TSANGA J: This was an application
for an interpleader lodged by the Deputy Sherriff of Karoi against Edward
Chigango & 55 others as first respondents and judgment creditors. Fresh
Bakery, Karoi were second respondents and judgment debtors. David Govere was
the third respondent and claimant.
The order I granted in this matter
on 1 November was as follows:
1.
The application by the Deputy Sheriff Karoi to amend the citation of
David Govere who is already duly authorised to represent Noxon Investment as
Director, with the citation of Noxon Investments (Pvt) Ltd, as 3rd
Respondents is granted.
2.
The claimant's claim, Noxon Investments (Pvt) Ltd to the goods placed
under attachment in execution of Judgment Case No. HC6273/10 is hereby
dismissed.
3. The
goods set out in the notice of seizure and attachment dated 26 October 2011
issued by Applicant are declared executable
4. The
claimant is ordered to pay the costs of the Judgement Creditor and
Applicant.
My reasons for the above order were
as follows:
An application to amend the citation
of David Govere was made by the applicant. With regards to incorrectly cited
parties, case law and legal authorities are clear that such amendments are
permissible. As Herbstein and Van Winsen[1]
explain at p145:
“Where
a party has been cited incorrectly, the citation can be amended. It is
important to distinguish between situations where the person cited is a
non-entity and where an existing entity has been incorrectly cited. It is also
important to distinguish the correction of citation of a party and the
substitution of a new party. A court can allow the substitution of a party by
way of an amendment provided that no prejudice results to the other parties to
the proceedings”.
In casu I was not faced with the
substitution of a new party altogether but the correction of an incorrectly
cited party. I allowed the application to amend the citation of David Govere
with that of Noxon Investments and proceeded to hear the matter to finality for
the following reasons. From the evidence in the papers filed in support
of the interpleader application and from the affidavit of David Govere himself,
it was clear at all times that he was being cited as David Govere in his
capacity as Director of Noxon Investments. The first evidence of this is from
the detail in the summons themselves. The issue therein was outlined as
follows:
“You
are summoned to appear before this court on the 26th day of
September 2012 at 10 am /pm to have it determined and declared whether certain
movable property listed in annexure hereto, attached and removed on the 8th
of August 2012 by the messenger of Court, Karoi by virtue of Warrant of
executing issued by this court of the 12th day of October 2011, in
an action in which you the said Edward Chigango and 55 others, obtained a
judgment in the sum of $51 161.30 plus interest thereon at the rate of 5% per
annum from 31 July 2010 against Fresh Bakery, Karoi, which said property David
Govere, in his capacity as Director of Noxon Investments ( Pvt|) Ltd claim to
be his company's property.” (My emphasis)
Secondly, the applicant's founding
affidavit in para 4 also referred to David Govere as follows:
“The
3rd Respondent is David Govere in his capacity as Director of
Noxon Investment Pvt Ltd whose address is c/o of Bvekwa Legal
Practitioners, 5th Floor Dolphin House, 123 Leopold Takawira Street
Harare.”
Again it is clear from the above
that he was cited in his capacity as representing Noxon Investments. The
amendment sought among those relating to the citation was to change this
particular to read as follows:
“The
3rd Respondent is Noxon Investments (Pvt) Ltd, a corporate body duly
registered in terms of the laws of Zimbabwe being represented by its Managing
Director, Mr David Govere whose address is care of Bvekwa Legal Practitioners,
5th Floor Dolphin House, 123 Leopold Takawira Street Harare”
Thirdly the third respondent himself
deposed in his interpleader affidavit in this capacity as follows:
I DAVID GOVERE, do hereby take oath and state as follows:
1.
I am a director of Noxon Investments. In this capacity I have authority
to swear to this affidavit.The facts I depose to are to the best
of my knowledge and belief true and correct.
The rest of his affidavit then
details in that capacity why he says the property belongs to Noxon Investments.
It was thus very clear to me at all times that Noxon Investments was being
represented by David Govere and that he had been authorised to represent Noxon.
There was no reason not to grant the application to amend and not to proceed
with the case as Noxon Investments already had filed papers stating their claim
through their legal representative David Govere.
Case authorities also make it clear
that an amendment is in order unless it is made mala fide or it is prejudicial
to the other party which prejudice cannot be compensated for by an order for
costs, or by some other suitable order such as postponement. (Lixivia (Pvt)
Ltd vGray Security Services (Pvt) Ltd 2001 (4) SA at 215H- 225Gand Four
Towers Investments (Pvt) Ltd vAndre's Motors 2005 (3) SA 39 at p
43).
There was no prejudice to Noxon
Investments in this case who were already familiar with the claim and had
deposed through their Director with regards to their claim to the property. The
application to amend the citation of David Govere also did not prejudice him as
it was designed to avoid any prejudice that would result from citing him in his
personal capacity. His subsequent objection to this improper citation, as well
as the application's quest to rectify this error through an amendment were
proper in my view. However, the amendment did not merit the call by David
Govere that the applicant should withdraw the entire application and issue a fresh
one. This, there was positively no need for other than to merely delay the
matter. The then cited third respondent, David Govere could have raised the
issue of the incorrect citation whilst at the same time coming fully prepared
to argue its case since the capacity of David Govere as acting on behalf of
Noxon had already been clearly substantiated in the papers inclusive of his own
affidavit.
Thus in my view, when I allowed the
amendment and proceeded to hear the application, it was in full appreciation of
the reality that Noxon Pvt Ltd had already been informed of the proceedings and
had already put forward their case through David Govere as their authorised
Director. The request to issue a fresh application was merely a ploy to delay
the matter further. This contrasts with the duty of the court to resolve
disputes expeditiously and not to find prejudice where there is none. (SeeMuchenje
and others vStuttaford Removals Pvt Ltd HH 374/13). It was
David Govere's choice as duly authorised Director of Noxon Investments Pvt Ltd,
to come to court not fully prepared to argue its case.
With regards to dismissing the third
respondent's claim to the goods, i.e. Noxon Investment (Pvt) Ltd, once the
application was granted, the evidence produced in the papers filed of record,
failed in my view, to support the claim on a balance of probabilities. The
third respondent asserted its claim on the strength of an agreement of sale of
both business and assets, which it averred supported its stance that it had
been sold the Bakery and all its equipment by Aroma Bakeries in 2000. The
agreement attached detailed the effective date of the sale as being 1 July
2000. The property described 15 Fred Jameson Road Karoi, the address of the
second respondent the judgement debtor.
The first respondents challenged the
authenticity of this claim through an attachment of a judgment of this court
passed by CHITAKUNYE J in HC 5863/05 on 9 September 2009. This judgement,
involving the very same premises i.e. Stand No 15 Karoi Township reveals that
the owners of the property in that case were in fact Karoi Cash Bakery. They
were suing Aroma Bakeries to whom they had leased the property for a nine year
period, starting in February 1997 for breach of lease in that they had sublet
the premises to Harambe Holdings. The premises had not been kept in good
condition and the application was against both Aroma bakeries and Harambe
Holdings to repair the premises to the condition they were before 1997.
If Aroma Bakeries was being sued as
lessee well after 2000 in terms of a lease agreement operational over a nine
year period entered into in 1997, it is hard to see how it could have been the
owner of premises in 2000 when it is alleged to have sold the premises to Noxon
Investments. As such the first respondent's claim that the sale agreement may
not have been authentic seemed to have merit in light of this judgement.
Also as was argued by Mr Magogo
on behalf of the judgment creditors, the issue of assets not belonging to the
judgment debtor was only raised when execution was imminent. It was also his
averment that when the matter was still in the labour forum the judgment debtor
filed for a stay of execution of the award on the basis that the figures
calculated were wrong. There was no averment then that it did not own the
property.
It is also worth regurgitating the
relevant paragraphs from the claimant' s affidavit as regards the assertion of
ownership in his interpleader affidavit since it further raised considerable
doubt over its claim that it is entirely a separate entity whose property is
caught up in the mix. Its claim in the applicable paragraphs reads as
follows:
“4.
The goods belong to Noxon Investments (Private) Limited. They do not belong to
Freshkabe (sic) Karoi Bakery. The judgment is against Freshbake, Karoi
5. I
attach hereto a copy of the Agreement of Sale of business and assets in the
name of Noxon Investments (Private) Limited, I mark it A. It shows that the
business was sold to Noxon Investments directly from Aroma Bakeries. All the
equipment therein also belongs to Noxon Investments (Private) Limited. Fresh
Bake is renting the property. I must mention that this business was now being
run by Trinpac Investments (Private) Limited. Noxon remained the owner of the
assets and also continued to add some so that it could realise reasonable
returns from Trinpac. In fact it is Trinpac that employed the judgment
creditors.”
From the above, Noxon says it owns
the property. However, it says that Trinpac, to which it admits a clear link
was the one responsible for the Bakery and for employing the judgment
creditors. In other words, the inference from the above paragraph is that Noxon
and Trinpac, whom it says employed the judgement creditors at Fresh Bake, are
all part of a single entity.
This much was also averred to by the
first respondents who maintained that the Director of Noxon Investments is also
the Director of a group of companies in which second respondent i.e. Fresh
Bakery is a subsidiary to. They are all in the same stable.
In the case of Deputy Sherriff
Harare & Trinpac Investment (Claimant) & Christopher William Barnsley
(Judgment Creditor) HH 121 – 2011 PATEL J as he then was, emphasised
through a number of case authorities, that while a company is a separate legal
entity, courts will pierce the corporate veil where it is being used merely to
defeat the course of justice. (Cases cited in support of this averment included
Lategan & Another vBoyes & Anor 1980 (4) SA 191(T)
at 200-2001; Van Nierkerk vVan Nierkerk & Ors 1999 (1) ZLR
421 at 427;Mawere vMinister of Justice 2005 (1) ZLR 317 (H) at
327).
He put it thus:
“The
exceptions to the general principle have been extended beyond the realm of
fraudulent and improper conduct to the situation where a single economic entity
owns all the shares in its subsidiaries and controls every aspect of its
operation'
He also went further to explain as
follows:
“The
rationale for this extension, as I perceive, is that where the operation of an
economic group are so close as to be virtually indivisible, considerations of
policy tend to militate against any legal separation of its integral units, for
to do so would be to perpetuate an essentially corporate fiction. Of course
this may not invariably be the case, but the equities would certainly favour
such an approach in dealings at arm's length with innocent outsiders”.
In that case the purported
separation between Trinpac and its Holding Company, Harambe, was deemed to be
no more than a subterfuge. In casu applicant says that it is Trinpac,
one of its own that was running the Bakery and that employed the judgment
creditors. I therefore did not see how it could distance itself from an
association with Fresh Bake.
Cumulatively, it was for the reasons
that I have elucidated above that I dismissed the claimant's claim and ordered
the applicant to proceed with the execution in favour of the judgment
creditors.
Bvekwa legal
practitioners, Claimant's
legal practitioners
Sinyoro & Partrners, Judgement Creditors legal practitioners
