Pleadings re: Approach to Pleadings, Pre-Trial, Disparities with Testimony, Unchallenged Statements & Issue Estoppel

Appealed
SC62-24 : DELTA CORPORATION LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: GWAUNZA DCJ, UCHENA JA and KUDYA JA

This is an appeal against the whole judgment of the High Court (the court a quo) dated 25 October 2023 in which it dismissed the appellant's application for a declaratur.BACKGROUND FACTSThe appellant is a beverage manufacturing company which manufactures, sells, and distributes alcoholic and non-alcoholic beverages of local and international ...

This is an appeal against the whole judgment of the High Court (the court a quo) dated 25 October 2023 in which it dismissed the appellant's application for a declaratur.

BACKGROUND FACTS

The appellant is a beverage manufacturing company which manufactures, sells, and distributes alcoholic and non-alcoholic beverages of local and international brands. The appellant earns its income in both local and foreign currency and incurs expenses in both local and foreign currency.

The respondent is the collector of revenue on behalf of the Government.

The appellant submitted its value added tax (VAT) returns for the period March 2019 to October 2021 as well as Income Tax returns for the years ended 2019 and 2020 and paid all its taxes in full for these years in Zimbabwe dollars (ZWL).

On 17 November 2021, the respondent gave the appellant notice of its intention to carry out a tax review of its tax affairs covering the period 1 January 2019 to 31 October 2021. The respondent raised issues with the appellant on whether its value added tax (VAT) returns for 1 January 2019 to December 2020, and the income tax payments for the period January 2019 to 30 September 2021 were paid in the currency of trade.

In response, the appellant wrote a letter to the respondent, dated 24 November 2021, stating that section 4A of the Finance Act [Chapter 23:04] requiring the payment of taxes in foreign currency, followed the promulgation of section 23 of the Finance Act No.2 of 2019 which made local currency the sole legal tender.

On 11 June 2022, after a tax audit of the appellant's returns, the respondent informed the appellant about discrepancies which were found in its self-assessments.

The respondent found, that, the appellant failed or neglected to pay income tax and value added tax (VAT) in foreign currency from the income which it received or accrued to it in whole or in part in foreign currency.

The respondent further found, that, the appellant had received foreign currency in respect of local sales during the period between April 2019 and March 2021.

After the audits, the respondent issued additional assessments against the appellant.

The respondent re-computed the appellant's tax liability and issued it with amended tax returns which required it to pay its taxes in foreign currency, in accordance with the revenue it received in foreign currency, and to also pay its taxes in local currency proportionate to the revenue it received in local currency.

On 14 June 2022, the appellant responded arguing, that, the Finance Act No.2 of 2019 should prevail over section 4A of the Finance Act as it was enacted before it.

The appellant further contended, that, the turnover apportionment method was inapplicable in relation to value added tax (VAT), and, therefore, payment of taxes in ZWL was legally correct.

On 5 July 2022, the respondent wrote a letter to the appellant notifying it of the adjustments it made to the USD value added tax (VAT) assessments and tax computation schedules for October 2020 to October 2021. On the same day, the respondent served on the appellant an income tax notice of assessment for the tax period January 2021 to December 2021.

Later, on 3 August 2022, the respondent wrote another letter to the appellant addressing issues raised by the appellant on 14 June 2022.

The respondent explained that the law on value added tax (VAT) and Income Tax required that payment of taxes must be made in the currency of trade and that section 4A of the Finance Act was not amended nor repealed.

The respondent further observed, that, the appellant's value added tax (VAT) returns were incomplete for the reason that the section that separates foreign currency input and output tax from local currency input and output tax was not completed.

On the same day, the respondent issued an additional value added tax (VAT) notice of assessment for the tax period covering the period March 2019 to September 2020 requiring that local currency input and output tax be computed and paid separately from the foreign currency input and output tax.

Aggrieved by the respondent's re-assessments, the appellant applied to the court a quo for a declaration of invalidity;

(i) Firstly, in respect of the additional income tax assessments for the tax years ended 2019 and 2020; and

(ii) Secondly, the additional value added tax assessments issued against it by the respondent for the period March 2019 to October 2021.

It submitted, that, the re-assessment was invalid on account of the fact that it referred to the term 'gross tax' which is foreign to all tax statutes and that the amended tax returns did not compute the appellant's taxable income rendering the re-assessment invalid.

The appellant further submitted, that, it was unlawful for the respondent to reject payment in the form of local currency as it was declared the sole legal tender of Zimbabwe. It argued, that, the enactment of section 4A of the Finance Act, which stipulates that the Zimbabwean currency was to be the sole legal tender, must prevail over all older provisions.

The appellant argued, that, section 4A(1)(c) of the Finance Act and section 38(4) of the Value Added Tax Act both referred to section 41 of the Reserve Bank of Zimbabwe (RBZ) Act, and, therefore, the non-obstante provisions ought to be restricted to the old bond notes and should not be extended to the Real Time Gross Settlement dollar (RTGS) currency.

The appellant further submitted, that, section 4A(1)(C) of the Finance Act predated section 44C of the Reserve Bank of Zimbabwe (RBZ) Act which made the RTGS$ the sole legal tender in Zimbabwe.

It also argued, that, when Statutory Instrument 212 of 2019, SI 212 of 2019 was promulgated, it excluded the payment of taxes in foreign currency as an exception to the use of sole legal tender.

The appellant submitted, that, there were no jurisdictional facts present for the respondent to have issued it with the additional notices of assessment.

The appellant further submitted, that, the respondent violated its rights enshrined in section 15(3) of the Value Added Tax Act, by denying the deduction of the input tax paid by it in local currency from the output tax received by it in foreign currency.

On that note, the appellant submitted that the respondent's Public Notice No.26 of 2019, which set out the manner of computation, was unlawful and an attempt to legislate.

The appellant argued, that, the penalty on its foreign currency tax was not recoverable in foreign currency as there was no legal provision to that effect.

Per contra, the respondent opposed the application on the premise that 'gross tax' is an administrative term applied to denote an amount of the taxable income that will still be subject to further deductions before arriving at the net tax amount due to be paid to the respondent.

The respondent further argued, that, the assessment complied with all the requirements prescribed by law.

It further submitted, that, payment of taxes in foreign currency on income received in foreign currency is exempted from being paid using the nation's sole legal tender as provided by section 23 of the Finance Act.

The respondent contended, that, the legal requirements that warranted the re-assessment were that it found taxable income which was not subjected to tax; in determining an alleged loss, there was some income which ought to have been taken into consideration but was not; and, there was credit which was granted that should not have been granted.

The respondent submitted, that, deductions of input taxes from output taxes should be separated according to currencies and that the law prohibits deductions of input taxes from output taxes across currencies.

The respondent further submitted, that, Public Notice No.26 of 2019 was issued for the purpose of administering advice and information to assist taxpayers whose receipts from trade were specifically in both local and foreign currency.

The respondent argued, that, a penalty was a tax, and, as such, any outstanding foreign currency tax is payable in foreign currency and a penalty on any outstanding local currency tax is payable in local currency.

The court a quo determined, that, if the notices of assessment conformed with section 2 as read with section 51(2) of the Income Tax Act [Chapter 23:06] (ITA), and, as long as the value added tax (VAT) evaluation complied with section 31(5) of the Value Added Tax Act, then, the assessments cannot be rendered invalid on the basis of an alien term.

The court a quo held, that, the respondent's argument that the term 'gross tax' was an administrative reference to a provisional figure obtained during the computation process, which would still be subject to further consideration, is acceptable.

The court a quo held, that, the RTGS currency and bond notes and coins are all legal tender for the reason that the Reserve Bank of Zimbabwe (RBZ) Act does not expressly stipulate otherwise.

The court further held, that, Statutory Instrument 142 of 2019, SI142 of 2019, which introduced the sole legal tender concept did not single out the electronic currency.

The court a quo determined, that, there were exemptions to the introduction and use of the sole legal tender, such as the payment of customs duty and the payment of value added tax (VAT) on imports.

The court a quo further held, that, all relevant legislation should be taken into consideration in determining in which currency tax assessment forms should be submitted, and tax be paid.

Therefore, the court a quo determined that the reference to 'any other law' was with respect to section 4A of the Finance Act and section 38(4) and (9) of the Value Added Tax Act.

The court a quo held, that, the jurisdictional facts which triggered the additional assessments were the appellant's computation of all taxes in the local currency when part of its income had been received in foreign currency, and, there were improper deductions to the taxable income.

Regarding value added tax (VAT), the court a quo determined that the respondent had found that the appellant had not submitted the VAT returns in the prescribed form and had completely avoided completing the section dealing with the calculation of VAT in foreign currency.

The court a quo held, that, section 38(9) of the Value Added Tax Act declares that all provisions of the Act shall apply with such changes as may be necessary to the payment of tax in foreign currency in the same way as they apply to the payment of tax in local currency.

The court a quo further held, that, a reading of section 38(4) and (9) of the Value Added Tax Act makes it apparent that the legislature has not sanctioned a cross-currency deduction of input tax from output tax.

The court a quo held, that, a penalty is a tax in accordance with tax legislation, and, therefore, section 4A(7) of the Finance Act applies given that it states, that, all provisions of the Value Added Tax Act shall apply with such changes as may be necessary to the payment of tax in foreign currency in the same way as they apply to the payment of tax in local currency.

In the result, the court a quo held that the submissions made by the appellant lacked merit and proceeded to dismiss the application.

Dissatisfied with the determination of the court a quo, the appellant noted an appeal to this Court on the following grounds of appeal:

“GROUNDS OF APPEAL

1. The court a quo erred at law and misdirected itself by failing to consider and determine material issues raised by the appellant, thus rendering the proceedings grossly irregular. In particular, the court a quo failed to consider and determine the following issues raised by the appellant:

(a) Whether there is a penalty for payment of taxes purportedly due in foreign currency in the local legal tender, and what that penalty is?

(b) Whether the apportionment formulae used by the respondent exists in the taxing Act, and, if so, in which provisions of the taxing Acts?

(c) Whether the formulae used by the respondent, in computing both income tax and value added tax (VAT), was rational and possible to comply with?

(d) Whether there is a constitutional bar to the respondent utilizing section 4(A)(7) of the Finance Act and section 38(9) of the Value Added Tax Act to amend primary legislation?

(e) The implication of the contra-fiscum rule to uncertain tax legislation.

2. The court a quo erred at law and misdirected itself in finding, that, the assessments issued were valid at law when such assessments referred to a line item described as “gross tax” which 'gross tax' is not included in any taxing statute and is not a necessary component in the computation of taxable income.

3. The court a quo erred at law and misdirected itself in finding, that, the jurisdictional facts to issue additional assessments were present permitting the respondent to issue additional assessments on the appellant.

4. The court a quo erred at law and misdirected itself in finding, that, the appellant was not entitled to deduct its input tax on purchases made in foreign currency and in ZWL from its output in foreign currency.

5. The court a quo erred at law in finding that penalties were chargeable in foreign currency; this, despite neither section 4(A) of the Finance Act nor section 38 of the Value Added Tax Act providing for the charging of penalties in foreign currency.

6. The court a quo erred at law and misdirected itself in applying section 4(A)(7) of the Finance Act and section 38(9) of the Value Added Tax Act through the instrument of public notices in such a manner that they permit the amendment of primary legislation by institutions other than Parliament, which is unconstitutional and therefore unlawful.

RELIEF SOUGHT

1. That, the instant appeal succeeds with costs.

2. That, the order of the court a quo, in case number HC5952/22, be and is hereby set aside and substituted with the following:

“It is hereby ordered that:

1. The application be and hereby (sic) succeeds with costs.

2. The additional VAT assessments issued on the applicant for the tax period March 2019 to October 2021 be and are hereby declared invalid.

3. The additional income tax assessment issued on the applicant for the tax year ended 2020 be and is hereby declared invalid.”

SUBMISSIONS BEFORE THIS COURT

At the hearing of the appeal, counsel for the appellant submitted, that, the six issues mentioned in ground of appeal number one were raised by the appellant and addressed by the respondent before the court a quo; yet, the judgment a quo was silent on the issues listed in the appellant's first ground of appeal.

He further submitted, that, the issues were dispositive of the disputes between the parties.

In that regard, counsel submitted that the decision of the court a quo ought to be set aside on account of the fact that a party is entitled to reasons for a court's decision on all issues raised and argued before it.

Counsel further argued, that, the assessment was invalid as it, in its notice of assessment, referred to an amount it referred to as 'gross tax' which term is foreign to tax legislation.

Counsel relied on the case of Nestle v Zimbabwe Revenue Authority SC148-21 to argue, that, an assessment must only contain information provided for in the Income Tax Act for the reason that an assessment is a statutory document.

He further submitted, that, the court a quo disposed of the matter on the premise that the term did not prejudice the appellant, yet, it did, considering that the appellant was unfamiliar with the term.

Counsel also submitted, that, the assessment by the respondent was intended to be an amendment of its self-assessment, therefore, using an alien term baffles the appellant on what exactly was amended.

Counsel submitted, that, since there was no original foreign currency assessment, the respondent lacked the basis on which to issue an additional assessment.

He further submitted, that, the apportionment formula was irrational and inconsistent with the provisions of the Income Tax Act and Value Added Tax Act.

Counsel further stated, that, in accordance with the case of Breastplate Service (Pvt) Ltd v Cambria Africa PLC SC66-20, once a currency is recognized as the sole legal tender, one cannot refuse it.

He argued that the Zimbabwean dollar is the only currency acknowledged in Zimbabwe.

Per contra, counsel for the respondent submitted, that, the actual material issues dispositive of the matter were all addressed in the judgment a quo and that the issues mentioned in the appellants ground of appeal number one are not dispositive of the issues between the parties.

He further argued, that, the case of Inamo Investments (Pvt) Ltd v Zimbabwe Revenue Authority SC96-23 established that even when the local currency is legal tender, revenue earned in foreign currency shall be remitted in foreign currency.

He submitted, that, section 47 of the Income Tax Act and section 31 of the Value Added Tax Act permit the Commissioner of the respondent to make additional assessments.

Counsel submitted, that, the rationale of the court a quo was not on the notion of prejudice but it found, that, in spite of the term 'gross tax' the assessment met all the obligatory requirements to render it valid.

Counsel submitted, that, the term was explained in its heads of argument and before the court a quo.

He further submitted, that, an assessment should consist of the taxable income to which a tax rate is applied, before arriving at a taxable figure.

Counsel submitted that the appellant cannot seek a relief different from that prayed for in its relief sought.

THE ISSUES

The appeal raises the following issues for determination by this Court:

1. Whether or not the court a quo erred in not determining all issues raised by the appellant.

2. Whether or not the use of the phrase “gross tax” in the notice of assessment renders it invalid.

3. Whether or not the court a quo erred at law and misdirected itself in finding that the jurisdictional facts entitling the respondent to issue additional assessments were present.

4. Whether or not the court a quo erred in holding that tax for revenue earned in foreign currency and value added tax (VAT) paid in foreign currency, and additional tax incurred for not paying tax in foreign currency should be paid in foreign currency.

APPLICATION OF THE LAW TO THE FACTS

Whether or not the court a quo erred at law and misdirected itself in finding that the jurisdictional facts entitling the respondent to issue additional assessments were present

In determining this issue, the court a quo held as follows:

“[32] Plainly, and as per the applicant's own explanation, the 'jurisdictional facts' existed before the respondent issued the amended assessments. With regards to income tax, and in terms of section 47 of the Income Tax Act, what triggers the additional assessments is the consideration by the respondent's Commissioner that an amount of taxable income which should have been charged to tax was not charged to tax, or that an amount which should have been taken into account in the determination of an assessed loss was not, or that an amount was incorrectly allowed as a deduction. If the Commissioner comes to such conclusion, the respondent is obliged to adjust the assessment.

[33] The respondent has explained, that, what prompted scrutiny of the applicant's self-assessments, for 2019 and 2020, was the computation of all taxes in the local currency, when, as a matter of fact, part of its income for the tax years in question had been received in foreign currency.

Furthermore, for the year 2020, the applicant had improperly made some deductions to the taxable income. The respondent pointed them out to the applicant. The applicant reacted by correcting its assessments. But these are enough 'jurisdictional facts.'

[34] Regarding VAT, section 31(3) of the VAT Act, in paraphrase, provides, in part, that, where the Commissioner is not satisfied with any return or declaration furnished by a taxpayer, or where he [or she] has reason to believe that any person has become liable for the payment of any amount of tax but has not paid it, the Commissioner may make an assessment of the amount of tax payable by that person who shall have to pay it.

Furthermore, in terms of section 28(1) of the Act, every registered operator is required to submit returns in the prescribed form, reflecting such information as may be required for the purpose of the calculation of tax.

[35] The respondent has explained, that, the applicant did not submit the VAT returns in the prescribed form. The prescribed form has Part I to IV for the calculation of VAT in the local currency, and Part V for the calculation of VAT in foreign currency.

The applicant did not complete Part V.

Thus, the necessary information required for the calculation of VAT in foreign currency was missing.

None of all this has been refuted by the applicant. Yet, these are the relevant 'jurisdictional facts' necessary to trigger the amended assessments by the respondent.

The applicant's objection under this head equally has no merit.”

We agree with the court a quo that jurisdictional facts were present which justified the respondent's issuance of notices of assessments.

As correctly pointed out by the court a quo, the appellant admitted the following jurisdictional facts:

1. That, it received payments in foreign currency hence it is seeking a declaratur that it was, in spite of having been paid in foreign currency, entitled by law to pay income tax and value added tax (VAT) for such payments in local currency.

2. That, it was paid value added taxes by its customers in foreign currency which the law requires it to collect and pay it to the respondent, but, it withheld the foreign currency taxes and sought to substitute them with local currency payments to the respondent.

3. That, it had not completed Part (V) of the VAT tax return which it was legally required to complete.

4. That, it had, by re-submitting corrected self- assessment returns, admitted that it had not correctly completed its self-assessment forms.

The court a quo's findings are correct. The appellant's appeal under this ground has no merit.

View Appeal
HH577-23 : DELTA BEVERAGES (PVT) LTD vs ZIMBABWE REVENUE AUTHORITY
Ruled By: MAFUSIRE J

The applicant seeks a declaration of invalidity in respect of additional income tax assessments for the tax years ended 2019 and 2020. It also seeks another declaration of invalidity of the additional value added tax [VAT] assessments issued against it by the respondent for the period March 2019 to October 2021. It claims costs of suit on an attorney and client scale against the respondent.

The applicant is an integrated manufacturer, seller, and distributor of a wide range of products, including alcoholic and non-alcoholic beverages. It is a registered taxpayer. It earns revenue in both local and foreign currency, principally United States dollars [USD]. Likewise, its expenditure is incurred in both local and foreign currency.

The respondent is a central collector of revenue for Government through the various pieces of the tax legislation, principally the Income Tax Act [Chapter 23:06] and the Value Added Tax Act [Chapter 23:12] (”the VAT Act”).

The system of taxation involves the compilation by the taxpayers of self-assessments of their tax liabilities and the submission of tax returns to the respondent in respect of any year of assessment. The respondent can adjust these assessments for any anomalies it may pick during its own audit processes.

The matter before the court is largely one of law, more precisely, the interpretation of the relevant provisions of the tax statutes, the facts being largely common cause and useful only as background material.

These facts are as follows:

Following a tax audit on the applicant's tax affairs for the period 1 January 2019 to 31 October 2021, the respondent concluded that the applicant had improperly computed its income tax in the sense, that, despite having received foreign currency for some of its sales in the relevant period, it had neglected or omitted to remit its income tax in respect thereon in foreign currency, but had purported to pay it all off in the local currency. The respondent further concluded, that, the applicant had improperly deducted certain expenses from its taxable income.

Perceiving the applicant's conduct to be a violation of the tax statutes, the respondent disallowed the expenses which it considered to have been improperly deducted. Further, it proceeded to re-compute the applicant's tax liability and issued it with amended tax returns, apportioning the tax payable by the applicant in the proportion of the ratio of its turnover in foreign currency to local currency.

In effect, it required the applicant to pay its taxes in foreign currency in respect of the applicant's revenue received in foreign currency, and in local currency in respect of the revenue received in local currency.

The respondent conducted a similar audit and a re-assessment of the applicant's value added tax (VAT) obligation.

It concluded, that, the applicant had paid its foreign currency component of the value added tax (VAT) all in the local currency, contrary to law. Furthermore, the respondent considered, that, the applicant had not properly completed the VAT returns in that it had left out a whole section altogether - this is the section that separates the foreign currency input and output taxes from the local currency input and output taxes.

Generally, and in very simple terms, output tax is the tax charged and received by a registered operator for subsequent transmission to the respondent. Input tax is the tax that the operator pays on imports. Input tax is deducted from the output tax and the balance is what is remitted to the respondent.

In its amended notices of assessment, the respondent required that the foreign currency input and output taxes be separated from the local currency input and output taxes so that there would be no cross-currency deductions. In other words, the respondent required that only foreign currency input tax be deductible from the foreign currency output tax, and, similarly, that, only local currency input tax be deductible from the local currency output tax.

According to it, that is the correct interpretation of the relevant tax provisions.

The applicant objected to the respondent's re-assessments on multiple grounds. The case was argued on several fronts. Severely truncated, the case before the court crystallized into five areas as laid out below. I proceed to deal with each one of them in turn, summarizing the arguments for and against, and, immediately afterwards, pronouncing my decision on each....,.

(iii) No jurisdictional facts present to issue assessments

The next ground of objection by the applicant, again summarized, was that before the respondent issued the assessments in contention, no jurisdictional facts existed for it to do so.

The applicant explains 'jurisdictional facts' as pre-conditions prescribed by law that must be satisfied before the respondent could have taken the administrative steps that it did.

The applicant argues, that, unless there was an amount either of gross income or allowable deductions that ought to have been considered by the applicant in its self-assessments but had not, then, the necessary jurisdictional factors to trigger the action taken by the respondent were absent. As such, such action was invalid and should therefore be set aside.

The respondent's counter argument is that the jurisdictional facts warranting the action that it took were present because, by law, what prompts it to issue an additional tax assessment to a taxpayer are findings by it, during the audit process, that, among other things, some taxable income was not subjected to tax; or that in determining an alleged loss by a taxpayer there was some income which ought to have been taken into account that was not; or a deduction which was made that was not; or that there was credit that was granted but which ought not to have been granted.

It is argued, that, all these factors, and more, were present in the present situation.

Plainly, and as per the applicant's own explanation, the 'jurisdictional facts' existed before the respondent issued the amended assessments.

With regards to income tax, and in terms of section 47 of the Income Tax Act, what triggers the additional assessments is the consideration by the respondent's Commissioner that an amount of taxable income which should have been charged to tax was not charged to tax, or that an amount which should have been taken into account in the determination of an assessed loss was not, or that an amount was incorrectly allowed as a deduction.

If the Commissioner comes to such conclusion, the respondent is obliged to adjust the assessment.

The respondent has explained, that, what prompted scrutiny of the applicant's self-assessments for 2019 and 2020 was the computation of all taxes in the local currency, when, as a matter of fact, part of its income for the tax years in question had been received in foreign currency. Furthermore, for the year 2020, the applicant had improperly made some deductions to the taxable income. The respondent pointed them out to the applicant. The applicant reacted by correcting its assessments.

But, these are enough 'jurisdictional facts'.

Regarding value added tax (VAT), section 31(3) of the Value Added Tax Act, in paraphrase, provides in part, that, where the Commissioner is not satisfied with any return or declaration furnished by a taxpayer, or where he [or she] has reason to believe that any person has become liable for the payment of any amount of tax but has not paid it, the Commissioner may make an assessment of the amount of tax payable by that person who shall have to pay it.

Furthermore, in terms of section 28(1) of the Value Added Tax Act, every registered operator is required to submit returns in the prescribed form, reflecting such information as may be required for the purpose of the calculation of tax.

The respondent has explained, that, the applicant did not submit the value added tax (VAT) returns in the prescribed form.

The prescribed form has Part I to IV for the calculation of value added tax (VAT) in the local currency, and Part V for the calculation of VAT in foreign currency.

The applicant did not complete Part V.

Thus, the necessary information required for the calculation of value added tax (VAT) in foreign currency was missing.

None of all this has been refuted by the applicant.

Yet, these are the relevant 'jurisdictional facts' necessary to trigger the amended assessments by the respondent.

The applicant's objection under this head equally has no merit.

SC05-22 : CUTHBERT DUBE vs PREMIER SERVICE MEDICAL AID SOCIETY and PREMIER SERVICE MEDICAL INVESTMENTS
Ruled By: MAKONI JA, MATHONSI JA and CHITAKUNYE JA

This is an appeal against the whole judgment of the Labour Court (the court a quo) which allowed two appeals filed in that court by the first and second respondents in terms of section 98(10) of the Labour Act [Chapter 28:01].

It set aside the two awards made in favour of the appellant, and, in their place, substituted them with an order dismissing the appellant's claims before the arbitrator.

FACTUAL BACKGROUND

The first respondent is a medical aid society registered in terms of the Medical Services Act [Chapter 15:13]. The second respondent is the investment vehicle of the first respondent. Both respondents are managed by two separate boards of directors.

It is common cause, that, the appellant was the Chief Executive Officer of the first respondent in terms of a contract of employment. He also drew a salary from the second respondent in unclear circumstances.

He attained the retirement age, of 60 years, in December 2013 in terms of the Retirement Policy of the Society 4/2003 of the first respondent.

On 14 March 2013, both boards of directors of the respondents unanimously extended the appellant's tenure of office by a further ten years.

The new contract commenced from 1 January 2014 and would end on 31 December 2024.

At the beginning of 2014, the appellant commenced the extended employment contract. The parties also reached an agreement that the appellant's monthly salary would be US$60,000 per month effective January 2014 along with other benefits. It was later reduced to US$43,000.

Following allegations that the appellant was taking an exorbitant salary of US$92,000 every month, before allowances, without the knowledge of the full Board, other than two of its members, the boards withdrew their earlier decision of extending the appellant's contract of employment.

They relied on the provisions of the Retirement Policy to rescind the extension of the employment contract.

The appellant was thus requested to take a pre-retirement paid leave.

In response, the appellant, through a letter dated 20 February 2014, addressed to the first respondent, claimed that he had a subsisting contract of employment for a period of ten years which commenced on 1 January 2014.

He insisted that the contract had not been terminated in any way, and, consequently, he would abide by it and continue to execute his duties in terms of the same until its expiry.

No such letter was written to the second respondent.

Consequently, a dispute arose between the appellant and the first respondent.

On 17 February 2015, the dispute between the appellant and the first respondent was referred to compulsory arbitration. The terms of reference were as follows:

“(a) To determine whether or not the claimant's (the appellant in this matter) contract of employment was lawfully terminated;

(b) The appropriate remedy.”

On 14 March 2015, a dispute in the matter between the appellant and the second respondent was referred to compulsory arbitration. It is not clear from the record how the dispute had arisen. The terms of reference were as follows:

“(a) Whether or not the appellant's contract of employment was enforceable against the second respondent;

(b) If so, whether or not the claimant's contract of employment was lawfully terminated and the remedy thereof.”

On 14 April 2015, the arbitrator issued awards in respect of both matters.

In the matter between the appellant and the first respondent, the arbitral award was to the effect that the contract of employment between the appellant and the first respondent still subsisted and thus remained in force. He further ordered that the first respondent pay the appellant all salaries and benefits from the date these were last paid at the salary scale of US$92,000 per month.

In the matter between the appellant and the second respondent, the arbitral award was to the effect, that, the appellant's contract of employment was enforceable against the second respondent and that the contract was never terminated thereby rendering the appellant entitled to payment of salaries and benefits as claimed.

Aggrieved, the first and second respondents independently appealed against the two arbitral awards to the Labour Court, under LC/H/348/15 and LC/H/349/15 respectively. The two appeals were consolidated for the sake of convenience.

PROCEEDINGS IN THE COURT A QUO

The first respondent, in its heads of argument before the court a quo, in which it was the first appellant, argued that the arbitrator made a determination that ran foul of the issue presented before him.

It submitted, that, the issue before the arbitrator was whether or not the employment contract between the first respondent and the appellant was lawfully terminated. Thus, it insisted that the arbitrator fell into error when he determined that there was a valid and enforceable contract between the parties whereas it was common cause between the parties that no contract still existed.

The first respondent contended, that, the arbitrator was bound by the terms of reference and had no authority to re-format the issues as presented to him by the parties.

It was also the first respondent's case that no evidence was tendered to justify the amount of US$92,000 per month which was awarded to the appellant by the arbitrator.

The second respondent largely associated itself with the arguments made by the first respondent regarding the arbitrator straying from the terms of reference.

In addition to that, the second respondent submitted that the arbitrator missed the import of the issues referred to him and came to the conclusion that there existed a contract of employment between the appellant and the second respondent.

The second respondent further submitted, that, it was simply the investment vehicle of the first respondent and used to contribute to the appellant's salary at the request or on the instructions of the appellant. Thus, it was the second respondent's submission that these remittances did not make it the appellant's employer.

Per Contra, the appellant submitted that the arbitrator correctly determined the issues before him.

He submitted, that, the issues referred to the arbitrator were whether or not the appellant's contract of employment was lawfully terminated and to determine the appropriate remedy. He further submitted, that, determining whether or not the contract was valid was the first stage of inquiry which would then lead to the conclusion of whether or not the same was lawfully terminated.

Regarding the second respondent, he submitted that the evidence placed before the arbitrator, of termination of the contract in the form of a letter, was not sufficient enough to prove that the same was terminated in terms of the law.

The appellant insisted that a contract of employment could only be terminated by mutual consent, death, dismissal through a formal disciplinary hearing, or resignation.

Thus, he proffered that a valid contract still existed as the second respondent failed to prove termination.

The appellant further submitted, that, the second respondent was his employer, by extension, as management of the same reported directly to him. It followed that his contract of employment with the second respondent was valid and enforceable.

DETERMINATION OF THE COURT A QUO

The court a quo examined the terms of reference as placed before the arbitrator by the parties.

With respect to the first respondent, the court reasoned that it was clear in the parties minds that the contract of employment had been terminated and what required determination was whether or not such termination was lawful.

The court further reasoned, that, the arbitrator fell outside the terms of reference by making a determination that the contract of employment still subsisted and remained in force.

The court relied on the case of C Kambuzuma and Ors v The Athol Evans Hospital Home Complex SC118-04 in its reasoning that the arbitrator ought to have confined himself to the terms of reference and not go further than that.

In addition, the court a quo held that the arbitrator, by making a finding that there was still a valid contract in existence between the parties, effectively made a new employment contract for the parties, contrary to the Supreme Court decision in the matter between Kundai Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397.

With respect to the second respondent, the court a quo made a finding, that, as was apparent from the record, the second respondent did not extend the appellants tenure.

It effectively concluded, that, there was nothing to enforce between the appellant and the second respondent as there was never an employment contract between them. Consequently, the court found that there was nothing to terminate and therefore the appellant was not entitled to anything from the second respondent.

In the result, it allowed the appeals and set aside the arbitral awards.

This prompted the appellant to note the present appeal on the following grounds:

GROUNDS OF APPEAL

“1. The court a quo misdirected itself and erred at law in finding that the decision of the arbitrator, that there was still a subsisting contract of employment between the appellant and the first respondent, was outside the arbitrator's terms of reference.

2. The court a quo erred by making a determination that there was no binding contract of employment between the appellant and the second respondent.”

SUBMISSIONS ON APPEAL

In addressing the first ground of appeal, counsel for the appellant made the following submissions:

The issue before the court was a question of interpretation of the terms of reference. The terms of reference were quite straightforward and had inherent in them two questions, namely:

1. Has the contract of employment been terminated?

2. If so, was the termination lawful?

A term of reference, in terms of the Labour Act [Chapter 28:01] (the Act) is statutorily regulated and must be interpreted in terms of the scheme under Part XII of the Labour Act.

What has to be resolved is the dispute that was referred to conciliation.

The court a quo fell into error by treating this as voluntary arbitration, in which the terms of reference were as a result of the meeting of the minds of the parties. To the contrary, this was a compulsory arbitration in terms of the Labour Act where the labour officer formulates the terms of reference after taking into account the nature of the dispute between the parties.

A labour officer referring a dispute to compulsory arbitration cannot create a new dispute for the parties as was held in Tafadzwa Sakarombe & Anor v Montana Carswell Meats SC44-20.

As regards the appellant's second ground of appeal, counsel for the appellant made the following submissions:

A resolution by one party to terminate its contractual obligations cannot bind the innocent party to the contract.

It was a serious misdirection by the court a quo, that, the appellant was bound by the decisions of the respondents in respect of the contract between the parties.

Further, a contract need not be in writing. There is no doubt that an oral contract of employment existed between the appellant and the second respondent.

The court a quo relied on the absence of a written contract to determine that there was no contract between the appellant and the second respondent. From the circumstances, including the payment of salary and the duties of the appellant vis a vis the second respondent, there is no doubt that a contract existed between the parties.

Counsel for the respondents submitted:

In respect of ground one, that, the issue before the arbitrator was to determine whether or not the contract of employment was lawfully terminated. The arbitrator went on to determine that there was a valid contract of employment between the parties, which was not an issue placed before him.

The conduct of the arbitrator was tantamount to making a contract for the parties, which he or any court or tribunal cannot do as a matter of law.

As regards the purported contract of employment between the appellant and the second respondent, that the appellant could not point to a single document that suggested that there was a contract between him and the second respondent.

The only contract produced was the one between the appellant and the first respondent.

The argument by the appellant, that there is an oral contract, is startling. He failed to present evidence before the court a quo, and this court, to prove that there was an oral contract. Thus, there was nothing to enforce between the appellant and the second respondent.

ISSUES FOR DETERMINATION

1. Whether or not the court a quo erred in finding, that, the arbitrator acted outside his terms of reference in concluding that a contract of employment between the appellant and the first respondent still subsisted.

2. Whether or not the court a quo erred in finding, that, the appellant did not have a binding contract with the second respondent.

THE LAW

The matter before this Court pertains to compulsory arbitration which derives from statute. It only arises after the failure of conciliation and the issuing of a Certificate of No Settlement (L MADHUKU, Labour Law in Zimbabwe...,.). This was provided for in terms of section 93(5) of the Labour Act [Chapter 28.01] before the amendment to the section.

The author, L MADHUKU, Labour Law in Zimbabwe…, puts it this way:

“This new scheme focuses on the nature of the dispute in determining whether or not to refer it to compulsory arbitration. Disputes of interest depend on whether or not an essential service is involved;...,. A dispute of interest, outside the essential service, cannot be referred to compulsory arbitration in the absence of agreement by parties.”

Crucial to mention are provisions of section 98 of the Labour Act. The relevant parts read as follows:

“93 Effect of reference to compulsory arbitration under Parts XI and XII

(1) In this section 'reference to compulsory arbitration' in relation to a dispute, means a reference made in terms of paragraph (d) of subsection (1) of section eighty-nine or section ninety-three.

(2) Subject to this section, the Arbitration Act [Chapter 7:15] shall apply to a dispute referred to compulsory arbitration.

(3) Before referring a dispute to compulsory arbitration, the Labour Court or the labour officer, as the case may be, shall afford the parties a reasonable opportunity of making representations on the matter.

(4) In ordering a dispute to be referred to compulsory arbitration, the Labour Court or labour officer, as the case may be, shall determine the arbitrator's terms of reference after consultation with the parties to the dispute.”

In Ballantyne Butchery (Pvt) Ltd t/a Danmeats v Edmore Chisvinga & Ors SC 2015 (1) 335, SC06-15..., this Court held that:

“Where a dispute is referred to compulsory arbitration by a labour officer, section 98(4) of the Labour Act [Chapter 28:01] enjoins the officer to determine the arbitrator's terms of reference, after consultation with the parties to the dispute.”

The same point was made in Metallon Gold Zimbabwe (Pvt) Ltd & Anor v Collen Gura 2015 (1) 509, HH263-16..., where it was held that:

“However, the procedure for submission is that the matter commences with conciliation before a labour officer in terms of section 93 of the Labour Act. When conciliation fails, the labour officer then refers the dispute to compulsory arbitration in terms of section 98. In doing so, the labour officer consults the parties for the arbitrator's terms of reference to be drawn. The arbitrator is confined to the agreed terms of reference during the arbitral process;..., if the arbitrator goes beyond the terms of reference that may be a ground for objection to the registration of the arbitral award.”

It thus follows, that, in settling the terms of reference for compulsory arbitration, the parties have a role to play. They are consulted by the Labour Court or the labour officer, as the case may be.

It is an established principle that an arbitrator is not allowed to venture outside the terms of reference when making a determination.

The law on arbitration, and terms of references, was succinctly captured at pp10 to 11 in the case of Munchville Investments (Pvt) Ltd t/a Bernstein Clothing v Chiedza Mugavha SC62-19 as follows:

“As regards the jurisdiction and powers of arbitral tribunals, it must be emphasised that the arbitration process, generally, is a voluntary and consensual process, both at common law and under the Arbitration Act [Chapter 7:15].

This is made clear by section 4(1) of the Act which stipulates that 'any dispute which the parties have agreed to submit to arbitration may be determined by arbitration'. Moreover, by virtue of section 4(3) of the Act 'the fact that an enactment confers jurisdiction on a court or other tribunal to determine any matter shall not, on that ground alone, be construed as preventing the matter from being determined by arbitration'.

According to BRAND: Labour Dispute Resolution (2nd ed. 2008) at p.163:

'In private arbitration, the arbitration agreement plays a pivotal role. It embodies a description of the dispute to be referred to arbitration, it names the arbitrator, it specifies the terms of reference and arbitrator's powers, it sets out the process before the actual hearing, and, finally, it describes the process to be followed during the hearing.'

In similar vein, as was stated in Total Support Management (Pty) Ltd & Anor v Diversified Health Systems (SA) (Pty) Ltd & Anor 2002 (4) SA 661 (SCA) at 673H-I:

'The hallmark of arbitration is that it is an adjudication, flowing from the consent of the parties to the arbitration agreement, who define the powers of adjudication, and are equally free to modify or withdraw that power at any time by way of further agreement.

It is thus axiomatic that the jurisdiction and powers of an arbitrator are determined by agreement between the disputant parties. The terms of reference define the dispute to be resolved and the manner in which it is to be resolved. The arbitrator's mandate flows from and is limited by the terms of reference.

To put it differently, the arbitrator derives his jurisdiction and powers from the arbitration agreement between the parties.

The position is no different under section 93(1) of the Labour Act.

The jurisdiction and powers of an arbitrator are established and assumed by dint of the agreement of all the parties involved and their voluntary submission to the arbitral process and its jurisdiction. The arbitrator is not endowed with jurisdiction by the labour officer or conciliator. It is the disputant parties themselves who vest the arbitrator with jurisdiction, notwithstanding any preceding or parallel lis or contestatio between them. In other words, it is the voluntary and consensual nature of arbitration that determines the scope of the arbitrator's jurisdiction and powers where any matter is referred to arbitration in terms of section 93(1) of the Labour Act.'”...,.

The above-cited case establishes that the principles applicable to private or voluntary arbitration are the same as those applicable to compulsory arbitration in terms of the Labour Act.

However it must noted, that, there is a slight difference in that in respect of private arbitration there is complete party autonomy with no room for intervention by the arbitrator.

Section 93(2) of the Labour Act, however, gives the Labour Court, or the Labour Officer, the right to intervene and determine the terms of reference - in consultation with the parties.

The arbitrator ought not to mis-characterise the disputes between the parties.

In Alliance Insurance v Imperial Plastics (Pvt) Ltd SC30-17..., the learned MALABA DCJ..., cited with approval the case of Inter Agric (Private) Limited v Mudavanhu & Ors SC09-15 wherein the respondent, alleging unfair dismissal, filed a grievance with a labour officer, and, failing conciliation between the parties, the labour officer referred the matter to compulsory arbitration. MALABA DCJ opined:

“Article 34(2)(a)(iii) of the Arbitration Act states that an arbitral award can be set aside if it contains submissions on matters beyond submissions for arbitration. In Inter-Agric (Pvt) Ltd v Mudavanhu & Ors SC09-15, at p3 of the cyclostyled judgment, GOWORA JA said:

'In addition, at law, the arbitrator was only competent to determine the dispute between such parties as had been referred to him by the labour officer. Thus, he was confined to his terms of reference. He had no mandate beyond that which had been referred to him.'”...,.

See also Augur Investments OU v Fairclot Investments (Private) Limited t/a T & C Construction & Anor SC08-19.

What emerges from the above authorities is that the arbitrator, in determining the dispute referred to him, is confined to the terms of reference settled for him or her by the Labour Court or the labour officer in consultation with the parties.

He is not allowed to stray outside those terms of reference. For emphasis, he has no mandate beyond that which has been referred to him or her.

APPLICATION OF THE LAW TO THE FACTS

In essence, the principal issue to be addressed is whether or not the arbitrator exceeded his terms of reference and thereby arrived at the wrong conclusions. Flowing from this is the correctness or otherwise of the decision of the Labour Court in not upholding the arbitrator's award.

The appellant submits, that, the court a quo took a simplistic and fundamentally wrong approach in interpreting the terms of reference. He avers that it is implicit in the terms of reference that what was before the arbitrator were two issues and these are:

1. Has the contract of employment been terminated?

2. If so, is the termination lawful?

Before considering the attack on the arbitrator, that he misconceived the nature of the inquiry and his duties, or exceeded his jurisdiction by venturing outside the terms of reference, it is necessary to determine the nature of the inquiry which was before him.

As mentioned at the outset, the arbitrator had to determine whether or not the contract between the appellant and the first respondent had been lawfully terminated and the remedy thereof.

In my view, what was implicit in the terms of reference is that:

(a) There had been a contract of employment between the appellant and the first respondent.

(b) That the contract was terminated by the employer; and

(c) That the appellant's issue was whether or not the same was lawfully terminated.

This is what the arbitrator had to relate to.

The court a quo was therefore correct in finding, that, the arbitrator had mis-interpreted the terms of reference.

Indeed, the arbitrator erred given the specific terms of reference in proceeding to make the finding, that:

“1. That, the contract of employment between the respondent and the claimant still subsists and remains in force.”

The court a quo correctly opined, that:

“What seems to be coming out of the arbitral award is that, firstly, the arbitrator was not sure of the position of the respondent's employment status. Secondly, the arbitrator was not sure of the propriety of the respondent's salary apart from commenting that the employee was entitled to continue working while the Board made its deliberations. His position was that the contract was never terminated….,.

When parties presented the above as a term of reference, it was clear on their minds that the respondent's contract of employment with the first appellant had been terminated. What required determination was whether or not such termination was lawful.”

Counsel for the appellant had this to say about the above finding, in para 9 of the appellant's Heads of Argument:

“The above misdirection was the source of the court a quo's error. Parties never presented any terms of reference. This was compulsory arbitration. It was the labour officer who formulated the terms of reference, after taking into account the nature of the dispute between the parties.”

He further contended, that, instead of taking into account the nature of the dispute after conciliation, the court a quo applied the wrong principle, namely, taking into account a non-existent 'intention of the parties'.

The dispute was referred to the labour officer for conciliation as follows:

“(i) Whether or not our client's contract of employment was terminated, and, if so, when?”

He concluded by submitting, that, taking into account the nature of the dispute, the arbitrator was correct to include a determination of whether or not the employment had been terminated.

What counsel for the appellant over-looked is the role of the parties to the dispute, in the settlement of terms of reference to be referred to an arbitrator.

Section 98(4) of the Labour Act makes provision for the labour officer 'to determine the arbitrator's terms of reference after consultation with the parties to the dispute.'

Whilst it is the function of the labour officer to determine the terms of reference, he or she does not do it by himself or herself. He has to do so in consultation with the parties. The parties input in the final product: see Ballantyne Butchery (Pvt) Ltd t/a Danmeats v Edmore Chisvinga & Ors SC 2015 (1) 335, SC06-15.

There is no indication on the record that the appellant objected to the terms of reference as presented to the arbitrator at the beginning of the arbitration process.

The arbitrator, in his award, captures the terms of reference as referred to him by the labour officer. It is during the analysis stage that he changes course and starts to deal with whether the appellant's contract had been terminated.

The arbitrator clearly fell outside the terms of reference, contrary to the settled position of the law which states that arbitrators should confine themselves to the presented terms of reference: see Munchville Investments (Pvt) Ltd t/a Bernstein Clothing v Chiedza Mugavha SC62-19.

He could not go behind what was before him to ascertain what it is that was referred to the labour officer, as was suggested by counsel for the appellant.

The arbitrator was not asked to determine whether or not the contract between the parties still subsisted, but, was required to determine whether or not the contract between the parties was lawfully terminated.

In light of the foregoing, the court a quo's finding cannot be faulted.

The court a quo further found that equally disturbing is that the arbitrator's conduct was tantamount to making a contract for the parties which neither he nor any court or tribunal can do as a matter of law. It remarked as follows:

“Making contracts for parties is not the duty of an adjudicating authority. An adjudicating authority deals with disputes arising from contracts, or, indeed, interprets terms of contract where parties need interpretation of the terms thereof in the context of disputes between them. They do not make contracts for parties. In the Kundai Magodora case (above) at 403C-D the Supreme Court stated as follows:

'In principle, it is not open to courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted even if they are shown to be onerous or oppressive.'

As is appositely cautioned by CHRISTIE: The Law of Contract in South Africa (5ed.) at p366:

'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 make them do it by enforcing the court's idea of what the contract ought to have been.'”

Indeed, the arbitrator misdirected himself by concluding, that, the contract was never terminated. It was not within his remit to exceed his mandate. The arbitrator misconceived the whole nature of the inquiry or his duty in connection therewith.

Thus, the first ground of appeal has no merit and must fail.

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

This is an appeal against part of the judgment of the High Court sitting at Bulawayo, dated 2 May 2019.

The court a quo granted the following order:

1. That, the purported Deed of Sale concluded by the parties on 26 January 2010, in respect of a portion of Umguza 100 Acre Lot 5A be and is hereby confirmed to be null and void for want of compliance with the mandatory provisions of the Regional, Town and Country Planning Act [Chapter 29:12].

2. That, the plaintiff's claim for payment by the defendant of reasonable rentals and holding over damages be and is hereby dismissed with costs.

3. That, the plaintiff be and is hereby ordered to pay to the defendant the sum of $125,000 being compensation for improvements effected by the defendant on the plaintiff's property.

4. That, the prescribed rate of interest be levied on the amount under (3), supra, with effect from 24 June 2015 to the date of full payment.

5. That, the plaintiff pays costs of suit.

The part under appeal relates to paragraphs 3, 4 and 5 of the order. The appellant is also aggrieved by the court a quo's failure to pronounce itself on the claim for eviction in that order.

THE FACTS

The facts that are relevant to this appeal are common cause. The appellant sadly passed away on 24 August 2019, before the appeal was heard. He was, by order of this Court, substituted, on 22 July 2020, by his duly appointed executor dative, who also happens to be his son.

The appellant is the registered title holder of Umguza 100 Acre Lot 5A in the District of Bulawayo measuring 67,2123 hectares held under Deed of Transfer No.74/91 (the immovable property). It is situated in the outskirts of Bulawayo and falls under the administrative jurisdiction of the Umguza Rural District Council.

On 17 August 2000, the appellant sought, but failed, to obtain a sub-division permit for the property into units of less than five (5) hectares. The responsible authority adjudged any plots that were less than five (5) hectares not to be viable for agriculture.

The respondent resided on a fully developed six (6) acre plot in the vicinity of the appellant's immovable property.

On 12 January 2010, in anticipation of an agreement of sale to be consummated with the appellant, the respondent sold his plot for the sum of R225,000.

On 26 January 2010, the parties concluded a written agreement for the sale of 10 acres (4,047ha) of the immovable property (the plot) for the sum of US$20,000.

A deposit of US$10,000 was to be paid before the respondent could take occupation.

The balance was payable at the rate of US$2,000 per month from 1 May 2010.

The other terms and conditions of the agreement were that the respondent would “pay the cost of all transactions connected with the transfer of the property, all charges of capital gains, and draw electric power to the homestead of the seller.”

The respondent duly paid the deposit and took occupation on 1 April 2010.

His building plans were approved by the Umguza Rural District Council on 3 April 2010. He constructed a three bedroom cottage and a four bedroom main house in 2010. In 2011, he installed electricity infrastructure for his two dwellings and the appellant's homestead but only drew electricity to his dwellings. He flushed a borehole previously sunk by the appellant, constructed two (2) septic tanks and two (2) blair toilets. He also put up a perimeter fence around “his” plot.

It was common cause that he expended the total sum of US$34,158=75 and R2,220 on these developments.

The relationship between the appellant and the respondent deteriorated soon after the respondent took occupation of the property.

The appellant refused to accept the instalments tendered by the respondent and demanded that the respondent keep his money while he kept his land.

The respondent tendered the balance of the purchase price, and, when it was rejected, he issued summons for specific performance in HC491/11.

Thereafter, with the help of their legal practitioners, a compromise was reached between the parties but was not honoured.

In the result, the appellant then sued the respondent for the payment of the balance of the purchase price, in the sum of US$10,000, in HC2828/12.

During this tumultuous period, unbeknown to the respondent, the appellant sought to regularize the sale of the plot by applying for a subdivision permit to the department of Physical Planning Offices in Bulawayo on 10 January 2011.

It was only in or about October 2012 that the respondent became aware that the appellant did not have a sub-division permit entitling him to subdivide the immovable property and sell the plot.

On 27 February 2013, acting on the appellant's request, the respondent paid US$550 to the appellant's former legal practitioners for the processing of a belated sub-division permit.

Notwithstanding that the immovable property measured 67,2123ha, a permit for the subdivision of the immovable property into two Stands measuring 4,047 and 37,6961 hectares was duly issued on 29 April 2013.

The permit, however, turned out to be a fake document.

Acting on the erroneous belief that the permit was genuine, on 6 June 2013 and 30 January 2014, the respondent paid US$5,000 and US$4,000, respectively, towards the purchase price.

The respondent, therefore, paid to the appellant a total sum of US$19,000 for the purchase of the plot.

He, in addition, expended US$34,158=75 and R2,220 in the development of the immovable property.

By the time a pre-trial conference was held a quo, both parties had withdrawn their earlier actions against each other.

THE PARTIES RESPECTIVE CLAIMS IN THE COURT A QUO

At the pre-trial conference, the parties agreed, inter alia, that their agreement of sale was invalid and illegal for breaching section 39(1)(i) and section 40 of the Regional, Town and Country Planning Act. This was because it had been concluded without a subdivision permit.

Consequently, the appellant tendered the purchase price of US$19,000 and sought the eviction of the respondent from the plot.

He also claimed an ascertainable amount for unjust enrichment for the period of the respondent's stay to the date of his eviction.

The quantum for the enrichment claim was based on what the appellant perceived to be the reasonable rentals that the respondent would have paid for the occupation of the property.

He, therefore, claimed US$18,000 for the occupation of the plot from March 2010 to April 2015 and “holding over damages at the rate of US$10 per day…, from 1 May 2015 to the date of vacation” and costs on the higher scale.

The respondent contested the action.

He disputed being unjustly enriched and averred, that, he was a bona fide occupier by virtue of the invalid agreement. He also averred, that, in the absence of a lease agreement, the appellant did not have a valid cause of action for the payment of reasonable rentals and holding over damages.

He, in turn, counter claimed for unjust enrichment for the improvements he had made on the immovable property.

He averred that the appellant was enriched at his expense by these improvements.

He further alleged that the appellant was enriched by the payment of US$19,000 towards the purchase price and US$550 for the procurement of the subdivision permit.

The respondent, therefore, sought the repayment of the denominated amounts; a refund of the expenses incurred in erecting the electricity infrastructure; and the depreciated replacement cost (being the current cost of reproduction or replacement of an asset less deductions for physical deterioration, obsolescence and optimization) of the improvements he made on the plot.

He specially entreated the court to award him “such payments as will be sufficient to enable the defendant to purchase a property of comparable value including all the improvements he had effected.”

He also sought interest at the prescribed rate from the date of summons to the date of payment in full and costs on the higher scale.

In his plea to the counter-claim, the appellant, again, tendered the refund of US$19,000.

He disputed to being unjustly enriched by the developments made by the respondent on the immovable property. He averred, that, the respondent had failed to draw electricity to his homestead and had fraudulently facilitated the issuance of the fake permit. He also alleged that the respondent's dwellings were constructed without his authority and that he was therefore a mala fide occupier. Lastly, he stated that these dwellings would not be useful to him.

The two issues referred to trial a quo where whether or not:

1. The appellant was entitled to a reasonable rental arising from the respondent's occupation of the plot; and

2. The defendant has been unjustly impoverished, and plaintiff unjustly enriched, as a result of the alleged developments made by the defendant upon the plot; and, if so, the quantum thereof.

THE FINDINGS OF THE COURT A QUO

The court a quo confirmed the invalidity of the agreement of sale on the ground that it was contrary to the mandatory dictates of sections 39(1)(i) and 40 the Regional, Town and Country Planning Act.

The confirmation was in accordance with established authority emanating from this Court in such cases as X-Trend–A Home (Pvt) Ltd v Hoselaw (Pvt) Ltd 2000 (2) ZLR 348 (S) and City of Gweru v Kombayi 1991 (1) ZLR 333 (S).

It held, on the authority of Magodora & Ors v Care International Zimbabwe 2014 (1) ZLR 397 (S)…, that a lease agreement could not possibly be extrapolated from the invalid agreement of sale; and, resultantly, dismissed the claim for rentals and holding over damages sought by the appellant in the main.

It is clear from a reading of the judgment, that, the court a quo did not relate the request for reasonable rentals and holding over damages to the appellant's own enrichment claim against the respondent.

The appellant pleaded such a cause of action.

He testified during the trial, that, the respondent derived benefit from the farming activities he conducted on the plot. He also asserted that another benefit that accrued to the respondent was in the form of rental savings that he would have been obliged to pay elsewhere but for his stay on the plot.

These assertions were not, and could not, be controverted by the respondent.

However, it appears that counsel for the appellant misconceived the appellant's case and did not pursue the claim to fruition.

The court a quo, on the basis of credibility findings and the probabilities of the case, further found the respondent to have been a bona fide occupier and the appellant a mala fide seller.

Consequently, it relaxed the in pari delicto rule in favour of the respondent.

It, thus, held that the appellant had been unjustly enriched at the expense of the respondent, who was concomitantly impoverished by the transaction.

The court a quo, therefore, upheld the respondent's counter claim.

In computing the measure of the benefit that accrued to the appellant, the court a quo applied the pari delictum rule.

In the exercise of its broad discretion, it relaxed the pari delictum rule in a bid to do justice between the two protagonists.

It had no difficulties in finding the appellant to have been enriched in the sum of US$19,550 constituted by the payments towards the purchase price and the facilitation of the procurement of the sub division permit.

The correctness of this finding is beyond question.

After all, the appellant did not retract his tender of US$19,000, and conceded the payment of US$550 for the stated purpose.

The parties disagreed on whether or not the respondent was entitled to compensation for the improvements that he made on the immovable property.

The appellant submitted a quo that the respondent was not entitled to the value of the improvements:

(i) Firstly, because the respondent had not properly framed them under the enrichment cause of action in his pleadings.

(ii) The second was that the improvements were not, nor would they be, useful to him.

He, in any event, agitated for their urgent removal from his property.

The court a quo held, that, while on the pleadings, the cause of action for the improvements was poorly and inelegantly framed, the respondent had obliquely included them in his enrichment cause.

Further, that the purported defective pleadings had, in any event, been amplified and cured:

(i) Firstly, by the inclusion of the developments in the second issue referred to trial at the pretrial conference; and

(ii) Secondly, by the overwhelming evidence adduced by the respondent at the trial together with the scope and tenor of the questions asked and answers rendered during cross examination.

The court a quo also held, on the authority of Reza v Nyangani 2001 (1) ZLR 202 (S)…, that usefulness was to be measured objectively, and not subjectively, on the basis of added value.

It, therefore, found the improvements to be objectively useful to the appellant. It also found that they could not be removed because they were fixed to the immovable property.

The court a quo estimated the added value of the improvements at $125,000 and not US$132,833=33 claimed by the respondent.

It adopted the lowest depreciated replacement value of $90,000 provided in one of the three valuation reports produced in January 2018. The court a quo then added the depreciated replacement value of the plot, estimated in two of the valuation reports at $35,000, to this figure.

It, therefore, awarded the aggregate amount of $125,000 to the respondent as a fair and equitable amount that adequately represented the enrichment that accrued to the appellant and constituted his concomitant impoverishment.

Lastly, the court a quo declined to immediately evict the respondent from the immovable property on two grounds:

(i) The first was that he had a real improvement lien on the property, dischargeable on full payment of the award.

(ii) The second was that the respondent had invested all the resources he had on the plot.

To evict him from the plot, empty-handed, would not only be intolerable, but, would consign him and his family to the indignity of homelessness and destitution.

I quote below the concluding remarks of the court a quo in this regard. At p15 of its cyclostyled judgment, it stated that:

“This Court firmly believes that this is a proper case to exercise its discretion in the interest of equity and fairness by ordering that the defendant be evicted only upon payment of the full compensation ordered by the court per the defendant's counter-claim. This is mainly because the defendant has a real lien over the portion of the land in issue.”…,.

Notwithstanding the firm belief, the court a quo omitted to make the contemplated order of eviction in the final order that issued.

THE GROUNDS OF APPEAL

The appellant initially raised six grounds of appeal. At the commencement of the appeal hearing, in Bulawayo, counsel for the appellant moved for the deletion of the second ground of appeal and the amendment of the fourth ground.

Counsel for the respondent did not oppose the amendments.

We, accordingly, granted the amendments by consent of the parties.

Resultantly, the following five grounds of appeal remained in contention:

1. The Honourable Court a quo misdirected itself in law in holding, that, despite the respondent's failure to plead unjust enrichment with regards to the improvements upon the property at issue, such failure to specifically plead unjust enrichment was curable by the evidence.

2. The court a quo misdirected itself at law by failing to order either for or against the appellant on a claim of eviction of the respondent from the appellant's land when such a claim was put before the court a quo for determination by that court.

3. The court a quo misdirected itself in its application of the law in awarding what amounts to contractual damages in the relaxation of the in pari delicto principle in that the court a quo relied on valuations provided by the respondent, when, in fact, the court a quo could only have relied on the actual proof of expenditure upon such land having been pleaded and proof provided.

4. The Honourable Court a quo erred in ordering that interest on the judgment debt be paid by the appellant from 24 June 2015, when, in fact, the valuation relied upon for the monetary award in issue was done in 2018.

5. The Honourable Court a quo misdirected itself at law by ordering that the appellant pays the costs, when, in fact, the appellant was partially successful in the court a quo.

The relief sought from these grounds of appeal was:

(i) Firstly, that the appeal succeeds with costs.

(ii) Secondly, that the judgment a quo be altered by setting aside the paragraphs relating to the payment of the sum of $125,000, interest, and costs. These were to be substituted by an award for the payment of the purchase price paid of $19,000 and the actual expenditure proved to have been incurred in the improvements to the immovable property in the sum of $34,158=75 and ZAR2,220. The interest on these sums was to run from the date of the order and each party was to bear his own costs.

The appellant further sought the inclusion of an order of eviction to the substituted order.

THE ISSUES FOR DETERMINATION

The issues that arise from the grounds of appeal are these:

1. Whether or not the court a quo erred in finding that the respondent had proved his case and was therefore entitled to damages for unjust enrichment.

2. Whether or not the court a quo erred in relaxing the pari delicto rule and in awarding the respondent compensation in the nature of contractual damages.

3. The date on which interest should commence to run and the appropriateness of a cost order against the appellant a quo.

THE CONTENTIONS BEFORE US

During counsel for the appellant's oral submissions, it appeared to the court that the parties required an opportunity to attempt settlement of the matter. Counsel for the respondent was amenable to such a course of action.

The parties requested for a period of three (3) weeks to pursue the attempt at settlement.

We accorded them the opportunity to do so. The matter was accordingly postponed for continuation in Harare on 24 August 2020.

The attempt at settlement was, however, not successful.

The appeal proceeded in Harare.

Mr G Ndlovu, substituted Mr Masiye-Moyo as counsel for the appellant at the resumed hearing.

Counsel for the appellant made the following submissions:

That, the court a quo erred in awarding compensation for improvements under the enrichment cause in circumstances where the respondent had not specially pleaded such a cause.

While he conceded that the respondent had, in oral testimony, specifically premised his claim for compensation for the improvements on unjust enrichment, he argued that oral testimony could not, in law, cure such a glaring defect in his pleadings.

We directed counsel for the appellant's attention to the averments, as amended by consent of the parties at the hearing a quo on 16 January 2018, embodied in paragraphs 3, 4 and 5 of the respondent's counterclaim (on p40 of the record of proceedings) and paragraph 4.1 of his replication to the appellant's plea in reconvention (on p48 of the record of proceedings).

Counsel maintained, that, these averments did not specifically plead unjust enrichment in respect of the improvements but only did so in regard to the purchase price and the amount paid to procure the subdivision permit.

Counsel for the appellant further argued, that, as no contractual rights could ever arise or be enforceable from an illegal agreement, it was incompetent:

(i) Firstly, for the respondent to pray for “contractual damages” under an enrichment claim; and

(ii) Secondly, that while the court a quo correctly relaxed the in pari delicto principle in this case, it was also incompetent for it to award such “contractual damages” to the respondent.

The court a quo had done so, the argument went, by awarding compensation which included the amount of money that the respondent would require to purchase a piece of land similar in size to the one he had lost; and, by further awarding an aggregate sum which would enable the respondent to erect structures of an equivalent value to the improvements.

He contended, that, an award of compensation based on improvements was limited to the actual expenses incurred by the respondent.

He also contended, that, it was against public policy, and therefore improper, for any court of law to accord judicial recognition to and approval of an illegal and void agreement. To do so would undermine the tenets of public policy upon which the in pari delicto principle was premised.

Lastly, he conceded that an improvement lien constituted part of our law.

He, however, argued that such a right of retention could not avail any party whose improvements flowed from an illegal agreement.

Concomitantly, the court a quo, therefore, misdirected itself in failing to grant the order of eviction to the appellant.

Counsel for the respondent made contrary submissions:

(i) Firstly, he contended that the respondent had actually pleaded unjust enrichment not just for the actual expenditure he incurred in purchasing the plot, in procuring the permit, and drawing electricity to the appellant's homestead, but, also for the improvements.

(ii) Secondly, that, on the authority of Reza v Nyangani 2001 (1) ZLR 202 (S) and Derby Farms (Pvt) Ltd v Chirunga HH82-07…, once the court relaxed the in pari delicto rule it had the further discretion to do justice between the parties by awarding an equitable amount of the value added by the improvements. In so doing, the court could consider the real and not the nominal value of the improvements.

He argued, that, in Reza v Nyangani 2001 (1) ZLR 202 (S), this Court had ignored the exact expenditure that had been incurred in favour of the depreciated replacement value of the improvements. This was because, by the time the dispute was adjudicated, the actual expenses were too negligible while the depreciated replacement value, which catered for the fall in the value of money, represented the fair and equitable value added to the property by the improvements.

He, therefore, contended, that, the respondent was entitled to the value added to the immovable property by the improvements and not just the actual expenditure he had incurred.

Hence, his submission that the correct value added to the immovable property by the improvements was constituted by the depreciated replacement value of such improvements.

Finally, he submitted that the invocation of the improvement lien was again an exercise of the court's discretion, which the appellant had not, and could not, impugn on any of the irrationality grounds known to our law articulated in the case of Hama v National Railways of Zimbabwe 1996 (1) ZLR 664 (S).

He, however, conceded, in exchanges with the court, that the court a quo failed to capture the conditional eviction of the respondent in the operative part of its order.

He entreated us to exercise the powers conferred on the Supreme Court by section 22(1)(b)(ix) of the Supreme Court Act [Chapter 7:13] to “correct” the order and achieve justice between the parties.

In reply, counsel for the appellant, argued that both this Court and the High Court had adopted the depreciated replacement value in decided cases because of the endemic hyperinflation that characterized the local economy at the time.

He sought to distinguish the two cases cited by counsel for the respondent from the present case on the basis, that, this country did not experience similar inflationary pressures but was stable between 2010, when the actual expenses were incurred, and 2019, when the enrichment order was granted.

Counsel for the appellant, however, conceded that this Court could, in terms of section 22(1)(b)(ix) of the Supreme Court Act, correct the omission to grant the conditional eviction in the operative part of the order of the court a quo rather than remit the case for this to be done.

THE LAW

The requirements for an action of unjust enrichment were set out by ZIYAMBI JA in Gamanje (Pvt) Ltd v City of Bulawayo SC94-04…, in the following terms:

“The requirements for an action for unjust enrichment are:

(i) Firstly, that the defendant has been enriched by the receipt of a benefit;
(ii) Secondly, that he has been so enriched at the expense of the plaintiff;
(iii) Thirdly, that the enrichment is unjustified (in the sense that it would be unjust to allow the defendant to retain the benefit);
(iv) Fourthly, that the enrichment must not come within the scope of one of the classical enrichment actions; and
(v) Fifthly, there must be no positive rule of law which refused an action to the impoverished person.

See Industrial Equity v Walker 1996 (1) ZLR 269 AT P 300; See also Wille's Principles of South African Law, 8th edition, at pp633-5.”

To the same effect is Du PLESSIS in his seminal work The South African Law of Unjustified Enrichment, Juta, 2012…, where he writes that:

“To succeed with a claim based on unjustified enrichment, the plaintiff must meet four general requirements, or, as it is sometimes said, four general elements of enrichment liability have to be present. (i) First, the defendant must be enriched;
(ii) Secondly, the plaintiff must be impoverished;
(iii) Thirdly, the defendant's enrichment must be at the plaintiff's expense; and
(iv) Finally, the defendant's enrichment must be unjustified, which means that it must be without legal ground (sine causa).”

ANALYSIS AND APPLICATION OF THE LAW TO THE FACTS

Whether or not the court a quo erred in finding that the respondent had proven his case and was therefore entitled to damages for unjust enrichment

In the court a quo, and in this Court, the appellant conceded that the respondent had pleaded and proved unjust enrichment in respect of the part payment of the purchase price in the sum of US$19,000.

Counsel for the appellant, however, argued a quo, and in this Court, that, the respondent was not entitled to the measure of enrichment based on the valuations produced a quo:

(i) Firstly, because unjust enrichment was not specifically pleaded and could not, as held by the court a quo, be properly cured by evidence.

(ii) Secondly, because the award granted a quo was for contractual damages and not for unjust enrichment.

The law on what constitutes a cause of action is settled.

A cause of action is simply a factual conspectus, the existence of which entitles one person to obtain from the court a remedy against another person. In other words, it is an entire set of facts upon which the relief sought stands: see Peebles v Dairiboard (Private) Limited 1999 (1) ZLR 41 (H)…, and Abrahamse & Sons v SA Railways and Harbours 1933 CPD 626…,.

To determine whether the respondent raised an enrichment cause on the improvements, regard must be had to his plea to the appellant's declaration in the main matter, and to the subsequent averments he made in his counterclaim.

The facts pleaded by the respondent, upon which his relief rested appear in paragraph 10.2 of his plea and paragraph 3 of the appellant's replication in convention; paragraphs 2, 3, 4 and 5 of his counterclaim, as amended on the first day of trial a quo (16 January 2018). It is also necessary, for completeness, to refer to paragraph 1 of the appellant's plea to the counter-claim and paragraph 1 of the respondent's replication.

I set these below:

“RESPONDENT'S PLEA IN CONVENTION

10.2 The defendant avers that if the contract were to be found to be null and void then he stands to be prejudiced and the plaintiff to be unjustly enriched, because, in pursuit of his obligations in terms of the sale, he had built a house on the land, paid US$19,000 to the plaintiff, commenced to draw electricity to the plaintiff's homestead, and, through his own funds, facilitated the issue of a subdivision.

WHEREFORE, the defendant prays for the dismissal of the plaintiff's claims with costs on the punitive scale.

In the event, however, that the Honourable Court holds that the agreement is null and void, then, the defendant prays that the plaintiff be ordered to compensate the defendant in such sum of money as at the time of judgment would be sufficient for the defendant to acquire a property of comparable value including all improvements effected by the defendant on the land in issue, a refund of the money spent in drawing electricity for the plaintiff's benefit, and money spent in procuring a subdivision permit.

RESPONDENT'S COUNTERCLAIM

1….,.

2. On 26 January 2010, the parties entered into an agreement of sale wherein the plaintiff sold and the defendant purchased an undeveloped piece of land identified in the agreement of sale as 'a portion of land 10 acres in extent being part of Plot 5A 100 Acres Lot, Bulawayo'.

3. In pursuit of his obligation in terms of the agreement of sale, the defendant paid to the plaintiff the total sum of US$19,000, and, inter alia, for the benefit of the plaintiff, commenced drawing electric power to the defendant's homestead and paid for the procurement of a subdivision permit by the plaintiff.

4. The defendant avers, that, the plaintiff has been unjustly enriched at his expense in that the defendant paid to the plaintiff the sum of US$19,000 which the plaintiff accepted, and further commenced to draw electricity for the benefit of the plaintiff, and paid to the plaintiff US$550 to procure or cause the procurement of a sub-division permit at his expense.

5. The defendant, as he is entitled to do, had developed the piece of land and he will be unfairly prejudiced if the improvements were to accrue to the plaintiff without any compensation from him.”

THE APPELLANT'S REPLICATION IN CONVENTION

Ad paragraph 10.2

Plaintiff denies that he stands to be unjustly enriched from the property built by the defendant and avers that:

3.1 Defendant built the property contrary to a warning against such development by the plaintiff.

3.2 Plaintiff has no use for the property so built by the defendant as he already has other plans with regards to the use of the land upon which the defendant built the property.

THE APPELLANT'S PLEA TO THE COUNTERCLAIM

1. There is no cause of action disclosed in the counter-claim.

THE RESPONDENT'S REPLICATION TO THE COUNTERCLAIM

1. Ad para 1

This is disputed. The defendant's cause of action is founded on a claim of unjust enrichment.

Ad para 4

4.1 The defendant will accept payment in the sum of US$19,550 and persist in its claim for damages as contained in the counterclaim.”…,.

The above pleadings clearly show, that, the respondent specifically pleaded to an enrichment claim in respect of improvements in defence to the main action, but, did not specifically carry this through to the counterclaim.

The substance of the enrichment cause is, however, embodied in paragraph 5 of the counterclaim.

The deliberate use of choice words such as 'developed piece of land' 'improvements' 'unfairly prejudiced' 'accrued to plaintiff without compensation' connote a direct benefit to the appellant at the expense of the respondent and clearly encapsulate all the four requirements of an enrichment cause recognised in our law.

I am satisfied that the court a quo's finding, that the respondent did plead unjust enrichment in his counterclaim, is unassailable.

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

THE FACTS

THE PARTIES RESPECTIVE CLAIMS IN THE COURT A QUO

THE FINDINGS OF THE COURT A QUO

Notwithstanding the firm belief, the court a quo omitted to make the contemplated order of eviction in the final order that issued.

THE GROUNDS OF APPEAL

THE ISSUES FOR DETERMINATION

THE CONTENTIONS BEFORE US

THE LAW

ANALYSIS AND APPLICATION OF THE LAW TO THE FACTS

Whether or not the court a quo erred in finding that the respondent had proven his case and was therefore entitled to damages for unjust enrichment

Whether or not unjust enrichment exists is a factual finding: see Evans v Rapper SC55-04…,.

In the present matter, the court a quo made the factual finding that the appellant had been enriched at the expense of the respondent and was therefore entitled to recoup the value of the enrichment.

That finding has not, and on the facts, cannot be impeached by the appellant.

The existence of the improvements was not disputed a quo. Nor were the valuation reports, on which they are all itemized, controverted.

Indeed, the appellant accepted, that, the respondent expended US$34,158=87 and R2,220 in making the improvements.

I am satisfied, that, the court a quo correctly found that the respondent had proved his case for unjust enrichment on a balance of probabilities.

It seems to me, therefore, that the first ground of appeal was misconceived and cannot succeeded.

SC09-22 : MOVEMENT FOR DEMOCRATIC CHANGE (TSVANGIRAI) and DOUGLAS MWONZORA and DR THOKOZANI KHUPE vs LILIAN TIMVEOS and THABITHA KHUMALO and OTHERS
Ruled By: GUVAVA JA, MAKONI JA and CHITAKUNYE JA

In Nzara Others v Kashumba Others SC18-18 this Court reiterated the need for a court to adhere to issues placed before it and not to go on a frolic of its own on issues not motivated by the parties. At page 13-14 of the cyclostyled judgment, ...

Appealed
SC31-22 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY CALLAGHAN and MILLICENT CALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

This is an appeal against the whole judgment of the High Court (court a quo) dated 18 October 2018. The court a quo granted an application for absolution from the instance made jointly by the respondents, granted claims in reconvention, and ordered the appellant to pay costs of the counterclaims on a legal practitioner and client scale.

The court a quo erred in this regard and the appellant was correctly aggrieved by the judgment of the court a quo.

There is no evidence in the record that the first, third, fourth, fifth, sixth, and seventh respondents (Formscaff (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) had filed counterclaims and the court a quo erred in granting counter claims that were not before the court.

Although the second respondent was properly before the court a quo, the requirements for the grant of absolution from the instance were not met.

Accordingly, the judgment must be vacated. I set out hereunder the reasons for this finding.

BACKGROUND FACTS

The appellant is a registered commercial bank operating in Zimbabwe. The first respondent is a private company registered in accordance with the laws of Zimbabwe. The third to seventh respondents (Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) are private individuals who bound themselves as sureties and co-principal debtors in respect of a loan granted to the first respondent. The second respondent is a private limited company duly incorporated in Zimbabwe.

The appellant issued summons against the respondents on 13 March 2017 for the payment of US$368,706=62 being capital and US$20,654=10 being interest on the sum of US$368,706=62 at the rate of 18% per annum, which rate was subject to change from time to time, with effect from 26 November 2016 to date of payment in full and costs of suit on a legal practitioner and client scale.

At the commencement of trial, by consent of the parties, the claim was amended to read as follows:

“(i) By deletion of the capital amount of US$368,706=62 and the substitution thereof with the amount of US$361,034=23.

(ii) By deletion of the interest amount of US$20,654=10 and the substitution thereof with the amount US$28,246=49.”

The total amount claimed by the appellant amounted to US$389,362=72.

In its particulars of claim, the appellant averred that in or around November 2015, the appellant and the first respondent entered into an agreement in terms of which the appellant extended to the first respondent a loan for the sum of US$373,000.

The loan was accessed through the first respondent's operating account and was for the purpose of assisting the first respondent in financing its working capital requirements.

Interest was to accrue on the facility at the rate of 12% per annum subject to change from time to time and 18% per annum in the event of default by the first respondent in making due and punctual payment of any instalment.

The loan advanced was repayable to the appellant as follows:

“(a) US$2,000 on the 30th November 2015;

(b) US$1,500 on the 30th December 2015;

(c) US$2,000 on the 30th January 2016; and thereafter

US$15,200 per month with effect from the 28th of February 2016 until full payment.”

It was a term of the agreement, that, in the event of the first respondent defaulting in making due and punctual payment of any instalment, the total outstanding amount would immediately become due and payable.

The second, third, fourth, fifth, sixth and seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) bound themselves jointly and severally as sureties and co-principal debtors with the first respondent for payment of any and all monies due to the appellant.

The respondents defaulted in making due payment of the loan under the agreement giving rise to the total outstanding amount claimed by the appellant of US$389,362=72.

All the respondents jointly entered an appearance to defend, and, in their plea, denied that the amount claimed by the appellant arose from the agreement dated 2 November 2015.

The first respondent denied owing the appellant any money as it argued that the loan advanced through the loan agreement was repaid in full on the 30th of December 2015. The first respondent further denied owing the appellant any interest under the loan facility and maintained that the appellant actually recovered more interest from it than was lawfully due.

The second to the seventh respondents (Penniwill (Pvt) Ltd, Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) averred that all the suretyship deeds held by the appellant were void for vagueness as they covered an unlimited liability. They contended, that, a suretyship deed must contain a limit in monetary terms so as to be valid.

The second respondent (Penniwill (Pvt) Ltd) averred that the deed of suretyship between it and the appellant was void as it was not authorised by its Board of Directors.

The first respondent (Formscaff (Pvt) Ltd) further stated, that, the acknowledgment of debt executed by it in favour of the appellant was unenforceable as it was not signed by its representatives.

The second respondent (Penniwill (Pvt) Ltd) also averred, that, it never authorised the registration of a mortgage bond in favour of the appellant over its property known as Subdivision A of Subdivision H of N'Thaba of Glen Lorne situate in the District of Salisbury held under Deed of Transfer number 1998/95 ('the property').

Together with its plea, the second respondent (Penniwill (Pvt) Ltd) filed a claim in reconvention against the appellant and averred, that, the appellant fraudulently procured a suretyship and mortgage bond in its favour over the second respondent's property. The second respondent prayed that the suretyship deed and mortgage bond be cancelled.

The appellant entered a plea against the claim in reconvention and denied all the averments made by the respondents.

On 30 May 2017, the third to seventh respondents (Rodney Callaghan, Millicent Callaghan, Charles Cannings, Clifford Johnson and Lesley Bennet) indicated their intention to apply to amend their pleas and file a claim in reconvention at the pre-trial conference.

The amendments sought alleged that all the respondents purported suretyships had expired by effluxion of time, having been signed more than three years before the loan was granted. It was also averred, that, the suretyships were in contravention of section 12 of the Moneylending and Rates of Interest Act [Chapter 14:14] ('the Moneylending Act') and, as such, were invalid and unenforceable.

In the proposed claim in reconvention, the third to seventh respondents sought an order that their respective suretyships be declared null and void.

The second, third and fourth respondents (Penniwill (Pvt) Ltd, Rodney Callaghan and Millicent Callaghan) prayed that the mortgage bonds in their names be cancelled.

There is, however, no evidence in the record that the amendment was ever granted at the pre-trial conference or at the trial.

On 27 July 2017, the parties signed a Joint Pre-Trial Conference Minute and the issues for determination by the court a quo were stated as follows:

“1. Whether 2nd, 3rd, 4th, 5th, 6th, and 7th Defendants Deeds of Suretyship are valid and enforceable.

2. Whether 2nd Defendant's 1st and 2nd Mortgage Bonds (numbers 1557/13 and 1656/13) in favour of Plaintiff are valid and enforceable or whether they should be cancelled.

3.Whether 1st Defendant is indebted to Plaintiff under the Loan Agreement dated 2 November 2015 in the sums of US$368,706=62 as capital and US$20,654=10 as interest, and, was there novation or termination of the loan agreement.

4. Whether 1st, 2nd, 3rd, 4th, 5th, 6th and 7th Defendants, jointly and severally, one paying the others to be absolved, are indebted to Plaintiff as alleged or at all.”...,.

The court a quo, in making its determination, found that the first and third to seventh respondents made claims in reconvention as to the invalidity of the sureties in their names.

However, as submitted by counsel for the appellant, these respondents did not make any claims in reconvention in their pleas. The claim in reconvention which is in the record relates only to the second respondent.

No amendment to the claim in reconvention was made to show that this was to cover all the respondents.

As such, the court a quo was clearly wrong and made a determination on an issue which was not properly placed before it.

Rule 121(1) of the High Court Rules provides that:

“A claim in reconvention shall be so described and shall be bound and filed with the defendant's plea.”

Only the second respondent properly made its claim in reconvention in its plea. The rest of the respondents only filed a notice of application to amend their pleas and claims in reconvention on the 30th of May 2017.

The respondents notice stated, that, at the pretrial conference, the respondents would apply to amend the pleas and make claims in reconvention. The record does not reflect whether or not the application for an amendment was motivated and if it was granted. More specifically, there is no order in the record to show that the amendment was granted at the pre-trial conference. The Pre Trial Conference Minute is also silent on this issue.

It seems to us that the court a quo could not make any finding on claims which were never raised in the papers before it by the respondents.

A court must determine a matter based on the papers and evidence placed before it by the parties. It cannot go on a frolic of its own: see Nzara and Ors v Kashumba N.O. and Ors SC18-18…,.

The court a quo fell into error when it granted claims in reconvention which were not properly pleaded by the respondents....,.

The court a quo also erred in cancelling the surety and mortgage agreement in circumstances where there were no counter-claims filed by the third to seventh respondents seeking such relief.

SC32-22 : CUTHBERT DUBE vs PREMIER MEDICAL INVESTMENTS (PVT) LTD and PREMIER SERVICE MEDICAL AID SOCIETY
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

On 7 July 2021, the High Court (“the court a quo”) dismissed an application brought against the respondents by the appellant for want of prosecution with costs. It also ordered the appellant to pay the costs of the application brought by the first and second respondents for the dismissal of ...

THE FACTS

Both respondents are incorporated in terms of the laws of this country and are sister companies. The second respondent is a medical aid society while the first respondent is its investment vehicle.

For quite some time, the appellant was the second respondent's Chief Executive Officer, a position he vacated prior to the commencement of the proceedings forming the basis of this appeal.

On 27 March 2018, the appellant brought a court application in the court a quo for a declaratory order to the effect that he was the holder of ten million shares, representing a 20% shareholding in the first respondent. He also sought a declaration that the conduct of the first and second respondents, of regarding him as not being a shareholder, was unlawful, null and void and of no force or effect. He also sought costs on the scale of legal practitioner and client.

The basis of the application, as stated in the founding affidavit, was that the appellant had purchased the ten million shares of the first respondent on 29 July 2010. He attached a copy of a share certificate issued to him and signed by two directors of the first respondent whose names are not disclosed in the certificate.

While alleging that he paid for the shares, he did not produce proof of such payment.

According to the appellant, what prompted him to make the application for a declaratory order was the first and second respondents refusal to acknowledge him as the holder of the shares in question. This followed a meeting of the second respondent held on 21 May 2015 which resolved not to ratify the award of the 20% shareholding in the first respondent to the appellant.

On 11 April 2018, the respondents filed opposition to the application for the declaratory orders.

The opposing affidavit was deposed to by Jeremiah Bvirindi, the chairman of the Board of Directors of the second respondent, who denied that the appellant was ever a shareholder of the first respondent.

The respondents also took the view that there were disputes of fact and put in issue the circumstances under which the appellant had purported to acquire the shares at a time he was the Chief Executive Officer of the second respondent.

According to the respondents, the appellant obtained the share certificate he relied on “either illegally, fraudulently, or without following due process” as set out in the first respondent's Regulations.

Significantly, the respondents confirmed that the appellant had deposited a cheque of Z$6,585,672,555=75 into the second respondent's bank account.

The respondents view was that a mere deposition of the above amount in the Bank account was improper and motivated by fraudulent intent on the part of the appellant.

In any event, so the respondents argued, while the payment for the 15% shares (not 20%), should have been made on 25 April 2007, it was only made on 19 March 2008 when the amount had been ravaged by inflation rendering it inequitable to the value of the shares.

It was also the respondents case that the purported sale of the 15% shares and a donation of 5% shares to the appellant was done without the authority of the Board and/or the shareholders. The appellant took advantage of his position as the Chief Executive Officer to influence the sale to their prejudice.

It is common cause that the appellant did not act upon the notice of opposition filed by the respondents within the time allowed by the rules of court or at all. This prompted the respondents to file the initial application for dismissal of the application for want of prosecution under case number HC11129/18.

The application was opposed by the appellant and subsequently set down for hearing in March 2019.

Again, it is common cause that on the date of the hearing, following negotiations between the parties, the respondents withdrew the initial application for dismissal for want of prosecution. This was on the understanding that the appellant would purge his default by filing the outstanding pleadings in the main application and prosecute it.

He did not.

PROCEEDINGS IN THE COURT A QUO

When the appellant did not honour his undertaking to prosecute the main matter for about five (5) months, the respondents filed the second application for dismissal for want of prosecution in terms of Rule 236(3)(b) of the High Court Rules 1971 on 2 August 2019.

It is that application which forms the basis of the present appeal.

In the founding affidavit, again deposed to by the chairman of the Board of Directors of the second respondent, on behalf of both of them, the respondents stated, that, following their filing of their opposition on 11 April 2018, the appellant had neither filed an answering affidavit nor set the matter down for hearing.

The respondents chronicled the appellant's tardiness in the handling of his application which saw him failing to file heads of argument even in the initial application for dismissal.

They stated, that, even after being accorded the second chance to redeem himself, the appellant had snubbed the opportunity and done absolutely nothing until a second application for dismissal was lodged.

After stating that they had elected to file the application for dismissal for want of prosecution instead of setting the main matter down for hearing, as they are entitled to do in terms of the Rule, the respondents ended there.

They urged the court to grant the order for dismissal on that basis alone.

In opposing the application, the appellant took issue with the authority of the deponent of the founding affidavit to represent the respondents.

He contended that one person could not lawfully represent two separate artificial persons and that the resolutions relied upon by the respondents were invalid by reason that the signatories names were not declared.

His only explanation for the delay in prosecuting the application was that, to the knowledge of the respondents, he had “not been feeling well for a long time” which affected his ability to give instructions to his legal practitioners to file an answering affidavit.

The appellant insisted, that, he owns 20% shares in the first respondent and should be allowed to pursue his claim, otherwise his property rights would be infringed.

It is also important to note that the appellant made two assertions which have a bearing on the resolution of this appeal:

In paragraph 6 of his opposing affidavit, in response to the accusation that he had not filed an answering affidavit or taken steps to set the matter down, the appellant stated that:

“6. Ad para 8-9

These averments have been overtaken by events. On 19 August 2019, I filed my answering affidavit and heads of argument in HC2821/18. What remains is for the applicants herein, as respondents therein, to file their heads of argument.”

Regarding the question whether the respondents had made a good case for the relief sought, the appellant stated, at paragraph 8:

“8. Ad para 11-14

8.1. I do not accept that the applicants have met (sic) the case for the order they are seeking.

8.2. The founding affidavit does not advance any grounds for the court to exercise its discretion in favour of dismissal instead of determining the main matter on the merits. The applicants just want a dismissal because they are asking for it.”

The court a quo found that it was both convenient and logical for the deponent of the founding affidavit to represent the respondents as he had knowledge of the shareholding structure of the first respondent. In the court a quo's view a company has the liberty to authorize anyone it deems fit and proper to represent it in litigation.

It found that the delay in responding to the pleadings was evidence of the appellant's non-committal to finalize the matter, because, if it had been of importance to him, the appellant would have pursued the matter with diligence.

In the court a quo's view, the unsubstantiated claims of illness by the appellants were not an acceptable reason for the delay.

It granted the application for dismissal for want of prosecution.

PROCEEDINGS BEFORE THIS COURT

The appellant was aggrieved. He launched this appeal on the following grounds:

1. The court a quo misdirected itself and erred in law in not finding, in limine, that the respondents were not properly before it for the reason that the deponent to the respondents founding affidavit had no lawful authority to institute the proceedings on their behalf.

2. In dismissing the appellant's application under HC2821/18 for want of prosecution, the court a quo improperly exercised its discretion in that it only took into account one factor, namely, the reasonableness of the explanation for inaction, instead of also taking into account other mandatory factors such as possible prejudice to the respondents appellant's (sic), prospects of success on the merits, and the balance of convenience.

3. As an alternative to 2, the court a quo improperly exercised its discretion and erred in law in dismissing the appellant's application under HC2821/18 for want of prosecution without an analysis of, and application of its mind to all the mandatory factors to be taken into account before such dismissal.

4. With the court a quo having refused to take into account the established fact that the appellant's application under HC2821/18 had been ready for set down for a considerable period, its decision to dismiss the application for want of prosecution was so unreasonable that no reasonable court, applying its mind to the circumstances of the case, could ever have made such a decision.

5. The court a quo's finding that the appellant's explanation for the delay in prosecuting his application was inexcusable, was so unreasonable that no reasonable court, applying its mind to the circumstances of the case, could ever have made such a decision.

I mention, in passing, that, some of the five (5) grounds of appeal are repetitive and inconcise. They do not meet the threshold set by Rule 44.

As the issue was not raised with the parties at the hearing of the appeal, it shall not be considered in the determination of the appeal.

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

The appellant appealed to this Court on five (5) grounds of appeal most of which attacked the factual findings of the court a quo instead of the law as required by section 92F(1) of the Labour Act [Chapter 28:01].In terms of that section, an appeal lies from any decision of ...

SC39-23 : LINDA KOPECKY and MARK KOPECKY and TSHOLOFELO TRUST and DIANE THORNTON and SLIPPER SHELL INVESTMENTS (PVT) LTD vs CITY OF HARARE and SPIRIT LIFE CHURCH
Ruled By: BHUNU JA, MAKONI JA and MWAYERA JA

This is an appeal against the whole judgment of the Administrative Court handed down by MANDEYA J on 13 May 2022.After hearing submissions from counsel for the parties, the court dismissed the appeal with costs indicating that reasons for the order would be given in due course.These are the reasons.THE ...

This is an appeal against the whole judgment of the Administrative Court handed down by MANDEYA J on 13 May 2022.

After hearing submissions from counsel for the parties, the court dismissed the appeal with costs indicating that reasons for the order would be given in due course.

These are the reasons.

THE FACTS

The second respondent is the owner of a certain property known as No.1 Petersham Road, Malborough, Harare (the “property”). The appellants are residents of the neighbourhood within which the property is located. The first respondent is a Municipality, Local Planning Authority and an administrative body tasked with the mandate of rendering services to the residents of Harare.

The second respondent, on 9 December 2021, made an application to the first respondent for change of use of its property from residential to use as a church.

The application was opposed by the appellants who feared that the use of the property, as a church, would cause noise pollution thereby disturbing the peace and tranquillity of the neighbourhood. They accordingly filed their objections with the first respondent.

After considering the objections from the appellants, the first respondent granted the application subject to certain conditions. These conditions included, inter alia, a prohibition of the use of certain musical instruments in a way that would disturb the peace of other neighbours. The permit stipulated that the second respondent would construct a sound proof auditorium which was to be inspected by the first respondent's Department of Works.

PROCEEDINGS IN THE COURT A QUO

Dissatisfied by the decision of the first respondent, the appellants lodged an appeal in the Administrative Court (“the court a quo”).

They were challenging the decision of the first respondent on the basis, that, the provisions of the Regional Town and Country Planning Act [Chapter 29:12] (“the Act”) were not complied with before the application was granted. They averred, that, the second respondent neglected to provide all the relevant information required in applications of that nature, in particular, they alleged that it neglected to provide information relating to the external area to be covered by the building, the number of floors of the building, the extent and location of parking facilities for motor vehicles.

Furthermore, they queried the citation of the name of the second respondent in the application. They submitted, that, the Regional, Town and Country Planning Act requires that the owner of the property makes the application or it be done with the consent of the owner.

Their argument was that the owner of the property in question is Spirit Life Church International yet the application before the first respondent was launched by Spirit Life Church. It was their case that Spirit Life Church is a non-existent entity.

The appellants further argued, that, all the interested parties were not notified of the application for the change of use of the property. It was their case that the large number of people who would attend church service would result in noise pollution despite the stipulated precaution.

They contended, that, the permit did not make provision for the costs associated with connection of a sewer system for the church. They also argued, that, the application was granted after the time frame within which to consider it had lapsed.

In response to the appeal, the respondents argued, that, due process of the law was followed before the application was granted.

They disputed the allegation that the notice was not given to all the interested parties and that the application was considered out of time.

With regards to the citation of the second respondent, it submitted that the omission of the word 'International' did not render the second respondent non-existent. They argued that there was no confusion as to the identity of the second respondent.

Further, it was argued that the application form contained all the relevant information to enable the first respondent to consider the application.

The court a quo dismissed the appeal.

It found, that, the argument that the application was considered outside the time frame provided for by the law was unmeritorious as the timeframe was extended by a letter written by the second respondent to the first respondent dated 30 November 2021.

It also dismissed the argument that the respondent did not provide all relevant information. The court held that the application form was to be filled to the extent appropriate.

It found that all the interested parties were notified.

The court a quo dismissed the argument that the first respondent would incur additional costs associated with constructing a sewer line for the church on the basis that the appellants had not motivated that argument.

Aggrieved by the decision of the court a quo, the appellants appealed to this Court on the following grounds:

GROUNDS OF APPEAL

1. The court a quo misdirected itself when it determined the matter on the mistaken basis that the party that had applied for the permit had granted an extension of the period during which the first respondent herein was obliged to determine that application.

2. The court a quo erred when it failed to determine that the second respondent's failure to provide the information that was required under sections 10, 11 and 12 of the application form invalidated the application on the basis that it violated the peremptory provisions of section 26(1) of the Regional Town and Country Planning Act.

3. The court a quo erred when it failed to determine that the application for the development permit was invalid for the reason that the purported applicant therein, Spirit Life Church, does not exist.

4. The court a quo erred when it failed to determine that the permit that was purportedly granted to the second respondent was invalid for failing to make a provision for the cost of connecting the proposed development to the sewer line.

5. The court a quo erred when it failed to nullify the permit on the basis that the same had been granted on the basis of falsehoods which were contained in the application.

RELIEF SOUGHT

The appellants pray that the appeal be allowed with costs and the decision of the court a quo be set aside and substituted with a decision setting aside the decision of the first respondent to grant the permit, and, that the first respondent dismisses the application for the permit. They also prayed for costs of suit.

ISSUES FOR DETERMINATION

(1) Whether or not the court a quo erred in failing to find that due process was not followed before the first respondent granted the permit to the second respondent.

(2) Whether or not the incorrect citation of the name of the second respondent, in the application before the first respondent, was fatal.

PROCEEDINGS BEFORE THIS COURT

APPLICATION OF THE LAW TO THE FACTS

(1) Whether or not the court a quo erred in failing to find that due process was not followed before the first respondent granted the permit to the second respondent

In motivating the appeal, counsel for the appellants argued, that, section 26(1) of the Regional, Town and Country Planning Act was not complied with in that the second respondent omitted to fill in Part 2 and 3 of the application form. His argument was that the permit was granted in the absence of all the relevant information required.

He further argued, that, the application was made by a non-existent entity.

His argument was that the Regional Town and Country Planning Act makes it clear that the application ought to be made by the registered owner of the property or with the consent of the owner.

He based his argument on the authority of John v Delta Beverages Ltd SC40-17 wherein it was held, that, the omission of the word “Pvt” was fatal as there was no party called Delta Beverages Ltd.

Further, he submitted that the permit was a nullity as it did not make provision for the costs associated with construction of a sewer system.

In response, counsel for the first respondent argued, that, section 26(1) of the Regional Town and Country Planning Act does not prescribe the information that ought to be contained in the application form. He submitted, that, the form was filled to the satisfaction of the first respondent, hence, the argument that section 26 of the Regional, Town and Country Planning Act was not complied with lacks merit.

It was his argument, that, the application form was complemented by the justification report which contained the full information required, hence, it cannot be said that insufficient information was supplied when the application for the permit was made.

Counsel for the first respondent further argued, that, the decision by the first respondent involves an exercise of discretion. He submitted that this Court should be slow to interfere with an exercise of discretion. His case was that the appellants do not allege that the discretion was exercised injudiciously warranting interference by this Court.

With regards the citation of the second respondent, he argued that the omission of the word 'International' was not fatal. His case was that unlike the omission of the words '(Pvt) Ltd' the omission of the word International does not have legal connotations. He argued that John v Delta Beverages Ltd SC40-17 was distinguishable from this case.

In addition, he submitted that there was already a sewer line in place which the church could connect to....,.

NON EXISTANT PARTY

The court was inclined to agree with the argument advanced by the second respondent. The case relied upon by counsel for the appellants is distinguishable from the present case.

In John v Delta Beverages Ltd SC40-17, the omission of the word “Pvt” was fatal because the word has legal connotations unlike the omission of the word International.

In any event, there is no confusion as to the identity of the second respondent.

The appellants, in their letter of objection, in the appeal before the court a quo, and the present appeal, cites the second respondent as Spirit Life Church without including the word International.

They cannot, therefore, turn around and claim that Spirit Life Church is a non-existent entity.

To add on, the appellants never raised the objection when the matter was still before the first respondent.

At that stage, the second respondent would have been able to amend its documents.

In Marange Resources (Pvt) Ltd v Core Mining & Minerals (Pvt) Ltd & Ors SC37-16…, this Court commented as follows:

“As for the legal consequences of wrong citations; understandably. very few situations of 'wrong defendants/respondents' or 'wrong plaintiffs/applicants' have had to be decided in our jurisdiction, as such errors, I believe, are routinely rectified in consultation between the parties: see also, for comparison, Paterson TJM, Eckard's Principles of Civil Procedure, Juta and Company Ltd, 2005, 5th ed (2012) p184 where it is stated:

'In the event of these pleas (non-joinder and mis-joinder) being successful, the court will order a stay in the proceedings so that the pleadings can be amended so as to bring the proper parties before the court.'”

SC50-22 : LONRHO LOGISTICS (PRIVATE) LIMITED vs RAM PETROLEUM (PRIVATE) LIMITED
Ruled By: UCHENA JA, MATHONSI JA and KUDYA JA

Dismayed by the respondent's outright refusal to deliver to it outstanding fuel in terms of an agreement of sale entered into between the parties, the appellant filed a claim for specific performance in the High Court (“the court a quo”).

The appellant sought judgment compelling the respondent to deliver 120,000 litres of diesel purchased from the respondent.

By judgment delivered on 31 March 2021, the court a quo dismissed the claim and issued the following order:

“Accordingly, I order as follows:

1. The plaintiff's claim is dismissed.

2. The contract entered into between the parties, whereby the plaintiff purchased 150,000 lrs of fuel from the defendant, be and is hereby cancelled.

3. The defendant be and is hereby is (sic) ordered to pay the plaintiff the sum of $159,300 representing the plaintiff's partial performance of the contract.

4. The plaintiff be and is hereby ordered to pay the defendant's costs of suit.”

This is an appeal against that whole judgment of the court a quo.

THE FACTS

The background facts are largely common cause.

The appellant is a transporter of note while the respondent is a fuel monger. They have a long standing business relationship whereby the respondent has been supplying the appellant with bulk fuel over the years.

On 1 November 2018, the parties entered into a sale agreement in terms of which the respondent sold and the appellant purchased 150,000 litres of diesel.

On 2 November 2018, the appellant paid the purchase price of $201,000 in terms of the invoice presented to it by the respondent but did not take delivery of the diesel in question. In fact, it was not until 28 November 2018 that the respondent delivered only 30,000 litres of the diesel on the instructions of the appellant.

This left a balance of 120,000 litres of diesel which is the subject of the present litigation involving the parties.

Problems started in January 2019 when three events occurred in quick succession:

(i) First, the Minister of Finance and Economic Development gazetted the Customs and Excise (Tariff) (Amendment) Notice (No.7, 2019) as S.I. 9 of 2019. The Statutory Instrument came into operation on 13 January 2019. It was enacted to amend Part II of the Second Schedule of the Customs and Excise (Tariff) Notice, 2017 which was published in Statutory Instrument 53 of 2017.

(ii) Second, and subsequently to that, the Petroleum (Petroleum Products Pricing) Regulations S.I.10 of 2019 were gazetted. Section 3 thereof made it clear that they applied to “petroleum products prices in relation to wholesaling and retailing activities.” Section 5 provided the formulas that were to be applied by the Zimbabwe Energy Regulatory Authority (“ZERA”) in calculating the price of any petroleum product.

It is significant to note, that, the amount of duty imposed by S.I 10 of 2019 appears to have been equivalent to the amount fixed by S.I 9 of 2019, which, as I have stated, specifically stated that it came into operation on 13 January 2019 without in any way suggesting that it had retrospective effect.

(iii) Third, and obviously in response to the imperatives of the Statutory Instruments referred to above, the Zimbabwe Energy Regulatory Authority (ZERA) issued a directive requiring all oil companies to declare their fuel stocks as of midnight on 12 January 2019. The directive was contained in a circular dated 17 January 2019 which reads in relevant part:

“RE: DECLARATION OF OIL COMPANY FUEL STOCKS AS OF MIDNIGHT 12TH JANUARY 2019

Pursuant to the meeting held at the Ministry of Finance on the 16th January 2019 between Ministry of Energy and Power Development, Ministry of Finance, Zimbabwe Energy Regulatory Authority and Oil Companies, the authority requires that Oil Companies declare the details of the following:

1.0 Stockholding of diesel, petrol and paraffin held by the Oil Company at depot or at NOIC (old duty paid) as of midnight 12th January 2019 before the new pricing (Statutory Instrument 10 of 2019) came into effect.

2.0 Outstanding coupons (yet to be redeemed) as of midnight 12th January 2019, indicating products, category of customers, volumes and value, as well as special conditions attaching to coupons.

Oil Companies are further advised that they are required to pay the difference in duty between the old duty and new duty to ZIMRA on the stock referred to in 1.0 as the fuel will be sold in terms of S.I 10 of 2019.”…,.

Following these developments the appellant moved quickly.

On 24 January 2019, it demanded the immediate delivery of the balance of 120,000 litres of diesel.

The respondent was unmoved.

Citing an increase in duty, the respondent refused to deliver until the appellant paid additional duty on the outstanding diesel.

By email of 24 January 2019, the respondent tabled three options available to the appellant. The respondent wrote:

“…, we wish to provide you with below three options.

1. Lonrho pay the difference of duty amounting to $1=65.

2. Lonrho can draw down at the current price of fuel to exhaust your prepayment with us.

3. RAM Petroleum can refund Lonrho the total amount prepaid.”

The appellant would have none of it.

Calling the respondent's proposal “nonsense” it emotionally put its case across that the Zimbabwe Energy Regulatory Authority (ZERA) directive did not apply to the diesel that had already been sold.

With the battle lines drawn, the appellant enlisted the services of its legal practitioners whose letter of demand to the respondent yielded nothing.

PROCEEDINGS BEFORE THE COURT A QUO

On 7 February 2019, the appellant sued out a summons against the respondent seeking an order directing the respondent to deliver the outstanding diesel.

The claim was contested by the respondent.

In a long winding plea characterized by a number of alternative averments, the respondent pleaded the existence of a tacit term of the agreement that the appellant should have taken delivery within seventy two hours after effecting payment.

In addition, it asserted that section 230(1) of the Customs and Excise Act [Chapter 23:02] constituted an implied term that it was entitled to recover from the appellant any amount by which duty was increased.

Some of the pleas raised by the respondent related to fictional fulfilment of the contract in the sense that it had tendered delivery of the diesel which the appellant refused.

Also, that by failing to accept delivery, the appellant had repudiated the contract thereby entitling the respondent to cancel it and tender the sum of $159,300 being the difference.

Following a full trial, the court a quo found that the contract became perfecta when the parties agreed on the thing sold (the merx), the price (pretium) and showed they had the requisite animus to contract.

It was the court a quo's finding, that, the contract was perfected when the respondent accepted the payment for the 150,000 litres of diesel.

Regarding transfer of ownership of the diesel, the court a quo remarked:

“It is evident to me that in the present matter, transfer of ownership of the fuel in question happened by way of constitutum possessorium without actual delivery of the thing and by means of a mere change in the parties intention regarding animus domini. The change in animus in this matter repeatedly took place each time the plaintiff paid for the fuel and the defendant accepted payment for the fuel. By that exchange, the plaintiff acquired ownership in the fuel, when looking at the facts in the present matter means that ownership of the 150,000 litres transferred to the plaintiff in early November 2018.”

Notwithstanding those findings, the court a quo went on to find that the burden for paying for the increase in duty passed to the appellant.

Further, it found that by failing to accept delivery, the appellant repudiated the contract of sale.

In disposing of the matter, other than dismissing the appellant's claim, the court a quo also granted positive relief to the respondent, namely, the cancellation of the contract and the return of the purchase price paid by the appellant.

PROCEEDINGS BEFORE THIS COURT

The appellant remained aggrieved. It noted this appeal on the following grounds of appeal:

1. Having come to the conclusion, that, the contract between the parties had become perfecta and ownership passed to the appellant, the court a quo erred in not concluding that provisions of Statutory Instrument 10 of 2019 were, on the circumstances of the matter, not engaged in that:

(a) The duty chargeable under and in terms of that Statutory Instrument was not meant to, and did not, affect transactions that had already been concluded.

(b) Respondent did not place before the court any evidence tending to show that it had been required to and had in fact paid additional duties on fuel already purchased by the appellant.

2. The court a quo erred, at any rate, in concluding that the increase of duty on future sales was a risk which the appellant was required to bear by operation of law.

3. Consequently, the court a quo erred in not finding that the respondent had breached the agreement between the parties by reason of its failure to deliver diesel that had been purchased by the appellant.

4. The court a quo seriously misdirected itself on the facts, such misdirection amounting to an error in law in not finding, at any rate, that there was no agreement between the parties on the delivery timelines and that the respondent had, at all times, been prepared to effect delivery of the fuel to the appellant.

5. The court a quo erred in granting the respondent positive relief on the basis of averments made in its plea.

The over-arching issue commending itself for determination from the foregoing grounds is whether the appellant's consignment of diesel was subject to additional duty under SI10 of 2019. Also, whether there were any timelines for the delivery of the diesel, and whether the court a quo erred by granting relief to the respondent.

Counsel for the appellant submitted that S.I.10 of 2019 was not applicable in the circumstances of this case, it having come into effect on 13 January 2019 and not having retrospective effect.

In counsel's view, and for that reason, the directive to oil companies given by the Zimbabwe Energy Regulatory Authority (ZERA) only applied to fuel that was still to be sold and not the fuel, like the 120,000 litres of diesel, that had already been sold.

The fuel that had already been sold could not be subjected to further taxation and did not carry such risk.

Counsel submitted, that, the respondent had no business subjecting the appellant's fuel to the directive issued by the Zimbabwe Energy Regulatory Authority (ZERA).

Regarding the applicability of section 230(1) of the Customs and Excise Act, counsel for the appellant took the view, that, the section was not engaged. There was no evidence, so it was argued, that the respondent had been requested to, and did pay, any additional duty as envisaged by section 230(1) of the Customs and Excise Act.

On repudiation, counsel for the appellant submitted, that, the court a quo's findings were not supported by any evidence at all. There was nothing in the conduct of the parties suggesting that delivery was to be made within 72 hours. Neither was there evidence of any delivery timelines or any tender of delivery.

Per contra, counsel for the respondent contended, that, the appellant's reference to S.I.10 of 2019 was not only a false premise, it was also irrelevant. This is because the additional duty was imposed by SI9 of 2019.

In counsel's view, it was a fallacy that the directive by the Zimbabwe Energy Regulatory Authority (ZERA) imposed a duty on fuel.

Counsel further contended, that, section 230(1) of the Customs and Excise Act constituted a term imposed by law which transferred liability to pay duty onto the appellant.

Finding it difficult to defend most of the findings made by the court a quo, which appeared contradictory, counsel for the respondent submitted that the court a quo arrived at a correct conclusion on wrong reasons.

Given that a party does not appeal against the reasons for judgment, so it was argued, the respondent could not do anything about the situation....,.

WHETHER THE COURT A QUO ERRED IN GRANTING POSITIVE RELIEF TO THE RESPONDENT ON THE BASIS OF ITS PLEA

It is curious that the court a quo granted an order in favour of the respondent cancelling the sale and directing the respondent to refund the balance of the purchase price.

That relief was granted on the strength of a plea and nothing more. The respondent had not filed a counter-claim.

The point is made in Indium Investments (Pvt) Ltd v Kingshaven (Pvt) Ltd & Anor 2015 (2) ZLR 40 (S)…, that:

“A plea is a defence, and, as such, can be likened to a shield. It is not a weapon or a sword. No relief can attach to a party through a plea.”

Unfortunately, that is precisely what the court a quo granted in this case.

However just the court a quo may have considered the respondent's tender of the sum of $159,300 to be, it was plainly incompetent for it to ratify it through an unsolicited court order.

Doing so was a gross misdirection.

SC57-22 : ERICA NDEWERE vs PRESIDENT OF ZIMBABWE N.O. and CHIEF JUSTICE N.O. and JUDGE PRESIDENT OF THE HIGH COURT N.O. and JUDICIAL SERVICE COMMISSION and MINISTER OF JUSTICE N.O.
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

This is an appeal against the whole judgment of the High Court (the court a quo) in which it dismissed the appellant's urgent chamber application wherein she sought an interdict to prevent the first respondent (the President) from establishing a Tribunal in terms of section 187(3) of the Constitution of ...

FACTUAL BACKGROUND

The appellant is a former judge of the High Court of Zimbabwe having been removed from office by the President on the recommendations of a Tribunal he set up.

What led to the intended establishment of the Tribunal were complaints relating to the appellant's performance as a judge.

In particular, the complaints related to her work output, which was deemed unsatisfactory and below the expected standard. One of the complaints was that the appellant issued a review judgment in respect of criminal proceedings without having properly perused the record of proceedings. As a consequence, she ordered the release, from prison, of a person who had previous convictions which militated against his release.

The position of the fourth respondent, Judicial Service Commission (JSC), was that the appellant's conduct, inter alia, amounted to gross misconduct and/or gross incompetence warranting the referral of the matter to the President in terms of section 187(3) of the Constitution.

It is common cause, that, by letter dated 15 September 2020, the appellant was advised by the Judicial Service Commission (JSC) that she was under investigation for impeachable acts of misconduct.

In response, the appellant's erstwhile legal practitioners, in a letter dated 30 September 2020, wrote back to the Judicial Service Commission (JSC) indicating that the appellant was not obliged to respond to that matter. Their view was that the JSC had no legal authority to deal with the complaints raised against the appellant and that the second respondent (Chief Justice) had no authority to direct the JSC to attend to any complaints against a sitting judge of the High Court.

Further, the letter highlighted, that, in any event, it was premature for the Judicial Service Commission (JSC) to invoke section 187(3) of the Constitution before compliance with the provisions of the Judicial Service (Code of Ethics) Regulations SI107 of 2012 (Code of Ethics).

Consequently, the Judicial Service Commission (JSC) resolved that the question of the appellant's removal from office ought to be investigated by a Tribunal appointed to inquire into the matter in terms of section 187(3) of the Constitution.

It advised the appellant of this resolution by letter dated 12 October 2020.

A day after receipt of the letter, the appellant, through her erstwhile legal practitioners, filed an urgent chamber application under case number HC6128/20 which she subsequently withdrew.

On 26 October 2020, the appellant, through her current legal practitioners, filed yet another application through the chamber book, seeking the Provisional Order which is the subject matter of this appeal. The Provisional Order sought reads as follows:

“INTERIM RELIEF GRANTED

IT IS ORDERED THAT:

1. Pending the final determination of the legality of the fourth respondent's decision to advise the first respondent to establish a Tribunal in the absence of due process, the first respondent be is hereby interdicted from setting up a Tribunal to investigate the question of removing the applicant from office in terms of section 187(3) of the Constitution.

2. In the event that a Tribunal referred to here above is already set up by the first respondent to investigate the applicant's conduct, then, the Tribunal's proceedings be stayed until the determination of the legality of the fourth respondent's decision to advise the first respondent to establish a Tribunal.

TERMS OF THE FINAL ORDER SOUGHT

That the first, second, third, fourth, and fifth respondents show cause to this Honourable Court why a final order should not be granted in the following terms:

1. The fourth respondent's decision advise to the first respondent to set up a Tribunal to inquire into the question of whether the applicant should be removed as a judge be and is hereby declared unlawful and set aside (sic).

2. It is hereby declared that any disciplinary action against the applicant must be done in compliance with Statutory Instrument 107 of 2012 being the Judicial Services (Code of Ethics) Regulations, 2012 as read with the Constitution of Zimbabwe.”

PROCEEDINGS IN THE COURT A QUO

At the commencement of the proceedings, the fourth respondent (Judicial Service Commission) raised five points in limine which the second and third respondents (Chief Justice and Judge President of the High Court) associated themselves with.

The appellant also raised a point in limine....,.

The court a quo, in a well-reasoned judgment, dismissed all the preliminary points raised by the Judicial Service Commission (JSC) and the appellant.

None of the parties appealed against the court a quo's dismissal of the points in limine.

It will therefore, not be necessary, for the determination of this matter, to relate to the findings of the court a quo on the preliminary points.

View Appeal
HB60-19 : JOEL SILONDA vs VUSUMUZI NKOMO
Ruled By: BERE J

On 22 April 2015, the plaintiff issued summons out of this court seeking the following order against the defendant:

“(1) An order confirming null and void the purported agreement of sale signed by the plaintiff and defendant on the 12th January 2010 in respect of Umguza 100 Acre Lot 5A for want of a subdivisions permit at the material time, and, in any event, and in the alternative, for defendant's breach of the terms and conditions of the agreement of sale.

(2) An order for the eviction of the defendant and all those claiming rights after him from Umguza 100 Acre Lot 5A currently occupied by the defendant on the basis of a null and void agreement of sale.

(3) Payment of the sum of US$18,000 being reasonable rental and unjust enrichment arising from defendant's occupation of Umguza 100 Acre Lot 5A from March 2010 to April 2015.

(4) An order for holdover damages at the rate of US$10 per day being reasonable rental for the portion of Umguza 100 Acre Lot 5A currently occupied by the defendant calculated from the 1st May 2015 to date of vacation, both days included.

(5) Costs of suit on a higher scale.”

Upon being served with the summons, and after indicating his intention to defend the action, the defendant, in his plea, flatly denied any form of liability and sought the dismissal of the plaintiff's claim with costs at a punitive scale.

In addition, the defendant counter claimed on the basis of unjust enrichment and sought an order against the defendant in the following terms:

“1. Payment in the sum of US$19,000 together with such payment as will be sufficient to enable the defendant to purchase a property of comparable value including all the improvements he had effected.

2. A refund of all the money used by the defendant in drawing electricity to the plaintiff's homestead and applying for a subdivision permit.

3. Interest on all sums at the prescribed rate of 5% per annum with effect from the date of issue of summons to date of payment in full.

4. Costs of suit at an attorney and client's scale.”

THE FACTS OF THE CASE

The following facts are not in dispute in this case:

By a Deed of Sale signed by both parties on 26 January 2010, the plaintiff sold to the defendant 10 acres of land being part of 100 Acre of Lot 5A, Umguza District on certain terms and conditions outlined in the deed.

At the time the parties signed the agreement of sale, there was no subdivision of the land in question as required by section 40 of the Regional, Town and Country Planning Act [Chapter 29:12], thus rendering the agreement null and void from its inception.

As fate would have it, the parties ran into problems with their agreement, with allegations and counter allegations mounted against each other.

Under cases referenced HC491/11 and HC2828/12 both parties initiated civil action against each other over the invalid agreement.

Confusion reigned.

Both parties ended up withdrawing the civil suits against each other leaving the instant case to resolve their differences and provide some direction.

THE EVIDENCE

The evidence in this trial centred on the testimonies of the two protagonists aided by some documentary exhibits to strengthen each other's position. I proceed to deal with that.

THE PLAINTIFF'S EVIDENCE

The plaintiff, who was aged 94 years at the time he gave evidence in court, was in full control of his faculties and did not seem to show any sign of struggling due to his advanced age.

The witness gave a detailed narrative of his relationship with the defendant, whom he regarded as his “child”. He chronicled how he entered into an agreement of sale (exhibit 1 of Annexure 1) on 26 January 2010. The witness told the court, that, pursuant to the signing of the agreement and the payment of the initial US$10,000 (ten thousand) dollars, he allowed the defendant to commence construction on the purchased property.

He said it was part of the agreement that the defendant would pay expenses related to the processing of the subdivision permit.

The witness said he wanted the defendant to pay him $350 per month as rentals for staying and conducting his farming activities at the plot which was the subject of the sale agreement.

He said when they ran into problems with their agreement, owing to the defendant's failure to comply with their agreement, he wanted him to be evicted from the plot and the defendant's response was to report him to the police.

When the witness's attention was drawn to the fact that the defendant was alleging to have made improvements for which he had been enriched and therefore wanted to be compensated, he said that the improvements had not benefited him and that the defendant was free to destroy such improvements.

The witness confirmed the improvements consisted, inter alia, of two dwelling houses, the second one of which the defendant had constructed against his will. The witness further told the court, that, in installing electricity, the defendant had used substandard poles which got rotten, and, he concluded his evidence in chief by suggesting that the defendant had cheated him.

Under cross-examination from the defendant's counsel, the plaintiff confirmed that he and the defendant had signed the sale agreement in 2010 and that as a result of that, the defendant had carried out visible improvements on the purchased property.

The witness also confirmed, that, other than the sale agreement, he had not signed any lease agreement with the defendant.

When questioned about the borehole on the property, the witness was emphatic that it was him who had sunk it and that all the defendant did was merely to have it flushed.

On further cross-examination, the witness could not dispute that the houses built by the defendant had electricity installed by the defendant.

When the valuations of the improvements done by the defendant were brought to his attention, the plaintiff was unable to challenge same. The best the plaintiff could say on the valuations was;

“He did that on his own volition. I did not tell him to make such developments. There is a letter which says there should be no development until the case is over.”

The plaintiff's cross examination was concluded by an admission, that, when he concluded the agreement of sale with the defendant, he was fully aware that he did not have a sub-division permit.

When his attention was drawn to his arbortive attempt to obtain a subdivision permit in 2000, almost 10 year before signing the agreement with the defendant, the plaintiff denied having applied for such permit, and sought to argue that the only permit he had applied for was for the southern side of his plot.

THE DEFENDANT'S EVIDENCE

The defendant commenced his evidence by highlighting the cordial relationship which he had enjoyed with the plaintiff prior to entering into this agreement of sale with him.

He indicated, that, in order to raise the money to buy this particular plot, he had to dispose of his smaller 6 acre piece of land. The defendant told the court, that, after paying the initial agreed sum of US$10,000 (ten thousand United States Dollars), he embarked on the construction of his cottage which was subsequently followed by the main house and electrification of same.

The defendant testified on the difficulties that he had with the plaintiff which were centred on the latter's refusal to receive part of the payment owing to delay.

The defendant, said, owing to the frustrations which he faced as a result of the refusal by the plaintiff to accept payment, he ended up initiating legal proceedings against the plaintiff for breach of contract.

The plaintiff also confirmed the civil suit commenced against him by the defendant and its ultimate withdrawal.

The defendant testified, that, all in all he paid the plaintiff a total of US$19,550 (nineteen thousand five hundred and fifty United Stated Dollars) toward the agreement.

The defendant's further evidence was that he only became aware of the absence of the subdivision permit much later, and when he was well into the agreement, as a result of which he gave the plaintiff US$80 for the facilitation of the permit.

The defendant further stated, that, when he eventually got the subdivision permit, through the plaintiff's legal practitioners, it turned out to be a fake or not authentic document.

He insisted that other than paying for its processing, he had no input into its production and flatly denied ever being involved in the fraudulent acquisition of the sub-division permit.

In his further evidence in chief, he gave a detailed account of the various improvements he made at the “purchased” property and the numerous demands for his eviction made against him by the plaintiff.

The witness said he was prepared to move out of the property as long as he was fully compensated for the improvements made. In his own words, the defendant stated the following as regards his counter claim;

“May the court order that the plaintiff compensates, the reason being that I constructed my house after he had given me permission to do so. I constructed two houses and he was watching me do so. If he says I should vacate the piece of land I will do so by removing what I put there to enable me to construct again at a different place. If he does not end up a destitute or a person of no fixed abode.”

When questioned during his evidence in chief to indicate the improvements he made, the following is what he stated:

“First and foremost, I built a three-bedroomed house (cottage), and, secondly, a three bedroomed main house. I pulled electricity to the house. On that Stand was a dry borehole. I got a company which flushed the borehole. I then bought the pump and the jojo tank which I fixed for the storage of water. That is the water that we are using. The rest of the things have their valuation.”

The witness went further to give the three valuations of the improvements he carried onto the property which he averaged to come up with a figure of US$97,833=33.

The witness emphasized that he had invested all his resources on the property and maintained that if he did not get compensated for such improvements he would end up having no fixed abode.

The defendant was taken through cross examination, part of whose thrust was to challenge him why his (defendant's) lawyer had not suggested to the plaintiff that he was lying, if at all he was misleading the court during his testimony. Part of the exchanges which caught the court's attention and require emphasis went along the following:

“Q: You accept now that this land has always belonged to plaintiff until today?

A: Yes.

Q: You appreciate that the plaintiff's claim is based on you being unjustly enriched and him being unjustly impoverished?

A: I realize he was unjustly enriched. I paid some money towards the property to the plaintiff following our sale agreement.

Q: What do you want from the plaintiff?

A: I want him to reimburse me for the expenses I incurred on that piece of land so that I am able to get another place to stay with my children since he pretended as if he was selling me that piece of land, he knew I would never get any title deed in respect of that land…,.

Q: Your claim is based on unjust enrichment?

A: Yes.

Q: You heard him say he has no use of such improvements?

A: Yes, I heard him say so but he is going to use them. The structures are on his piece of land which he pretended to be selling. There is electricity which he will use. If he did not want the houses, he could not have allowed me to construct them….,.

Q: Your bundle, you have put in several receipts from pages 90-102 to support your expenditure. All these are from September 2010. These were incurred at a time plaintiff told you to stay away from his land and to keep your money?

A: We had entered into an agreement of sale.”

When it was suggested to the witness that he was supposed to be paying rentals to the plaintiff, the defendant denied ever entering into a lease agreement with the plaintiff, but rather a sale agreement.

In conclusion, the defendant said that the valuation reports that he submitted had collectively dealt with the improvements he made and for which he was claiming to be paid.

ASSESSMENT OF EVIDENCE

At a joint pre-trial conference (record pp56-58), held by the parties, the parties narrowed their contentious issues to the following:

(1) Whether or not the plaintiff is entitled to a reasonable rental arising from the defendant's unauthorized/authorized occupation of the property in dispute.

(2) Whether or not the defendant has been unjustly impoverished and the plaintiff unjustly enriched as a result of the alleged developments made by the defendant upon the disputed part of the land, and, if so, the quantum thereof.

It is with these issues in mind that I proceed to consider the evidence tabled in this court.

Is the plaintiff entitled to reasonable rentals

The evidence which is not in dispute is that the defendant took occupation of the property in issue pursuant to a sale agreement, which sale turned out to be null and void or invalid owing to its non-compliance with the mandatory provisions of sections 39(1)(b)(i) and 40 of the Regional, Town and Country Planning Act [Chapter 29:12].

The sale agreement entered into by the parties is self-explanatory and it is too ambitious, if not too generous, to read into the agreement that it could, at any stage, be turned into a lease agreement to provide for a basis for the plaintiff to claim rentals.

It cannot possibly be the correct position, as stated by the plaintiff in his declaration, that:

“In or about March 2010, Defendant forcibly occupied a portion of Umguza 100 Acre Lot 5A….,.”

This averment is clearly not borne out by the overwhelming evidence in this court which speaks to the defendant's occupation as informed by the agreement of sale.

The fact that under case HC2828/12 the plaintiff initiated a civil suit against the defendant to force compliance with the sale agreement cements the existence of the agreement of sale between the parties.

The argument is simply, that, if in 2010, the defendant had forced himself onto the plaintiff's property, there would have been no need for the plaintiff to try and enforce compliance with some agreement in 2012 - two years down the line.

The plaintiff, in his own testimony, confirmed that the defendant only took occupation of the plot pursuant to an agreement.

What cannot be disputed is that subsequent to the defendant's occupation, the agreement ran into challenges. Despite this, these challenges did not in any way change the defendant from being a purchaser to a tenant.

The parties were fully conscious of what they wanted when they entered into this agreement.

It is not for this court to re-write the contract for the parties.

As was observed by the Supreme Court in the case Magodora and Others v Care International Zimbabwe 2014 (1) ZLR 397 (S)…,:

“It is not open to the courts to write a contract entered into between the parties or to excuse any of them from consequences of the contract that they freely and voluntarily accepted, even if they are shown to be onerous or oppressive. This is so a matter of public policy. Nor is it generally permissible to read into the contract some implied or tacit term that is in direct conflict with its express terms.”

For these reasons, the court is not prepared, for whatever reasons, to convert or to read into a simple sale agreement, a lease agreement.

One gets the obvious impression that reference to the defendant's alleged forced occupation of the property was slotted in as a desperate attempt to justify a claim for rentals by the plaintiff.

The averment clearly lacks merit and it is not sustainable.

Has the defendant been unjustly enriched at the expense of the plaintiff

This enquiry is intricably linked to the existence or non-existence of a lease agreement.

I have already made my position clear, that, the plaintiff is not entitled to any rentals flowing from a lease agreement because no such agreement ever existed or can be inferred from the evidence led in this court. If anything, the evidence shows, beyond doubt, that, it is in fact the plaintiff who has been unjustly enriched and the defendant impoverished in the process.

It is not in dispute, that, pursuant to the sale agreement the defendant paid a total of $19,550 towards the fulfillment of that agreement. The $19,000 was for the purchase of the land and $550 was paid towards the facilitation of the subdivision of the sold piece of land when the defendant realized that he had been sold the land in violation of the mandatory provisions of the Regional, Town and Country Planning Act.

The defendant's evidence in support of this payment was not challenged by the plaintiff.

In fact, in his declaration filed in this court on 22 April 2015, the plaintiff made an unsolicited offer to refund the defendant US$19,000 on monthly instalments of US$395.

The defendant's claim is built in his counterclaim filed in this court on 24 June 2015.

In that counter-claim, the defendant states that he made a number of improvements which would prejudice him if they were to accrue to the plaintiff without him being compensated.

In his closing submissions, the plaintiff's counsel criticized the defendant's pleadings and commended as follows:

“Of significance is that in paragraph 5 above defendant did not specifically allege that the alleged improvements have resulted in plaintiff being enriched.”

I accept the position taken by the plaintiff's counsel, that, the defendant's pleadings, especially in the counter claim, were poorly drafted. They lacked elegance. They could have been drafted in a much better way.

However, I do not accept that when the defendant's case is looked at holistically, the alleged defects in the pleadings can be raised to the level of fracturing his case. This is because the defects were cured by the overwhelming evidence in support of the defendant's case.

The defendant's uncontroverted evidence was that pursuant to the agreement of sale (which turned out to be invalid), he had poured substantial resources on the plaintiff's property. In the process, the plaintiff ended up being enriched and the defendant impoverished and that the defendant wanted to be compensated for this.

This was the basis of the defendant's claim, and even the plaintiff's counsel fully understood this as demonstrated by the tone and nature of his cross-examination of the defendant.

It is therefore not sustainable for counsel to argue that the defects in the pleadings must lead to the collapse of the defendant's case.

View Appeal
HH209-19 : ELLIOT RODGERS vs PUWAYI CHIUTSI and TENDAI MASHAMAHANDA and REGISTRAR OF DEEDS and SHERIFF OF ZIMBABWE and BARIADE INVESTMENTS (PVT) LTD and LAW SOCIETY OF ZIMBABWE
Ruled By: MANZUNZU J

The court cannot grant that which has not been asked for.

View Appeal
HH606-18 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY GALLAGHAN and MILLICENT GALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: MUZENDA J

In the matter of Mining Industry Pension Fund v DAB Marketing (Pvt) Ltd SC25-12, MAKARAU JA said that:“The importance of the admission is that it is thus seen as limiting or curtailing the procedures before the court, in that, where it is not withdrawn, it is binding on the court, ...

Appealed
SC95-21 : UPENYU MASHANGWA and BLESSING MASHANGWA vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and UNITED FAMILY INTERNATIONAL CHURCH
Ruled By: GWAUNZA DCJ, MAKONI JA and BERE JA

This is an appeal against the whole consolidated judgment of the High Court dismissing the appellants application in HC4197/18 and granting the respondents application in HC1774/18.FACTUAL BACKGROUNDThe appellants are husband and wife and were, at one point, members of the United Family International Church (“UFIC”), the third respondent in casu.The ...

This is an appeal against the whole consolidated judgment of the High Court dismissing the appellants application in HC4197/18 and granting the respondents application in HC1774/18.

FACTUAL BACKGROUND

The appellants are husband and wife and were, at one point, members of the United Family International Church (“UFIC”), the third respondent in casu.

The first and second respondents are also husband and wife and are the leaders (prophet and prophetess, respectively) of the United Family International Church (UFIC).

In the court below, the appellants instituted an action against the respondents, under HC7214/18 claiming a total sum of US$6,535,000 to be paid jointly and severally, the one paying the others to be absolved, broken down as follows:

“(a) Damages for US$700,000 being the value of property number 14 Edinburgh, Marlborough, Harare.

(b) A refund of the sum of US$1,698,000 for misrepresentation.

(c) US$37,000 being refund for fees paid to Tichaona Mawere.

(d) An amount of US$1,100,000 being a refund paid to the defendants.

(e) An amount of US$2,000,000 being damages for fraud and misrepresentation.

(f) An amount of US$500,000 being damages for mental anguish.

(g) US$500,000 being damages for defamation of character. (sic)

(h) Payment of interest on the sums in (a) to (g) above at the prescribed rate from the date of demand to the date of full and final payment.

(i) Payment of costs of suit on a legal practitioner and client scale.”

The claims were particularised in the declaration as summarised hereunder:

CLAIM ONE

In 2012, and during church proceedings, the first and second respondents fraudulently misrepresented to the appellants “that anyone with a bank debt or loan was to be cancelled as it was a season of miraculous cancellation of debts.” (sic)

It is alleged, that, this followed after the respondents had been 'privately' informed that the appellants had an existing ZB Bank loan in the sum of US$500,000.

As a result of this misrepresentation, the appellants were induced not to pay back the loan, and, as a consequence, the Bank executed on their immovable property thus causing them to lose a property worth US$700,000.

CLAIM TWO

In the same year, the respondents misrepresented in church, that, one Tichaona Mawere (Mawere) “was a great lawyer and that he would not lose a case” when in fact he was not a registered legal practitioner.

Acting on the misrepresentation, the appellants instructed the said Tichaona Mawere (Mawere) to handle their matter for a claim of US$1,698,000 and expended fees in the sum of US$37,000. Mawere produced fake court orders resulting in them making a loss to the tune of US$1,735,000.

CLAIM THREE

That, in the period ranging from 2014 to 2016, the appellants were called on stage in church. The respondents would announce that the appellants “were a successful example in the Ministry.”

Acting on these “misrepresentations” the appellants made various direct contributions amounting to US$1,100,000 to the respondents. The respondents would represent “that, in so contributing, the plaintiffs (the appellants) would reap what was commensurate with their contributions.”

CLAIM FOUR

The appellants were again paraded in church on stage “as a chosen people by God to have succeeded in business.”

As a result of that further “misrepresentation” the appellants marketed the respondents prophecies for the advancement of the respondents interests and “their prophesies as the success story of the prophesies.” In the process, the appellants were prejudiced to the tune of US$2,000,000.

CLAIM FIVE

Before the amendment, which I shall deal with later, the claim was that “the defendants (the respondents) caused damages through defamation (sic) by publishing false articles against the plaintiffs and their business activities; articles claiming that the plaintiffs perfumes cause cancer.”

CLAIM SIX

The appellant's claimed that “the defendants caused mental anguish to the plaintiffs, emotional embarrassment and torture by exposing the plaintiffs private lives on the defendants Facebook online page 'The Truth About Prophet Makandiwa.'”

It was further averred, that, the information had been given to the respondents “in private” and the statements were meant to destroy their reputation.

Upon being served with the summons, the respondents entered an appearance to defend.

They further addressed a letter to the appellants, in terms of Rule 140 of the High Court Rules 1971 (the Rules), to the effect that the claims in question were vague and embarrassing and that they did not disclose a cause of action.

It was averred that it was not clear whether the appellants were suing in terms of Contract or under the Law of Delict, and, as regards claims five and six, whether the claims were made under defamation or injuria.

The appellants did not respond to this letter.

Consequently, the respondents filed an exception to the appellants summons and declaration.

The exception was dismissed on 12 January 2018 by MANGOTA J who ordered that the appellants amend their declaration in respect of claims five and six, that the respondents file their plea, and that the matter proceeds in terms of the Rules.

As directed, the appellants amended their declaration in respect of claims three, five, and six.

CLAIM THREE

It was amended by the addition of paragraph 20.1.

It was claimed, that, upon being confronted by the appellants, the respondents undertook to repay the appellants all the money they had contributed upon proof of such payment. Despite being furnished with the proof, the respondents have refused or neglected to pay in accordance with their undertaking.

CLAIM FIVE

It was amended by deleting the original claim and substituting it as summarised below:

The appellants were in the business of manufacturing and selling perfumes. On or around 16 August 2016, and after the fallout between the appellants and the respondents, the respondents caused to be published an article in the Herald Newspaper in which they said:

“You just need one person who can move around telling people that your perfumes can cause cancer and the news begins to spread; your company will begin to go down.” (sic)

“The statement was false and the respondents intended to spread a rumour and thereby injure the appellants in their trade. In view of the close relationship between the parties before the fallout, the words of the respondents caused a rumour to spread that the appellants perfumes cause cancer. As a result of the statement, and the subsequent rumours, the public desisted from purchasing appellants perfumes. Consequently, the appellants, through their company, ceased to manufacture the perfumes. The appellants suffered damages due to the respondents wrongful conduct in the sum of USD$500,000.”

CLAIM SIX

The original claim was deleted and substituted with a claim summarized as follows:

On or about 2 February 2017, the respondents caused to be published on their Facebook page titled “The truth about Emmanuel Makandiwa” private and intimate details of the appellants which they had received in confidence. The publication of the details was wrongful and was done with an intention to injure the appellants standing in society, and was done in the wake of the fallout between the parties. Appellants suffered damages, as a result of the unlawful intrusion into their private lives, in the sum of USD$500,000.

Following the dismissal of the exception, and, on 23 February 2018, the respondents filed an application for the dismissal of the appellants claims in toto in terms of Order 11 Rule 75 of the High Court Rules, under HC1774/18.

The respondents, having failed to prosecute their application under HC1774/18 timeously, the appellants filed a chamber application for dismissal of the same for want of prosecution in terms of Rule 236(3)(b) of the High Court Rules, on 8 May 2018, under HC4197/18.

Since both matters were set down for hearing at almost the same time, and, before different judges, a request was made for their consolidation and it was granted.

DETERMINATION BY THE COURT A QUO

The court' s approach was to determine the application in terms of Rule 236(3)(b) of the High Court Rules under HC4197/18 first.

It opined, that, if it granted the relief being sought by the appellants that would be the end of both matters. If it dismissed the application, then, it would proceed to hear the respondents application in terms of Rule 75 of the High Court Rules, under HC1774/18, which it coined the main matter.

Regarding the application for dismissal for want of prosecution, the court found that the reasons proffered for the delay in prosecuting the matter were reasonable. It also stated that it had a discretion to discharge the application or make any other order as it deemed fit in the circumstances.

In the result, the application for dismissal for want of prosecution was dismissed and the court ordered that the main matter be heard on the merits.

Pertaining to the issue of the dismissal of the appellants claims, in terms of Rule 75 of the High Court Rules, the court a quo dealt with each of the appellants claims in turn.

It found, that, the appellants claims were frivolous and vexatious and warranted summary dismissal.

Aggrieved by the decision of the court a quo, the appellants noted an appeal to this Court. This is the appeal that this Court is seized with.

GROUNDS OF APPEAL

“1. The court a quo erred and misdirected itself in that having found that respondents had, by their admission, failed to prosecute their cause within the prescribed period, it ought to have dismissed for want of prosecution; no special circumstances existing to exercise a discretion in their favour.

2. The court a quo grossly erred and misdirected itself in that a prior judgment of the High Court, in HH10-18, having established that a valid and substantiated cause of action based on fraud existed between the parties, it could not render otherwise.

3. A fortiori the court a quo effectively reviewed and contradicted an extant earlier judgment of a judge of parallel jurisdiction on the same cause, between the same parties, contrary to the principles of res judicata and issue estoppel.

4. The court a quo further erred and misdirected itself in finding, contrary to law, that, fraud and fraudulent misrepresentation did not constitute a valid cause of action at law; subsequently, the court a quo erred in failing to find that the question of whether fraud and its constituent elements had been proven was an evidentiary issue reserved for trial.

5. The court further grossly erred and misdirected itself in determining the matter regardless of conflicting material averments which could not be resolved on affidavit a fortiori, it could not find as a matter of fact that the claims by the appellants were frivolous and vexatious, absent evidence and its testing in contested action proceedings....,.

Regarding grounds four and five, the court, at the outset during the hearing, enquired of counsel for the appellants whether these grounds had been abandoned as they had not been motivated in the Heads of Argument.

In response, counsel for the appellants advised, that, none of the grounds were being abandoned.

On being asked to direct the court to where these grounds were motivated, he directed the court to paragraph 15 of the appellants Heads of Argument. This is what paragraph 15 states;

“Even if the court per TAGU J could revisit the question, it still did so wrongly and wrongfully. That there is a valid cause of action is beyond doubt. The law allows refunds and reimbursements for unlawfully paid funds. As a result, there cannot be argument that no cause of action can arise.”

The argument advanced in this paragraph completely misses the respondents position.

It is not that there is no cause of action. It is that the appellants pleaded falsehoods and that they could never succeed at trial on the facts as pleaded. Their action was therefore frivolous and vexatious.

The paragraph also misconstrues the finding of the court a quo.

Nowhere in the judgment a quo is it stated that a misrepresentation did not constitute a valid cause of action.

The court a quo examined each claim separately and gave reasons as to why it found each claim to be frivolous and vexatious. The crisp finding of the court a quo, in respect of each claim, was that on the facts as pleaded by the appellants, no competent cause could be sustained.

By way of illustration, in Claim One, the appellants alleged that the respondents alleged that they stopped paying the loan that they had obtained from ZB Bank on the basis of a prophecy made by the respondents to the effect that it was “a season of miraculous cancellation of debts.”

It could not, on the facts as pleaded by the appellants, be established through a deeds search at the Registrar of Deeds office that the appellants owed ZB Bank Limited USD500,000 and that the property they allegedly lost was bonded in favour of ZB Bank for that amount.

It could not be supported, factually, through a search carried out in the Civil Registry of the High Court that ZB Bank sued the appellants for USD500,000 between 2012 and 2017 as alleged, and that the property in question was attached or sold in execution as alleged or at all at the instance of ZB Bank Limited.

The reality on the ground, which the appellants never controverted, was that the property was at all material times owned by Carmeco Investments (Private) Limited (Carmeco) a separate persona from the appellants in terms of Deed of Transfer No.10763/2002 dated 24 September 2002.

In that regard, the law relating to companies applies with full force and effect.

The appellants cannot claim to have been prejudiced in respect of what they did not own.

In any event, as early as 29 February 2012 Carmeco Investments (Private) Limited had sold the property for USD800,000 to Nemajo Family Trust as represented by Steward Nyamushaya. The purchase price thereof was paid in full through the appellants agents, McDowells International (Private) Limited.

At no time did it appear from the deeds search that Carmeco Investments (Private) Limited, which owned the property, mortgaged number 14 Edinburgh Road, Marlborough to ZB Bank Limited for the sum of USD500,000 during the period 2012 to 2017.

The above illustration clearly demonstrates that the appellants pleaded falsehoods.

In their notice of opposition to the application, the appellants did not controvert these facts.

They contended, that, they did not have to reply to the evidence submitted by the respondents as it was a matter of evidence to be related to at trial.

They overlooked the fact, that, in terms of Rule 75(2) and (3) of the High Court Rules a party making an application in terms of subrule (1) is required to do two things:

(i) Firstly, he or she shall file an affidavit in which he sets out his belief that the action is frivolous and vexatious and the grounds for his belief.

(ii) Secondly, he or she may attach documents which verify his or her belief that the matter is frivolous and vexatious.

Once that information has been placed before the court, it should be incumbent upon the other party to controvert it.

In casu, the appellants did not do so. Rather, they directed their energy to a vitriolic attack on the respondents instead of addressing the requirements of Rule 75 of the High Court Rules.

Having misconstrued the court a quo's finding, grounds of appeal four and five must fail.

View Appeal
HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J

The basis of issue estoppel is an admission of facts or a failure to deny the facts alleged in pleadings that deals with facts such as a plea on the merits.

View Appeal
HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J

The two matters were consolidated to avoid conflicting judgments as the two matters involving the same parties, and same issues, were ready for arguments at almost the same time before different judges.

At the hearing of the two matters, counsels for the parties did not make oral submissions but agreed that the two matters be decided on the papers filed of record.

The following is the background to the two matters.

Upenyu and Blessing Mashangwa (the Mashangwas) are husband and wife respectively. They are members of the United Family International Church (UFIC).

Emmanuel and Ruth Makandiwa (the Makandiwas) are also husband and wife respectively. The Makandiwas are leaders (prophet and prophetess respectively) of United Family International Church (UFIC).

In case HC7214/18 the Mashangwas filed summons in this Honourable Court containing six claims against the Makandiwas and the United Family International Church for a total sum of US$6,535,000 to be paid jointly and severally, the one paying the other to be absolved.

In their declaration, the Mashangwas claimed that:

(1) In the year 2012, at Harare, and in church, the Makandiwas fraudulently and misrepresented to the Mashangwas that anyone with a bank debt or loan was to be cancelled as it was the season of miraculous cancellation of debts after the Makandiwas were informed, privately, that the Mashangwas had an existing ZB Bank loan to the tune of US$500,000.

As a result of the misrepresentation, the Mashangwas were induced not to pay the ZB Bank loan, and, in the result, the Bank executed on the Mashangwas property being 14 Edinburgh Road, Harare for $500,000 thereby losing their house valued at $700,000.

(2) In the same year, the Makandiwas misrepresented, in church, that one Tichaona Mawere was a great lawyer who would not lose a case, when, in fact, Mr Tichaona Mawere was an unregistered legal practitioner.

Acting on the misrepresentation, the Mashangwas handed over their McDowell file to the said Tichaona Mawere for a claim of US$1,698,000 and expended in fees an amount of US$37,000. Tichaona Mawere then produced fake court orders and the Mashangwas lost a total sum of US$1,735,000.

(3) In the years ranging from 2014 to 2016, the Mashangwas were called on stage, in church, by the Makandiwas and were announced as a successful example in their Ministry (UFIC).

Acting on this misrepresentation, the Mashangwas made various direct contributions to the Makandiwas and the church money amounting to US$1,100,000.

(4) The Mashangwas were also paraded in church, on the stage, by the Makandiwas, as the chosen people by God to have succeeded in business.

As a result of the misrepresentation, the Mashangwas marketed the Makandiwas prophecies to the tune of US$2,000,000.

(5) and (6) In claims (5) and (6), they alleged that the Makandiwas defamed them thereby destroying their reputation and causing monetary loss to the tune of USD500,000.

Having been served with the summons, the Makandiwas entered appearance to defend the claims.

They proceeded to address a letter, in terms of Rule 140 of the High Court Rules 1971, to the Mashangwas pointing out that the claims were vague and embarrassing and that they did not disclose a cause of action, and asked whether they were suing in contract or delict; and, as regards claim (5) and (6) asked whether the claims were in defamation or injuria.

The Mashangwas did not respond to the letter, causing the Makandiwas to file an exception on 30 August 2017 to the Mashangwas pleadings in terms of Order 21 Rule 137(1)(b) in case HC7214/18.

The exception was heard on 6 November 2017 by MANGOTA J in respect of all the six claims but was dismissed on 12 January 2018 and the Mashangwas were ordered to amend their declaration in respect of claims (5) and (6), and, the Makandiwas to plead, and thereafter, the matter was to proceed in terms of the High Court Rules 1971.

However, after the dismissal of their exception, the Makandiwas filed another court application on 23 February 2018 for the dismissal of the Mashangwas claims in terms of Order 11 Rule 75(1) of the High Court Rules 1971 in HC1774/18.

The Mashangwas, having felt that the Makandiwas had neglected or failed to timeously prosecute the court application which they instituted under case HC1774/18, filed a chamber application for dismissal on 8 May 2018 under HC4197/18.

Both applications were ready for hearing at almost the same time, before different judges, hence the consolidation of the two applications.

ISSUES FOR DETERMINATION

This court is therefore being asked to decide two issues simultaneously:

(i) The first issue is whether the Makandiwas application should be dismissed for want of prosecution as prayed for by the Mashangwas in HC4197/18.

In the event of this court granting the relief asked by the Mashangwas, this would be the end of the matters and this court will not deal with the Makandiwas application.

(ii) However, in the event that this court dismisses the Mashangwas application for dismissal, the court will proceed to deal with the second issue pertaining to the Makandiwas application for dismissal of the Mashangwas claims in the main case under HC7214/17....,.

SHOULD MAIN MATTER BE DISMISSED IN TERMS OF ORDER 11 RULE 75(1) OF THE HIGH COURT RULES

After the dismissal of their exception in HC7214/17 the Makandiwas pleaded to the main case and filed this application for summary dismissal of the principal case as being frivolous and vexatious in terms of Order 11 Rule 75(1) of the High Court Rules 1971 (the Rules).

The principal case contained the six claims brought against them by the Mashangwas as outlined above. I shall endeavor to deal with each of the claims where possible.

Suffice to state, at this stage, that Rule 75 of the High Court Rules provides that:

“75 Application for Dismissal of Action

(1) Where a defendant has filed his plea, he may make a court application for the dismissal of the action on the ground that it is frivolous or vexatious.

(2) A court application in terms of subrule (1) shall be supported by affidavit made by the defendant or a person who can swear positively to the facts or averments set out therein, stating that in his belief the action is frivolous or vexatious and setting out the grounds for his belief.

(3) A deponent may attach to his affidavit, filed in terms of subrule (2), documents which verify his belief that the action is frivolous or vexatious.”

In their supporting affidavits, the Makandiwas prayed that the principal case must accordingly be summarily dismissed pursuant to Rule 75(1) of the High Court Rules, and contended, among other things, that the action in the principal case is not only both frivolous and vexatious, but also a self–evident gross and contemptuous abuse of the process of this court on the bases that -

“1. The plaintiffs have deliberately pleaded and founded their purported causes of action on deliberate and easily demonstrable falsehoods;

2. Each of the six (6) claims suffers from predictable failure and so groundless that no reasonable person could ever hope to obtain relief therefrom;

3. The principle case has not been brought with the bona fide intention of obtaining relief;

4. The proceedings have been brought with the sole and mala fide intention of annoying and harassing us. It as such amounts to the unmitigated abuse and contempt of this court and the process thereof; and

5. The principal case is inconsistent with reason and common sense, and, as such, unworthy of serious consideration.”

The respondents (the Mashangwas) opposed the application. They took seven points in limine. The points were:

(1) Matter passed in rem judicatam;

(2) Estopel;

(3) Disputes of fact;

(4) Unlawful reversal of order of proceedings;

(5) Attempt to avoid the consequences of a valid acknowledgement;

(6) Mala fides and abuse of court process; and

(7) Provisions of the Rules not available to applicants.

On the merits, they contended, among other things, that, Mr Makandiwa is a common fraudster, a false prophet who has no relationship with God, is a liar who lied about a lawyer called Tichaona Mawere, and many other ills....,.

AD MERITS

The Makandiwas filed this application in terms of Rule 75(1) of the High Court Rules 1971 for the summary dismissal of frivolous and vexatious action proceedings instituted by the Mashangwas in an action pending before this court under case number HC7214/17.

The respondents made six claims.

Their cause of action in claims 1-4 is said to fall into the delict of fraud. The fifth claim is said to relate to the delict of injurious falsehoods. The sixth claim has been held to fall under the delict of injuria.

A common thread runs through these claims.

They plead that they were members of the third applicant (United Family International Church), a Christian Church founded by the first and second applicants (Emmanuel Makandiwa and Ruth Makandiwa). They further allege that they either received prophesies or representations in church or that certain injurious publications were made of and concerning them or their business. Hence, they claimed various sums all aggregating to a staggering six and a half million United States Dollars.

The applicants pleaded to each of the six claims. They denied the allegations.

Their pleas were filed in contemplation of the present application for dismissal.

The applicants placed before the court a detailed verifying affidavit that traversed and attached incontrovertible evidence which they said exposed the falsity of the facts pleaded by the plaintiffs in their declaration.

The applicants, thereafter, filed the present application for the dismissal of the suit as frivolous and vexatious.

The application is strongly opposed by the respondents.

THE LAW

Rule 75 of the High Court Rules allows a defendant, who has pleaded, to apply for the summary dismissal of the action on the grounds that it is vexatious.

The defendants must, on notice of motion, positively swear to the facts and verify their belief that the action is vexatious and deserving of summary dismissal.

The purpose of this procedure is the same as that of the procedure for summary judgment or provisional sentence.

The court, if satisfied, has the inherent jurisdiction to disallow and dismiss proceedings that are frivolous or vexatious: see Ushewokunze Housing Co-oporative Society Limited v Crest Breeders International (Private) Limited HH529-16; Rogers v Rogers & Another 2008 (1) ZLR 330…,.; and S v Coopers & Others 1977 (3) SA 475…,.

The test to be applied can be explained in no better words than those of MAKARAU JP…, in Stationery Box (Pvt) Ltd v Natcon (Pvt) Ltd & Anor HH64-10 as follows:

“The test to be applied in summary judgment applications is clear and settled. The onus resting on a defendant resisting summary judgment has been described as amongst the lightest that the rules of procedure cast on the litigants. He does not have to prove his defence. He must merely allege facts, which, if he can succeed in establishing them at the trial, would entitle him to succeed in his defence.

The defence so set up must, however, be plausible and bona fide.

Obviously implied in this test, but oft overlooked by legal practitioners, is that the defendant must raise a defence. The facts alleged must lead to and establish a defence that meets the claim squarely. If the facts that he alleges, fascinating as they may be and which he may very well be able to prove at the trial of the matter, do not amount to a defence at law, the defendant would not have discharged the onus on him and summary judgement must be granted.

To defend a claim arising out of a contract of sale, the purchaser must attack either the existence of the agreement itself or the fact that the goods sold were not delivered to him. If other defences are raised, they must be raised explicitly. It is not the function of the court to put words into the defendant's mouth and thereby establish a possible defence on his behalf when the defendant fails to do so in his opposing affidavit.”

In the present case, the respondents ultimately denied any liability to the plaintiffs.

This application, therefore, turns on the law of summary dismissal of cases on the basis that they are frivolous and vexatious.

Order 11 Rule 75(1) of the High Court Rules, which provides for this procedure, states that the defendant may make an application for the summary dismissal of the case, after filing of his plea, on the grounds that it is frivolous and vexatious.

My sole duty is to determine whether or not the claims are frivolous and vexatious....,.

CLAIM THREE

Claim Three is based on the fact, that, from the year 2014 to 2016, the Mashangwas were called on stage, in church, and were announced as a successful example in their Ministry, United Family International Church (UFIC), and, as a result, they made direct contributions to the church amounting to $1,100,000.

The gravamen of this claim is that the respondents lost the sum of USD$1,100,000 as a result of the representation made by the applicants: in short, they are saying if the applicants had not paraded them in church as a successful example in the Ministry they would not have made contributions to the church.

Contributions are generally known as tithes and offerings.

Tithes and offerings are biblical concepts recorded as early as the Book of Genesis. Tithes and offerings are acts of worship that edifies the relationship between the person who gives the offering and God. They are predicated on the believer's faith and are not enforced. They are free will offerings given in all the Christian Churches. Tithes and offerings constitute 10% of the giver or offeror's income, though, in practice, not all believers give the exact 10%. Only in certain churches is the 10% enforced by forcing the followers to declare their incomes from which the 10% is calculated.

If the respondents allegation is true, which may be so given that they are business people, then, their income during the period in question exceeded USD$11,000,000, and, if they believed the representation made by the applicants, that they are a successful example in the Ministry, they willingly parted with an amount of USD1,100,000.

However, what makes the claim frivolous and vexatious, in my view, is the fact that if ever the respondents parted with such kind of money inside the third applicant, United Family International Church (UFIC), those were free will offerings not recoverable from anyone - unless the respondents wish to try the impossible and get that from God, the receiver of the offerings.

How they hope to get a court to interpret scripture and say one reading is preferable to another in the Holy Bible remains a mystery.

In casu, the respondents admitted, in their pleadings, that the tithes they gave cannot be returned.

Having made that admission in pleadings, the admission thereof had fatal consequences to their case. The admissions are conclusive proof of the admitted fact and the respondents are, at law, precluded from controverting it.

This is our law.

See DD Transport (Pvt) Ltd v Abbort 1988 (2) ZLR 92 (SC); Moresby–White v Moresby White 1972 (3) SA 222 (RA).

This claim..., is frivolous and vexatious and is summarily dismissed....,.

CLAIM SIX AS AMENDED

Lastly, the crux of this claim is an allegation by the respondents to the effect that the applicants violated their privacy when they published information communicated to them in private on their Facebook page “The Truth About Makandiwa.”

The respondents claim a staggering USD500,000.

What has not been controverted by the respondents is the fact, that, the Facebook page in question does not belong to the applicants nor does it represent the applicants views.

In fact, the Facebook page contains some information that denigrates the first applicant (Emmanuel Makandiwa).

This fact, from the papers, is deemed admitted by the respondents: see Rule 104 of the High Court Rules 1971.

Further, the date, nature, and extent of the material given to the first applicant in private and confidence has not been pleaded but is said to be certain information of a private nature, which the respondents said they would say at the trial, rendered such pleadings defective, and, under any circumstances did not find any cause of action.

This is in variance with the law as stated in the case of International Tobacco Co. of SA Ltd v Wollheim 1953 (2) SA 603 (A)…, where the court said:

“It appears to be clear that the plaintiff, in his declaration, must set out the words alleged to have been used and may not content himself with giving their effect. It is for the court to decide what their effect is.”

The sixth claim is, on the pleadings, so patently groundless that the respondents cannot ever hope to succeed in obtaining relief on hence should be summarily dismissed as being frivolous and vexatious.

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Appealed
SC62-24 : DELTA CORPORATION LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: GWAUNZA DCJ, UCHENA JA and KUDYA JA

View Appeal
HH577-23 : DELTA BEVERAGES (PVT) LTD vs ZIMBABWE REVENUE AUTHORITY
Ruled By: MAFUSIRE J

SC05-22 : CUTHBERT DUBE vs PREMIER SERVICE MEDICAL AID SOCIETY and PREMIER SERVICE MEDICAL INVESTMENTS
Ruled By: MAKONI JA, MATHONSI JA and CHITAKUNYE JA

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

SC09-22 : MOVEMENT FOR DEMOCRATIC CHANGE (TSVANGIRAI) and DOUGLAS MWONZORA and DR THOKOZANI KHUPE vs LILIAN TIMVEOS and THABITHA KHUMALO and OTHERS
Ruled By: GUVAVA JA, MAKONI JA and CHITAKUNYE JA

Appealed
SC31-22 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY CALLAGHAN and MILLICENT CALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

SC32-22 : CUTHBERT DUBE vs PREMIER MEDICAL INVESTMENTS (PVT) LTD and PREMIER SERVICE MEDICAL AID SOCIETY
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC39-23 : LINDA KOPECKY and MARK KOPECKY and TSHOLOFELO TRUST and DIANE THORNTON and SLIPPER SHELL INVESTMENTS (PVT) LTD vs CITY OF HARARE and SPIRIT LIFE CHURCH
Ruled By: BHUNU JA, MAKONI JA and MWAYERA JA

SC50-22 : LONRHO LOGISTICS (PRIVATE) LIMITED vs RAM PETROLEUM (PRIVATE) LIMITED
Ruled By: UCHENA JA, MATHONSI JA and KUDYA JA

SC57-22 : ERICA NDEWERE vs PRESIDENT OF ZIMBABWE N.O. and CHIEF JUSTICE N.O. and JUDGE PRESIDENT OF THE HIGH COURT N.O. and JUDICIAL SERVICE COMMISSION and MINISTER OF JUSTICE N.O.
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

View Appeal
HB60-19 : JOEL SILONDA vs VUSUMUZI NKOMO
Ruled By: BERE J

View Appeal
HH209-19 : ELLIOT RODGERS vs PUWAYI CHIUTSI and TENDAI MASHAMAHANDA and REGISTRAR OF DEEDS and SHERIFF OF ZIMBABWE and BARIADE INVESTMENTS (PVT) LTD and LAW SOCIETY OF ZIMBABWE
Ruled By: MANZUNZU J

View Appeal
HH606-18 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY GALLAGHAN and MILLICENT GALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: MUZENDA J

Appealed
SC95-21 : UPENYU MASHANGWA and BLESSING MASHANGWA vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and UNITED FAMILY INTERNATIONAL CHURCH
Ruled By: GWAUNZA DCJ, MAKONI JA and BERE JA

View Appeal
HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J

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HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J

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Law Portal Zimbabwe

Pleadings re: Approach to Pleadings, Pre-Trial, Disparities with Testimony, Unchallenged Statements & Issue Estoppel

Appealed SC62-24 : DELTA CORPORATION LIMITED vs ZIMBABWE REVENUE AUTHORITY Ruled By: GWAUNZA DCJ, UCHENA JA and KUDYA JA

View Appeal HH577-23 : DELTA BEVERAGES (PVT) LTD vs ZIMBABWE REVENUE AUTHORITY Ruled By: MAFUSIRE J

SC05-22 : CUTHBERT DUBE vs PREMIER SERVICE MEDICAL AID SOCIETY and PREMIER SERVICE MEDICAL INVESTMENTS Ruled By: MAKONI JA, MATHONSI JA and CHITAKUNYE JA

Appealed SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

Appealed SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

SC09-22 : MOVEMENT FOR DEMOCRATIC CHANGE (TSVANGIRAI) and DOUGLAS MWONZORA and DR THOKOZANI KHUPE vs LILIAN TIMVEOS and THABITHA KHUMALO and OTHERS Ruled By: GUVAVA JA, MAKONI JA and CHITAKUNYE JA

Appealed SC31-22 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY CALLAGHAN and MILLICENT CALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET Ruled By: GARWE JA, PATEL JA and GUVAVA JA

SC32-22 : CUTHBERT DUBE vs PREMIER MEDICAL INVESTMENTS (PVT) LTD and PREMIER SERVICE MEDICAL AID SOCIETY Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC39-23 : LINDA KOPECKY and MARK KOPECKY and TSHOLOFELO TRUST and DIANE THORNTON and SLIPPER SHELL INVESTMENTS (PVT) LTD vs CITY OF HARARE and SPIRIT LIFE CHURCH Ruled By: BHUNU JA, MAKONI JA and MWAYERA JA

SC50-22 : LONRHO LOGISTICS (PRIVATE) LIMITED vs RAM PETROLEUM (PRIVATE) LIMITED Ruled By: UCHENA JA, MATHONSI JA and KUDYA JA

SC57-22 : ERICA NDEWERE vs PRESIDENT OF ZIMBABWE N.O. and CHIEF JUSTICE N.O. and JUDGE PRESIDENT OF THE HIGH COURT N.O. and JUDICIAL SERVICE COMMISSION and MINISTER OF JUSTICE N.O. Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

View Appeal HB60-19 : JOEL SILONDA vs VUSUMUZI NKOMO Ruled By: BERE J

View Appeal HH209-19 : ELLIOT RODGERS vs PUWAYI CHIUTSI and TENDAI MASHAMAHANDA and REGISTRAR OF DEEDS and SHERIFF OF ZIMBABWE and BARIADE INVESTMENTS (PVT) LTD and LAW SOCIETY OF ZIMBABWE Ruled By: MANZUNZU J

View Appeal HH606-18 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY GALLAGHAN and MILLICENT GALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET Ruled By: MUZENDA J

Appealed SC95-21 : UPENYU MASHANGWA and BLESSING MASHANGWA vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and UNITED FAMILY INTERNATIONAL CHURCH Ruled By: GWAUNZA DCJ, MAKONI JA and BERE JA

View Appeal HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR Ruled By: TAGU J

View Appeal HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR Ruled By: TAGU J

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Appealed
SC62-24 : DELTA CORPORATION LIMITED vs ZIMBABWE REVENUE AUTHORITY
Ruled By: GWAUNZA DCJ, UCHENA JA and KUDYA JA

View Appeal
HH577-23 : DELTA BEVERAGES (PVT) LTD vs ZIMBABWE REVENUE AUTHORITY
Ruled By: MAFUSIRE J

SC05-22 : CUTHBERT DUBE vs PREMIER SERVICE MEDICAL AID SOCIETY and PREMIER SERVICE MEDICAL INVESTMENTS
Ruled By: MAKONI JA, MATHONSI JA and CHITAKUNYE JA

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

Appealed
SC06-22 : JOEL SILONDA (SUBSTITUTED BY EXECUTOR, VUSUMUZI SILONDA) vs VUSUMUZI NKOMO
Ruled By: GUVAVA JA, UCHENA JA and KUDYA AJA

SC09-22 : MOVEMENT FOR DEMOCRATIC CHANGE (TSVANGIRAI) and DOUGLAS MWONZORA and DR THOKOZANI KHUPE vs LILIAN TIMVEOS and THABITHA KHUMALO and OTHERS
Ruled By: GUVAVA JA, MAKONI JA and CHITAKUNYE JA

Appealed
SC31-22 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY CALLAGHAN and MILLICENT CALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: GARWE JA, PATEL JA and GUVAVA JA

SC32-22 : CUTHBERT DUBE vs PREMIER MEDICAL INVESTMENTS (PVT) LTD and PREMIER SERVICE MEDICAL AID SOCIETY
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

SC34-22 : NICHOLAS MUKARATI vs PIONEER COACHES (PRIVATE) LIMITED
Ruled By: GWAUNZA DCJ, MATHONSI JA and CHITAKUNYE JA

SC39-23 : LINDA KOPECKY and MARK KOPECKY and TSHOLOFELO TRUST and DIANE THORNTON and SLIPPER SHELL INVESTMENTS (PVT) LTD vs CITY OF HARARE and SPIRIT LIFE CHURCH
Ruled By: BHUNU JA, MAKONI JA and MWAYERA JA

SC50-22 : LONRHO LOGISTICS (PRIVATE) LIMITED vs RAM PETROLEUM (PRIVATE) LIMITED
Ruled By: UCHENA JA, MATHONSI JA and KUDYA JA

SC57-22 : ERICA NDEWERE vs PRESIDENT OF ZIMBABWE N.O. and CHIEF JUSTICE N.O. and JUDGE PRESIDENT OF THE HIGH COURT N.O. and JUDICIAL SERVICE COMMISSION and MINISTER OF JUSTICE N.O.
Ruled By: MAKONI JA, MATHONSI JA and KUDYA JA

View Appeal
HB60-19 : JOEL SILONDA vs VUSUMUZI NKOMO
Ruled By: BERE J

View Appeal
HH209-19 : ELLIOT RODGERS vs PUWAYI CHIUTSI and TENDAI MASHAMAHANDA and REGISTRAR OF DEEDS and SHERIFF OF ZIMBABWE and BARIADE INVESTMENTS (PVT) LTD and LAW SOCIETY OF ZIMBABWE
Ruled By: MANZUNZU J

View Appeal
HH606-18 : NMB BANK LIMITED vs FORMSCAFF (PVT) LTD and PENNIWILL (PVT) LTD and RODNEY GALLAGHAN and MILLICENT GALLAGHAN and CHARLES CANNINGS and CLIFFORD JOHNSON and LESLEY BENNET
Ruled By: MUZENDA J

Appealed
SC95-21 : UPENYU MASHANGWA and BLESSING MASHANGWA vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and UNITED FAMILY INTERNATIONAL CHURCH
Ruled By: GWAUNZA DCJ, MAKONI JA and BERE JA

View Appeal
HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J

View Appeal
HH40-19 : UPENYU MASHANGWA and ANOR HC4197/18 and EMMANUEL MAKANDIWA and OTHERS HC1774/18 vs EMMANUEL MAKANDIWA and RUTH MAKANDIWA and ANOR and UPENYU MASHANGWA and ANOR
Ruled By: TAGU J