ZHOU
J:
This
is an application for the joinder of the first respondent as a third
party in Case No. HC12970/12. The application was instituted in terms
of Order 14 Rule 93 of the Rules of this Court.
The
application is opposed by the first respondent.
After
hearing argument from counsel I granted the relief sought with some
amendments to the draft order and gave brief reasons. I indicated to
the parties that my full written reasons would be given upon the
request of either party. The first respondent has written a letter
requesting to be furnished with the written reasons for the decision.
These are the reasons:
The
applicant is a Commercial Bank incorporated and registered in
accordance with the laws of Zimbabwe. The second respondent, the
University of Zimbabwe, holds a foreign currency account with the
applicant. The first respondent is the Central Bank for Zimbabwe. It
is established in terms of section 4 of the Reserve Bank of Zimbabwe
Act [Cap 22:15].
On
2 October 2007 and 3 February 2009 the first respondent issued two
directives bearing reference numbers RI:303 and RK26, respectively.
The directive referenced RI:303ordered the applicant together with
other Authorised Dealers to, inter alia, lodge with and transfer to
the first respondent all their Corporate Foreign Currency Accounts
and Non-Governmental Organisations balances by close of business on 2
October 2007. In compliance with that directive the applicant
transferred to the first respondent the money held by it in the
second respondent's account. It maintained what is referred to as a
“mirror balance”, which essentially meant that it only had a
record of the balance in the second respondent's account.
In
2012, the second respondent issued summons against the applicant for
payment of the money which was held in its account. The action was
instituted under Case No. HC12970/12. The second respondent claims a
sum of US$6,475,968.14. Having entered appearance to defend the claim
the applicant instituted the instant application in terms of Order 14
Rule 93 of the High Court Rules, 1971 for the joinder of the first
respondent as a third party in Case No. HC12970/12.
Rule
93 provides as follows:
“Where
in any action a defendant who has entered appearance claims as
against any person not already a party to the action (in this Order
called a third party) –
(a)
That he is entitled to contribution or indemnity;
(b)
That he is entitled to any relief or remedy relating to or connected
with the original subject matter of the action and substantially the
same as some relief or remedy claimed by the plaintiff; or
(c)
That any question or issue relating to or connected with the said
subject matter is substantially the same as some question or issue
arising between the plaintiff and the defendant, and should properly
be determined, not only as between the plaintiff and the defendant,
but as between the plaintiff and the defendant and the third party,
or between any or either of them;
the
defendant may make a court application to join that person as a third
party in the action.”
It
has been held that the object of the third party procedure is to
avoid multiplicity of actions dealing with substantially the same
subject matter and largely involving the same evidence. The
inconvenience of requiring the parties to prove the same facts over
again is obviated thereby saving time and mitigating the parties'
expenses.
See
Building Electrical & Mechanical Corp (Salisbury) Ltd v Johnson
1950 SR 142 at 148; 1950 (4) SA 303; also Herbstein & Van Winsen,
The Civil Practice of the Supreme Court of South Africa 4th
Ed., p.165.
This
Court has a discretion as to whether or not to order joinder. The
discretion will, of course, be exercised judicially upon a
consideration of the facts and circumstances of the case. The Court
will generally order joinder of a third party if a prima facie case
is shown unless the joining of the third party will embarrass the
plaintiff or there are special circumstances militating against such
joinder.
Building
Electrical & Mechanical Corp (Salisbury) Ltd v Johnson (supra).
The
applicant contends that it is entitled to be indemnified by the first
respondent for the amount being claimed against it by the second
respondent. The applicant further states that the question or issue
of its liability to the second respondent in Case No. HC 12970/12 is
substantially the same question or issue to be determined as between
the applicant and the first and second respondents.
In
its opposition the first respondent objected in limine to its
citation in the instant application on the ground that it should have
been given notice of sixty days as required by section 6 of the State
Liabilities Act [Cap 8:14]as read together with section 63B of the
Reserve Bank of Zimbabwe Act [Cap 22:15].
The
first respondent also argues that it is immune from suits for
“anything done in good faith and without negligence”. It argues
that the applicants must prove “beyond reasonable doubt” that it
acted in bad faith and negligently.
At
the hearing of the matter, Mr Mlotshwa for the first respondent
raised the defence of prescription from the bar.
Section
63B of the Reserve Bank of Zimbabwe Act [Cap 22:15] provides as
follows:
“The
State Liabilities Act [Cap 8:14] applies with necessary changes to
legal proceedings against the Bank, including the substitution of
references therein to a Minister by references to the Governor.”
Section
6(1) of the State Liabilities Act [Cap 8:14] provides the following:
“Subject
to this Act, no legal proceedings in respect of any claim for –
(a)
Money, whether arising out of contract, delict or otherwise; or
(b)
The delivery or release of any goods;
and
whether or not joined with or made as an alternative to any other
claim, shall be instituted against –
(i)
The State; or
(ii)
The President, a Vice-President or any Minister or Deputy Minister in
his official capacity; or
(iii)
Any officer or employee of the State in his official capacity;
unless
notice in writing of the intention to bring the claim has been served
in accordance with subsection (2) at least sixty days before the
institution of the proceedings.”
The
applicant argues, in the main, that the notice requirement does not
apply to an application for joinder in terms of the Rules. In the
alternative, the applicant submits that in the event that it be found
that the provisions apply the court should exercise its powers in
terms of section 6(3) of the State Liabilities Act and condone the
non-compliance with the notice requirement.
In
my view an application for the joinder of the first respondent as a
third party brought in terms of Order 14 Rule 93 is not a claim for
money. It therefore falls outside the ambit of section 6(1)(a) of
the State Liabilities Act.
The
fact that the applicant claims an entitlement to contribution or
indemnity does not transform the application for joinder into the
claim for money. The averment that the applicant is entitled to
contribution or indemnity is necessary to sustain the application for
joinder. The claim for contribution or indemnity is the subject of a
different case, the main case (Case No. HC 12970/12), in respect of
which the joinder of the first respondent is being sought.
I
therefore conclude that the objection in limine must fail. The
application is properly before this Court.
Even
if I were wrong in the above conclusion, it seems to me that this
would be an appropriate case for condonation of the non-compliance
with the requirement for notice.
Section
6(3) of the State Liabilities Act provides:
“The
court before which any proceedings referred to in subsection (1) are
brought may condone any failure to comply with that subsection where
the court is satisfied that there has been substantial compliance
therewith or that the failure will not unduly prejudice the
defendant.”
The
first respondent suffers no prejudice by not being given sixty days'
notice of the application for joinder. It is not the main claim.
The
instant application was filed on 23 January 2013, nine months ago.
The first respondent has had ample time before being served with the
pleadings in the main action to undertake any investigations
regarding the factual background to the proposed claim against it.
After all, it would be aware of the institutions from whose accounts
balances were transferred to it pursuant to its directives. This is
not a claim that arises from the conduct of some single official or
employee in some remote part of the country. The claim arises from
its directives which it readily admits were issued directing
authorised dealers to transfer the balances referred to above to it.
The
issue of whether the first respondent is excused from liability on
the ground that it acted in good faith and without negligence is for
determination by the Court when it enquires into the merits of the
claim by the applicant against the first respondent.
If
that is the first respondent's defence to the claim then it must be
properly pleaded and established by evidence at the trial. For the
purpose of this application the applicant need only satisfy the
requirements of Rule 93. The applicant has discharged its onus in
that respect.
The
submission that the cause of action in the application for joinder
has now prescribed must be rejected for two reasons. Firstly, it was
only raised from the bar during argument. The first respondent's
opposing papers do not seek to rely on that ground.
Secondly,
and in any event, the defence of prescription is not sustainable on
the facts of this matter.
What
triggers an application for the joinder of a third party is the
service of summons against a defendant (the applicant in casu). The
application can only be made after the applicant has entered
appearance to defend the claim instituted against it. From the time
that the summons in the main case was served and the applicant
entered appearance to defend a period of three years had not passed
when the application for joinder was instituted.
Thus,
the claim for joinder has not prescribed.
The
draft order filed on behalf of the applicant does not require the
applicant to serve a statement of its claim on the first respondent
but merely copies of the pleadings filed of record in the main case.
There is a prayer for the first respondent to file its own pleadings
in response to those pleadings.
In
my view, the proper order should include the filing by the applicant
of its statement of claim against the first respondent. That is the
claim which the first respondent may then respond to.
In
the result, it is ordered as follows:
1.
That the first respondent be and is hereby joined as a third party in
the proceedings in this Court under HC12970/12.
2.
The applicant herein shall file and serve on the first respondent, as
the third party in the proceedings aforesaid, copies of all the
pleadings and documents filed of record therein, together with any
statement of its claim against the first respondent within ten days
of this order.
3.
Upon service aforesaid the first respondent herein, as the third
party in the proceedings aforesaid, shall be entitled to file
pleadings of its own within the normal period of time as prescribed
by the Rules of this Honourable Court and the applicant and second
respondent shall be entitled to respond thereto in the usual manner.
4.
The costs of this application shall be costs in the cause in
HC12970/12.
Scanlen
& Holderness, applicant's legal practitioners
G
N Mlotshwa & Company, first respondent's legal practitioners
