Urgent
Chamber
Application
MAFUSIRE
J:
This
was an urgent chamber application for a stay of execution.
It
was filed on 6 March 2015. It was brought to my chambers at 17:15
hours three days later, i.e. on 9 March 2015. There were eleven
applicants. Their case was that on 6 March 2015, i.e. the date the
application was filed, the Sheriff, the second respondent herein, was
scheduled to sell a number of properties belonging to applicants two
to eleven.
The
basis for seeking a stay was that the first respondent, hereafter
referred to as “NSSA”,
had a judgment against the first applicant, hereafter referred to as
“Tetrad
Holdings”
or simply “Holdings”.
It was said that that judgment had been obtained in error. NSSA's
debt was said to be with Tetrad Investment Bank Limited, hereafter
referred to as “Tetrad
Bank”
or simply “the
Bank”,
and not with Tetrad Holdings.
Apparently
the Bank was a subsidiary of Holdings.
However,
in the founding papers it was stressed that the Bank and Holdings
were two distinct and separate entities. As such, it was said that an
application for the rescission of NSSA's judgment against Holdings
had already been filed with this court. Thus, it was argued, if the
Sheriff's sale went ahead there would be prejudice, not only to the
shareholders of the applicants but also to the creditors.
After
reading the papers I agonised over whether or not to set down the
matter for hearing. The application was extremely economic with
information. For example, other than describing all the applicants as
companies incorporated according to the laws of Zimbabwe, and
mentioning that NSSA had a judgment against Tetrad Holdings, which
judgment was what the Sheriff was executing, the founding papers said
nothing about the nature of the relationship between NSSA, as the
judgment creditor, and the rest of the applicants. But the main
matter in which the writ of execution had been issued being a debt
collection claim I guessed that respondents two to eleven must have
been guarantors or sureties of some sort. As it turned out, indeed
they were.
But
that was not all.
The
certificate of urgency, signed on 6 March 2015, said the matter was
urgent because the sale was scheduled to take place that day; that
Holdings was not, and had never been, NSSA's debtor, but that it
was the Bank that was; that for that reason the application for
rescission of judgment had excellent prospects of success and that if
the matter was not heard on an urgent basis there was a risk of
irreparable prejudice to the applicants' shareholders and
creditors.
Only
one date was mentioned, namely 6 March 2015, the date of the sale.
Nothing was said about when NSSA had obtained the judgment. It was
not mentioned when the applicants had become aware of that judgment.
No information was given as to what action, if any, the applicants
had taken upon getting to know about that judgment. Neither the date
of NSSA's writ nor that of the Sheriff's attachment was given.
The property that the Sheriff had attached and was selling was not
disclosed. Finally, it was not said when the application for
rescission of judgment had been filed.
I
turned to the founding affidavit and the rest of the papers. They
were essentially an extension of the certificate of urgency.
Only
two other dates were mentioned, namely 8 August 2014 and 16 February
2015. It was said 8 August 2014 was when Tetrad Bank had held a
Scheme Meeting with its creditors which NSSA had attended, which,
allegedly signified NSSA's acceptance that its debt was with the
Bank, not Holdings. It was said 16 February 2015 was when the Sheriff
had served the notice of sale on Tetrad Bank. That was about all that
the founding affidavit ever disclosed by way of additional
information. The rest were basically legal arguments on why the sale
had to be stopped.
The
draft order sought a permanent stay of execution by way of a final
order. The interim relief sought a stay pending the determination of
the application for rescission of judgment. The case number for that
rescission application was just left blank!
In
the alternative, it was sought that if the sale had gone ahead
already, then the Sheriff was to be ordered not to confirm it. He was
also to be ordered to release into the applicant's custody the
property that he had attached.
The
urgent chamber application was classically a dog's breakfast. But
in spite of my serious misgivings at that stage I set it down for
hearing on 12 March 2015. I decided to let the applicants have their
day in court.
In
the morning of the day of the hearing NSSA filed a notice of
opposition. It tore into the applicant's case.
On
urgency it was said NSSA's judgment had been given on 28 March
2014. That was almost a year ago. NSSA's writ had been served on 15
August 2014 but the applicants had turned the Sheriff away on the
basis that execution had been suspended pending an order for leave to
convene a Scheme Meeting in terms of the Companies Act (Cap
24:03).
On 20 August 2014 and 10 October 2014 NSSA had sent the Sheriff back
to the applicants with the writ. Movable properties for applicants
two to eleven had then been attached. Thus, NSSA argued, the
applicants had been aware of the attachment as far back as August
2014 but had chosen to do nothing until the day of the sale, almost
seven months later.
On
16 February 2015 the applicants had been served with the notice of
sale. Again they had chosen to do nothing.
Only
on 27 February 2014 did they file an ordinary court application for
the condonation of the late filing of the application for rescission
of judgment. However, they had withdrawn that application on 5 March
2015. They had then proceeded to file the urgent chamber application
on the next day, 6 March 2015.
NSSA
said the Sheriff's sale had gone ahead as scheduled.
Turning
to the urgent chamber application itself, NSSA said the certificate
of urgency was defective in more or less the reasons that I have
outlined above.
On
the merits, NSSA maintained Holdings was its proper debtor even
though it might have entered into some arrangement with its
subsidiary, the Bank, to issue the requisite deal notes and basically
manage the debt. It was said applicants two to eleven had all signed
surety bonds, inter
alia,
guaranteeing Holdings, not the Bank, as NSSA's principal debtor. It
was said that the fact that NSSA had attended the Scheme Meeting, on
invitation for that matter, did not mean that it was absolving
Holdings from the debt. On the main action, it was said that the
applicants had deliberately refrained from filing their plea because
they knew they had no defence.
As
I invited the parties into my chambers it was manifestly obvious that
the applicants could not reasonably persist with their urgent chamber
application in the state that it was in.
Indeed
Mr Mpofu,
for the applicants, duly assisted by Mr Hashiti,
both instructed by Ms Zvinavashe,
advised that it was no longer necessary to argue the aspect of
urgency and waste the court's time. He said that what the
applicants would now request was that the matter be removed from the
roll for urgent matters and referred to the ordinary roll. The
parties could be granted the liberty to file supplementary
affidavits. The costs could be made in the cause. He submitted that
the applicants were not prepared to withdraw their urgent chamber
application, and that they could not be forced to do so. He said
whether I could strike off the matter from the roll for urgent cases
or simply refer it to the ordinary roll would amount to the same
thing because, ultimately, the matter would one day be heard on the
ordinary roll.
Unfortunately
for the applicants, their stance was not an agreed position with
NSSA, something which Mr Mpofu,
from the remarks which prefaced his submissions, had obviously
anticipated. Mr Chihambakwe,
for NSSA, insisted that the matter should simply be dismissed with
costs on the higher scale of attorney and client because the
application had undoubtedly been an abuse of the court process.
Seeing
my inclination towards dismissing the application with costs, Mr
Mpofu,
argued forcefully that where a judge decides that a matter brought to
him under a certificate of urgency, is in fact not urgent, the proper
course is to refer it to the ordinary roll or strike it off the roll
for urgent matters. The judge should then leave the question of costs
for determination together with the merits of the case.
He
said if I were to order costs at that stage, the applicants would
have to seek my leave to appeal to the Supreme Court, thereby
entailing the matter being heard again. He submitted that if I were
to dismiss the application it would mean that I would have decided
the merits of the case yet these had not been argued before me.
He
said there were a number of Supreme Court decisions to the effect
that if a judge finds the matter not to be urgent the proper course
is to strike it off and not to dismiss it. At that stage Mr Mpofu
did not have the citation of those cases but only remembered some of
the parties involved. He offered to make the judgments available to
me later on.
After
hearing argument from both sides I was of the view that the
applicants' case for urgency had lacked merit right from the onset;
that by refusing to withdraw it and insisting that it be referred to
the ordinary roll where they would try and patch it up by filing
supplementary affidavits, and that by also insisting that the
question of costs be left over for determination together with the
merits, the applicants were trying to have their cake and eating it.
I felt I had the discretion to refer or not to refer to the ordinary
roll an application that is brought under a certificate urgency when
it is not urgent.
However,
in this case it was my strong view that the applicants had not
supplied me with any useful information that would have enabled me to
decide whether or not their case merited to be dealt with on an
urgent basis. They had dragged the respondents to court. When they
had submitted their application in the first place they had obviously
taken the view that it had been complete. However, it was obvious
that they now realised how seriously defective it had been. So
instead of doing the logical thing, namely to withdraw it and tender
wasted costs, they were now cleverly trying to salvage the situation
by seeking a referral of the matter to the ordinary roll so that they
could supplement their pleadings. In the process they hoped to avoid
paying the wasted costs.
I
considered that such conduct was inappropriate and that the
applicants had to be mulcted in costs. In the end I dismissed the
application with costs on an attorney and client scale. I stressed in
my ex
tempore
pronouncement that it was because of the serious lack of merit on the
aspect of urgency that I was dismissing it.
Subsequent
to my order, Mr Mpofu
supplied a number of authorities on the point that where a judge
decides that an urgent chamber application is in fact not urgent, the
proper course is to strike it off the roll.
The
first was a judgment of this court by UCHENA J in African
Consolidated Resources Plc & Ors v Minister of Mines and Mining
Development & Ors.
At p 215D - E of his judgment the learned judge said:
“Mr
Mutamangira
urged this court to dismiss the application if the court found in
favour of any of the respondents' preliminary issue. As I cannot
deal with other issues in view of my finding that the application is
not urgent, the order sought by the respondents is not appropriate. A
finding that a case is not urgent does not mean that the applicant's
case has no merits. It means the case does not qualify for hearing on
an urgent basis in terms of Rule 244 of the High Court Rules. It
should simply take its place among cases awaiting to be set-down for
hearing in terms of the rules applicable to [non]-urgent
applications. See the comments of CAMERON JA in Commissioner,
South African Revenue Service v Hawker Air Services (Pty) Ltd;
Commissioner, South African Revenue Services v Hawker Aviation
Partnership & Ors
2006 (4) SA 292 (SCA) at 299F – 300A.
A
case judged to be not urgent should simply be struck off the roll for
it to be proceeded with like any other case.”
The
second case was that of Phineas
Mariyapera v Eddies Pfugari (Private) Limited & Anor.
On pp 1 and 2 of the cyclostyled judgment ZIYAMBI JA said:
“Mr
Uriri,
for the appellant in his submissions before us raised two points.
Firstly, that having found the matter was not urgent, the court a
quo
should simply have removed the matter from the roll and not dismissed
it. Secondly, that the order of punitive costs was an improper
exercise of the court's discretion and that an award of costs on
the ordinary scale would have been the appropriate order.
Dealing
with the first issue, Mr Uriri
conceded that although the court dismissed the application, such
dismissal was not on the merits and therefore would not give rise to
a plea of res
judicata
in any future proceedings. This was, in our view, a proper
concession. However, the point needs to be made that in a case such
as this one the correct order to be made would be that the matter be
removed from the roll, rather than dismissed. The order of the court
a
quo
will be amended accordingly.
On
the second issue, namely, the award of costs on the higher scale, we
find that the court a
quo
did make certain findings of fact which could not properly be made
without an enquiry into the merits of the matter. However, there were
other findings of fact which were either common cause or apparent on
the papers and undisputed which were properly taken into account by
the Court in the determination of the issue. ………………………………..
We
accordingly find that there is no basis on which it can be said that
there was an improper exercise of the court's discretion in
awarding costs on the higher scale such as would warrant interference
by this Court.”
The
third case was Air
Zimbabwe (Private) Limited & Anor v Stephen Nhuta & Ors.
At p 5 of the cyclostyled judgment, ZIYAMBI JA said:
“The
first ground of appeal makes no sense because the court a
quo
did not decline to hear the matter. Indeed, having found that the
matter was not urgent it nevertheless proceeded to hear and determine
it on an urgent basis. In so doing the court a
quo
contradicted itself. What it should have done once a finding of lack
of urgency was made, was to strike or remove the mater from the roll
of urgent matters and not proceed to hear the merits for, once a
hearing has taken place and a decision made on the merits, the
question of urgency becomes irrelevant.”
The
fourth and last case was that of Edward
Tawanda Madza v The Reformed Church in Zimbabwe Daisyfield Trust &
Ors.
Again the same learned judge of appeal said:
“The
learned Judge was of the view that the urgency was created by the
appellants …………………….
We
do not find any impropriety in the learned Judge's exercise of his
discretion in this regard.
However,
having concluded the matter was not urgent, the proper course would
have been to remove the matter from the roll of urgent matters to
allow the appellants, if so minded, to place the matter before the
High Court on the ordinary roll for determination. The order of
dismissal was improper in the circumstances.
Accordingly
it is ordered as follows:
1.
……………………………………………………………..
2.
The judgment of the court a
quo
is altered to read as follows:
'The
matter is not urgent. It is removed from the roll. The applicants
shall pay the costs of this application.'
3.……………………………………………………………..”
It
seems to me that what the above authorities were concerned with was
the dismissal of the entire urgent chamber application as if it would
have been determined on the merits.
That
was neither the order that I gave in this case nor the import of it.
In
my view, an urgent chamber application is one in which there is,
unavoidably, the initial or opening application for the matter to be
heard on an urgent basis. Only after this has succeeded can the
merits of the dispute be considered. In my view, the application for
the matter to be treated as urgent is an inevitable adjunct of the
actual application on the merits. Urgency has its own set of
considerations. So what I dismissed in this case was that antecedent
application for the matter to be heard on urgent basis. Even though
both parties and myself did from time to time touch on the merits
during the hearing, nonetheless I restricted my order of dismissal to
the aspect of urgency. The applicants had not been prepared to
withdraw it. I could not force them to do so. But I did not feel
bound to accede to their request to have the matter referred to the
ordinary roll. What they had presented to me in the first place had
been a complete application by itself. They had made their bed of
roses. They could only lie on it.
My
order of costs on the higher scale was informed by the spuriousness
of the application for the matter to be heard on an urgent basis, and
the applicants' attitude that notwithstanding their realisation and
manifest acceptance of the paucity of their papers they nonetheless,
sought to avoid paying the costs that they had caused the respondents
to incur. I found it unacceptable.
17
March 2015
G
N Mlotshwa & Co,
applicants' legal practitioners
Chihambakwe
Mutizwa & Partners,
first respondent's legal practitioners
1.
2010 (1) ZLR 208 (H)
2.
SC 3/14
3.
SC 65/14
4.
SC 71/14
5.
At p 7 – 8 & 10
