NDOU J: These
two matters have a chequered history and are characterized by voluminous papers
and emotive language. Because the
matters essentially involve the same main parties and centre around the same
issue, this court granted an order consolidating these matters under case HC
18/08. The matters were argued at the
same time. I propose to focus on the
main legal issues involved here and ignore all the emotive and unnecessary
papers filed.
First Application – HC 1583/07
In the first application, the
applicants seek the eviction of Nerger Properties, 3rd
respondent. The salient facts of the
first application are the following. The
applicants are registered companies of limited liability. The 2nd applicant owns all the
issued shares of the 1st applicant in its entirety. The deponent of applicant's founding
affidavit, one Raphael Howard Chitrin avers that he is a director and manager
of both applicant companies. He is a
holder of all the shares in the 2nd applicant together with his
wife. The principal assets of the 1st
applicant are various properties two of which consist of the building and open
area situate at 70 Jason Moyo Street, also known as Jameson Buildings stand 188
Bulawayo Township which will be referred to as “Jameson Buildings”.
The ownership of the Jameson
Building has been the subject of protracted litigation. In the litigation the applicant was R Chitrin
and Company. By act of cession, all
rights held by R. Chitrin and Company against shareholders of the 1st
applicant were, in terms of the judgment under HC 1676/03 (and Supreme Court
case under SC 140/05), ceded to the 2nd applicant. The 2nd applicant has acquired all
the shares in the 1st applicant and 2nd applicant's
control, ownership and rights over Jameson Buildings is beyond dispute post the
Supreme Court determination under case number SC 140.05. The 2nd applicant became the
effective owner by purchasing the entire shareholding of the 1st
applicant. The title deeds of the
Jameson Building are registered in the name of the 1st
applicant. The above-mentioned High
Court and Supreme Court judgments were between R. Chitrin and Company and a
number of respondents, one of which was the 3rd respondent, being
the party who claimed to have purchased the shares in the 1st
applicant. The 3rd
respondent, despite having lost its appeal at the Supreme Court has nonetheless
purported to act as owners and landlord and has taken rentals from the 1st
and 2nd respondents. The 1st
and 2nd respondents have occupied Jameson Buildings without any form
of lease agreement from the 1st applicant. R. Chitrin and Company occupied a portion of
Jameson Buildings by virtue of a lease with 1st applicant prior to
its exercising its rights of first refusal to purchase shares in the 1st
applicant. Other tenants were a Mr
Chiponda trading as Olgas Centre, Hybate Trading, V M Elkinton and Two
Shillings Boutique. Whilst the
abovementioned litigation was pending the 3rd respondent arranged
that each tenant would pay a pro rata
contribution towards rates and water and the electricity was metred
individually. The collection of these
monies by 3rd respondent was without the authority of the
applicants. However, after the Supreme
Court dismissed 3rd respondent's appeal, this practice ceased in
2007 and since then these monies have been paid by 2nd applicant and
no monies have been paid by the respondents.
The 1st and 2nd respondents still continue to
enjoy the use of the property and the 3rd respondent continues to
exercise assumed rights of administration.
No occupational consideration has been paid to the applicants by the
respondents. Even though the Supreme Court
ruled against them, the 3rd respondent refused to move out when
asked to do so by the applicants.
However, at a later date, 3rd respondent appeared to have
agreed to move out pursuant to the Supreme Court judgment. The 3rd respondent's legal
practitioners even negotiated that they be given time to move out on their
own. On 23 February 2007, the
respondent's erstwhile legal practitioners wrote a letter to the applicants'
legal practitioners couched in the following terms:
“Your letter of the 14th instant to Mr and Mrs
Tayali has been referred to us for our attention and further action.
First of all, we must emphasize that our clients are not in
unlawful possession of the premises they occupy. After the Supreme Court judgment, there was
communication between the parties, and your clients were fully aware of, and
consented to, the occupation of the premises by our clients.
…
Finally, it is unfair to ask our clients to vacate the
premises on seven days notice: it is not possible to find suitable business
premises within seven days. The
notice to our client should be reasonable, and we believe that three months is
adequate.” (emphasis added)
The respondents did not put into issue applicant's right to
evict them. They sought the applicant's
indulgence to wind up their operations.
On 12 may 2007 the 1st respondent, acting on behalf of 3rd
respondent wrote a letter to the 1st applicant's agent in the
following terms:
“…
Regarding the notice period served on January 31, 2007, we
request that the notice be extended to May 31, 2007 because as you are
aware, we are a business and we need to secure new premises as well as wind up
our business. …”
Once more, all that the respondents were seeking was 1st
applicant's indulgence. The 1st
applicant's agent did not accept the respondent's request for indulgence and by
letter dated 20 March 2007 declined in the following terms:
“(1)…
(2) …
(1) Regarding
the adjustments of the notice period we regret to advise that this will not be
possible in view of the extent to which the landlord's redevelopment plans have
been developed. As such we expect to
have vacant possession of the premises you occupy on 1 May 2007 at the latest
…”
1st and 2nd
respondents agreed to vacate Jameson Buildings by the end of May 2007. Thereafter, the respondents resisted eviction
and their conduct has prevented the applicants from having any sort of access
to any portion of the property including such areas over which the respondents
have never had any purported rights upon any grounds whatsoever. The respondents have also removed the
applicants' lock and chain and violence has been used to deny the applicants'
the exercise of their rights. Mr Chitrin
was assaulted by an employee of 3rd respondent when he tried to
assert the applicants' rights. The respondents
then embarked on a media campaign, presumably to seek public sympathy on the
matter. They also sought to politicize a
legal issue as they sought assistance of the Vice President. The 3rd respondent is subletting
the premises and receiving rentals. In
their opposing papers the respondent's case is that the above-mentioned
negotiations and the letters written in pursuance of such negotiations were on
a without prejudice basis. They state in
5.3 of their opposing affidavit:
“As indicated by the plaintiff [sic] the negotiations concerning our eviction was [sic] on a without prejudice basis to our
right and we are enforcing such rights anywhere. So the without prejudice basis papers must be
expunged from the record and we claim our rights to statutory tenant in this
case.”
On the question of statutory tenancy, the respondents did not
make any submissions in this regard in their heads of argument. Be that as it may, nowhere in the opposing
affidavit do any of the respondents claim to have a lease or paid rentals. This fatal lack of this material averment
puts at rest any claim to a right of occupation by virtue of being a statutory
tenant. Section 22(2) of the Commercial rent
regulations Statutory Instrument 1676/1983 presupposes a prior lease and continuing
payment of rentals before a claim of statutory tenancy is made. Further, the respondents averred that a
certificate is required from the Rent Board.
These are commercial premises and no such certificate is required. In the opposing affidavit the respondents
suggest that the application is based on falsehoods but they have not
articulated such falsehoods. In fact,
this application is premised on the above-mentioned order of this court which
was upheld by the Supreme Court. Another
issue raised by the respondents is that the balance of convenience favours
their occupation until the Supreme Court finalises the appeal by Mrs Humpage
i.e. 3rd respondent in the second application. The said appeal is however non-existent. This is so because her application for
condonation for late filing of the appeal was dismissed by the Supreme Court.
Another issue raised by respondents
is that they have a lien over Jameson Buildings. This issue was raised for the first time in
the heads of argument. The averments on
the existence of the lien should have been made in the opposing affidavit. It seems this is a mere after thought. It is not clear what type of lien is being
claimed. In any event, the respondents
are not in lawful possession of the premises so they cannot claim a lien. There are no averments of the nature and
extent of improvements upon which the claim for a lien is premised. The respondents have not established any defence
at law at all except the clutching at straws.
They had their matter determined by this court. The applicants have set out clear grounds
showing that they have all rights over the disputed property and that the
respondents occupy the property without any right whatsoever and without paying
rent or contributing to other expenses such as rates. The opposing papers carefully analysed in
fact simply do not disclose any defence at law.
The deponent, somewhat emotively, points out that the property was purchased
by R. Chitrin and Company for what is now a paltry sum. The fact is however, at the time of the
transaction the purchase price was a reasonable sum. Hyper-inflation has eroded that sum but that
is not the fault of applicant. In any
event, a perusal of the papers in the very first High Court case will show that
the respondents themselves offered very much less for the property than was
offered by R. Chitrin and Company.
The effect of the High Court and
Supreme Court orders, supra, is that R. Chitrin and Company have a right of
first refusal which right resulted in a ruling in their favour. The applicants have made out a case for the
eviction. The respondents have blown hot
and cold. On the one hand, they sought
indulgence of the applicants to seek alternative premises to move to. On the other hand, they arrogantly refused to
comply with the order of this court as confirmed by the Supreme Court. This kind of behavior calls for costs at an
enhanced scale – Fuyana v Moyo & Ors HB-39-05. Further, the respondents used strong language
in their pleadings. This is not desirable
and calls for censure by the court by way of an appropriate award for costs on
a higher scale – Shoprite Checkers (Pty)
Ltd v Bumpers Schwarmas CC & Ors 2003(5)
SA 354 (SA); Dr Ferguson & Partners
v Zimbabwe Federation of Trade Unions
& 33 Others HB-57-04 and Mkwananzi
& Anor v Mkwananzi & Anor
HB-125-06.
Accordingly the provisional order
granted by this court on 20 July 2007 be and is hereby confirmed. The applicants have applied for this order to
be carried into execution and have placed reliance on Rule 240 of the High
Court Rules 1971. It is in exceptional
cases that the court will order execution notwithstanding the filing of any
notice of appeal - Masukume v Mboma HB-46-03 and Jere v Chitsunge HB-10-03. There are major problems in the latter application
for execution pending appeal. First, the
founding affidavit does not contain averments in this regard. The issue was raised in the heads of argument
and oral submissions by Ms Moyo. Second, procedurally I do not think I can
make such an order outside a special application. In Zimbabwe
Mineral Development Corp & Anor v
African Consol Resources PLC & Ors SC-1-10 CHIDYAUSIKU CJ dealt with this issue in
detail. He noted that at common law the
noting of appeal against a judgment suspends the operation of that
judgment. At common law the court
granting the judgment enjoys inherent jurisdiction to order execution of that
judgment despite the noting of an appeal, the successful party has to make a
special application for such relief. For
the court to be able to exercise this discretion properly, the special
application must set out in some detail the basis for seeking such relief. The respondent is entitled to an opportunity
to respond to the application. In this
case, the applicants did not make a special application, they simply applied at
some stage in the course of the proceedings to have a relief of that kind. This approach renders the fundamental right
of appeal nugatory or abrogated without due process. Once a judgment is given, the losing party is
entitled to appeal. The noting of appeal
has the effect of suspending the judgment.
It is only then that the successful party can make a special application
for leave to execute the judgment despite the noting of an appeal.
Second application – HC 2747/07
This claim by Nerger Properties for
an order that the right of first refusal granted to R. Chitrin and Company be
declared void for non-compliance with section 183 of the Companies Act. Mr Mazibisa,
for the applicants, concedes that the proceedings are between more or less the
same parties and concern more or less the same subject matter i.e. R. Chitrin
and Company's right of first refusal. As
alluded to in the first application above, this High Court and Supreme Court
ruled that R. Chitrin and Company has such right of first refusal. Mr Mazibisa,
however, submits that the two matters are not founded on the same cause of
action. Nerger Properties' claim in this
second application is based on alleged non-compliance with section 183 of the
Companies Act [Chapter 24:03] (“the Act”).
It is applicants' contention that in light of the provisions of section
183(1) (b) and 183(2) of the Act there ought to have been a general meeting of Potential investments shareholders
to empower and authorize the director Mr Louw (who granted R. Chitrin the right
of first refusal) in specific terms. It
is alleged that there was never such a general meeting of Potential Investments
shareholders to authorize the disposal of Jameson Buildings via the sale of the
entire issued shares and loan account of Potential Investments. In the circumstances, it is averred that the
resultant right of first refusal agreed upon by one of the directors of
Potential Investments and R. Chitrin is null and void for non-compliance with
section 183(1)(b) and 183(2) of the Act.
Authority for this averment is submitted to be Mason v Timore Trading
services (Pvt) Ltd 2004(2) ZLR 347(H) and Ngatibataneyi (Pvt) Ltd v Moyo
& Anor SC 13/07.
It is beyond dispute that question
of Mr Louw's authority to dispose of Jameson Buildings was contested issue at
the High Court and Supreme Court in the previous proceedings. Admittedly no specific reference was made to
section 183, supra. But the issue was
indeed determined by the High Court and Supreme Court. In his cyclostyled judgment under HB-30-05
CHEDA J at pages 7-8, stated:
“The truth of the matter is that Mr Louw had the mandate
and authority to deal with both Mr Chitrin
for and on behalf of applicant and 7th respondent. There, therefore existed a special relationship between the
two in the form of principal and agent and as such 1st respondent
[Rebecca Elizabeth Humpage] can no doubt escape the conduct of Mr Louw. The
question is whether or not the applicant had a right of first refusal on this
property. Mr Louw negotiated the lease
agreement. He remembers that Mr Chitrin
kept on referring to the right of first refusal …” (emphasis added)
What can be discerned from this
passage is that Mr Louw's mandate to grant the right of refusal to R. Chitrin
was a crucial issue determined by the High Court in the previous
proceedings. The applicant does not at
all proffer an explanation why he did not raise the additional issue of
assailing the right of refusal on the basis of section 183, supra. Why is it challenging this right of refusal
in a piecemeal fashion? Nerger
Properties was in any event represented by a legal practitioner. Be that as it may the Supreme Court under SC
476-06 in the former proceedings also dealt with Mr Louw's authority or mandate
to grant the right of refusal to R. Chitrin.
At page 6-7 of the cyclostyled judgment this is what appears:
“Mrs Zurnamer's contention that Louw did not have
authority to grant it [right of first refusal] does not assist. Potential had long authorized Louw to deal
with the property on its behalf.
Indeed when Louw granted this right to the respondent he genuinely
believed he was entitled to do so and similarly Chitrin was entitled to believe
that a right granted by Louw was proper as he always dealt with matter
regarding the property. It does not
assist Potential to attempt to place any limitations on Louw's mandate at this
state. Louw was at all material times
an agent of Potential concerning the property …” (Emphasis added)
The respondent's case in this matter
is that the applicant is merely trying to obtain the same relief that it failed
to establish in the previous proceedings and relies on a wholly inappropriate
section of the Companies Act to do so.
The respondent's case is alternatively, that, in any event, section 183,
supra, does not apply in this
case. It is respondent's argument that
what happened here is that the shareholders in the company (3rd to 7th
respondents) sold their shares. Mr Louw
did not sell the company assets. It is argued
that when shares are sold and transferred no meeting defined in section 183, supra, is required.
It is clear from the foregoing that
this special plea of res judicata
raised by the respondent is a declaratory plea which seeks to quash the matter
altogether. It seeks to destroy to
operation of the cause of action – Brown v
Vlok 1925 AD 56 at 58; Sibeko and Anor v Minister of Police & Ors 1985 (1) 151 (W) and Chimpondah & Anor v Muvami HH-81-07. In the latter judgment MAKARAU JP (as she then was) had this to say at page 4 of her
cyclostyled judgment:
“The requirements for the plea of res judicata are settled.
Our law recognizes that once a dispute between some parties has been
exhausted by a competent court, it cannot be brought up for adjudication again
as there is need for finality in litigation.
To allow litigants to plough over the same ground hoping for a different
result will have the effect of introducing uncertainty into court decisions and
will bring the administration of justice into disrepute.
For the plea [of res
judicata] to be upheld, the matter must have been finally and definitely
dealt with in the prior proceedings. In
other words, the judgment raised in the plea as having determined the matter
must have put to rest the dispute between the parties by making a finding of in
law and/or in fact against one of the parties on the substantive issues before
the court or on the competence of the parties to bring or defend the
proceedings. The cause of action as
between the parties must have been extinguished by the judgment.”
The requisites of res judicata, put differently, are that -
(a) The
two proceedings must have been between the same parties or their successors in
title;
(b) Concerning
the same subject matter; and
(c) Founded
upon the same cause of action or cause or complaint – Mitford's Executor v Ebden's
Executor & Ors 1917 AD 682; Le
Roux v Le Roux 1967(1) SA 446
(A);
The Civil Practice of the Supreme
Court of South Africa
(4th Edition) Herbstein and Van Winsen at 250 – 1 and Wolfenden v Jackson 1985 (2) ZLR 313 (SC).
For a plea of res judicata to
succeed, however, it is not necessary that the cause of action in the narrow
sense in which term is sometimes used should be the same in the latter case as
in the earlier case. If the earlier
necessarily involved a judicial determination of some question of law or fact
in the sense that the decision could not have been legitimately or rationally
pronounced without at the same time determining that question or issue, then
that determination, though not declared on the face of the recorded decision,
is deemed to constitute an integral part of it, and will be res judicata in any subsequent action
between the same properties in respect of the same subject matter – Williams v Shub 1976(4) SA 567 (C ); Boshoff
v Union Government 1932 TPD 345; Cook & Ors v Muller 1973(2) SA 240 (N); Owen
Smith v Owen Smith 1981 ZLR 514
(S); Munemo v Muswerwa 1987(1) ZLR 20 (SC); Mvaami
(Pvt) Ltd v Standard Finance Ltd 1977(1)
SA 861(R) and Wolfenden v Jackson, supra. In this case the issue of Mr Louw's authority
to grant the right of first refusal was hotly contested in the previous
proceedings. As alluded to above, the
High Court and Supreme Court made a determination that Mr Louw had authority to
represent Potential in its dealings with R. Chitrin. The applicant seeks to plough the same ground
of challenging Mr Louw's authority based on section 183, supra. With the benefit of
experienced counsel in the previous proceedings applicant does not proffer any
explanation why the challenge of Mr Louw's authority was not based on section
183, ab initio.
To allow this kind of application
will result in uncertainty in court decisions and will bring the administration
of justice into disrepute. The Supreme
Court has confirmed the High Court decision that Mr Louw had the authority to
represent Potential in the granting of the right of first refusal. The Supreme Court's judgment is final in
terms of section 26 of the Supreme Court Act [Chapter 7:13]. The issue of res judicata is fatal to the applicant's
claim. This court has inherent
jurisdiction to prevent abuse of its process in certain circumstances. This power has to be exercised sparingly and
only in exceptional cases and in clear cases – Hudson v Hudson & Anor
1927 AD 259 at 267 and Fisheries
Development Corp of SA Ltd v Jorgensen
& Anor; Fisheries Development
Corp of SA Ltd v AWJ Investments
(Pty) Ltd & Ors 1979 (3) SA 1331 (W) at 1338. This is one such case where the proceedings
are vexatious and frivolous. The
applicant had ample forum and opportunity to challenge Mr Louw's
authority. The applicant did so in the
High Court and in the Supreme Court unsuccessfully. Thereafter, the applicant went back and
studied the law once more and discovered section 183 and decided to use it to
assail Mr Louw's authority.
Without going into other issues raised, I accordingly dismiss
this application with costs on the legal practitioner and client scale.
Joel Pincus, Konson & Wolhuter, applicant's legal practitioners under
HC 1583/07 and respondent's legal practitioners under HC 2747/07
Cheda & Partners,
respondent's legal practitioners under HC 1583/07 and applicant's legal
practitioners under HC 2747/07
