be scrutinised to any extent by a court in their absence.

Consequently, the determination by the court of the issues related to the lease agreement concluded by Indium and all the respondents in reference to the share sale agreement was highly irregular.

It follows, therefore, that, any issues referred to the trial court for determination in relation thereto would be irregular. It is therefore logical to conclude that the court a quo dealt with matters and issues that were not before it.

This leaves Indium, Kingshaven, Shumba and his wife.

They were parties to a document, being the lease agreement, which is the only document properly before the court.

Those were the parties that were before the court, and, therefore, the only dispute for determination was that arising from the lease agreement in respect of which the court had to determine the respective rights and obligations of the parties before it....,.

THE VALIDITY OF THE LEASE AND THE REI VINDICATIO

I turn, then, to discuss the real issue before the court a quo, that is, the claim for the eviction of Kingshaven, and through it, Shumba and his wife, from its premises.

The preamble to the lease agreement acknowledges that Jayesh Shah and Shaleetha Mahabeer have become the beneficial owners of shares in Indium Investments (Private) Limited. The relevant provision states:

“Whereas, by a sale of shares agreement between JAYESH SHAH and SHALEETHA MAHABEER, on the one part, and DANIEL SHUMBA and LINDA SHUMBA, on the other, JAYESH SHAH and SHALLETHA MAHABEER have become the beneficial owners of shares in INDIUM INVESTMENTS (PRIVATE) LIMITED.”

In turn, Indium is the registered owner of the premises.

In terms of clause 3.1 of the lease agreement, the lessee undertook to deposit an amount of Z$ One Billion as security for the due performance by it of its obligations under the lease. Rental for the premises was set at Z$ One Billion per month payable in advance and reviewable from time to time.

In recognition of the prior ownership of the shares in Indium, by Shumba and his wife, in terms of clause 13.1 of the lease, the latter were granted an option to re-purchase the shares in Indium. The option was to expire on 9 October 2008.

It is common cause that the option was not exercised.

In February 2008, Indium advised Kingshaven, that, it was in breach of its obligations under the lease to pay rentals and cancelled the lease. On 10 December 2008, the lease also expired through the effluxion of time. Indium again issued summons, this time claiming return of the premises by virtue of the expiry of the lease through the effluxion of time.

In the plea to the claim for their eviction from the premises, the respondents admitted, that, the appellant was the registered owner of the premises.

The claim, as pleaded by the appellant, was a simple actio rei vindicatio.

The nub of the actio rei vindicatio is that an owner is entitled to reclaim possession of his property from whosoever is in possession thereof. As was stated in Chetty v Naidoo 1974 (3) SA 3…,:

“It may be difficult to define dominium comprehensively (cf. Johannesburg Municipal Council v Rand Townships Registrar & Ors 1910 TS 1314 at 1319), but, there can be little doubt…, that, one of its incidents is the right to exclusive possession of the res, with the necessary corollary that the owner may claim his property wherever found, from whomsoever holding it.

It is inherent in the nature of ownership, that, possession of the res should normally be with the owner, and, it follows, that, no other person may withhold it from the owner unless he is vested with some enforceable right against the owner (e.g. a right of retention or a contractual right).”

As a consequence, once the ownership by Indium of the premises was acknowledged and accepted by the respondents, all that the court a quo had to determine was whether Kingshaven had any legal right to remain in possession of the same.

Therefore, the simple task before the court a quo was to decide whether or not a lease agreement existed between the parties as alleged, and, thereafter, to determine whether or not the claim for eviction on the lease was well founded.

This, the court failed to do.

It went on to make wider pronouncements on relationships that were not before it. It thereby misdirected itself.

The principle of rei vindicatio was applied in Stanbic Finance Zimbabwe Ltd v Chivhungwa 1999 (1) ZLR 262 (H) by MALABA J…, where he remarked as follows:

“The principle on which the actio rei vindicatio is based is that an owner cannot be deprived of his property against his will and that he is entitled to recover it from any person who retains possession of it without his consent.

The plaintiff, in such a case, must allege, and prove, that he is the owner of a clearly identifiable movable or immovable asset and that the defendant was in possession of it at the commencement of the action.

Once ownership has been proved, its continuation is presumed.

The onus is on the defendant to prove a right of retention: Chetty v Naiddo 1974 (3) SA 13 (A) at 20A-C: Makumborensa v Marini SC130-95 p2.

It follows, that, the action is based on the factual situation that prevailed at the time of the commencement of the legal proceedings.”

Once an owner proves that the property is his and that the defendant originally obtained possession of the res pursuant to a contract, the owner is obliged to prove that such a contract has expired or that he was entitled to cancel it and has indeed terminated it.

In Chetty v Naidoo 1974 (3) SA 3 it was emphasised that:

“…,. a plaintiff who claims possession by virtue of his ownership must, ex facie his statement of claim, prove the termination of any right which he concedes the defendant would have had but for the termination.”…,.

The only defences available to a defendant in the position of the respondent are the following;

(i) That he had a right to possess;

(ii) That he was not in possession; or

(iii) That the plaintiff is not the owner.

It is worth noting, that, the respondents did not plead any of these defences.

In truth, they could not have, as they had a lease with Indium the termination of which they did not deny or place in issue. The validity of the lease agreement is confirmed.

Counsel for the appellant has, however, further submitted, that, the court, in the face of this clear claim, then went on to grant judgment in favour of the respondents in the absence of a counter claim.

In African Farms and Townships v C.T. Municipality 1963 (20) SA 555 (AD) STEYNE CJ made the following remarks:

“Counsel for the appellant further argued, that, the order in the original proceedings, which as such is an order dismissing the application, is to be equated with absolution from the instance, leaving the issue undecided.

In my view, there is no substance in that argument.

As Sande, De Diversis Regulis ad l. 207, points out, the res judicata is not so much the sentential, the sentence, or the order made, as the lis or negotium, the matter in dispute or question at issue about which the sententia is given, or the causa which is determined by the sententia judicis.

As pointed out in Purchase v Purchase 1960 (3) SA 383 (N) at p385, dismissal and refusal of an application have the same effect, namely, a decision in favour of the respondent.

The equivalent of absolution from the instance would be that no order is made, or that leave is granted to apply again on the same papers.

In Commissioner of Customs v Airton Timber Co Ltd 1926 CPD 351 at p359, WATERMEYER J, draws a distinction between the actual judgment and the reasons for judgment, and expresses the view, in effect, that, where the decision of a particular question, although dealt with in the reasons for judgment, is not incorporated in the actual judgment, and the question is not necessarily determined by the judgment, the matter is not res judicata.

I do not understand this to mean, that, where a Court decides the particular issue raised and dismisses the application, the question decided is not res judicata. If that is what it does mean or imply, I would be unable to agree with it.

In the present case, having regard to the judgment, the import of the order is clearly that, on the issues raised, the Court found against the appellant and in favour of the respondents.”

A dismissal of the plaintiff's claim is a judgment in favour of a defendant.

It is my view, that, the dismissal had the effect of awarding the respondents judgment in their favour.

I turn next to the relief being sought.

In the prayer, the appellant seeks an order for the setting aside of the judgment of the court a quo and its substitution with an order entering judgment in its favour in terms of the summons.

In addition to the cancellation of the lease, Indium sought the following relief:

“2. An order directing the defendants, and all those claiming occupation through them, to vacate the premises situate Stand 450 Avondale West Township of Stand 390 Avondale West, otherwise known as 108 West Road, Strathaven, Harare (“the premises”).

3. An order that in the event that within forty-eight (48) hours of the date of the above order being issued and the defendants failing and/or neglecting and/or refusing to comply, the Sheriff for Zimbabwe, or his lawful deputy for Harare, duly assisted by the Zimbabwe Republic Police if need be, be authorised empowered and directed to eject the defendants from the premises, and all those claiming occupation through them, and to hand over vacant occupation of the premises to the plaintiff or its authorised agent or representative.

4. An order precluding and restraining the defendants from removing any item of property from the premises.

5. An order for payment of the sum of $Z2,567,000,000 (two billion five hundred and sixty seven million dollars) together with interest thereon calculated at the prescribed rate to the date of payment as follows;

5.1 On Z$567,000,000 (five hundred and sixty seven million dollars) with effect from 10 December 2007;

5.2 On Z$1,000,000,000 (one billion dollars) with effect from 1 January 2008; and

5.3 On Z$1,000,000,000 (one billion dollars) with effect from 1 February 2008.

6. An order for holding-over damages at the rate of Z$4,000,000,000 (four billion dollars) per month with effect from 1 March 2008 to the date that the plaintiff recovers vacant occupation of the premises aforesaid, such rate to be adjusted from time to time in accordance with market rates.

7. An order for interest on the sum of holding over damages aforesaid at the prescribed rate from the date each amount becomes due and payable.

8. An order for payment of the sum of Z$10,000,000,000 (ten billion dollars) together with interest thereon at the prescribed rate from the date of judgment to the date of payment.

9. Costs of suit as between legal practitioner and client.”

The appellant sought for an order confirming the cancellation of the lease.

It is common cause that the lease has expired through the effluxion of time. Its expiry is not in dispute and it is not necessary to confirm its cancellation.

As a consequence, an order for the eviction of the respondents from the premises will issue.

The interdict against the removal of items from the premises was never put in issue.

Appealed
SC09-21 : ANDERSON MANJA and 98 OTHERS vs SHERIFF OF ZIMBABWE and GURTA MINING AG
Ruled By: MAVANGIRA JA, UCHENA JA and MATHONSI JA

This is an appeal against the whole judgment of the High Court handed down on 3 June 2020 which upheld the second respondent's claim to immovable property and/or mining claims located in Mashonaland West placed under judicial attachment by the first respondent for sale in execution of a judgment.The judgment ...

BACKGROUND FACTS

The appellants were employed by Amble Mining (Private) Limited. A labour dispute between them and their employer yielded an arbitral award which was registered as a judgment of the High Court. Upon execution of that judgment, a chrome mine comprising of mining claims, 110 compound houses, a shop, 6 round thatched guest houses, 3 separate guest houses, and a workshop were seized by the Sheriff.

The Sheriff sought to recover the judgment debt of USD1,199,251=88.

Following attachment, the second respondent, a company incorporated in terms of the laws of Switzerland, claimed all the property as its own.

The appellants did not admit the claim. This forced the Sheriff to institute interpleader proceedings in the court a quo to settle the conflicting claims.

The second respondent admitted that the mining claim once belonged to the judgment debtor. Its case, however, was that it had bought the property from the judgment debtor in 2009 during which year it also took transfer of the claims.

As proof of the sale, the second respondent produced a Board Resolution of a company known as Maranatha Ferrochrome (Private) Limited, the holding company of Amble Mining (Private) Limited.

The second respondent also produced a copy of a certificate of registration of the mining claim issued by the Ministry of Mines and Mineral Development in its name.

In addition to that, the second respondent also produced two letters written by the Acting Provincial Mining Director for Mashonaland West.

The letters in question are contradictory.

The first, dated 31 May 2018, stated that the mining claims belonged to the judgment debtor. The second, dated 5 July 2018, apologised for what it referred to as a “gaffe” in the earlier letter and stated that the mining claims belonged to the second respondent.

The appellants' case was that there was collusion between the Acting Provincial Mining Director, the second respondent, the judgment debtor, and Maranatha Ferrochrome (Private) Limited in order to confound creditors.

The appellants moved for the lifting of the veil of incorporation so as to expose the second respondent, the judgment debtor, and Maranatha Ferrochrome (Private) Limited as companies of the same Group.

The purported sale of the mining claims would be shown to be a sale between subsidiary companies.

The court a quo found that after producing the documents I have alluded to, the second respondent had discharged the onus of proving ownership. It had set out a prima facie case of ownership which had the effect of shifting the onus to the judgment creditors, the appellants herein, to prove otherwise.

The court a quo further found that the appellants did not adduce any evidence. As such, the prima facie case provided by the second respondent “mutated” to proof of ownership.

The appellants were aggrieved and noted this appeal on four (4) grounds.

GROUNDS OF APPEAL

1. The court a quo grossly erred by granting inter-pleader claim in the circumstances where the second respondent failed to prove ownership of the attached property on a balance of probabilities.

2. The court a quo grossly erred by failure to consider connivance between the judgment debtor and the second respondent to defeat execution of a court order.

3. The court a quo grossly erred by shifting the burden of proof to the appellants instead of the second respondent.

4. The court a quo erred by granting costs on an attorney client scale against the appellants where there was no basis for such.

THE APPEAL

Although there are four grounds of appeal, they crystallize around essentially one issue that falls for determination in this appeal. It is whether the court a quo erred in upholding the claimant's claim to the property.

It was submitted, on behalf of the appellants, that, the second respondent did not discharge the burden of proving ownership because the evidence tendered by the second respondent shows that itself, Maranatha Ferrochrome (Private) Limited, and the judgment debtor are one and the same thing. The whole arrangement, so the argument goes, to transfer the mining claims from the judgment debtor to the second respondent was meant to shield the property from execution.

To illustrate that point, counsel for the appellants drew attention to the Board Resolution relied upon as evidence of the existence of a sale agreement involving the mining claims. It was argued that a resolution is not a sale agreement but is a pre-requisite for the conclusion of a sale agreement by a company. If indeed the judgment debtor had gone on to enter into an agreement of sale, in terms of which it alienated the property to the second respondent, it was argued, then the latter would have produced, not only the agreement of sale, but also proof of payment as consideration for the mining claims.

Apart from that, counsel submitted, the fact that it is common cause that Andrew Lawson, who attended the Board of Directors' meeting of 13 October 2009, in Italy, at which the resolution was made, is also a director of the judgment debtor, is suggestive of the resolution being a sham and the transfer of the claims being an elaborate hoax.

In view of its centrality in the resolution of this appeal, the resolution, which is an extract from the minutes of an Extraordinary Meeting of the Board of Directors of Maranatha Ferrochrome (Private) Limited held on 13 October 2009 is reproduced below:

“Minutes of an Extraordinary Meeting of the Board of Directors of Maranatha Ferrochrome (Pvt) Ltd held on Tuesday 13 October 2009 in the offices of Sineco Spa in Ceparano, Italy

Present:
Mr Gialuigi Ghezzi - Chairman
Mr Giorgio Barelli – Director
Mr Andrew Lawson – Director

Apologies:
Mr. George Mashavatu – Director

The following resolutions were agreed and passed unanimously by the board of directors of Maranatha Ferrochrome (Private) Limited -

1. Maranatha Ferrochrome (Private) Limited hereby agrees to sell all mining claims and leases owned by this company and its subsidiary, Amble Mining (Pvt) Ltd, Gurta A.G. of Switzerland. These claims are, in total, to be sold for a sum of USD1,350,000 (one million three hundred and fifty thousand united state dollars). It was noted that Mr. Andrew Lawson has authority to sign and accept ownership of the said claims and mining lease on behalf of Gurta A.G. by means of a Power of Attorney from Gurta A.G.

2. Mr Keith Beck – ID NO. - 32-058218 N00 is hereby empowered to transfer ownership of the above-mentioned mining claims and leases on behalf of Maranatha Ferrochrome (Pvt) Ltd and Amble Mining (Private) Limited.”…,.

A simple interpretation of this resolution, which is obviously not an agreement of sale, is that Andrew Lawson, a director of the alleged seller of the mining claims (Maranatha) was given a power of attorney by the alleged purchaser of those claims, the second respondent, to receive delivery of the claims from the same seller in which he is a director. He was to hold the claims on behalf of the alleged new owner.

This was a classic case of the seller selling to itself.

It is also remarkable, that, after agreeing to sell the mining claims, the alleged seller does not appear to have progressed further to accomplish the mission. No sale agreement was produced. In addition, the closest the second respondent came to proving movement of funds to purchase the claims, is an invoice dated 18 December 2018 setting out the values of the 54 Blocks of Ngezi mining claims being US$1,050,000. It also shows the value of the 6 Blocks of Mapanzura mining claims, being US$300,000.

It is needless to say that the invoice, being neither a receipt nor a bank statement, does not prove anything.

I mention, in passing, that, if indeed money had changed hands, the second respondent would not have had any difficulties producing proof of payment.

Counsel for the appellants also made reference to the lease agreements produced by the second respondent.

Again, because of its importance in shedding light to the dispute between the parties, I reproduce the pertinent part of the standard document hereunder:

“LEASE AGREEMENT

A settlement agreement was negotiated between Upthrow Trading (Private) Limited, Maranatha Ferrochrome (Pvt) Ltd, Amble Mine (Private) Limited, Gurta AG, Glossy Investments (Private) limited and Honourable Paul Mangwana and signed in Italy on 3 October 2013. In terms of this settlement agreement, following the completion of the handover of the mining claims, Maranatha Ferrochrome (Private) Limited representing Gurta AG who are the legitimate owners of the mining claims in Ngezi do hereby offer the Lease Agreement Arrangement for the property known as:

WHITE HOUSE ROOM 3

The lessee hereby agrees to rent the said property (on) for a period of 3 months with effect from 1 September 2015 expiring on 3 November 2015 subject to the payment of monthly rentals amounting to US$25 to Maranatha Ferrochrome (Private) Limited. Lease may be terminated by either party giving two weeks as notice of termination.”…,.

Again, a simple interpretation of the lease agreements which the second respondent entered into with its alleged tenants shows that six (6) years after the second respondent had purportedly purchased the mining claims and their environs from the judgment debtor, the latter was still being listed on the lease agreements as having an interest in the property.

Not only that, the second respondent was still not visible on the ground to an extent that the leases were written on the letterhead of Maranatha Ferrochrome (Private) Limited - the parent company of the judgment debtor.

If that set of facts was not disconcerting enough, then, it should indeed be remarkable to note that Maranatha Ferrochrome (Private) Limited was also receiving rentals for the leased properties.

Those facts cannot be ignored.

The documents from the Ministry of Mines and Mineral Development, relied upon by the second respondent, had their own challenges.

Counsel for the appellants submitted that the certificate of registration purportedly showing that the claims had changed hands was a photocopy. Although the second respondent was challenged to produce the original, it failed to do so.

More importantly, when the Ministry was requested to confirm the status of the mining claims, it initially wrote a letter dated, 31 May 2018, signed by one M. Maisera, the Acting Deputy Provincial Mining Director for Mashonaland West, which states in part:

“This office acknowledges receipt of your letter dated 24 May 2018 in which information of mines held by Amble Mining (Private) Limited is requested.

According to records held by this office, Amble Mining (Private) Limited is the holder of the following chrome blocks…,.”

It is common cause that the listed blocks are those that were placed under attachment and form the dispute between the parties.

There may have been a change of the Acting Provincial Mining Director for Mashonaland West because, on 5 July 2018, S. Mpindiwa, writing under that title, was singing a different tune.

In S. Mpindiwa's letter to the appellants' legal practitioners, he/she apologised for what he/she referred to as “a gaffe” in stating that the judgment debtor owned the mining claims. Instead, that office then stated that the mining claims were long transferred to the second respondent.

Unfortunately, the letter did not explain how the “gaffe” came about.

Counsel for the appellants pointed to this contradiction as proof..., that the information from the Ministry of Mines could not be relied upon.

View Appeal
HH351-20 : THE SHERIFF OF ZIMBABWE and GURTA AG vs ANDERSON MANJA and 98 OTHERS
Ruled By: CHIKOWERO J

JUSTIFICATIONThe HOLY BIBLE, CONCORDANCE AUTHORIZED KING JAMES VERSION, 2013 p1078 reads, in Ecclesiastes 4:09-12:“9. Two are better than one; because they have a good reward for their labour.10. For, if they fall, the one will lift up his fellow: but woe to him who is alone when he falls; for ...

JUSTIFICATION

The HOLY BIBLE, CONCORDANCE AUTHORIZED KING JAMES VERSION, 2013 p1078 reads, in Ecclesiastes 4:09-12:

“9. Two are better than one; because they have a good reward for their labour.

10. For, if they fall, the one will lift up his fellow: but woe to him who is alone when he falls; for he has not another to help him up.

11. Again, if two lie together, then they have heat: but how can one be warm alone?

12. And, if one prevail against him, two shall withstand him; and a threefold cord is not quickly broken.”

I therefore refer to a number of legal sources as well as illustrations in determining this inter pleader application.

CLAIMANT BEARS THE ONUS TO PROVE THAT THE ATTACHED PROPERTY BELONGS TO IT AND MUST DISCHARGE THAT ONUS ON A BALANCE OF PROBABILITIES

In Sabarauta v Local Authorities Pension Fund and the Sheriff SC77-17, UCHENA JA, writing for the Zimbabwe Supreme Court, said:

“Interpleader proceedings are instituted by the Sheriff in respect of property attached by him when a third party claims ownership of that property. In such proceedings, it is necessary for the party claiming the attached property to prove ownership by clear and satisfactory evidence.”

In The Sheriff for Zimbabwe v Mahachi and Leomarch Engineering HMA34-18, MAFUSIRE J puts it thus…,:

“One common thread running through such cases, and several others on the point, is that there is a rebuttable presumption that where someone is found in possession of movable goods, they are presumed to be the owner of that property.

Where someone else other than the possessor claims to be the owner of those goods, they have the onus to prove, on a balance of probabilities, that they are the owner. There are no hard and fast rules on how they may go about proving such ownership. Every case depends on its own facts. The claimant may have to produce some evidence, such as receipts or other documents, if available, to prove ownership. A bald assertion that they are the owner is not enough.”…,.

The facts of each matter ultimately resolves the question whether clear and satisfactory evidence has been tendered by a claimant to satisfy the court, that, on a balance of probabilities, the property attached belongs to the claimant. The road to proving ownership is not a one way street.

WHERE THE CLAIMANT HAS PRODUCED SUFFICIENT EVIDENCE TO CONSTITUTE PRIMA FACIE PROOF OF OWNERSHIP THE ONUS SHIFTS TO THE JUDGMENT CREDITOR TO DISPROVE SAME BY PRODUCING EVIDENCE TO THE CONTRARY

The claimant does not need, at this stage, to prove, on a balance of probabilities, that the attached property belongs to it. All that is required of it is to show, on the face of it, that the property probably belongs to it.

That is what prima facie proof means in civil cases.

The onus then shifts to the judgment creditor to disprove the claimant's prima facie evidence of ownership by producing its own evidence to the contrary.

If the contrary evidence satisfies the court, the claim fails and execution proceeds. The converse is true.

The judgment creditor cannot successfully disprove the claimant's prima facie evidence of ownership by making unsubstantiated assertions in its own opposing affidavit. Neither can it do so through composing heads of argument based on the bare assertions in the opposing affidavit.

It follows also that argument at the hearing of the inter pleader application is no substitute for a judgment creditor's failure to produce contrary evidence to disprove the claimant's prima facie evidence of ownership of the attached goods.

If the judgment creditor cannot disprove the claimant's prima facie evidence of ownership, the result is this: What was prima facie evidence of ownership is transformed into proof on a balance of probabilities. The attached goods are then declared not executable and their release from attachment ensues.

This procedure has a parallel in Criminal Law.

If the State establishes a prima facie case against an accused who then opens and closes his defence case without without leading any evidence at all that person will be convicted. The conviction is not based on the prima facie case. It is no longer that. It has graduated to become proof beyond a reasonable doubt for want of any competing evidence.

In (1) Smit Investments Holdings SA (Proprietary) Limited (2) Genet Mining (Proprietary) Limited v (1) The Sheriff of Zimbabwe (2) Pungwe Mining (Private) Limited SC33-18 PATEL JA, with whom MALABA CJ and HLATSHWAYO JA concurred, said…,:

“In a bid to prove its ownership of the assets, the first appellant produced statements of account for Mbada Mine which showed that some payments, but not all, had been made by Mbada Mine. In addition, both appellants produced detailed agreements concluded with Mbada Mine (on 15 July 2012 and 22 July 2015), respectively, which stipulated that ownership of the assets would remain with the appellants until the full purchase price was paid. It was the court a quo's finding that the agreements were not authentic and that there was collusion between the appellants and Mbada Mine.

It was alleged, by the second respondent, that, the agreements were doctored by Mbada Mine and the appellants ex post facto and that there was no paper trail to show that the assets belonged to the appellants.

However, no evidence was led to substantiate the second respondent's allegations of collusion.

The court relied on the bald averment by the second respondent that the documents were not authentic and simply took that to be correct.

It is the second respondent that levelled allegations of inauthenticity and collusion. Consequently, it is the second respondent that should have proven the same.

This position was succinctly captured in the case of Circle Tracking v Mahachi SC4-07, where the court held that the principle that he who alleges must prove is a basic concept of our law.

No evidence was adduced by the second respondent to substantiate the alleged inauthenticity of the agreements.

The appellants produced documents which show that the assets had been procured by them and initially belonged to them. They also produced the agreements concluded with Mbada Mine in 2012 and 2015 which show that ownership was reserved in favour of the appellants until the full purchase price was paid. The relevant provisions are contained in clauses 4.3 and 11.6 of the first appellant's agreement and clause 7.7 of the second appellant's agreement.

The second respondent alleged that the documents supporting the appellants' claims were a recent fabrication meant to frustrate the execution of the assets, but, the dates when the agreements were concluded reveal that they were executed well before the second respondent instituted any legal proceedings in this matter. There is also nothing in the record to give credence to the allegations that the documents were fabricated by the appellants in collusion with Mbada Mine. It is my view, therefore, in the absence of any evidence to the contrary, that the agreements are genuine and that their provisions and the agreed compacts contained therein must be accepted as being authentic, as well as commercially and legally cognizable.”

This court's decision in the Sheriff of Zimbabwe v Senital (Pvt) Ltd t/a Frank B Mine and Zimbabwe United Passenger Company Ltd HB233-18 underscores this point. There, MAKONESE J expressed it in these words…,:

“The claimant refuted the allegations that the property belonged to the judgment debtor, and, in a bid to prove ownership of the attached property, the claimant attached some receipts and agreements of sale as proof of the attached assets. An agreement of sale is taken as prima facie proof of ownership. Where a claimant tenders some acceptable proof of ownership the onus must necessarily shift to the judgment creditor disproving the claimant's ownership of the attached goods.”

Similarly, CHITAPI J explained in The Deputy Sheriff Marondera v Hombarume and 7 Ors HH521-18…,:

“In my view, this claimant's claim is not far fetched. The claimant did not just attach the registration book as proof of legal ownership. He attached the official motor vehicle extract from Central Vehicle Registry. It gives details of the importation of the vehicle by the claimant and proof of payment of import duty and police clearances. In such a situation, the onus to prove that the third claimant is not the owner of the vehicle must shift to the judgment creditor. Where the claimant places before the court acceptable evidence of ownership or of some other legally recognizable ground warranting release of the attached property from execution, the onus shifts on the party who impugns such evidence to controvert it.”...,.

THE FACTS

The judgment creditors were employees of Amble Mining (Private) Limited. The latter traded as Amble Mine.

On 24 May 2010, an Independent Arbitrator granted an award ordering the Mine to reinstate the 99 employees with effect from March 2006 without loss of salary and benefits. As an alternative, the Mine was to pay them certain sums for back pay, damages for loss of employment, punitive damages, housing allowance, cash in lieu of leave and cash in lieu of notice. The total amount was US$1,199,251=88.

The date when the matter was referred to the Arbitrator is not disclosed in the papers. Also kept under wraps is the history of the labour matter leading up to the award.

Amble Mining (Pvt) Ltd is the judgment debtor.

On 28 June 2017, the employees filed a court application for registration of the arbitral award. The application to register the award as an order of this court was granted, unopposed, on 16 August 2017.

A Writ of Execution Against Movable Property must have been issued. I have not seen it. What I have perused, both in the court record relating to registration of the arbitral award and the present matter is a Writ of Execution against immovable property. It was issued on 18 June 2018. In the writ is a statement speaking to a nulla bona return of service. The nulla bona return of service was not placed before me. I do not know when it was issued. I am also in the dark as to where the Sheriff had sought to effect the attachment.

However, as regards the immovable property, the Sheriff was instructed to attach and execute what was said to be the judgment debtor's property being a certain chrome mine comprising of:

(i) The mining claim, being a block of 25 mining claims known as BEE 47 registered as No. G310 BM.

(ii) 110 compound houses.

(iii) 1 x shop.

(iv) 6 x round thatched guest houses tiled/geyser.

(v) 3 separate guest houses.

(vi) Workshop.

This was to realize the sum of US$1,199,252=99 which was the alternative remedy to reinstatement.

On 26 June 2018 the Sheriff wrote to the Provincial Mining Director, Mashonaland West Province attaching the mining claim in question together with everything else listed on the writ of execution against immovable property.

Gurta AG is the claimant. It is a company incorporated in terms of the laws of Switzerland. It is therefore a peregrinus. It has paid security for costs.

Gurta AG filed an affidavit with the Sheriff claiming ownership of all the attached property. The affidavit was deposed to by Carlo Ghezzi. He is a Board member and Chairman of the claimant.

The claimant admits that the mining claim used to belong to the judgment debtor. However, the claimant purchased the same sometime in 2009 and took transfer the same year.

In an endeavor to prove its claim, Gurta AG annexed certain documents to the affidavit delivered to the Sheriff.

Those documents are copies each of the certificate of registration of the mining claim after transfer; a Board Resolution of Maranatha Ferro Chrome (Pvt) Ltd, signed by the chairman and secretary on 15 October 2009, reflecting that the Board agreed, on 13 October 2009, to sell all its mining claims as well as those of its subsidiary, Amble Mining (Pvt) Ltd, to Gurta AG for US$1,350,000; an unsigned document on Maranatha Ferrochrome's letterhead said to be an invoice relating to the Sale and a Lease Agreement on Maranatha Ferrochrome's letterhead, dated 9 September 2015, in terms whereof Joseph Wirima rented one of the rooms at the mining claim for a period of 3 months running from 1 September 2015 to 30 November 2015 at a rental of US$25 per month.

The judgment creditors rejected the claim.

This led to the Sheriff instituting these inter-pleader proceedings.

The claimant, in a bid to prove its claim before this court, again filed an affidavit by the same deponent. It annexed thereto copies of the same documents as previously laid before the Sheriff. This time, it attached also copies of two letters written by the Acting Provincial Mining Director Mashonaland West on behalf of the Secretary for Mines and Mining Development. The letters are dated 5 July 2018. One was addressed to the judgment creditor's then legal practitioners, Citizens Legal Society and Advisory Trust. The other was addressed to the Sheriff's office.

In both letters, the Ministry of Mines and Mining Development, through the author, set the record straight by advising that the mining claim in question belongs to the claimant as evidenced by records reflecting transfer as having been effected to Gurta AG on 26 October 2009.

The author apologized to both addressees for a mistake which had been made in an earlier letter to Citizens Legal Society and Advisory Trust on 31 May 2018 which stated that the mining claims, and two other claims, belonged to the judgment debtor.

THE JUDGMENT CREDITORS' POSITION

Besides the letter of 31 May 2018 from the Ministry of Mines and Mining Development (which was superseded by the letters of 5 July 2018 from the same Ministry) the judgment creditors did not produce any evidence to contradict that tendered by the claimant.

They alleged collusion between the Acting Provincial Mining Director, Mashonaland West, the claimant, the judgment debtor, and Maranatha Ferrochrome (Pvt) Ltd to cook up the documentary evidence which the claimant placed before me.

I was told that there was therefore no sale of the mining claim in question to the claimant because all the documents speaking to such sale and transfer of the claim were fabricated.

The judgment creditors, in opposing papers, heads of argument, supplementary heads of argument, and oral argument at the hearing said this:

No paper trail leading up to transfer of the mining claim to the claimant had been put before me. There was therefore neither sale nor transfer of the mining claim in favour of Gurta AG. The claim was still registered in the name of the judgment debtor and therefore executable.

The argument was premised upon section 275 of the Mines and Minerals Act [Chapter 21:05] which reads in relevant part:

“275 Registration of transfer of mining locations and transfer duty payable

1. When any registered mining location or any interest therein is sold or otherwise alienated in any manner whatsoever, the seller or person who so alienates shall notify the mining commissioner of the transaction within sixty days of the date of such transaction, and shall inform him of the name of the person to whom such location or interest is sold or otherwise alienated and of the amount of the valuable consideration, if any, agreed upon and the date of the transaction.

2. When any registered mining location, or any interest therein, has been sold or otherwise alienated, whether before or after the first November, 1961, in any manner whatsoever, for valuable consideration, transfer duty at the rate fixed by Parliament shall be paid by the purchaser, which terms shall include any person becoming entitled to such location or interest therein by way of sale, exchange or other like transaction;

1….,.

2….,.

3….,.

4. Subject to this Act, any person entitled to be registered as the holder of a registered mining location, or any interest therein, shall make application to the mining commissioner for the transfer of such location or interest, and every such application shall be in writing and signed by or on behalf of the applicant, and shall be accompanied by the following particulars -

(a) The last issued certificate of registration or of special registration of the location or the holder's copy of the mining lease, as the case may be;

(b) Certificates by the transferor and transferee in the prescribed form;

(c) A duplicate original grosse or notarially certified copy of any and every existing written agreement affecting or bearing upon the sale, alienation, exchange or transfer;

(d) In the event of there being no such existing written agreement, certificates by the transferor and transferee to that effect;

(e) The original or notarially certified copy of any power of attorney which may be required to authorize an agent to act on behalf of any party to the transfer; if the original power is lodged with the mining commissioner and the applicant does not wish the mining commissioner to retain it, he shall furnish with it a copy which the mining commissioner shall compare with the original, certify to be a true copy and retain;

(f) If such application is in respect of the transfer of any mining location registered for precious stones or any interest therein, a certificate from the secretary that the Minister has granted the permission required under section two hundred and eighty two in respect of such transfer.

5. The mining commissioner shall, on receipt of such application and other documents, and of the transfer duty or, if no such duty is or may in the future be payable or the whole of such duty has been remitted under subsection (9) of the prescribed fee, and if he is satisfied that the other provisions of this Act have been complied with, register transfer by making the necessary entries in his registers and other records: Provided that -

(i) No transfer, as aforesaid, shall be valid unless it has been registered by the mining commissioner, and no such registration shall be made -

(a) Where such location is liable for forfeiture or under attachment;

(b) Until dues, fees, royalties, rents or other moneys due and payable to the mining commissioner under this Act in respect of the property to be transferred have been paid;

(c)…,.

(d) Where the transferee is not a permanent resident of Zimbabwe, unless the mining commissioner, after consultation with the Reserve Bank of Zimbabwe, is satisfied that all requirements imposed by or under the Exchange Control Act [Chapter 22:05] have been complied with;

(i)…,.

(ii)…,.

(8) The mining commissioner shall also, on receipt of the prescribed fee, issue to the transferee a certificate in the form prescribed and such certificate shall record the interest of the transferor, whether whole or otherwise, in such block.”

The judgment creditor's alternative argument was this:

Should I find that there was a sale then I should pierce the corporate veil on two grounds:

(i) Gurta AG, Amble Mining (Pvt) Ltd, and Maranatha Ferrochrome (Pvt) Ltd were companies in the same Group. The first two were subsidiaries of the third. Therefore, the sale was between subsidiary companies.

(ii) Secondly, there was fraud involved because the sale and transfer of the mining claim were designed to defeat the judgment creditors' entitlement to attach the mining claim by taking it out of the judgment debtor's hands.

THE ANALYSIS

I am satisfied that the claimant established, prima facie, that the mining claim belongs to it. The precise legal position is that the holder of a mining claim has the right to work such claim to the exclusion of everyone else.

The totality of the documentary evidence tendered by the claimant satisfies me in this regard.

It is true that the date stamp on the copy of the certificate of registration on record is not legible to the extent that the day and month of registration of the transfer is not visible. But the year of registration of that transfer is reflected on the document as being 2009. The two letters from the Ministry of Mines and Mining Development, dated 5 July 2018, clearly state the date of registration of the transfer as 26 October 2009. So, the letters cure the deficiency appearing on the copy of the certificate in question.

What I have is a copy of the certificate, not the original.

The transfer number for the certificate in question is given in the letter which was addressed to Citizens Legal Society and Advisory Trust. It is TR 6627. That is the transfer number appearing on the copy of the Certificate of Registration after transfer tendered by the claimant. When issuing a duplicate original Certificate of Registration to a holder, the office of the Mining Commissioner obviously retains the original on file.

The Certificate of Registration is documentary evidence issued and signed by the Mining Commissioner in Harare. The letters of 5 July 2018 are pieces of documentary evidence authored by the Acting Provincial Mining Director, Mashonaland West in Chinhoyi. All three documents confirm that the claimant is the registered holder of the claim in question since 2009.

No contrary evidence was led by the judgment creditors to demonstrate that the certificate of registration was cancelled by the Mining Commissioner for whatever reason or disowned by him as being inauthentic or that the letters of 5 July 2018 contain falsehoods.

This court is not the Mining Commissioner. This court does not issue certificates of registration of mining claims. The person who must be satisfied that section 275 of the of the Mines and Minerals Act has been complied with is the Mining Commissioner. It is him, and not myself, who is under obligation to receive, peruse, and be satisfied with the documentation required before he issues a certificate of registration.

No evidence was placed before me, by the judgment creditor, to demonstrate that the certificate of registration in question was issued outside the statutory requirements.

The judgment creditor's criticism of the Board resolution to sell the mining claim to the claimant, the invoice, and the lease agreement, cannot be evidence tendered by the judgment creditor disproving the authenticity of the sale and transfer.

The courts have accepted that business persons often record their dealings in terms which perfectly make sense to them but are often wanting in clarity to the legal mind. One must therefore read commercial documents sensibly. A mere reading of a commercial document, standing alone, may not make much sense because the context of its making may not appear within the four (4) corners of the document.

This is how I have looked at the invoice, the lease agreement, and the Board resolution.

For example, the lease agreement entered into on 9 September 2015, at Ngezi Mining Area, with the tenant, Joseph Wirima, is recorded as:

“A Settlement Agreement was negotiated between Upthrow Trading (Pvt) Ltd, Maranatha Ferro Chrome (Pvt) Ltd, Amble Mining (Pvt) Ltd, Gurta AG, Glossy Investment (Pvt) Ltd and Honourable Paul Mangwana and signed in Italy on 3 October 2013. In terms of this Settlement Agreement, following the completion of the handover of the mining claims, Maranatha Ferro Chrome (Pvt) Ltd, representing Gurta AG who are the legitimate owners of the mining claims in Ngezi, do hereby offer the Lease Agreement/Arrangement for the property known as: WHITE HOUSE ROOM 3…,.”

The judgment creditor led no evidence from Joseph Wirima (the tenant), C Mutema (the witness to the lease agreement), Upthrow Trading (Pvt) Ltd, Glossy Investments (Pvt) Ltd and Honourable Paul Mangwana.

In respect of Joseph Wirima and C Mutema, there was no evidence that the lease agreement between the former and the claimant, represented by Maranatha Ferro Chrome (Pvt) Ltd, was inauthentic and not entered into on 9 September 2015 but after the attachment of the mining claim on 27 June 2018 - almost 3 years later.

Similarly, the judgment creditor adduced no evidence from Upthrow Trading (Pvt) Ltd, Glossy Investments (Pvt) Ltd and Honourable Paul Mangwana on the nature of the Settlement Agreement between these companies, Paul Mangwana, the judgment debtor, and the claimant.

(1) Smit Investments Holdings SA (Proprietary) Limited (2) Genet Mining (Proprietary) Limited v (1) The Sheriff of Zimbabwe (2) Pungwe Mining (Private) Limited SC33-18, Sheriff of Zimbabwe v Senital (Pvt) Ltd t/a Frank B Mine and Zimbabwe United Passenger Company Ltd HB233-18, and The Deputy Sheriff Marondera v Hombarume and 7 Ors HH521-18 are clear that where the claimant has made out a prima facie case that it is the owner of the attached goods the onus shifts to the judgment creditor to controvert such evidence.

Evidence can only be controverted by other evidence, not through heads of argument or oral submissions - the sole purpose of which is to endeavour to punch holes into a case which is already prima facie established.

The sale and transfer of the mining claim occurred in 2009.

This arbitral award was not yet in existence. Accordingly, there was no basis for the judgment creditor's assertions of fraudulent conduct and collusion between the claimant, the judgment debtor, and Maranatha Ferro Chrome (Pvt) Ltd.

There was no execution to defeat at the time of sale and transfer of the mining claims.

It was not even disclosed by the judgment creditor when it is that litigation in their labour case with the judgment debtor was instituted: see S v Stead 1991 (2) ZLR 54 (S); Mkombachoto v Commercial Bank of Zimbabwe Ltd and Another 2002 (1) ZLR 21 (H).

Still, on lifting the corporate petticoat of Gurta and peering behind it, I see no other exceptional circumstance justifying the same.

The judgment creditor told me, both in heads of argument and at the hearing, that, Maranatha Ferro Chrome (Pvt) Ltd, the judgment debtor, and the claimant are a single economic entity. I was therefore invited to go behind the claimant's skirt, disregard the three companies' separate corporate personalities and order execution of the mining claim, even though registered in the claimant's name, to satisfy the judgment debt owed by Amble Mining (Pvt) Ltd.

Counsel for the judgment creditor referred me to Deputy Sheriff Harare v Trinpac Investments (Pvt) Ltd and Anor HH121-11.

That case is distinguishable.

Here, there is no evidence at all as to who the shareholders of the claimant are. There is completely no evidence to prove that they are the same persons as the shareholders of the judgment debtor and its holding company, Maranatha Ferro Chrome (Pvt) Ltd. Neither is there any evidence that the directorship of the claimant is the same as that of the other two companies.

The bare allegation that the claimant is a 'baby' of the “Ghezzi family” was not substantiated. I therefore refuse to interfere with the claimant's corporate regalia: see Sibanda v JLF (Pvt) Ltd & Anor SC117-04.

HAS CLAIMANT PROVED ITS CASE ON A BALANCE OF PROBABILITIES?

In The Sheriff for Zimbabwe v Mahachi and Leomarch Engineering HMA34-18, MAFUSIRE J stated that there are no hard and fast rules on how a claimant goes about proving ownership of attached goods.

I fully subscribe to that view.

Examples abound, both at law and in life experiences. It is not every case where ownership is proved through production of receipts and agreements of sale. Also, in encouraging pupils to think outside the box, teachers would sometimes say, even after John had answered a question:

“Yes, there are many ways of killing a cat, Mary what is the answer?”

The route does not always matter. What is important is a safe journey.

For example, it is a fact notorious for judicial notice to be taken of that people in most African countries would, if travelling by air, have to board a plane to London or Paris first before connecting to a flight back to their African destinations. That does not make London or Paris the destination.

Olivia Charamba and The Fishers of Men realised this when they sang:

“Kana uchienda
Uchienda
Kwaunoda
Kwaunoda
Kune nzira
Kune nzira
Dzakawanda
Dzakawanda
…,..
Nzira dzekuenda kuGweru:
Kune Kadoma;
Chivhumudhara;
…,.”

These Shona lyrics simply mean that a traveller has a choice on the route to take to a destination. The gospel musician and her band then gave the example of the availability of two options when travelling to the Midlands Province city of Gweru: either through the Mashonaland West town of Kadoma or through the Mashonaland East town of Chivhu (also called “Chivhumudhara” or “The Republic of Enkeldorn”).

The judgment creditors were rigid.

They were of the view that ownership could only be proven by the claimant producing the documentation listed in section 275 of the Mines and Minerals Act [Chapter 21:05]. That was too narrow a view of the matter.

They appear not to have been alive to the law relating to shifting of the onus as laid down by the Supreme Court and applied in numerous decisions of this court. The result is that they did not realize that they had no defence to the claim right from the word go.

Full instructions appear not to have been taken and exhaustive legal research seems not to have been conducted by their legal practitioners.

On perusal of the claimant's initial affidavit and annexures laying claim to the property, the legal practitioners should have gone to the office of the Mining Commissioner in Harare to peruse the Ministry of Mines and Mining Development's file relating to the claim in question rather than being content in seeing permanent and unshifting onus on the shoulders of a party who did not bear the same.

The legal practitioners should thereafter have fully researched on the law relating to interpleader matters.

The law on interpleader claims is simple and readily available both in the textbooks and decided cases of the Supreme Court and this court. In the course of this judgment, I referred to some of those decisions. I also referred to the words of wisdom from two legal practitioners: the first an academic and the other one of the finest court lawyers that this nation has produced.

My view is that the two sets of legal practitioners who represented the judgment creditor in this matter, at different stages, should clearly have done better.

COSTS

The claim should never have been opposed. At the very least, the judgment creditor's legal practitioners should have gathered sufficient facts and evidence, both oral and documentary, for purposes of properly advising their clients.

I add that considering that the judgment creditors were a staggering 99 persons, the importance of the matter, its effect on them, and the monetary value of the arbitral award, a thorough job needed to be done to advance their interests rather than exposing them to further unwarranted financial prejudice in the form of legal fees and costs. If properly advised, the judgment creditors may not have opposed this claim.

It is for these reasons that I exercise my discretion on costs. I do not order punitive costs. The fault in defending the claim, as I have found, lies elsewhere.

ORDER

In the result, the following order shall issue:

1. The claimant's claim to all the immovable property which was placed under attachment in execution of judgment in HC5852/17 be and is hereby granted.

2. All the mining claims attached in terms of the letter written to the Provincial Mining Director, Mashonaland West, dated 26 June 2018, are declared not executable.

3. The judgment creditors shall jointly and severally, the one paying the others to be absolved, pay the claimant and the applicant's costs of suit.

SC18-21 : A. ADAM AND COMPANY (PVT) LTD and SGI PROPERTIES (PVT) LTD and GARABGA NCUBE AND PARTNERS vs GOODLIVING REAL ESTATE (PVT) LTD
Ruled By: GUVAVA JA, MAVANGIRA JA and BHUNU JA

This is an appeal against the whole judgment of the High Court sitting at Harare, dated 10 July 2019, in favour of the respondent. The court a quo in this case granted an interdict against the first and second appellants ordering them to share the money collected between 2014 and 2018 in accordance with the partnership agreement and stopping them from interfering with the management of Stands 147 and 151 Mbuya Nehanda Street, Harare.

BACKGROUND FACTS

In order to understand the basis of this appeal, it is necessary to set out, in some detail, the background of this matter.

The first and second appellants ('the appellants') are the owners of commercial properties known as Stand 147 and 151 Mbuya Nehanda Street, Harare ('the properties'). The third appellant is a law firm representing the appellants. The respondent is a real estate company, registered in terms of the laws of Zimbabwe.

The first and second appellants, and the respondent, entered into a partnership agreement wherein the respondent would develop and build shops on the appellants Stands. In terms of this agreement, it would be valid for a period of three (3) years and subject to renewal by both parties. The parties also agreed that the respondent would develop and effect certain improvements on the two properties at its own expense. It was further agreed, that, upon completion of the development of the properties, the parties would lease them out with the appellants being entitled to 67 per cent of the rentals and the respondent to 33 per cent.

Subsequent to this agreement, the parties entered into a commercial lease agreement dated 26 August 2010, which resulted in a joint venture agreement. Following the creation of the lease agreement, a dispute arose between the parties. The first and second appellants alleged that the contract between the parties was to operate for a period of three (3) years only whereas the respondent alleged that it was for a period of at least fifteen (15) years. The averment by the respondent was made on the basis of purported terms of a prior verbal agreement which the parties made before the creation and signing of the partnership agreement on 10 January 2010.

The dispute between the parties resulted in numerous litigation between the parties.

On 4 September 2013, the respondent approached the High Court under case number HC7215/13 seeking an interdict stopping the appellants from interfering with the respondent's management of the properties as agreed in the partnership agreement. The application resulted in a consent order which was granted by TAKUVA J and whose operative part reads as follows:

“1. Pending final disposition of the substantive dispute between the parties, through arbitration proceedings, the status quo obtaining at the premises in question shall continue to subsist and the parties' relations shall continue to be regulated by the existing agreements.

2. The parties shall proceed with due expedition to refer the dispute between them to the Commercial Arbitration Centre for resolution by an Arbitrator who shall dispose of the substantive dispute in accordance with the provisions of the Arbitration Act.

3. Each party shall bear its own costs.”

The dispute was referred to arbitration on 13 October 2013. The respondent sought a determination regarding whether the joint venture agreement had ceased to exist; whether it was entitled to take over the management and control of the developed premises; and, alternatively, whether the appellants had lawfully cancelled the agreements.

The respondent further filed an application for rectification before the High Court which sought the rectification of the partnership contracts so as to reflect the true intention of the parties in relation to the duration period to be covered by the agreement. The respondent alleged that the arbitrator, retired SMITH J, then wrongly advised it to withdraw its application for rectification before the High Court so that he would deal with it himself. The respondent further alleges that it co-operated without knowing that the arbitrator was an interested party and he went on to dismiss the rectification application....,.

The respondent averred that the written agreement between the parties did not correctly reflect the intention of the parties.

It was always their intention that the agreement would operate for a period of 15 years to enable the respondent to recover its capital and make a reasonable profit. The respondent further averred that to prove the agreement was meant to exist for 15 years, some of the tenants were made to enter into lease agreements of 15 years whereby both parties appended their signatures confirming the partnership would subsist for 15 years....,.

The appellants..., argued that the partnership agreement between the parties..., was to operate for 3 years only....,.

SC80-21 : ALLEN GESSEN vs PRISCILLA CHIGARIRO
Ruled By: MATHONSI JA

This is an application for condonation of the late noting of an appeal and the extension of time within which to appeal against a judgement of the High Court handed down on 1 October 2020.The applicant's initial appeal, filed timeously, was struck off the roll on 1 April 2021 for ...

This is an application for condonation of the late noting of an appeal and the extension of time within which to appeal against a judgement of the High Court handed down on 1 October 2020.

The applicant's initial appeal, filed timeously, was struck off the roll on 1 April 2021 for the reason that the Notice of Appeal was fatally defective.

FACTUAL BACKGROUND

The applicant is a citizen of the United States of America (USA) even though he was born in Russia. The respondent is a Zimbabwean citizen. The two met in 2011 in Harare, Zimbabwe and commenced having a relationship which is said to have been upgraded to a customary marriage by reason that the applicant paid the bride price for the respondent.

They never registered a legal marriage.

The parties association was blessed with a boy child, called Orrin, who was born on 23 July 2013.

During the period extending from 2015 to 2019, the applicant secured employment in Russia, and, as such, became resident in that country. In 2016, the respondent and the boy child, Orrin, followed the applicant to Russia where the family took up residence.

It was during the period of their temporary residence in Russia that the couple decided to have a second child. Owing to some health challenges, the respondent could no longer carry the pregnancy. They decided to have the child through surrogacy and found a surrogate mother with whom a Surrogacy Agreement was entered into.

It was signed by the applicant, the respondent, and the surrogate mother on 2 March 2018.

The Surrogacy Agreement stated, in pertinent part:

“We undertake to assume the equal rights and obligations of parents with respect to the children, born by 'surrogate mother' after embryo transfer to the uterine cavity of 'surrogate mother', in terms of their upbringing, as defined by the Russian legislation on family and marriage.”

In pursuance of that agreement, the surrogate mother carried the pregnancy for the parties and gave birth to the girl child, Elizabeth, now at the centre of the dispute, on 15 November 2018.

Unfortunately, the parties relationship hit turbulence, and, a short while after the birth of the child, they commenced living apart.

Although the surrogate mother had given her consent for them to register the child as their own, as genetic parents, the Khamovhichesky Department of the Civil Registry of Moscow refused their application to register the child as they were not married.

Acting together, they instituted a lawsuit against the Registry Office for their recognition as the parents of Elizabeth.

On 27 September 2019, the Meshchansky District Court of Moscow allowed the State registration of the child and for the respondent to be registered as its mother. The applicant was not so lucky. His application for registration as the father was rejected because, by then, he had had his employment in Russia terminated and had relocated to the United States of America.

In doing so, the applicant took the boy child, Orrin, with him.

Although there is no convergence between the parties as to what their intentions were, the applicant says he relocated to the United States of America with the respondent's consent, while the respondent's position is that the applicant abducted Orrin and deserted her and Elizabeth.

It is however not in dispute that the respondent and Elizabeth were left stranded in Russia. They had been in that country on the applicant's expired VISA.

The respondent and Elizabeth ended up living at the Zimbabwean embassy while processing documents to move to Zimbabwe. In due course, the duo found their way to Zimbabwe, in November 2019, where they have remained to this date.

The applicant was aggrieved.

He brought an application to the High Court in terms of the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention). The Hague Convention has been domesticated in Zimbabwe and bears the force of law by virtue of section 3 of the Child Abduction Act [Chapter 5:05].

The basis of the applicant's case was that the removal of the child from Russia, and its retention in Zimbabwe, are unlawful.

The applicant sought a declaratory order to that effect. Consequent to that, the applicant sought an order that the child be removed from Zimbabwe and sent to Boston in the United States of America or to Russia for a determination of the parties parental rights in those jurisdictions.

According to the applicant, Russia was the child's habitual residence. He asserted that the child had been in that country awaiting the processing of documentation which would have enabled it to migrate to the United States of America with the respondent in terms of their agreement.

The respondent opposed the application.

According to her, the parties had agreed to return to Zimbabwe and settle here. She stated that an email she had written to the applicant's lawyer, insinuating the existence of an agreement with the applicant for their relocation to the United States of America, had been written under duress. The respondent asserted full parental rights over the child to the exclusion of the applicant as her rights had been settled by the court in Russia. According to her, the child was lawfully retained as a Zimbabwean.

The High Court dealt with a number of approaches in seeking to determine the child's habitual residence for purposes of the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention).

It concluded, that, while the issue of the intention of the parties was key in determining habitual residence, the child's parents never formed an intention to settle in Russia. They travelled there for work only and for that reason Russia was not the child's habitual residence. It could not be returned to that country.

By the same token, the High Court found, that, it could not order that the child be returned to the United States of America given that doing so would not be in line with the Hague Convention's purpose of restoring the status quo ante.

Finding the Hague Convention inapplicable, the High Court dismissed the application.

The applicant was dissatisfied.

On 9 October 2020, well within the time allowed by the rules of court, the applicant filed an appeal to this Court. The appeal was defective in that the relief sought therein was incompetent. At the hearing, the appeal suffered the fate of all defective appeals. It was struck off the roll.

THE APPLICATION

The appeal, having been struck off the roll, the applicant has filed the present application for condonation of the late filing of an appeal and the extension of time within which to appeal. The application before me was filed on 9 April 2021 – just eight (8) days after the initial appeal was struck off.

Clearly, there was no material delay in seeking condonation.

The applicant's explanation for failure to comply with the Rules is, that, right up to the date of the hearing of the appeal, he was labouring under the mistaken belief that he had filed a valid appeal. The explanation is actually given by the applicant's legal practitioner who takes ownership of the defective prayer in the initial appeal.

On the prospects of success on appeal, the point is made, on behalf of the applicant, that, the High Court was wrong in dismissing the application on the basis that shared parental intent could not give rise to an application under the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention). The applicant would also want to contest the High Court's finding that Russia was not the child's habitual residence.

The respondent opposes the application.

In doing so, the respondent asserts, that, the intended appeal enjoys no prospects of success because the applicant had sought the return of the child to Russia. That country could not possibly be said to be the child's habitual residence in the circumstances of the case. Accordingly, the High Court's decision cannot be assailed.

In the respondent's view, the applicant ought to have appealed against the judgment of the court of Moscow which gave her sole parental rights over the child. She denies unlawfully retaining the child in Zimbabwe....,.

THE LAW

What the court has regards to in an application for condonation is now settled. The court has a discretion, which is exercised judicially, in considering an application of this nature. Relevant factors in this regard are;

(i) The degree of non-compliance with the Rules of court;

(ii) The explanation for the failure to comply;

(iii) The prospects of success on appeal;

(iv) The importance of the case;

(v) The interest of the respondent in the finality of the judgment;

(vi) The convenience to the court; and

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

See Maheya v Independent African Church 2007 (2) ZLR 319 (S)…,.

It is also settled that these factors have to be considered in conjunction with one another as they tend to be complimentary.

While it is true that consideration of the factors generally boils down to having regard to the explanation given by the applicant for condonation for delay and the prospects of success on appeal, the lack of a satisfactory explanation for the delay may be complemented by good prospects of success on appeal: see Khumalo v Mandeya and Another 2008 (2) ZLR 203 (S).

APPLICATION TO THE FACTS

The judgment sought to be appealed against was handed down on 1 October 2020. The applicant's putative appeal, under case number SC421/20, was struck off the roll on 1 April 2021. There was no delay in filing this application after the striking off of the appeal.

The applicant's failure to comply has been explained as the oversight of his legal practitioner who drafted a defective Notice of Appeal.

I accept, that, this Court has stated, in the past, that, there is a limit beyond which a litigant cannot escape the consequences of his or her legal practitioner's dilatoriness or lack of diligence: see Musemburi and Another v Tshuma 2013 (1) ZLR 526 (S)…,.

I take the view, however, that this is not a case in which the legal practitioner's lack of diligence should be visited upon the applicant. This is so mainly for two reasons:

(i) The first one is that the infraction by the legal practitioner only related to the crafting of the prayer in the notice of appeal. It is a fault that cannot be said to be gross.

(ii) The second is that I hold the view that the issues raised by the proposed appeal are arguable. They deserve the attention of the full Bench of the Appeal Court, if for no other reason but that the Supreme Court has not authoritatively pronounced itself on them.

I can only refer to the manner in which the court a quo dealt with the issue of the agreement of the parties in coming to a conclusion that the Hague Convention's application was not triggered.

For a matter to fall under the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention), its Article 3 must be satisfied. It provides:

“The removal or the retention of a child is to be considered wrongful where -

(a) It is in breach of rights of custody attributed to a person, an institution, or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention;

(b) At the time of removal or retention, those rights were actually exercised, either jointly or alone, or would have been exercised but for the removal or retention.

The right of custody mentioned in subparagraph (a) above may arise in particular by operation of law or by reason of a judicial or administrative decision, or by reason of an agreement having legal effect under the law of that State.”…,.

In Peacock v Steyn 2010 (1) ZLR 254 (H) the court found that the existence of a custody agreement between the parents of minor children who are not married, regulating their rights of shared custody, triggered the application of the Hague Convention. This is by virtue of Article 3.

In the present case, the Surrogacy Agreement I have referred to above provided some kind of shared custody between the parties.

That, therefore, presents the applicant with an arguable case on appeal.

Apart from that, counsel for the applicant drew attention to an email written by the respondent on 11 November 2019 while she was still in Russia. He submitted that the letter affirms the existence of an agreement between the parties to move the child to the United States of America.

The email was addressed to the respondent's legal practitioner instructing him to relay it to the applicant's legal practitioner for the attention of the applicant. It reads:

“Please be advised that Elizabeth and I are finally ready to travel and are now able to make plans for next steps. As you have previously indicated, you had gone ahead to America and we were to follow so that the children would be together and neither one of us would be deprived of his rights to both children. We will of course need to travel to Zimbabwe first in order to get visas, and, after that, will proceed to America. Please may you send confirmation that this is indeed still the plan as well as confirmation that you will be buying tickets so that we are all reunited. I look forward to receiving your response and finally ending the current separation from Orrin.”

I am aware that there was a suggestion by counsel for the respondent that the email was written under duress - the particulars of which were not clearly articulated.

That is however immaterial for our present purposes. What is important is that the statement by the respondent suggests that an agreement for shared custody may have existed.

If that is the case, the applicant is entitled to argue, on appeal, that, the retention of the child in Zimbabwe, in breach of such agreement, brings the case under the ambit of the Hague Convention on the Civil Aspects of International Child Abduction (the Hague Convention).

I am not sitting to determine the appeal, but merely to consider whether it is arguable.

I think it is.

A case has been made for the grant of the indulgence of condonation.

Regarding the issue of costs, counsel for the applicant tendered to pay the respondent's costs regardless of the outcome of the application. This he did upon a realisation that the application was necessitated by the applicant's blameworthiness.

An award of costs will be made by consent.

In the result, it be and is hereby ordered as follows:

1. The application for condonation for non-compliance with Rule 38(1)(a) of the Supreme Court Rules, 2018 be and is hereby granted.

2. The application for extension of time within which to file and serve a notice of appeal against the judgment of the High Court handed down on 1 October 2020 as HH620-20 be and is hereby granted.

3. The applicant shall file his notice of appeal within seven (7) days from the date of this judgment.

4. By consent, the applicant shall bear the costs of this application.

View Appeal
HH85-21 : JULIET KADUNGURE and ANDERSON KADUNGURE and NERIA KADUNGURE vs PATRICIA DARANGWA and MASTER OF THE HIGH COURT OF ZIMBABWE (N.O.)
Ruled By: CHIRAWU-MUGOMBA J

This matter was placed before me as an urgent chamber application having been filed on the 23rd of February 2021. Upon receipt, I gave directions for the filing of notices of opposition and opposing affidavits as well as heads of argument.

The second respondent did not file a notice of opposition, and, as a result, the court took it that he will abide by the decision rendered.

The applicants, through the urgent chamber application, seek an interdict, and, on the return date, a review.

Ordinarily, an application for review should be filed separately, but, given the prevailing COVID lockdown and Practice Direction Number 4, under which ordinary applications were not accepted for filing, I accepted the urgent application hence gave directives.

Let me hasten to say, that, this case is peculiar and should not be viewed as setting a precedent that review applications can be commenced through an urgent chamber application.

The first to the third applicants are, respectively, sister, father, and sister of one Genius Kadungure who passed away on the 8th of November 2020 (hereinafter the deceased).

The factual background to the application can be summarised as follows:

The deceased was a well to do person who had business interests in Zimbabwe, Botswana, and South Africa. The first respondent approached the family of the applicants, at the funeral, with a document that she purported was a Will of the deceased though it was not signed. Using undue influence, the applicants accepted the document as the last will and testament of the deceased and recommended the appointment of the first respondent as the executrix of the estate of the deceased.

The first respondent dissuaded the applicants from seeking legal advice indicating that she was also their lawyer.

The second respondent accepted the document as the last Will and testament of the deceased in terms of the Wills Act and also appointed the first respondent as the executor. This was followed by the issuance of Letters of Administration to the first respondent dated the first of December 2020.

The applicants reluctantly worked with the first respondent though they had questions over the will - a copy of which was never furnished to them.

After seeking legal advice, they approached the first respondent who refused to furnish them with a copy of the Will and minutes of a meeting held on the 25th of November 2020. They only managed to obtain copies from the second respondent.

To note is that the Will, which was drafted by the first respondent, confers executorship on her.

She, during the lock down period, attended to disposal of the deceased's Lamborghini motor vehicle in what they term 'hazy' circumstances. This was despite the fact, that, there was no detailed inventory and there was no confirmed distribution account.

FNB Bank in Botswana, where the deceased held an account for his company called Quick Gases (Pvt) Ltd, had extended a loan that had been unpaid since the demise of the deceased. He also left assets in South Africa, in the form of trucks, that were in danger of disappearing if the issues of executorship remained unresolved.

The first respondent had, on the 5th of February 2021, advertised an interim distribution account stating, falsely, that such was lying for inspection at the offices of the second respondent. The latter admonished the first respondent over her false claim.

There is litigation in Botswana over the legitimacy of the first respondent's executorship.

The applicants seek an interim interdict prohibiting any administration of the deceased's estate pending the return date upon which a review of the second respondent's decision to appoint the first applicant as the executrix, and to accept the document in question, will be sought.

The grounds for review are framed as illegality/absence of jurisdiction; fraud; speculation; malpractice; and gross irregularity.

The applicants are further concerned by the following acts which cast the authenticity of the Will in doubt:

(i) The haste with which the first respondent seeks to dispose of the Lamborghini without following due process;

(ii) The invitation by the first respondent for members of the public to inspect an estate account when she has already authorised disposal of the said vehicle;

(iii) The Will makes reference to some persons without stating their actual identities;

(iv) The vehicle arrived in Zimbabwe around the 30th of September 2020, and, its inconceivable that the deceased would have a Will drafted bequeathing it to a third party 23 days after its arrival;

(v) The deceased had a large fleet of vehicles and it is surprising that only the Lamborghini was mentioned in the will;

(vi) The first respondent falsely claimed that she is an attorney and she never wanted to avail the Will to the applicants.

The Will is therefore fake and the estate of the deceased should proceed under intestacy.

The matter is urgent and cannot wait because the applicants are the surviving blood relatives of the deceased and have a prima facie right to protect their interests.

The acceptance of the Will is a legal nullity and there is need to stop the first respondent in her tracks. She is already in the process of disposing of some assets of the deceased estate during the lock down period, more specifically, a Lamborghini motor vehicle, using a distribution account that was never availed nor approved by the second respondent.

Quick Gases (Pvt) Ltd, in which the deceased was the sole director, is in danger of being liquidated after F.N.B Bank in Botswana froze the company's bank account.

The applicants have been given up to the 31st of March 2021 to attend to issues relating to the appointment of the first applicant as executrix.

The first applicant is dissipating the deceased's estate to the permanent and irreparable harm of the applicants in circumstances when her appointment as executrix is a nullity; she has not furnished security to the second respondent for due administration of the estate; and she has not furnished the second respondent with a comprehensive inventory.

Waiting to prosecute a review application during the lockdown period without knowing when it will end will prejudice the applicants who are at risk of losing many assets.

The first respondent continues to take the law into her own hands to the detriment of the applicants.

There is no other alternative remedy to protect the rights of the applicants.

There is real risk that the first respondent, in the absence of a court order, will continue to alienate and dispose of the deceased's assets, and, accordingly, only an interdict will protect the rights of the applicants pending the return date.

The second and third applicants deposed to supporting affidavits in support of the first applicant's averments.

They thus seek a provisional order in the following terms:

“TERMS OF THE FINAL ORDER SOUGHT

That you show cause to this Honourable Court why a final order should not be made in the following terms:

1. The application is hereby granted.

2. The provisional order granted in this matter is hereby confirmed.

3. It be and is hereby declared that:

3.1 The document registered with the 2nd respondent on 25 November 2020 under DR. No.1771/20 as the will of the later Genius Kadungure ('the deceased') (who died on 8 November 2020) is null and void; and

3.2 The deceased died intestate.

4. The decision of the 2nd respondent, to register and accept the aforesaid document as the last will for purposes of administration of the estate of the deceased in terms of section 8(5) of the Wills Act (6:06) be and is hereby set aside.

5. The 2nd respondent's appointment of the 1st respondent, on 2 December 2020, as the testamentary executrix of the estate of the deceased, and all acts done by the 1st respondent (personally or by other persons at her direction) under and by virtue of such appointment be and are hereby declared null and void.

6. The letters of administration issued by the 2nd respondent, on 2 December 2020, in favour of the 1st respondent, under DR No.1771/20, appointing her as testamentary executrix, be and are hereby revoked.

7. The 2nd respondent shall convene another meeting to appoint an executor of the estate of the deceased which meeting shall be presided over by an official other than the official who presided over the meeting of the 25th of November 2020 or any of the officials who previously dealt with the estate of the deceased; and

8. The 1st respondent shall bear costs of suit on attorney-client scale (in the event that she opposes the application).

INTERIM RELIEF GRANTED

Pending the return date, the applicants are hereby granted the following interim relief:

1. Pending the return date, the 1st respondent is hereby interdicted from, in any way, administering, or dealing in the estate of Genius Kadungure ('the deceased') in Zimbabwe, Botswana or South Africa; and

2. The 2nd respondent, or any other person acting on his behalf, be and is hereby interdicted from (without the leave of this court) accepting for filing any document by, or acceding to any request from, the 1st respondent under DR. No.1771/20 save and except for the purposes of relinquishing the letters of administration issued hereunder.”

The first respondent strenuously opposes the application and raises several points in limine as follows:...,.

In heads of argument filed of record, the first respondent, through her legal practitioner, further raised a preliminary point that there was material non-disclosure.

The applicants did not inform the court that they signed affidavits, under oath, confirming that they had no objections to the unsigned document being taken as the deceased's last will and testament. Reference was made to the oft cited case of Graspeak Investments (Pvt) Ltd v Delta Ops (Pvt) Ltd and Anor 2001 (2) ZLR 551 (H).

The applicants, to the contrary, were very candid with the court that they accepted the document as a Will and recommended the appointment of the first respondent as executor. Their bone of contention is that they were unduly influenced by the first respondent.

The points in limine are therefore dismissed.

HHMA56-19 : THE STATE vs WONDERFUL MANJORO
Ruled By: MAWADZE J and ASSESSORS: CHADEMANA and MUSHUKU

The accused, who resides in Village 25, Chief Sengwe, Chiredzi, is facing two counts.

In Count 1, the accused is facing the charge of murder as defined in section 47(1) of the Criminal Law (Codification and Reform) Act [Chapter 9:23], in that, on 18 June 2015, at Gonowani Village, Headman Mpapa, Chiredzi the accused stabbed the now deceased, Stephen Chikucha, with an unknown sharp object in the chest causing his death.

In Count 2, which relates to attempted murder, defined in section 189 as read with section 47(1) of the Criminal Law (Codification and Reform) Act [Chapter 9:23] it is said, that, on 29 June 2015, at Murengwami Village, Headman Mpapa, Chief Sengwe, Chiredzi the accused attempted to kill Onias Chibhombise by stabbing him with an okapi knife in the neck.

The accused totally denies the charges in both Counts. In fact, the accused said he was unknown to both the now deceased in Count 1 and the complainant in Count 2. The accused said he does not even know the alleged crime scenes in both Counts.

As regards Count 2, of attempted murder, the accused said, at the time the alleged offence was committed, he was at his residence with his parents and nowhere near the crime scene.

During the State case, the prosecutor led evidence from Beauty Aleck in Count 1; Onias Chimbombise, complainant in Count 2; Amos Chinherera in both Counts 1 and 2.

The evidence of John Makondo, Dr Tungamira Isaac Rukatya and Dr Mutengerere was admitted in terms of section 314 of the Criminal Procedure and Evidence Act [Chapter 9:07].

It was during the evidence of D/Assistant Inspector Victor Chinoni (D/Assistant Inspector Chinoni) that counsel for the State sought to produce the accused's unconfirmed warned and cautioned statement and counsel for the accused objected.

The basis of counsel for the accused's objection was that the said unconfirmed warned and cautioned statement was inadmissible on the basis that it was improperly obtained.

Counsel for the State submitted, that, she intended to rely on this statement in the prosecution case and proceeded to apply to conduct a trial within a trial.

This judgment, therefore, solely concerns itself with a trial within a trial in order to determine the admissibility of the unconfirmed warned and cautioned statement made by the accused.

This statement in issue was made during video recording.

In order to determine its admissibility, the court had to watch, in camera, the recorded video. The written statement was not obviously produced at this stage. Further, in view of the nature of the State case, I decided to watch the video recording and make a determination in the absence of the learned Assessors Messrs CHADEMANA and MUSHUKU.

During the trial within a trial, the State led evidence from D/Assistant Inspector Victor Chinoni (D/Assistant Inspector Chinoni) who recorded the statement in issue, D/Sgt Thulisani Moyo who witnessed the recording of the warned and cautioned statement, and D/Cst Benard Chimbeke who operated the video camera.

The accused gave evidence.

Before dealing with the evidence led during the trial within a trial, I shall briefly discuss the law in relation to unconfirmed extra curial statements and their admissibility.

THE LAW

The rights of an arrested and detained person are provided for, inter alia, in section 50; section 52(a); and section 70(3) of our Constitution.

In brief, section 50 of the Constitution provides for the rights of an arrested and detained person; section 52(2)(a) protects any person from all forms of violence whether from public or private sources. In terms of section 53 of the Constitution, no person shall be subjected to physical or psychological torture, or to cruel or, inhuman or degrading treatment or punishment. Section 70 deals with the rights of any person accused of any offence, and, specifically, section 70(3) provides as follows:

“(3) In any criminal trial, evidence that has been obtained in a manner that violates any provision of this Chapter must be excluded if the admission of the evidence would render the trial unfair or would otherwise be detrimental to the administration of justice or the public interests.”

Section 50(1)(c) of the Constitution requires that an accused person be treated humanely and with respect for their inherent dignity. In terms of section 50(4)(c), an accused person has a right not to be compelled to make a confession or an admission.

All these are fundamental rights this court is enjoined to protect during criminal proceedings, and, as provided in section 86(3) of the Constitution, some of these rights are non-derogatory rights and may not be limited or violated.

Section 256 of the Criminal Procedure and Evidence Act [Chapter 9:07] deals with the admissibility of confessions or statements made by an accused person.

It is important to note, that, this relates to either written, oral, tape, video recorded or statements made in other forms: see S v Nkomo & Anor 1989 (3) ZLR 124F–125A.

The essential requirements of admissibility of such an accused's statement or confession is that it should have been made freely and voluntarily without the accused being unduly influenced thereto.

It is beyond the scope of this judgment to discuss what is undue influence. I shall therefore limit myself to what the accused alleges was done to him to compel him to give the warned and cautioned statement in issue.

Suffice to mention, that, generally, undue influence entails anything repugnant to fairness and the fundamental principles upon which our criminal justice system is based. These include, inter alia, improper manner of questioning or interrogation which may be aggressive and unduly lengthy; unnecessary confrontation meant to bring pressure to bear upon an accused person; physical maltreatment or violations visited upon an accused person, or such threats; inducements like promised release from custody, special treatment, privileges or offers of reward or leniency; and denial of rights like access to legal representation or presence of a guardian where juveniles are involved.

Indeed, the list is endless, and each case depends on its own facts.

It is trite, that, the onus is on the State to prove, beyond reasonable doubt, that the statement an accused person alleges was improperly made is admissible: see R v Jacobs 1954 (2) SA 320 (A).

Lastly, I would hasten to point out that the nature of the statement (that is whether confirmed or unconfirmed) and the nature of an accused person's challenge determines whether a trial within a trial is necessary.

It should be borne in mind, that, a trial within a trial is held to establish a question of law, the admissibility of the challenged statement, and not a question of fact like whether an accused person made the statement or not. The latter is a factual issue which can be resolved by leading evidence in the main trial to establish whether the accused made the statement or not: see S v Shezi 1994 (1) SACR 575.

I now proceed to apply these principles in this case.

THE ACCUSED'S EVIDENCE

The unconfirmed extra curial statement the State seeks to rely upon is a written statement which the accused made during a video recording. The nature of the accused's challenge is that it was not made freely and voluntarily hence it is inadmissible.

It is common cause that an attempt was made by the police to have this statement confirmed at Chiredzi Magistrates Court and that it was not confirmed as a result of the accused's objections. What is critical to note, however, is that, at the Magistrates Court, the nature of the accused's objection or complainant in relation to this statement was that he had simply been “intimidated”.

In his Defence Outline, made during a trial within a trial, the accused said he only made the statement after being physically violated or assaulted. He said threats of further assault were made if he did not accede to the police's demands to admit to the charges. The accused, in that Defence Outline, went on to narrate the sequence of events:

(i) Firstly, the accused said he was assaulted by D/Assistant Inspector Chinoni and D/Sergeant Moyo on 2 July 2015 at Chikombedzi Police Station before being taken for indications.

(ii) Secondly, the accused said the police details forced him to admit to the charges, telling him that he had committed these offences for ritual purposes based on some alleged superstitious belief. The accused said he was forced to admit that he committed the offences in Counts 1 and 2 in order to extract human blood from the victims under the superstitious belief that such human blood would heal his back pains.

(iii) Thirdly, he said at the alleged crime scenes, in Count 1 and Count 2, he was further assaulted.

(iv) Fourth, the accused said in the morning when his statement was later recorded at ZRP Chiredzi, D/Assistant Inspector Chinoni and D/Sgt Moyo handcuffed him. Thereafter, he was forced to place his hands between his legs. A log was then put behind his elbows, which log was suspended on two desks. While in that painful position the accused said the two police details assaulted him under the feet and on his buttocks. He said the assault continued until, due to pain, he admitted to the charges in both Counts. The accused said that it was after this brutal assault, which culminated in his admission, and that the statement in issue was then video recorded.

I understand from this Defence Outline, that, the accused's contention is that this statement is inadmissible as it was improperly obtained contrary to the provisions of section 256 of the Criminal Procedure and Evidence Act [Chapter 9:07].

Further, the accused is alleging that his constitutional rights were violated as he was compelled to make a confession or admission contrary to the provisions of section 50(4)(c) of the Constitution.

Lastly, the accused is alleging that this statement is improperly obtained evidence contrary to the provisions of section 70(3) of the Constitution and that its admission would render this whole trial unfair and not in the interests of the proper administration of justice.

When the accused took the witness stand, his version was as follows:

He said after being detained at ZRP Chikombedzi he first met the four CID details from Chiredzi on 30 June 2015 when they took him from the cells and interrogated him about the two Counts which he denied. Thereafter, he said an identification parade in relation to Count 2 was conducted.

He said his woes started soon after this identification parade.

The accused said the CID details said that he, the accused, was wasting time denying the offences when in fact he had been identified during the identification parade.

The accused said he was then physically violated as follows;

(a) At ZRP Chikombedzi he said D/Assistant Inspector Chinoni and D/Sgt Moyo hit him about twenty times under the feet after which they drove him to Chiredzi police station.

(b) The next morning, at ZRP Chiredzi, he was taken from the police cells and questioned about the two offences which he denied. He was again hit under the feet by D/Assistant Inspector Chinoni and detained. Later that day, he was taken for indications.

(c) During indications at the alleged crime scenes, he said D/Assistant Inspector Chinoni pulled out a firearm threatening to shoot him if he persisted in denying the offences and had to be restrained by D/Sergeant Moyo. At the alleged crime scenes, both D/Assistant Inspector Chinoni and D/Sergeant Moyo narrated to him how the offences in both Counts were committed after which he was forced to recite that account as he was video recorded. Thereafter, he was taken to his home in order to recover the knife used in the alleged commission of the offense and a brown jacket they alleged he was wearing despite that he had no such items. They returned to ZRP Chiredzi.

(d) The next day, at ZRP Chiredzi, on 3 July 2015, he was taken from the police cells and again asked about the offence which he denied. He was then handcuffed and positioned in the manner already explained in his Defence Outline after which both D/Assistant Inspector Chinoni and D/Sergeant Moyo severely assaulted him until he admitted to both charges. Thereafter, he was questioned and forced to narrate how he allegedly committed the offences, without any video recording being made, in the manner police had told him. He complied.

(e) After such compliance, the video recording of the warned and cautioned statement played in court was then done. The accused said he simply repeated what he police had told him to say. Thereafter, he was taken to court for confirmation proceedings.

(f) The accused said, at court, he naturally disowned the statement improperly obtained and showed the presiding Magistrate the injuries on his swollen hands caused by the handcuffs and also revealed that his feet were painful. The statement was not confirmed.

THE STATE'S EVIDENCE

The State led evidence from three CID details, D/Assistant Inspector Chinoni who recorded the statement; D/Sergeant Moyo who witnessed the recording of the statement; and D/Cst Bernard Chimbeke who took the video or recorded the proceedings on the video.

1. D/Cst Benard Chimbeke (D/Cst Chimbeke)

D/Cst Chimbeke said his task was to simply capture the proceedings of the recording of the warned and cautioned statement on the video. He disputed that any pressure or force was brought to bear upon the accused. He said the accused was never intimidated, assaulted, or forced to give the statement. He was also part of the CID details who took the accused from ZRP Chikombedzi to Chiredzi, a distance of about 120km.

No useful questions were put to him in cross examination.

2. D/Sgt Thulisani Moyo (D/Sgt Moyo)

D/Sgt Moyo is the investigating officer in both Counts but his role, in respect of the statement, was to witness its recording in writing and on video. He said, after the accused's rights were explained, the accused, whom he described as very co-operative, elected to give a statement. He too denied that the accused was intimidated, forced, assaulted, or threatened to give the statement. D/Sgt Moyo dismissed the accused's allegations of impropriety as false.

Under cross-examination, D/Sgt Moyo said he only later learnt that the accused had disowned the statement at court during confirmation proceedings alleging what the accused called “police intimidation”. He said they could not record the accused's warned and cautioned statement at ZRP Chikombedzi, where they went to collect the accused, as they had no video camera. He said the accused, at ZRP Chikombedzi, initially denied the charges but changed his version later at ZRP Chiredzi.

3. D/Ass Insp Victor Chinoni (D/Ass Insp Chinoni)

D/Ass Insp Chinoni is the detail who recorded the accused's statement and is implicated by the accused.

D/Ass Insp Chinoni said he is part of CID details who took the accused from ZRP Chikombedzi to ZRP Chiredzi. At Chiredzi, both D/Sgt Moyo and D/Cst Chimbeke witnessed the recording of the warned and cautioned statement. He said he properly warned the accused of his rights and the accused gave his statement freely and voluntarily. Thereafter, the accused read the statement and signed it. He disputed that the accused was coerced, forced, or assaulted.

Under cross examination, D/Ass Insp Chinoni explained that three are two discs; one for the recording of the warned and cautioned statement; and the other for indications, which indications were not part of the trial within a trial. He said he is not part of the police details who took the accused to court for confirmation proceedings.

D/Ass Insp Chinoni said after the accused disowned the warned and cautioned statement at court, alleging intimidation, he had to play the video recording to the Officer in Charge CID to show how he recorded the statement, which was typed electronically and video recorded.

I noted, that, D/Ass Insp Chinoni was a very impressive witness. Besides being an eloquent speaker, his attention to detail and knowledge of his work is excellent. The professionalism he exhibited in recording the warned and cautioned statement, as seen on the video, is commendable.

Indeed, counsel for the accused understandably found it difficult to cross examine him, let alone to make any in-roads into his evidence.

On the other hand, the accused impressed me also as a soft, smooth, and eloquent speaker. His unassuming demeanour may be misleading.

Be that as it may. this matter cannot be determined on eloquence alone.

ANALYSIS OF EVIDENCE AND FINDINGS MADE

I had the opportunity to view the video recording of the warned and cautioned statement. I did note, that, throughout the recording, the accused was allowed to tell his story, presumably in his own words, without any interruptions: see R v Shaube-Kuffler 1969 RLR 78 (A).

The accused's narration of events is detailed and lengthy.

In the circumstances, it is highly improbable that all that detail were words put in the accused's mouth which he memorised.

It is precisely for this reason that I had to watch the video recording of the statement.

I had a keen interest to observe if there were any signs that the statement was improperly obtained or not made freely and voluntarily. At this stage, I was not worried much about the contents of the statements per se but to assess the accused's demeanour.

I however noted that the statement is detailed.

While the statement is incriminatory, it is also exculpatory in that the accused emphasised that he had no intention to kill any of the victims.

Turning to the video recording, I noted the following:

(1) The accused's rights were well explained and the accused listened attentively. The accused, who then elected to give the statement, was allowed to, given an uninterrupted account and D/Ass Insp Chinoni only sought clarifications after the accused finished his explanation. As already said, the statement is quite lengthy.

(2) The accused gave a coherent, free flowing account in Shona.

(3) Before even giving the statement, the accused sought clarification, from D/Ass Insp Chinoni, on where to start, and he was allowed to start from wherever he believed was relevant.

(4) As the accused gave the statement, he was seated on a chair. Despite that his hands were handcuffed, the accused was gesturing using hands to emphasize whatever he was explaining. He commenced his account from the time he said he was in South Africa in order to give background information for his alleged conduct.

(5) The accused articulated the dates, time, manner, and how he met the alleged victims.

(6) As the accused gave the statement, he did not exhibit any signs of discomfort and was not fidgeting, but seemed alive as to the serious nature of the proceedings.

(7) D/Ass Insp Chinoni only sought details or clarifications arising from the accused's own explanation, for example, if the accused knew the deceased or complainant before, or the description of the knife allegedly used, and its owner.

(8) After the statement had been typed/recorded, the accused was given the statement to read it himself. I noted that the accused took his time reading the statement to himself, as shown by the movement of his lips. He held the statement with both hands. The concentration exerted in reading the statement by the accused was evident as he moved from one page to the other.

(9) After confirming the correctness of the statement, the accused was asked to sign, and he inquired why he should sign, after which D/Ass Insp Chinoni explained the purpose of signing, and, thereafter, he signed.

(10) The video ends with the accused proceeding to make indications, which are not subject of this hearing. However, I observed that the accused, at the alleged scenes of crime, walked without any difficulty.

A proper analysis of the accused's evidence shows that the accused was not consistent in his outline of version of events.

The alleged assault twenty times under the feet, the threats made with a firearm, and the alleged rehearsal of events were all not part of the accused's Defence Outline.

Further, all these issues the accused later said in his evidence were not put to D/Ass Insp Chinoni or D/Sgt Moyo in cross-examination.

It is difficult, in the circumstances, to accept that this statement was foistered on the accused.

As the accused explained, the gestures he made were his own. The accused admitted that the questions he asked were also his own meant to safeguard his rights.

The alleged gaps in the video referred to by counsel for the accused are difficult to appreciate in light of the explanation by D/Ass Insp Chinoni and that the accused's alleged indications are not before the court.

After a careful analysis of the evidence, I find nothing to suggest that the accused was swayed by any external impulses or that any form of pressure was improperly brought to bear upon him to cause him to give the warned and cautioned statement. There is nothing to negative his freedom of volition.

This explains why, even before the Magistrate who declined to confirm the statement, the accused only alleged “intimidation” not the physical violence he now outlined, in an inconsistent manner, before this court.

If the accused had been assaulted, as he alleges, he would have said so to the Magistrate.

I am not persuaded by the accused's evidence, that, the very magistrate who declined to confirm his statement would fail to properly record the alleged impropriety the accused alleged to him or her let alone to fail to note the injuries the accused exhibited to the magistrate.

It is incredible to suggest that the magistrate ignored all that as accused now alleged.

I am satisfied that the State has discharged the evidential onus thrust upon it as regards the admissibility of the accused's unconfirmed warned and cautioned statement. It has been proved, beyond reasonable doubt, that, the accused made the statement freely and voluntarily without being improperly influenced thereto.

After making this finding, I have no discretion to exclude the accused's warned and cautioned statement.

In the result, it is my finding, that, the accused's unconfirmed warned and cautioned statement is admissible.

Accordingly, the accused's warned and cautioned statement is admitted, as Exhibit 5, which includes both the written statement and the accompanying video recording of that statement.

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SC48-20 : EMMA KUNDISHORA vs ZIMBABWE RED CROSS SOCIETY
Ruled By: HLATSHAWO JA, MAKONI JA and BERE JA

SC03-21 : AFRITRADE INTERNATIONAL LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: PATEL JA, BHUNU JA and BERE JA

SC61-07 : AGRICULTURAL BANK OF ZIMBABWE LIMITED t/a AGRIBANK vs CLEMIO MACHINGAIFA AND CHENJERAI MUTAMBISI
Ruled By: SANDURA JA, ZIYAMBI JA and GARWE JA

Appealed
SC43-19 : AFRASIA BANK ZIMBABWE LIMITED (IN LIQUDATION) vs THE RIGHT INVESTMENTS (PVT) LTD and OPIUM INVESTMENTS (PVT) LTD and PHILLIPA COUMBIS
Ruled By: GWAUNZA JA, GARWE JA and MAVANGIRA JA

Appealed
SC21-19 : RONALD BAKARI vs TOTAL ZIMBABWE (PRIVATE) LIMITED
Ruled By: GARWE JA, GUVAVA JA and BHUNU JA

HH305-14 : FAIRDROP (PVT) LTD vs CAPITAL BANK CORPORATION LTD and JOURNET TRADING PL and ELSPENCE INVESTMENTS PL and OTHERS
Ruled By: MATHONSI J

View Appeal
HH273-16 : KINGDOM BANK LIMITED vs THE RIGHT INVESTMENTS (PVT) LTD and OPIUM INVESTMENTS (PVT) LTD and PHILLIPA COUMBIS
Ruled By: CHAREWA J

SC40-15 : INDIUM INVESTMENTS (PVT) LTD vs KINGSHAVEN (PVT) LTD and DANIEL SHUMBA and LINDA SHUMBA
Ruled By: CHIDYAUSIKU CJ, GWAUNZA JA, GOWORA JA, HLATSHWAYO JA and MAVANGIRA AJA

Appealed
SC09-21 : ANDERSON MANJA and 98 OTHERS vs SHERIFF OF ZIMBABWE and GURTA MINING AG
Ruled By: MAVANGIRA JA, UCHENA JA and MATHONSI JA

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HH351-20 : THE SHERIFF OF ZIMBABWE and GURTA AG vs ANDERSON MANJA and 98 OTHERS
Ruled By: CHIKOWERO J

SC18-21 : A. ADAM AND COMPANY (PVT) LTD and SGI PROPERTIES (PVT) LTD and GARABGA NCUBE AND PARTNERS vs GOODLIVING REAL ESTATE (PVT) LTD
Ruled By: GUVAVA JA, MAVANGIRA JA and BHUNU JA

SC80-21 : ALLEN GESSEN vs PRISCILLA CHIGARIRO
Ruled By: MATHONSI JA

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HH85-21 : JULIET KADUNGURE and ANDERSON KADUNGURE and NERIA KADUNGURE vs PATRICIA DARANGWA and MASTER OF THE HIGH COURT OF ZIMBABWE (N.O.)
Ruled By: CHIRAWU-MUGOMBA J

HHMA56-19 : THE STATE vs WONDERFUL MANJORO
Ruled By: MAWADZE J and ASSESSORS: CHADEMANA and MUSHUKU