On
6 July 2004, the applicant issued summons against the respondents,
jointly and severally and in solidium for payment of US$900,000=
which it alleged was overpayment of a loan advanced by the second
respondent to the applicant for onward lending to third parties. It
alleged that in terms of the agreement between the parties the second
respondent would receive repayments directly from third parties and
if any overpayment occurred such would be refunded to the applicant.
The
applicant averred that, in breach of the parties' agreement, the
second respondent had failed to refund the money.
In
the alternative, the applicant pleaded that the second respondent had
been unjustly enriched by the overpayment at the expense of the
applicant.
It
further averred that the first respondent was, at all material times,
a director and/or agent of the second respondent who was fully aware
of the agreement, and, in the exercise of his duties with the second
respondent, the first respondent was obliged to exercise care towards
the applicant. In breach of that duty of care, the first respondent
had carried out the second respondent's business negligently,
recklessly, fraudulently and without due care resulting in the
applicant suffering loss in the amount claimed.
The
first and second respondents defended the suit, and, in due course,
filed a joint plea in which they put in issue the existence of the
loan agreement and the terms alleged. They also disputed the
overpayment and the amount claimed averring that they were under no
obligation to pay the applicant the amount claimed or any amount.
In
respect of the allegation of unjust enrichment, they averred, in
paragraph 10, as follows:
“10
Ad Paragraph 8 (Alternative claim)
This
is denied. The defendants deny that the (sic) they were enriched as
alleged in the sum, of USD900,000= or at all. The second defendant
(the first respondent in casu) denies this and puts the plaintiff to
the proof thereof.”
The
first respondent also denied owing the applicant a duty of care and
denied the allegations of negligence, recklessness, or fraud in the
conduct of the second respondent's business.
At
the pre-trial conference held before a judge on 26 September 2006 the
applicant obtained leave, with the consent of the respondents, to
amend its declaration by the deletion of paragraph 4 and the
substitution of the following paragraph:
“4.
In or about April 2002, and at Harare, the parties entered into two
contracts in terms of which the first defendant lent and advanced
US$4,000,000= and US$2,500,000= respectively to the plaintiff at the
latter's special request and instance for onward lending to third
parties.”
The
amendment granted by consent at the pretrial conference also
incorporated an amendment of the discovery affidavit to include in
the schedule of discovered documents “copies of the memorandum of
agreements between the plaintiff and the defendant.”
The
matter was then set down for trial on 29 January 2007 but was
postponed sine die for some reason. Much later, on 30 November 2007,
the applicant's legal practitioners wrote to the first respondent's
legal practitioners requesting their consent to amend the applicant's
declaration further. They stated:
“Re:
KINGDOM MERCHANT BANK LIMITED v SATURN TRADING AND INVESTMENTS
LIMITED AND JAVESH SHAH : CASE NO. HC8618/04
We
refer to the above matter.
Please
take note that we wish to amend our client's declaration. The
proposed amendment, for purposes of clarity and convenience, will be
done by substitution in terms of Order 20 rule
133. Please find attached hereto copy of our client's Amended
Declaration. We request your consent to amendment so that the same
may be filed by consent.
Further,
the proposed amendment will not cause any prejudice to your client as
it is unlikely to affect his defence to the claim. Please kindly let
us hear from you within (5) five days from the date of service of
this letter on you.”
Needless
to say that the first respondent did not accede to the request for
his consent. His legal practitioners responded by letter dated 6
December 2007 which reads:
“KINGDOM
MERCHANT BANK LIMITED v SATURN TRADING AND INVESTMENTS LIMITED AND
JAVESH SHAH: CASE NO. HC8618/04
We
refer to your letter to us dated 30th
November 2007 and the annexed draft amended declaration.
We
regret to advise that we cannot accede to the consent that you seek
as we do not believe that your client has any valid legal grounds or
basis for seeking such an amendment, and, in any event, we believe
that no court will grant the amendment at this stage. Accordingly,
should your client wish to proceed it must file a court application,
on notice to ourselves, giving the usual ten (10) days period within
which we may object to the application to amend the declaration.
In
the meantime, our client's rights in respect of your proposed
amendment and the principal claim already framed remain fully
reserved.”
Faced
with that scenario, the applicant was forced to launch this
application for leave to amend the declaration in terms of Order 20
Rule 132 of the High Court of Zimbabwe Rules, 1971 alleging that the
amendment is necessary to clarify the existing causes of action,
inter alia, to bring up unjust enrichment, fraud, and theft as a
further alternative cause of action against the first respondent
personally.
The
applicant insisted that the amendment was merely a lucid and clearer
exposition of the claim which does not raise a different cause of
action and that no prejudice would be suffered by the respondents who
had already pleaded denying any form of liability.
The
first respondent opposed the application essentially on the basis
that the proposed amendment has come rather late in the day, being
made more than four years after the action was instituted after the
trial had been postponed on 29 January 2007. For that reason, any
cause of action that may have existed has long prescribed in terms of
the law.
The
first respondent takes the view that it is not the practice of this
court to allow wholesale amendments and substitution of a
declaration. According to the first respondent, the application is
meant to delay the finalisation of the matter and to frustrate his
application for dismissal of the applicant's claim for want of
prosecution which was filed as HC401/07. This is particularly so as
any amended declaration would have to be served on the second
respondent which is a peregrinus outside this jurisdiction.
I
should straight away dispose of the last two submissions.
It
is now a matter of record that the applicant obtained an order of
this court, on 4 October 2007, granting leave to serve summons and
declaration and other processes on the second respondent, a
peregrinus, at an address in the British Virgin Islands. That issue
should therefore not detain us in this matter any further. In
addition, it is also on record that the first respondent's
application for dismissal of the applicant's action, in HC8618/04,
for want of prosecution, which was filed as HC444/08, was disposed of
by a consent order granted on 8 October 2008. Again, submissions on
that point have been overtaken by events and should not detain us at
all.
Order
20 Rule 132, under which this application has been made, provides:
“Subject
to Rules 134 and 151, failing consent by all parties, the court or a
judge may, at any stage of the proceedings, allow either party to
alter or amend his pleadings in such manner and on such terms as may
be just, and all such amendments shall be made as may be necessary
for the purposes of determining the real question in controversy
between the parties.”…,.
In
terms of Rule 133, where the amendments are so numerous or of such a
nature that the making of them in writing would render the document
difficult or inconvenient to read, copies of the pleadings, as
amended, should be filed.
This
is what the first respondent has referred to as a wholesale
substitution of the declaration.
In
our law, the granting or refusal of leave to amend is a matter
entirely in the discretion of the court. The discretion reposed in a
judge must be judicially exercised. A court will generally grant such
amendments as are necessary for the purpose of determining the real
question in controversy between the parties: Copper Trading Co. (Pvt)
Ltd v City of Bulawayo 1997 (1) ZLR 134 (S)…,. In that case, the
Supreme Court (per KORSAH JA) went on to state…, that:
“It
is paramount that the discretion reposed in the court in respect of
amendments be exercised in a manner which allows the issues between
the parties to be fairly tried. The fact that the amendment might
lead to the defeat of the other party is not the kind of prejudice
which should weigh with the court: GMF Kontrakteurs (Edms) Bpk &
Anor & Pretoria City Council 1978 (2) SA 219 (T) at 222 C – F.”
In
D D Transport (Pvt) Ltd v Abbot 1988 (2) ZLR 92 (S)…, GUBBAY CJ
quoted with approval the sentiments of WESSELS J in Whittaker v Ross
& Anor 1911 TPD 1092…, that:
“This
court has the greatest latitude in granting amendments and it is very
necessary that it should have. The object of the court is to do
justice between the parties. It is not a game we are playing, in
which, if some mistake is made, the forfeit is claimed. We are here
for the purpose of seeing that we have a true account of what
actually took place and we are not going to give a decision upon what
we know to be wrong facts.”
Indeed,
the modern approach of this court has always been in favour of
granting applications for leave to amend whenever the amendment
facilitates the proper ventilation of the dispute between the
parties: C F Hutchison and N Atkinson N.O. v Logan HH91-98; Ncube v
Moyo HB105-10.
In
Commercial Union Assurance Co. Ltd v Waymark N.O. 1995 (2) SA 73 (T)
which was quoted with approval by CHINHENGO J in UDC Limited v Shamva
Flora (Pvt) Ltd 2000 (2) ZLR 210 (H)…, principles governing
amendments were set out as:
“1.
The court has a discretion whether to grant or refuse an amendment.
2.
An amendment cannot be granted for the mere asking, some explanation
must be offered therefore.
3.
The applicant must show that prima facie the amendment has something
deserving of consideration - a triable issue.
4.
The modern tendency lies in favour of an amendment if such
'facilitates the proper ventilation of the dispute between the
parties'.
5.
The party seeking the amendment must not be mala fide.
6.
It must not 'cause an injustice to the other side which cannot be
compensated by costs.'
7.
The amendment should not be refused simply to punish the applicant
for neglect.
8.
A mere loss of time is no reason, in itself, to refuse the
application.
9.
If the amendment is not sought timeously, some reason must be given.”
I
propose to be guided by these principles in deciding this
application.
I
have already made reference to the provisions of Rule 132, that an
amendment can be made at any stage of proceedings. In casu, the
matter was once set down for trial but the trial did not take off. It
currently awaits set down. Therefore, nothing turns on the timing of
the application for amendment as the parties have ample time before
the set down to deal with the amendment.
Counsel
for the applicant submitted that the proposed amendment was informed
by a desire to clarify the cause of action and introduces no new
cause of action. The first respondent, who appeared in person and
presented his case very well and with authority submitted that the
averment that he was unjustly enriched personally was not contained
in the original declaration and that its introduction at this late
stage is prejudicial to him because that claim has prescribed.
I
do not agree.
The
applicant's claim has always been for payment of $900,000= against
the respondents jointly and severally. The first respondent had
already been roped in on the allegation of negligence, fraud and
acting without due care. Unjust enrichment had already been pleaded
and it is the clarity of that pleading which was lacking. To my mind,
there is therefore a pressing need to effect an amendment that would
properly ventilate the real dispute between the parties.
I
am unable to find any prejudice that can be suffered by the first
respondent if the proposed amendment is granted. He was always being
sued for $900,000= in his personal capacity and the claim on the
basis of unjust enrichment was always there only that it had not been
pleaded with sufficient clarity hence the need to effect an
amendment.
The
applicant has given a satisfactory explanation for seeking the
amendment and it is desirable, in light of the numerous changes in
the declaration, that a new declaration, as amended, incorporating
all the amendments, be filed in terms of Rule 133. I am persuaded
that indeed the proposed amendment bellies
real triable issues. For instance, it is pertinent that the trial
court decides the issue of whether the first respondent was unjustly
enriched at the expense of the applicant.
To
my mind, the proposed amendment is an honest one propelled by a
genuine desire to succinctly ventilate the dispute between the
parties. To the extent that it does not introduce new material, it
cannot, by any stretch of the imagination, be said to be mala fide
and cannot cause an injustice between the parties.
I
have already stated that this is a matter that is yet to be set down
for trial, and, as such, the timing of the amendment is certainly not
an issue. The parties still have more than enough time to deal with
it. In all circumstances, justice demands that the amendment be
granted in order to effectively arm the court to determine the
dispute between the parties.
In
the result, it is ordered that:
1.
The applicant be and is hereby granted leave to amend its declaration
by the substitution of the original declaration with the draft
annexed to this application as annexure “D”.
2.
The said amended declaration shall be filed within five days of this
order and a copy served
upon the respondents.
3.
The respondents be and are hereby granted leave to amend any of their
pleadings, if they
so wish, within twenty days of service of the amended declaration
upon them.
