The
facts of this matter, in my view, disclose a tangled web of deceit.
The plaintiff is cast in the role of the big hairy spider and the
defendant would have the court believe that she is a harmless fly
caught in the spider's web. There is an underlying element that
pervades this case, of an unfortunate malaise that has afflicted
business transactions in this country in these harsh economic times.
People borrow money, then turn around and come up with the flimsiest
of excuses to avoid paying back.
The
court's task is to separate the wheat from the chaff and to
determine who is telling the truth between the borrower and the
lender. In order to do this, the court looks at the evidence on the
papers which the parties placed before it. Sometimes, the court can
decide that the whole story is not apparent from the papers before
it, and, consequently, refers the matter to trial so that witnesses
can testify under oath. Other times, the court can adopt a robust
approach when it looks at the papers before it, and decide that the
papers contain sufficient evidence for the dispute to be resolved
without going to trial.
The
plaintiff issued summons (Provisional Sentence on a liquid document),
in Form number 5, on 29 September 2014, claiming payment of
US$60,000= on the basis of an acknowledgment of debt dated 19
November 2013. The acknowledgment of debt was attached to the
summons. It advertised itself as having been prepared by Messrs
Lawman Chimuriwo Attorney at Law, a firm of legal practitioners. The
terms of the agreement between the parties included the following:
The
defendant borrowed and the plaintiff lent her the sum of sixty
thousand United States dollars; the borrowed sum was to be repaid on
or before the last day of August 2013 (preamble); the principal debt
was to be repaid by 5 December 2013 (clause 1); the payments of the
capital and interest were to be made at the legal practitioner's
office. The defendant agreed to pay collection commission calculated
at 10% of each and every payment made in reduction of the principal
debt, costs, and interest including the costs of preparation of
security documents.
Curiously,
the document is silent when it comes to the rate of interest agreed
by the parties.
In
clause 3, the defendant tells us that she “expressly renounces the
benefits of no cause for the debt, error in calculating the revision
of accounts, no value added, and no value received, and no value
recorded; the meaning of which I acknowledge is understood by me.”
No
doubt, the legal practitioner responsible for the drafting of this
document, mindful of his duties as an officer of the court and of his
responsibilities as a member of this noble and honorable profession
of the practice of law, explained the exigencies of all those legal
benefits that the defendant so expressly and eloquently renounced?
The
agreement was signed before two witnesses.
Summons
were served on the defendant on 8 October 2014. The return date
endorsed on the summons was 22 October 2014. The defendant filed a
notice of opposition on 7 October 2014. In her opposing affidavit,
the defendant confirmed that the signature on the acknowledgment of
debt is hers. She denied owing the sixty thousand dollars, and
averred that she only borrowed a sum of fifteen thousand dollars.
The
defendant narrated the background to the debt as follows:
Sometime
in July/August 2013 she was introduced to the plaintiff by her
friend, Collin Maworerea. Her friend told her that the plaintiff was
in the money lending business. The defendant was in urgent need of
US$15,000= with which to fund a business venture. When the parties
met, the plaintiff told the defendant that he could loan her that
sum, and that he could get the money from his employer, Zimbabwe
Rural District Council Workers' Union (ZRDCWU). In terms of the
parties' agreement, an acknowledgment of debt was signed by Collin
Maworerea in favor of the Zimbabwe Rural District Council Workers'
Union (ZRDCWU), on 3 August 2013. The defendant signed that document
as a witness. A perusal of this agreement will show that it was
titled “Loan Agreement”, and that it was a seven days' loan of
fifteen thousand dollars at 100% interest per month, whose purpose
was to provide working capital and which was to be repaid by 18
August 2013.
The
defendant averred that the plaintiff then gave Collin Maworerea the
fifteen thousand dollars, and Collin handed the money over to her.
The defendant said that she was later shocked when she “discovered”
that the rate of interest was 100% per month. She was also
subsequently “shocked” to discover that the plaintiff is not a
registered moneylender. She confirmed that she failed to repay the
fifteen thousand dollars by 18 August 2013 as stipulated. The parties
subsequently agreed that the defendant would pay 100% interest on the
capital loan of US$15,000= calculated from August to November 2013,
bringing the loan amount to sixty thousand dollars. It was agreed
that no further interest would accrue.
These
are the circumstances under which the second acknowledgment of debt
was allegedly signed by the defendant.
She
was again shocked to discover that the lender was now the plaintiff
and not the Zimbabwe Rural District Council Workers' Union
(ZRDCWU); that the capital was now sixty thousand; that interest
would commence afresh, again at 100% as if sixty thousand was the
original loan sum. On objecting “most strongly” to the rate of
interest, and after threatening to call her friend, Mr. Hussein, the
defendant avers that the interest element was dropped.
She
avers, further, that she refused to sign the acknowledgment of debt
on the basis that the lender was the Zimbabwe Rural District Council
Workers' Union (ZRDCWU), not the plaintiff, but changed her mind
when her friend, Collin Maworerea, threatened to commit suicide by
taking poison if she refused to sign the document. The defendant did
not “want blood on her hands”, so she signed the agreement.
In
addition, the plaintiff allegedly threatened to press charges of
fraud against her if she did not sign the acknowledgment of debt.
The
plaintiff filed his answering affidavit on 17 October 2014. He denied
that the defendant borrowed fifteen thousand United States dollars
from him, and pointed out that she signed an acknowledgment of debt
indicating that she borrowed US$60,000= therefore she had no basis at
law for contesting the summons for provisional sentence. The
plaintiff denied that usurious rates of interest were charged to the
defendant, and denied compounding such interest.
The
first question that falls for determination before me is whether the
plaintiff has discharged the onus on him in an application for
provisional sentence, such that he should be granted the relief that
he is seeking.
The
second issue that falls before me for determination is whether the
defendant has discharged the onus on her to adduce such evidence that
amounts to a viable defence against the granting of provisional
sentence.
Provisional
sentence is a summary remedy which is provided for in Order 4 Rule 20
of the Rules of the High Court 1971, as follows:
“ORDER
4 CLAIMS FOR PROVISIONAL SENTENCE
20.
Summons claiming provisional sentence
Where
the plaintiff is the holder of a valid acknowledgement in writing of
a debt, commonly called a liquid document, the plaintiff may cause a
summons to be issued claiming provisional sentence on the said
document.”
It
was submitted, on behalf of the plaintiff, in the plaintiff's heads
of argument which were filed of record on 12 November 2014, that the
principles which govern the determination of the merits of an
application for provisional sentence are settled. I am grateful to
counsel for the plaintiff for the exhaustive heads of argument which
he filed for the assistance of the court in determining this matter.
The essential elements of the procedure of provisional sentence were
captured in the case of Zimbank v Interfin 2005 (1) 114
as
follows:
“…,
the procedure of provisional sentence allows a creditor, armed with a
liquid document, to obtain payment of the debt without having to wait
for the final determination of the dispute between the parties.
Whilst a speedy remedy, provisional sentence is an extraordinary
remedy based on the presumption of indebtedness raised by the liquid
document. It is a brisk and robust remedy granted by the court in
appropriate cases, on the date of the hearing endorsed on the face of
the summons, after the court has satisfied itself that the defendant
has no probability of success in the principal case.”
Let
us try to summarise and to put these essential elements another way.
To succeed in a claim for provisional sentence, a petitioner must
allege and show that:
1.
The petitioner is a creditor which is in possession of a duly signed
and witnessed liquid document.
2.
There is a prima facie presumption of indebtedness in favor of the
petitioner.
3.
The petitioner is entitled to be summarily paid without having to
wait for resolution of the dispute in the main matter.
4.
The petitioner is entitled to a quick and robust remedy.
5.
The defendant has failed to discharge the onus on it, to rebut the
presumption of indebtedness which is raised by the production of a
valid liquid document.
6.
The defendant has very poor prospects of success in the main matter;
the defence proffered is weak, and not likely to be accepted by the
court.
For
further elucidation of the essential elements of provisional sentence
see Beki Sibanda v Elisha K. Mushapaidze
HH56-10.
It
was submitted, on behalf of the plaintiff, that provisional sentence
is an efficacious remedy which ought to be granted without ado,
especially considering that a defendant always has resort to the
protective provisions of the rules, in particular, of Rule 28, which
provides that:
“28.
Rights of defendant when provisional sentence granted
A
defendant against whom provisional sentence has been granted may —
(a)
Within one month after the attachment made under a writ of execution
issued by virtue of such sentence; or
(b)
If he has satisfied the judgment without an attachment, then within
one month after having done so; cause an appearance to be entered
with the Registrar to defend the action, and shall notify the
plaintiff of such entry. If he fails to do so within the stipulated
time, the provisional sentence shall immediately thereafter become a
final judgment of the court and the security given by the plaintiff
shall ipso facto become null and void.”
The
plaintiff challenged the averments made on behalf of the defendant
that there are material disputes of fact in this matter. The
challenge was aimed at the alleged failure to disclose the nature of
the disputes and at the alleged lack of substantiation of the
disputes. The plaintiff submitted that the alleged disputes are
“illusory” and “are of imaginative conjury”. The plaintiff
referred the court to the case of Zimbabwe Bonded Fibreglass
(Private) Limited v Peech 1987
(2) ZLR 338 (S)…,
where the court said that:
“It
is, I think, well established that in motion proceedings a court
should endeavor to resolve disputes raised in affidavits without
hearing of evidence. It must take a robust and common sense approach
and not an over fastidious one; always provided that it is convinced
that there is no real possibility of any resolution doing an
injustice to the other party concerned. Consequently, there is a
heavy onus upon an applicant seeking relief in motion proceedings,
without the calling of evidence, where there is a bona fide and not
merely an illusory dispute of fact.”
Other
cases which have pronounced on the issue of the cogency of evidence
that is necessary to establish a real dispute of fact are: Room Hire
Company (Private) Limited v Jeppe Street Mansions (Private) Limited
1959 (3) SA 115 (T)….,.
In
Soffiantini v Mould
1956
(4) SA 150E…,
the court said the following:
“It
is necessary to make a robust, common sense approach to a dispute on
motion as otherwise the effective functioning of the court can be
hamstrung and circumvented by the most simple and blatant stratagem.
The court must not hesitate to decide an issue of fact on affidavit
merely because it may be difficult to do so. Justice can be defeated
or seriously impeded by an over-fastidious approach to a dispute
raised in affidavits.”
See
also Joosab & Ors v Shah
1972
RLR 137 (G)…,.;
Lalla v Spafford N.O. & Ors
1973
RLR 241 (G)…,.;
Masukusa v National Foods Limited & Anor
1983
(1) ZLR (HC).
In
Chisese v Alluvial Exploration Services (Private) Limited
HH13-12
this court said that:
“It
is not all disputes of fact that matter in the determination of
applications. It is the material disputes of fact that matter.”
Here
is a brave attempt to summarise and restate the principles which
ought to guide a court, in motion proceedings, where the oft heard
lament of “there is a dispute of facts which cannot be resolved on
the papers” is heard:
(a)
If it is possible to take a bold and rational approach, which is not
overly exacting or picky, and there is no real possibility of being
unfair to the other party concerned, the dispute may be resolved on
the papers.
(b)
If it appears that the submission 'that there is a material dispute
of fact' is a deliberate and transparent ploy, which is calculated
to delay the resolution of the matter by making it appear to be
difficult to do so on the papers, the court must be careful not to
allow such a strategy to hamper its effectiveness or to defeat or
delay the resolution of the matter.
(c)
If the dispute of fact appears to be one that can confidently be
relied on as being genuine, authentic, true and above board, and it
is not merely deceptive or false, it is a material dispute of fact
which may require viva voce evidence for it to be resolved.
(d)
If the dispute of fact is one of substance, and has a bearing on the
issue to be determined, it is a material dispute of fact which may
require viva voce evidence for it to be resolved.
A
party against whom provisional sentence is claimed is called upon to
satisfy the plaintiff's claim or to appear before the court at the
hour and on the day and at the place stated in the summons to show
why he has not done so, and to acknowledge or deny the signature to
the said liquid document or the validity of the claim. See Zuva
Petroleum One (Private) Limited v Tawanda Ruzive
HB32-14.
In
the matter at hand, the defendant has not paid, so she has not
satisfied the plaintiff's claim, she has not denied that she signed
the acknowledgment of debt.
It
was submitted, on behalf of the plaintiff, that the defendant is
bound by the caveat subscriptor rule. Roughly translated this rule
stipulates that “…,.let the signer beware.” The celebrated
author R. H. CHRISTIE, in his book, Business Law in Zimbabwe…, has
this to say:
“The
business world has come to rely on the principle that a signature on
a written contract binds the signatory to the terms of the contract
and if this principle were not upheld any business enterprise would
become hazardous in the extreme. The general rule, sometimes known as
the caveat subscriptor rule, is therefore that a party to a contract
is bound by his signature, whether or not he has read and understood
the contract…, and this will be so even if he has signed in blank…,
or it is obvious to the other party that he did not read the
document.”
See
also Jane Nyika v Thembani Moyo & Ors
HB145-10.
The
defendant has not placed any evidence before the court in support of
her allegations of threats of arrest or duress. She did not report
the threats to the police; if she had, and there was evidence of this
threat, the offence of extortion could be established. She did not
immediately take steps to have the acknowledgment of debt declared a
nullity. She waited until the plaintiff sought to recover the debt,
then confirmed signing it, but denied doing so voluntarily. It is
circumstances such as these that the caveat subscriptor maxim were
designed to regulate, in my view. In the case of Nelson Mujeri Muza v
Agricultural Bank of Zimbabwe Limited
SC70-03
the
Chief Justice said that:
“The
evidence in this case simply does not support the allegation that
exhibit 2 was void ab initio and therefore a nullity by reason of
duress. Contracts that are void ab initio by reason of duress are
very rare as the duress required to render an agreement void ab
initio has to be extremely severe. It has to be so severe as to
negative any element of voluntariness such as where a stronger person
physically overcomes a weaker person and puts a pen in his hand and
physically forces his hand to write his signature on a written
contract; The Law of Contract in South Africa, 3rd
ed, R.H. Christie 337; Grotious 3.48. Van Leewan C.F. 1.4.41; Voet
4.2.2. Smith v Smith 1948 (4) S 61 (N) @ 67-8.
The
evidence adduced by the appellant fell far short of this
requirement.”
The
defendant has not disputed that the acknowledgement of debt is a
liquid document.
Of
the defences open to a defendant in terms of Order 4, this leaves
only one open, that of disputing the validity of the claim. See
Caltex (Africa) Limited v Trade Fair Motors & Anor
1963
(1) SA 36 (SR)
where
it was held that, where the acknowledgment of debt is sufficiently
clear and certain, and no evidence to the contrary has been given by
the defendant, provisional sentence will be granted.
The
defendant has raised the issue of the rate of interest which she
alleges is usurious. It has been held that where parties agree on a
rate of interest, that agreement is a qualification of the provisions
of section 4 of the Prescribed Rates of Interest Act [Chapter 8:10],
and interest may be levied as agreed by the parties, and not at the
prescribed rate. See Chiedza Chikomo v Yisrael Yehudah
HH29-12.
Only
a bona fide defence can defeat an application for provisional
sentence. A bona fide defence has been held to be:
“…,
a plausible case with sufficient clarity and completeness to enable
the court to determine whether the affidavit discloses a bona fide
defence. He must allege facts which, if established, would entitle
him to succeed.”
See
Kingstons Limited v L. D. Innerson (Private) Limited
SC08-06.
The
defendant has failed to present a plausible case in her own defence
to qualify her to defeat the plaintiff's claim for provisional
sentence. There is insufficient clarity, incompleteness in her
evidence, on the papers, to support her contention that the
plaintiff's claim is not valid. There is insufficient evidence that
the defendant was subjected to duress when she signed the
acknowledgment of debt. She is bound by her signature and by the
contents of the acknowledgment of debt. There is insufficient and
incomplete evidence that the principal debt is only US$15,000=.
Again, caveat subscriptor.
The
defendant signed a contract in which she agreed that the principal
debt was US$60,000= and went on to expressly renounce all the legal
benefits that she could have subsequently relied on in her defence
such as no value received, or error in calculation.
The
defendant is a respected and sophisticated businesswoman of many
years standing. It is highly improbable that she would sign a
document acknowledging indebtedness in a sum that is four times what
she actually owes, because she is subjected to duress, then to simply
keep quiet and not seek to discredit that document in a court of law
once the alleged duress had passed.
In
any event, the defendant has other remedies open to her in terms of
Order 4 if she is aggrieved by the decision of this court.
It
is my considered view that the plaintiff has discharged the onus on
him and shown, on a prima facie basis, that he is entitled to
provisional sentence as claimed in the summons. The defendant has no
bona fide defence to the plaintiff's claim. In the result, it is
hereby ordered that provisional sentence be and is hereby granted in
favor of the plaintiff, as against the defendant, in the sum of
US$60,000=, together with interest thereon at the prescribed rate
calculated from 19 November 2013 to the date of payment in full, as
well as costs of suit.
