MATHONSI
J: This summary
judgment application graphically illustrates that a trend is fast developing
among business people in this country to borrow huge sums of money from
financial institutions and when the time to pay comes, to pay as little as
possible or better still, not to pay at all. A pattern is manifesting itself
where business people will stop at nothing in avoiding to pay legitimate claims
and in the process play havoc to investor confidence.
BARTLETT J put it very succinctly in Industrial Equity Ltd v Walker
1996 (1) ZLR 269 (H) 308C when he said:-
“Things that go round come
round. Walker has had a merry dance. But he would, to my mind, be well advised
to realise that the music has stopped and the time has come to pay the piper.
Although with Walker's determination to divest himself of all things
executable, I fear that the dance is not yet over – and that it won't be long
before the pipes are calling again and the last waltz begins.”
On 19 July 2011 the applicant extended an overdraft
facility to the first respondent which was signed for by the second and third
respondents in terms of which the first respondent would be advanced a sum not
exceeding US$50 000-00. The second, third and fourth respondents signed
unlimited guarantees binding themselves as sureties in solidium for
the due and punctual repayment on demand of all sums of money due by the first
respondent.
Although money was drawn in terms of the facility to the tune of $51 500,45 the
first respondent failed to service it resulting in the applicant terminating
the facility and demanding immediate payment of the amount due. In response to
the demand the first respondent, again represented by the second, third and
fourth respondents, wrote 2 letters acknowledging indebtedness. In the letter
of 5 March 2012 they stated:
“REF: BancABC FACILITY NUMBER A13766 FOR USD 50 000.00
We acknowledge the above
facility and would want you to note that P.W.C. Motors p/l is willing to and
able to pay US$1 000.00 (one thousand United state dollars) per month towards
the balance that we owe BancABC.”
The respondent wrote another letter acknowledging the debt
on 12 March 2012. They stated as follows:-
“REF: BancABC FACILITY NUMBER A13766 FOR USD 50 000.00
We acknowledge the above
facility and would like to assure you of our commitment to pay it off as
urgently as we can. Our Managing director has put up his residential property
(with deeds) for sale and proceeds from that will be used to offset our debt
with the bank. We are very keen to maintain our business with BancABC and we
will channel all our transactions through them. We thank them for their
continued support and we apologise for our account's non-performance but we
trust that they will be patient with us regarding this matter.
Yours faithfully
P. Mare – Managing Director
W. Mare – Director
C. Mare – Director”
It would appear that the respondents underwent some
dramatic metamorphosis from the position proclaimed in the above correspondence
because when the applicant issued summons claiming the outstanding sum of $47
460-00, they promptly entered appearance to defend and requested a whole array
of further particulars.
Believing that the respondents did not have a bona fide defence to the
claim in light of the provisions of the facility document they signed and the
obviously unequivocal acknowledgement of indebtedness contained in the letters
I have cited above, the applicant filed this court application for summary
judgment.
In his founding affidavit, Luckson Pfukwa, the Head of Credit of the applicant
stated that the facts are within his personal knowledge and that he is duly
authorised to depose to the affidavit on behalf of the applicant. He confirmed
the cause of action as being the overdraft facility and the mortgage bond
registered against stand 5246 Mutare Township. The application is opposed by
the respondents. They took issue with the applicant's failure to attach a
resolution showing that Luckson Pfukwa is authorised to represent the
applicant. On the merits, they insisted that there are material disputes of
fact which should be determined at the trial. They demanded that the applicant
must prove the actual amount due, the legality of the interest claimed and also
justify the fees levied.
The respondents also insisted that certain amounts of money were paid to the
applicant which were not taken into account in arriving at the amount claimed.
They attached receipts totalling $830-00 for payments of $100-00 instalments
made between 2 March and 31 March 2012.
At the hearing of the application Mr Goba, for the respondents took a point in
limine that the deponent of the founding affidavit has not shown that he
has authority to represent the applicant. He submitted that Luckson Pfukwa does
not have locus standi to bring the action.
A summary judgment application is made in terms of Rule 64 of the High Court of
Zimbabwe Rules, 1971. The requirement for a supporting affidavit is contained
in subrule (2) of Rule 64 which provides;
“ A court application in terms
of subrule (1) shall be supported by an affidavit made by the plaintiff or by
any other person who can swear positively to the facts set out therein,
verifying the cause of action and the amount claimed, if any, and stating that
in his belief, there is no bona fide defence to the action.”
To my mind, the affidavit of Pfukwa meets all the
requirements of Rule 64 and he fell within the category of persons who could
swear positively to the facts; Bubye Minerals (Pvt) Ltd & Anor
v Rani International Ltd 2007 (1) ZLR 22 (S) 25B.
I am aware that there is authority for demanding that a company official must
produce proof of authority to represent the company in the form of a company
resolution; South Africa Milling Company (Pvt) Ltd v Reddy 1980(3)
SA 431; South African Allied Workers Union & Others v De Klerk N.O &
Others 1990 (3) SA 425.
However, it occurs to me that that form of proof is not
necessary in every case as each case must be considered on its own merits. Mall
(Cape) (Pvt) Ltd v Merino KO-Oprasie Bpk 1957 (2) SA 345 ( C). All the
court is required to do is satisfy itself that enough evidence has been placed
before it to show that it is indeed the applicant which is litigating and not
an unauthorised person.
To my mind the attachment of a resolution has been blown out of proportion and
taken to ridiculous levels. Where the deponent of an affidavit states that he
has the authority of the company to represent it, there is no reason for the
court to disbelieve him unless it is shown evidence to the contrary. Where no
such contrary evidence is produced the omission of a company resolution cannot
be fatal to the application. I therefore reject the point in limine.
On the merits the applicant is standing on firm ground having produced the
facility document signed by the respondents and the mortgage bond which is,
itself, an acknowledgement of debt. In addition, letters written by the
respondents admitting liability have been produced.
In order to succeed in defeating a summary judgment application the respondents
must disclose a defence and material facts upon which that defence is based
with sufficient clarity and completeness so as to persuade the court that if
proved at the trial such facts will constitute a defence to the claim: Hales
v Doverick Investments (Pvt) Ltd 1998 (2) ZLR 235 (H) 239 A-B.
As stated by ZIYAMBI JA in Kingstons Ltd v L.D. Ineson (Pvt) Ltd 2006
(1) ZLR 451 (S) 458 F-H and 459A:
“Not every defence raised by a
defendant will succeed in defeating a plaintiff's claim for summary judgment.
Thus what the defendant must do is to raise a bona fide defence – a
'plausible case' – with 'sufficient clarity and completeness to enable the
court to determine whether the affidavit discloses a bona fide
defence'. He must allege facts which, if established 'would entitle him to
succeed.' See Jena v Nechipore 1986 (1) ZLR 29(S); Mbayiwa v
Eastern Highlands Motel (Pvt) Ltd S – 139-86; Rex v Rhodian Investments
Trust ( Pvt) Ltd, 1975 R & N 723 (SR).
If the defence is averred in a
manner which appears in all circumstances needlessly bald, vague or sketchy
that will constitute material for the court to consider in relation to the
requirement of bona fides. See Breitenbach v Fiat SA (Edms) Bpk
1976 (2) SA 226 (T) at 228D-E.
The defendant must take the
court into his confidence and provide sufficient information to enable the
court to assess his defence. He must not content himself with 'vague
generalities and conclusory allegations not substantiated by solid facts' see District
Bank Ltd v Hoosain & Others 1984 (4) SA 544 ( C) at 547G-H; Mbayiwa
v Eastern Highlands Motel (Pvt) Ltd – supra; Hales v Doverick
Investments (Pvt) Ltd 1998 (2) ZLR 235 (H)”.
The respondents do not
even begin to satisfy the criteria set out above. All that they have done in
the opposing affidavit of the second respondent, is place in issue, without
more, the actual amount claimed and indeed the penalty fees. Yet all the claims
have been supported by documentation including the facility document and the in
duplum schedule showing how the amount claimed is arrived at.
The respondents signed an agreement allowing the applicant to charge the
interest that is being claimed. Without disputing the terms of the instrument
of debt, the respondents want the interest rate to be referred to trial. They
do not show why they should not be bound by what they agreed. These are the
same respondents who wrote 2 letters acknowledging the debt and asking for time
to pay. In my view, no defence whatsoever has been shown by the respondents.
Mr Musimbe for the applicant made reference to the remarks of ROBINSON J in Intercontinental
Trading (Pvt) Ltd v Nestle Zimbabwe (Pvt) Ltd 1993 (1) ZLR 21 (H) 37,
which I subscribe to, where the learned Judge said:-
“ Businessmen beware. If you
fail to honour your contracts then don't start crying if, because of your
failure, the other party comes to court and obtains an order compelling you to
perform what you undertook to do under your contract.”
I find it utterly deplorable that business people are
very quick to receive money from banks undertaking to repay on certain terms.
When they have expended the money and enjoyed the benefits they cry foul when
the lender demands its dues. We cannot allow a situation where business people
grab loans and then refuse to pay. As they say, the time to pay the piper has
come. I have taken into account the sum of $830-00 paid after computation of
the debt. In the result I make the following order; that
1.
Summary judgment be and is hereby entered in favour of the applicant against
the respondents, jointly and severally, the one paying the others to be
absolved, in the following;-
a)
The sum of US$46 630-00 being the balance on the overdraft facility entered
into between the parties on 19 July 2011.
b)
Interest on the sum of US$46 630-00 at the rate of 44% per annum from 5 June
2012, the date of service of summons to date of payment.
c)
Costs of suit on the legal practitioner and client scale together with
collection commission to the extent that such commission is permissible in
terms of the Law Society of Zimbabwe By Laws.
2.
The immovable property known as stand 5246 Mutare Township situate in the
District of Umtali registered in the name of the first respondent be and is
hereby declared specially executable.
Bere Brothers, applicant's
legal practitioners
Makombe
& Associates, respondent's legal practitioners
