Following certain concerns that I had raised on the form
and content of the urgent chamber application herein, the applicant decided to
withdraw it. However, it insisted that each party should bear their own costs.
On the other hand, the respondent insisted not only on its costs, but also that
they be paid on ...
Following certain concerns that I had raised on the form
and content of the urgent chamber application herein, the applicant decided to
withdraw it. However, it insisted that each party should bear their own costs.
On the other hand, the respondent insisted not only on its costs, but also that
they be paid on the higher scale.
After full argument on costs I awarded them at the higher
scale. Below are my reasons, most of which I had given ex tempore.
The urgent chamber application had been for an order that the
respondent (“the Bank”) should
uplift or remove the embargo that it had unilaterally placed on the applicant's
account with it.
The applicant's deponent, one Richard Mayiya (hereafter
referred to as “Richard”), was a Director
of the applicant. He claimed that two other Directors, a husband and wife team
based in South Africa, had resigned. He said that such a development had been
communicated to the Bank with instructions to alter the signing mandate
originally given to it. The mandate had included those Directors. The Bank had
initially complied. Richard Mayiya said he had made some four withdrawals
single handedly. However, the one ex-Director, the husband, one Reuben Munsamy
(hereafter referred to as “Reuben”),
had subsequently written to the Bank on the applicant's forged letter-head,
denying that he had resigned from the applicant and that he was still a
signatory to the account. The letter had warned the Bank of grave consequences
if it should honour requests for withdrawals on the basis of Richard's single
signature.
The Bank had filed a notice of opposition objecting to the
urgent chamber application on both technical and substantive grounds. But since
the application was withdrawn it became unnecessary to argue it on the merits,
except in so far as they had a bearing on the question of costs.
At the hearing, the applicant had wanted a postponement. It
transpired that as they had been waiting to be called into chambers the parties
had had an opportunity to discuss the matter. It seems the issue had finally
crystallised into whether or not Reuben Munsamy had indeed resigned as a Director
of the applicant and was no longer concerned with the manner the applicant's
account with the Bank would be run. The applicant wanted a postponement to
present its second resolution that allegedly would prove that Reuben had indeed
resigned. The first resolution was the one on which the application had largely
been predicated upon. It had been challenged.
The Bank was opposed to a postponement. Among other things,
it said the applicant had had ample opportunity to produce proof of Reuben
Munsamy's resignation and that the purpose for which the applicant wanted the
postponement, namely, to produce another resolution, would not change the
complexion of the case. It seemed the Bank wanted Reuben himself to provide the
proof of his resignation and to confirm the alteration of the signing
arrangements.
There was a stalemate.
Counsel for the applicant formally moved the application
for a postponement. Counsel for the Bank responded. It was before counsel for
the applicant could reply that I raised my concerns in order that he could take
them into account in his reply.
It had seemed to me, even before I had read the notice of
opposition, that the urgent chamber application was defective in a number of
ways. So I felt if the application was to be postponed I had to be satisfied
that it was regular in the first place. It was at that point that the applicant
decided to withdraw it. I felt it was a decision well-taken and I commended counsel
for the applicant for it.
The applicant's grounds for insisting that each party
should bear their own costs was that the Bank's action in “freezing” its
account had been taken unilaterally; that it had not afforded the applicant a
chance to make representation and that there had been no justification for such
action given that proof of Reuben Munsamy's resignation, in the form of a Form
CR14, had been furnished to the Bank. Furthermore, the Bank must have initially
accepted the applicant's position because Richard Mayiya had made four
withdrawals soon thereafter before the embargo had been placed.
In spite of the applicant's submissions, I not only awarded
the costs against the applicant but also on the higher scale. My reasons were
these.
The urgent chamber application was defective from the
outset. It had not been in Form 29 of the Rules of this court as required by
the proviso to Rule 241(2): see Zimbabwe Open University v Mazombwe 2009 (1)
ZLR 101 (H); Minister of Higher & Tertiary Education v BMA Fasteners
(Private) Limited & Ors HB42-14 and Base Minerals Zimbabwe (Private)
Limited & Anor v Chirosva Minerals (Private) Limited HH559-14. Among other
things, the grounds for the application had not been set out on the face of the
application.
The certificate of urgency was also defective.
It did not comply with Rule 244. Among other things, it
omitted the most basic of information on which the legal practitioner who had
certified the matter to be one of urgency had based her conclusions on.
Incidentally, she happened to be the same legal practitioner of record for the
applicant – an aspect that I did not take issue with despite the respondent's
protestation. Virtually all the averments in the purported certificate of
urgency had been arguments on the merits of the case, essentially why the Bank
had to be ordered to uplift the embargo.
In General Transport & Engineering (Pvt) Ltd & Ors
v Zimbabwe Banking Corporation Ltd 1998 (2) ZLR 301 (HC), it was held that the
reason behind the certificate of urgency is that the court is only prepared to
act urgently in a matter where a legal practitioner is involved and has given
his or her assurance that such treatment is warranted. The legal practitioner
must apply his or her mind and judgment to the circumstances of the case and
reach a personal view that the matter is urgent. He or she must support his or
her judgment with reasons.
Apart from the form, the urgent chamber application was
also defective in substance.
Among other things, Richard Mayiya's main proof that Reuben
Munsamy had stepped down was some resolution allegedly reached on 24 October
2014.
However, this document clearly referred to Reuben's removal
from a different entity altogether, an entity that was based in a different
country altogether - South Africa. Richard Mayiya had alleged that the
applicant, known as RM Mining and Industrial Zimbabwe (Private) Limited, and
that the other entity, known as RM Mining and Industrial South Africa CC, had a
“common shareholding”, whatever that meant. However, the two, being completely
different entities despite their names sharing the same root, it was not
explained why Reuben Munsamy's alleged resignation from the South African
entity would automatically be a resignation from the applicant.
Counsel for the applicant argued that the applicant had
subsequently updated its Form CR14 to align with the new development and that
it was such proof as had been submitted to the Bank. However, Reuben, in a
communication to the Bank, which was part of the applicant's papers, had denied
that he had resigned. Under such circumstances it should have been obvious to
the applicant that the only sensible thing for the Bank to have done would be
to embargo the account.
Another document submitted by the applicant as proof that Reuben
Munsamy had resigned and that the Bank had seemed to accept that fact, was an
extract of a bank statement of the applicant's account. It showed some debit
and credit entries between 13 November 2014 and 16 December 2014. The applicant
alleged that communication to the Bank, of Reuben Munsamy's alleged resignation,
had been on 10 November 2014. However, nowhere on the bank statement did it
show that the transactions had been on Richard Mayiya's single signature.
Furthermore, given that Reuben's warning to the Bank had been on 16 December
2014, it made sense that the Bank immediately placed the embargo. The applicant
could not rationally expect the Bank to continue honouring Richard's unilateral
withdrawal instructions in the face of Reuben's warning. For the applicant to
have mounted an urgent application under such circumstances was rather
irresponsible.
That was not all.
It was manifestly untrue for the applicant to allege, in
its application, that the Bank had embargoed its account without warning. Its
legal practitioners had written to the Bank on 18 December 2014 demanding the
removal of the embargo. The Bank had responded on 23 December 2014. It advised
of Reuben's communication and of the fact that it had informed Richard about
it. It had asked Richard to provide resolutions and other documents to confirm
Reuben's alleged resignation. The Bank had also expressly advised Richard that
the two entities had been separate and that the document that it had initially
been furnished with had been in respect of the South African entity and that it
was irrelevant. Instead of dealing with the Banks' concerns, the applicant had
rushed headlong with its urgent chamber application.
The draft provisional order sought the same relief in both
the interim and final orders.
In both instances, it was, in essence, a final order being
sought.
As I asked counsel for the applicant was it not obvious
that the blocking of the account by the Bank was but a symptom of the
underlying festering dispute between the parties? There had been no indication
anywhere in the application that the applicant had brought, or was planning to
bring, substantive proceedings to end the dispute so as to pave way for the
opening of the account. Instead, the applicant had precipitously filed the
urgent chamber application which avoided the main dispute. It should have been
obvious to the applicant that there had been a serious misjoinder of parties
and that the enormous dispute of fact, namely, whether or not Reuben had
stepped down, could not possibly be resolved on the papers, let alone in
summary fashion as is inevitable in an urgent chamber application.
Finally, when I had got seized of the matter, on New Year's
eve, literally some few hours before the demise of 2014, I had agonised over whether
or not to set it down on account of the numerous defects apparent on the face
of the application. Eventually, I decided I would give the applicant its day in
court. But seeing that the application was against the Bank only, and that this
was a party that would not help bring out the full story, I expressly directed
that the application and notice of set down be served, not only on the Bank,
but also on the other Directors, and that proof of such service should be filed
or produced at the hearing. Furthermore, realising that the other Directors may
well have been out of the country and in their home country, South Africa, I
further directed that if proper service was not going to be possible, given the
short time available, at least the applicant had to inform the other Directors
of the application and of the date and time of the hearing.
Surprisingly, at the hearing, no proof of service of the
application and or of the notice of set down was available.
Counsel for the applicant advised that in response to my
directive, another meeting of the applicant had been convened at which Reuben
Munsamy had resigned - again. He said he had a copy of the resolution to that
effect and would produce it if it was necessary.
That was hardly satisfactory. We were going round in
circles.
In the end, I considered that there was no
reason why the Bank had to be put out of pocket in respect of such a vexatious
application. I felt costs on the higher scale were justified.