Urgent
Chamber Application
TSANGA
J:
This
is an urgent application for stay of execution by the Sherriff of
certain lease equipment that Applicants are leasing from the
Respondents and for which they are said to have defaulted payment.
The execution is on the strength of default judgment obtained by the
Respondents on 10 September 2014 in terms of which they were to be
paid a sum of US$88,225-14, plus interest thereon at 25per cent per
annum as well as payment of costs of suit on a legal practitioner
client scale. The judgment also declared specified equipment as
executable. The first applicant is a company whilst the second
applicant and third applicants are its Directors.
I
heard the matter on a basis of urgency given the assertion on the
face of the application that the Applicants stood to suffer
irreparable harm from the execution more so given that they were
unaware of the default judgement up until they were served with the
notice of seizure. They had therefore lodged their urgent application
at the same time their application for rescission. They had just
lodged their application for rescission of judgment. Both parties
were heard on urgency and merits.
In
establishing a case for stay of execution, applicants emphasised that
the default judgment was improperly obtained since they had in fact
filed their plea at the time when it was obtained, albeit out of
time.
Applicants
do not dispute that a notice to plead and intention to bar was served
on them on 22 July and served on their practitioners on 23 July. It
is their contention that on 28 July they had attended at their
lawyer's office and a copy of the plea had been given to a clerk in
the employ of their legal practitioner to file and serve on the
Registrar and thereafter the parties. However, for reasons which they
state they are unaware of, this was not done and the plea was only
finally served on 20 August. It is from that date onwards that they
argue there was an awareness of their plea. An affidavit said to be
Annexure H stating what happened was however not among the
attachments in the application filed and placed before me.
The
applicants' position is that it is wrong for the other party to
proceed to snatch a judgement where an intention to defend has been
signalled. They averred in their affidavit that it was the duty of
the Respondents to ask them to regularise their plea with a view to
having the matter proceed to trial rather than to go on to snatch a
judgment as they did on 10 September 2014.
Also
they argued that they have a strong defence to the claim and that
their case stands a high chance of success in that they previously
disputed the amount being charged as interest - a fact they say the
Respondents acknowledged by duly crediting their account at one point
with an amount of $6,2844-39. Moreover they also stated that they
have paid an additional amount of US $50,000-00 into the respondents'
account thereby reducing the amount claimed.
The
Respondents on the other hand strongly oppose the application as
lacking in both urgency and merit. On urgency their argument is that
the existence of the default judgment was brought to the attention of
the second applicant as way back as October 2014. It was then that
the Applicants were informed that the property which is the subject
matter of the case would be sold. It was also then that it was agreed
to give them a chance to pay. Respondents also said that it was on
the strength of these discussions that they had instructed their
legal practitioners to stay off execution.
On
merit they disputed that any interest had been wrongly computed as
the payment amounts under the lease were only revised to stimulate
payment under the prevailing economic environment. More importantly
they argued that the filing of the plea was a non-event since the
applicants were already barred and the pleading could not have been
accepted whilst the bar was operational. As such it is their
standpoint that the default judgement was properly obtained.
The
merits of the main matter and the potential of success were also
challenged by the Respondents. They emphasised that the nature of the
agreement was purely that of lessor and lessee with a payment
schedule that was agreed to by both parties. It was not a loan by a
lease of equipment. There could therefore be no computation of wrong
interest according to their argument since the structure of payment
had been agreed upon. With regards to the payment of $50 000-00
Respondents observed that the Annexure J said to indicate the payment
was not attached to the application. They stated that in any event if
arrears were paid as alleged, then it was merely indicative of the
breach of the agreement by the applicant justifying its cancellation.
Their prayer is that the application should be dismissed in its
entirety.
Disposition
Since
this urgent application emanates from a default judgment the issue in
my view in deciding whether the order sought to provisionally stay
execution should be granted, rests fundamentally on whether the
applicants have a prima facie case that it was improperly obtained.
It
is not dispute that they were served with a notice to plead and
intention to bar in accordance with r 84 of the High Court Rules,
1971. A defendant who fails to deliver his plea within 5 days of the
delivery of the notice to plead and intention to bar will be barred.
The cross referenced file to this matter HC 4370/14 shows that the
Registrar confirmed on 31 July that the applicants were duly barred
as required by the rules. See Chichi
Clothing Mfrs (Pvt) Ltd v
CBZ & Ors 2006
(2) ZLR 80.
Therefore once the applicants were barred it was perfectly within the
rights of the Respondents to apply for a default judgment. This is
what they proceeded to do.
The
argument by the applicants that once they had filed their plea,
albeit out of time for reasons which had nothing to do with them, it
was the duty of the respondents to ask them to regularise their
faulty plea, cannot, in my view, stand. Rule 84 (1) is clear on the
procedure for the upliftment of a bar. It states that:
“Rule
84
(1)
A
party who has been barred may -
(a)
Make a chamber application to remove the bar
(b)
Make an oral application at the hearing , if any, of the action or
suit concerned and the judge or court may allow the application on
such terms as to costs and otherwise as he or it, as the case may be
thinks fit.”
At
the time that the plea was filed the Applicants' legal
practitioners, were fully aware that they were out of time and had
been barred. It was also irregular for the Registrar to accept for
filing any pleading from the barred party since the bar was in
operation. (See Rule 82 (a)).
The
procedure that was open to Applicant's practitioners in light of
this knowledge was not to file a plea in the hope that business would
continue as usual, but to make a chamber application for the
upliftment of the bar or alternatively to make an oral application at
the hearing. Since the lawyers had no knowledge that the matter had
been set down for hearing as a default judgment, the most sensible
root at the time they sought to file their plea would have been to
make a chamber application first for the upliftment of the bar which
they were fully aware of. The courts preference in any event leans
towards written chamber applications as opposed to oral submissions.
See GMB
v
Muchero
2008
ZLR 216 S).
The
onus was on them to apply for the removal of the bar. The
Respondents, as plaintiffs were entitled to apply for a default
judgement even if there were indications the defendant intended to
defend the matter See HPP
Studios
v
Associated Newspapers of Zimbabwe (Pvt) Ltd 2000
(1) ZLR 318 (H).
The
applicants' position is founded on an inexcusable disregard of the
rules on the part of their practitioners. It would make a mockery of
the rules of procedure for both barring and upliftment of the bar if
the courts are simply to discount the rules on the basis that a plea
was subsequently filed and that rules of courtesy should thereafter
kick in. The important point is that procedures do exist for the
upliftment of a bar which would have opened the door way for them to
file a late plea. This was not utilised in this case. There is
nothing in the rules that suggests that it was the duty of the
respondents to take responsibility to get applicants once they had
been barred, to put their house in order for the matter to go on
trial.
Even
if it were argued that that a litigant should not have to suffer as a
consequence of mistakes of his practitioner, it appears to me that
the case lacks merit on the main matter. At the behest of the
applicant practitioner and with the consent of the respondent that
document which captures the circumstances of the crediting of the
applicant's account was placed before me. It is dated 30th
April 2014. It captures the terms of the original lease agreement
signed by the parties and reproduces the payment profile as
structured in terms of that agreement. Thereafter the circumstances
resulting in the restructured arrangement for payment which is also
outlined, is captured in the sentence which reads as follows:
“However
taking into account the downturn in the economy together with your
request for revised finance charges, we would propose the following
arrangement……”
This
sentence does not suggest a dispute regarding interest but rather
suggests a request for revision stimulated by a non performing
economy.
The
restructured amounts are then set out including the difference of
$62,844-39 resulting from the restructuring. Thereafter the letter
then captures the implementation of the revised arrangement in terms
of what is to be paid as arrears, monthly instalments and final
payment.
The
applicant's argument that they have a prima facie defence with high
prospects of success in their application for rescission is not
supported by the evidence placed before me for this urgent hearing.
In
light of all the above arguments, I am unable to find any compelling
grounds for granting the applicants a stay of execution. Although
costs on a higher scale are sought, it is trite that they have to be
well justified and are not given as a matter of course. I am not
persuaded that they are justified in this case.
Accordingly
the application lacks merit and is accordingly dismissed with costs.
Chinyama
& Partners,
applicant's
legal practitioners
Gill
Godlonton & Gerrans,
respondents
legal practitioners
