PATEL JA: This is an
appeal against the Judgement of the High Court in interpleader
proceedings arising from the attachment of mining equipment carried
out by the first respondent (the Sheriff) at Mbada Mine.
The second respondent (the
judgement creditor) had obtained judgement against Mbada Mine and the
Sheriff, having attached certain movables at Mbada Mine, had
advertised them for sale. The property attached comprises mining
equipment, vehicles and office furniture. The claimants in the court
a quo
had filed separate interpleader applications which were consolidated
and heard together, as the facts, the legal issues and the judgement
creditor were the same.
Both claimants averred that the
items attached had been imported by Mbada Mine but actually belonged
to them. Ownership in this equipment was reserved in their favour
until it was fully paid for. According to the claimants, Mbada Mine
still owes ZAR 42 million and ZAR 48 million to the claimants
respectively. Therefore, the equipment was not executable as per the
agreements between the claimants and Mbada Mine until the purchase
prices had been fully paid.
The judgement creditor averred
that Mbada Mine had imported and was the owner of the equipment in
question. The agreements relied upon by the claimants were a façade
since the claimants had neither imported the equipment nor did it
belong to them.
Decision of the High Court
and Grounds of Appeal
The High Court considered the
relevant legislation and accepted that goods may be imported by
persons other than their owner. Also relevant was the definition of
the word “holder” in the Mines and Minerals Act, in terms of
which a holder of a registered mining location can import goods
belonging to another and can benefit from the suspension of duty on
goods imported for his mining operations. Any person who is not a
holder as defined or imports goods for resale is not entitled to
suspension of duty under the governing Customs Regulations.
The court a
quo found that the
documents available showed that Mbada Mine, being a holder, had
imported the disputed equipment into the country. The claimants had
not shown that they were the owners of that equipment. They had not
produced the relevant importation documents issued by the customs
authorities. They had only produced transportation documents and
invoices which did not assist their claims. The documents relating to
suspension of duty showed the claimants as suppliers rather than
owners of the equipment in question. Moreover, there was nothing to
show that the claimants had imported the equipment temporarily in the
absence of temporary import permits or proof of duty paid on the
equipment. Additionally, one document issued by the customs
authorities showed that some of the goods had been imported
permanently by Mbada Mine. The equipment could only have been so
imported if Mbada Mine had assumed permanent ownership. The claimants
could not be owners of goods imported permanently by Mbada Mine.
On the basis of these findings,
the court a quo
held that the probabilities favoured the judgment creditor's
assertion that the equipment belonged to Mbada Mine and that the
agreements of sale relied upon were mere shams. The evidence
suggested that there was collusion between Mbada Mine and the
claimants in order to frustrate the execution process. The claimants
had failed to persuade the court that they were the owners of the
equipment in dispute. In the event, the court dismissed the
claimants' claims with costs and declared the claimed property
specially executable.
The grounds of appeal herein
relate in essence to the ownership of the assets in question.
The appellants assert that the
question of ownership is governed by the agreements of sale and that
ownership in the assets has not transferred from the appellants to
Mbada Mine but remains vested in them pending full payment of the
relevant purchase prices. They also assert that the importation
process could not impact on the question of ownership or proprietary
rights in the assets. The appellants could be the beneficial owners
of equipment imported permanently by Mbada Mine. Lastly, they assert
that the finding of collusion by the court a
quo was not supported
by the evidence before the court.
It is not in dispute that Mbada
Mine had imported the assets that were attached by the Sheriff. The
point of contention is whether in so importing Mbada Mine had assumed
the right of ownership in the assets. It is also not in dispute that
initially, at some point, the appellants owned the assets in
question.
Arguments on Appeal
The appellants argue that the
fact that Mbada Mine was the one which imported the assets into the
country did not mean that Mbada Mine was the owner of the assets.
They argue further that the court a
quo's reliance on
importation documents was a misdirection since importation does not
prove ownership. To buttress this submission, the appellants rely
upon the definition of “importer” in the Customs and Excise Act.
Having regard to this definition, the appellants argue that the mere
fact that Mbada Mine had imported the assets did not prove that
ownership vested in it. This is so because the definition of importer
includes an owner or other person.
It is further submitted for the
appellants that the agreements entered into between Mbada Mine and
themselves should have been taken into cognisance by the court a
quo because this was
the evidence that proved the fact that ownership of the assets
remained with the appellants. They rely on the reservation clauses in
the agreements which stipulate that the right of ownership in the
assets would remain reserved with the appellants until the purchase
price was paid in full.
The appellants further argue that
it was a misdirection on the court a
quo's part to simply
dismiss evidence from the agreements on the ground that they were
fraudulent and executed ex
post facto. The
appellants also rely on a letter addressed by Mbada Mine to the
Sheriff which indicates that the assets that had been attached
belonged to the appellants as Mbada Mine was still substantially
indebted to them. They maintain that Mbada Mine was involved in the
importation of the equipment only as the holder of a registered
mining location. Essentially, the crux of the appellants' argument
is that one can be a holder and an importer but not necessarily the
owner of the assets imported.
The second respondent argues that
the findings of the court a
quo were on issues of
fact and that the appellants have not challenged those findings as
being grossly unreasonable. It further argues that the letter from
Mbada Mine to the Sheriff relied upon by the appellants was unsigned
and was therefore not authentic. It is also the second respondent's
submission that the letter from the Zimbabwe Revenue Authority
(ZIMRA) to Mbada Mine, concerning the suspension of duty on the
importation of the assets, implied that it was Mbada Mine that was
the owner of the assets. This was because there was a clause in the
letter stipulating that the assets were not to be sold.
The question that this Court has
to decide is whether the appellants have successfully discharged the
onus of proving that they are the owners of the assets concerned. To
answer this question, it is necessary to determine whether the
reliance by the court below on importation documents to prove
ownership was competent and whether the agreements showing the
appellants' ownership of the assets were genuine.
Whether Importer must be
the Owner
I take the view that the court a
quo's reliance on
importation documents to determine the issue of ownership was flawed
and incorrect. This is so because the Customs and Excise Act [Chapter
23:02] makes it clear
that a person who is not the owner can be an importer of goods.
Section 2 of that Act states that an importer:
“includes
any owner of or other
person possessed of or
beneficially interested in any goods at any time before entry of the
same has been made and the requirements of this Act fulfilled.” (my
emphasis)
The above provision is clear and
unambiguous. An importer can either be the owner or anyone else who
is possessed of or beneficially interested in the goods to be
imported. It does not limit the definition of an importer to the
owner alone. Mbada Mine possessed an interest in the assets as they
were to be used at its mine. It was not disputed that it was Mbada
Mine that had imported the assets. However, by holding that Mbada
Mine was also their owner, simply by virtue of having imported the
assets, the court a quo
undoubtedly
misdirected itself. It is abundantly clear under the Customs and
Excise Act that even a non- owner may import goods.
In relation to suspension of duty
on the importation of mining equipment, the Customs and Excise
(Suspension) Regulations 2003 (S.I. 257 of 2003) as amended, provide
in s 9K(2) that:
“suspension
of duty shall be granted to a holder in respect of specified goods
which, during the specified period, are imported by that holder for
use solely and exclusively for mining development operations.”
A “holder” of a mining
location, in the context of the above Regulations, is defined in s 5
(1) of the Mines and Minerals Act [Chapter
21:05] as:
“the
person in whose name such location is registered with the mining
commissioner or with the Board or with the Secretary …….. .”
The above
provisions make it clear that suspension of duty on imported mining
equipment is provided for persons who are holders of registered
mining locations in terms of the Mines and Minerals Act. There is
nothing in the definition of an “importer” or “holder”, or in
the provision which allows for suspension of duty, to indicate that
the person importing the equipment has to be the owner of that
equipment. For an importer to be entitled to suspension of duty, he
has to be a holder of a registered mining location, and must show
that the equipment will be used solely and exclusively for mining
development operations.
Having regard
to the foregoing, I take the view that the court a
quo's
reliance on importation documents to prove ownership of the assets in
question was misguided and incorrect. The relevant statutory
provisions are clear in that they do not speak of an owner of goods
but rather of an importer and a holder, neither of which necessarily
has to be the owner. To this end, the question of who imported the
assets becomes of no consequence to the determination of ownership.
The evidence of the former employee of Mbaba Mine is only helpful to
the extent that it proves what is already common cause, to wit, that
Mbada Mine was the importer of the equipment. He could not positively
state whether Mbada Mine had purchased the equipment before it was
imported or paid for it at any time thereafter.
It was the
second respondent's argument that Mbada Mines had made itself out
to be the owner by importing the assets on a permanent basis and that
the letter from ZIMRA directing that the assets were not to be sold
implied that ZIMRA was under the impression that the assets belonged
to Mbada Mine. The second respondent contends that this impression
could only be drawn from a representation by Mbada Mine that the
assets belonged to it and no one else. While it may be a fact that
Mbada Mine imported the assets on a permanent basis, that fact does
not automatically mean that it did so on the premise that it was the
owner of those assets. Nothing was advanced to substantiate the
argument that permanent importation is only available to the owner
and not an importer who does not own the assets. Indeed, nothing to
buttress such argument was placed either before the court a
quo
or before this Court. In the event, the argument cannot succeed.
Authenticity
of Agreements and Proof of Ownership
I now deal
with the findings of the court a
quo
that there was collusion between Mbada and the appellants and that
the contracts between Mbada and the appellants were mere shams. This
will determine the critical issue as to whether or not the appellants
were able to prove that they were the owners of the assets in
question.
It is trite
law that in interpleader proceedings the claimant has to set out
facts and evidence which constitute proof of ownership of the assets
which are the subject of contention. This point was underscored in
the case of Muzanenhamo
v
Fishtown
Investments (Pvt) Ltd & Ors SC
8/17, where it was held that the claimant must prove on a balance of
probabilities that he owns the property. The question to be answered
in
casu is
whether, on a preponderance of probabilities, the appellants proved
that they were the owners of the assets that they claimed.
In a bid to prove its ownership
of the assets, the first appellant produced statements of account for
Mbada Mine which showed that some payments but not all had been made
by Mbada Mine. In addition, both appellants produced detailed
agreements concluded with Mbada Mine (on 15 November 2012 and 22 July
2015 respectively) which stipulated that ownership of the assets
would remain with the appellants until the full purchase price was
paid. It was the court a
quo's finding that
the agreements were not authentic and that there was collusion
between the appellants and Mbada Mine. It was alleged by the second
respondent that the agreements were doctored by Mbada Mine and the
appellants ex post
facto and that there
was no paper trail to show that the assets belonged to the
appellants. However, no evidence was led to substantiate the second
respondent's allegations of collusion. The court relied on the bald
averment by the second respondent that the documents were not
authentic and simply took that to be correct. It is the second
respondent that levelled allegations of inauthenticity and collusion.
Consequently, it is the second respondent that should have proven the
same. This position was succinctly captured in the case of Circle
Tracking v
Mahachi
SC 4/07, where the
Court held that the principle that he who alleges must prove is a
basic concept of our law. No evidence was adduced by the second
respondent to substantiate the alleged inauthenticity of the
agreements.
The appellants produced documents
which show that the assets had been purchased by them and initially
belonged to them. They also produced the agreements concluded with
Mbada Mine in 2012 and 2015 which show that ownership was reserved in
favour of the appellants until the full purchase price was paid. The
relevant provisions are contained in clauses 4.3 and 11.6 of the
first appellant's agreement and clause 7.7 of the second
appellant's agreement.
The second respondent alleged
that the documents supporting the appellants' claims were a recent
fabrication meant to frustrate the execution of the assets, but the
dates when the agreements were concluded reveal that they were
executed well before the second respondent instituted any legal
proceedings in this matter. There is also nothing in the record to
give credence to the allegations that the documents were fabricated
by the appellants in collusion with Mbada Mine. It is my view,
therefore, in the absence of any evidence to the contrary, that the
agreements are genuine and that their provisions and the agreed
compacts contained therein must be accepted as being authentic, as
well as commercially and legally cognisable.
Disposition
In the result, I am amply
satisfied that the appellants have proved on a preponderance of
probabilities that they are the owners of the assets in question. It
was incorrect and a misdirection for the court a
quo to have relied so
heavily on the aspect of importation as that aspect does not assist
in the determination of ownership in the assets in question. The
agreements produced by the appellants show that ownership in the
assets would remain with them until the relevant purchase prices were
paid in full, and such payments clearly did not take place. As for
costs, they must ordinarily follow the outcome.
In the result, the appeal
succeeds with costs. The judgment of the court
a quo is set aside in
its entirety and substituted with the following:
“1. The claimants' claims are
upheld.
2. The assets listed under
schedules A and B are declared non-executable.
3. The judgment creditor shall
pay the claimants' and the applicant's costs.”
MALABA CJ: I agree.
HLATSHWAYO JA: I agree.
Kantor & Immerman, appellants' legal practitioners
Dube, Banda, Nzarayapenga & Partners, 1st
respondent's legal practitioners
Mhishi
Nkomo Legal Practice, 2nd
respondent's legal practitioners
