Opposed
Application
–
Exception and Special Plea in Bar
MAKONI
J:
The
plaintiff (Meikles) issued summons against the two defendants
Zimbabwe Stock Exchange (ZSE) and Alban Chirume (Chirume) claiming a
declaratur and damages in the sum of $50,000,000-00.
The
background to the matter is that on 16 February 2013, the defendants
suspended the trading of Meikles shares on the Zimbabwe Stock
Exchange.
The
suspension was done without affording Meikles an opportunity to make
representations before such a serious adverse action was taken.
On
26 February the defendants placed an advert in the Herald Newspaper
cautioning the public to “exercise caution in dealing with the
plaintiff's shares.”
The
suspension was eventually lifted.
The
defendants entered appearance to defend and filed an exception on
behalf of both defendants and a special plea in bar in respect of
Chirume.
I
must at the onset, deal with the nature of pleadings before me.
The
plaintiff's summons and declarations is ten pages and to it is
attached two letters as annexures. The defendants' exception is
three pages and the second defendant's plea in bar is one page.
Order
3 r11 of the High Court Rules 1971 on this issue provides:
“Before
issue every summons shall contain -
(a)----------
(b)----------
(c)
A true and concise statement of the nature, extent and grounds of the
cause of action and the relief or remedies sought in the action.”
The
author Isaacs in Beck's Theory and Principles of Pleading in Civil
Actions 5ed at p32 had this to say:
“17.
Before the court is asked to decide any question which is in
controversy between litigants it is in all cases necessary (except as
hereinafter indicated that the matter to be submitted to it for
decision shall be clearly ascertained.
The
plaintiff shall state in concise terms what facts he intends to rely
on and to prove and the defendant shall do the same so that on the
day of trial neither party shall be taken by surprise and that it may
not be necessary to have the case adjourned, thereby causing wasted
expense both litigants from which the State and the lawyers alone
derive profit.
It
has therefore often been stated by our courts and it cannot be too
often stated that the object of requiring the parties to file
leadings is to enable each side to come to trial prepared to meet the
case of the other.”
The
authors Herbastein and van Winsen in The Civil Practice of the High
Courts of South Africa 5th ed p565 stated the following about
pleadings:
“The
requisites of good pleading are said to be that it should contain a
statement of -
(1)
fact, not law;
(2)
material facts only;
(3)
facts not evidence; and
(4)
facts stated in a summary form and that 'material facts' are all
facts which must be proved in order to establish the ground of claim
or defence.”
Mathonsi
J, in Fungai Nhau v Memory Kipe and Anor HH73/15 confronted with what
he terms long winding special plea in bar/abetment had this to say:
“By
definition, pleadings must be concise and to the point. They must
identify the branch of the law under which the claim or defence to it
is made and should not contain evidence. Pleadings which are long
winding and argumentative should not find their way to these courts.
It is a serious dereliction of duty for legal practitioners to
continue, presenting such offensive pleadings when they have the aid
of literature guiding the drafting pleadings. I associate myself
fully with the sentiments of MAKARAU JP (as she then was) in Chifamba
v Mutasa & Ors HH16/08 (unreported) that:-
'Legal
practitioners are urged to read on the law before putting pen to
paper to draft pleadings in any matter is that what they plead is
what the law requires their clients to prove to sustain the remedy
they seek----. Litigation in the High Court is serious business and
the standard of pleadings in the court must reflect such.'”
I
associate myself fully with the above remarks.
Maybe
if legal practitioners in this matter had taken heed of the advice,
the present application might not have made.
Turning
to the issues at hand, I will deal first with the special plea in
bar.
The
Special Plea in Bar
Chirume
avers the claim against him in his personal capacity is bad in law
and ought not to have been instituted. This is based on the fact that
it is common cause that Chirume is employed by ZSE as its Chief
Executive officer (CEO).
At
all times relevant to the plaintiff's claim, he acted as an
official on behalf of his employer ZSE.
In
response the plaintiff contends that Chirume does not object to
misjoinder in his official capacity. In his personal capacity, he
acted ridiculously in breach of the plaintiff's right.
After
the consent to the upliftment of the suspension, he went on to place
an advert cautioning the public regarding trading in Meikles'
shares.
The
Law
The
authors o Herbastein and Van Winsen in The Civil Practice of the High
Court of South Africa 5th ed p598 stated that a special plea is one
that does not raise a defence on the merits of the case but, as its
name implies, sets up some special defence which has as its object
either to delay the proceedings (a dilatory plea) or to object to the
jurisdiction of the court (a declaratory plea) or to quash the action
altogether (a peremptory plea).
The
defendants, in casu, are raising a peremptory plea.
The
question is whether the issues or defenses that they have raised can
quash the action in respect of the second defendant altogether.
Mr
Mpofu, made a correct observation that Chirume is not taking issue
with the joinder of the second defendant in his official capacity. A
reading of the special plea will confirm that position. He is only
taking issue with the claim against him in his personal capacity.
In
para 22 of the declaration Meikles sets out the basis of Chirume's
liability.
In
summary Meikles's complaint is that it was suspended in breach of
their common law right to be dealt with in accordance with the rules
of natural justice. In so doing the defendants were negligent. The
defendants breached a duty of care arising from both statute and
administrative law that they discharge.
There
is no allegation that Chirume acted willfully, maliciously and
deliberately ignored the law which he must uphold. There are no facts
pleaded that suggest that he went beyond the scope of his calling of
the CEO of the ZSE. He is therefore entitled to protection in his
personal capacity.
In
the result, the special plea, in as far as it relates to Chirume, in
his personal capacity is upheld.
The
Exception
The
defendants contend that the plaintiff failed to establish a cause of
action against the defendants in that it failed to aver, with
particularity, all the essential requirements for liability in a
delictual claim.
They
further contend that there is no link between the alleged negligence
and the loss suffered by the plaintiff.
The
declaration does not state the manner in which the patrimonial loss
arose. The claim for the alleged fail in that share price of
plaintiff's shares cannot be made by the plaintiff as it does not
own the shares.
The
defendants contend that there is no recognizable cause of action
which is contained in the plaintiff's declaration both in respect
of the declaration and the claim for damages.
The
plaintiff's relies on s14 of the High Court Act [Chapter 7:06] for
the issuance of a declaration.
No
right has been identified. Instead the plaintiff's seeks a
declaration on a state of affairs which are factual and are in the
past.
He
relied on MDC v The President of the Republic of Zimbabwe 2007 (1)
ZLR 257 (H) for his submissions.
The
plaintiff also alleges a breach of administrative law duties in terms
of Administrative Justice Act [Chapter 10:28] in order to justify the
declaration and the claim for damages.
The
relief provided for in terms of s4 of Administrative Justice Act does
not include a declaratory order.
The
plaintiff seeks to rely on s66 of the Act on the basis that once it
establishes a breach, it must be granted the relief that it seeks.
That
is a misreading of the rules.
Section
66 follows s65 which provides that the Zimbabwe Stock Exchange has
power to make rules regulating the conduct of their members. The
plaintiff cannot rely on s66 as it gives power to Zimbabwe Stock
Exchange to control its own members. The power is not available to a
member.
Mr
Mpofu submitted that at this stage the plaintiff has to set up a
framework for the court to go by. Whether it can prove facts is
another issue.
The
Declaratur
He
submitted that many grounds were pleaded viz;
(i)
That the defendants acted outside the law;
(ii)
That the defendants did not accord the plaintiff the right to be
heard;
(iii)
That was in breach of s3 of the Administrative Justice Act.
He
further submitted that there is a concrete controversy between the
parties. The action is not in the past and the grant of the
declaratur raises the question of whether the defendant must pay
damages or not.
The
Damages Claim
Mr
Mpofu, submitted that s66 is binding upon both the plaintiff and the
defendants. The question would be whether the defendants are capable
of breaching the rules in s66. If so, then they caused damage to the
plaintiff.
Whether
they did so or not is a matter of evidence.
He
further submitted that if one attack's the reputation of a company,
shares of the company will suffer loss. The price at which a share
trades is directly linked to how the company performs. The question
of quantum is an actuarial issue.
Paragraph
22 of the declaration makes the allegation that the illegality has
affected the plaintiff. Plaintiff claims for purely economic loss.
The
Law
An
exception is a pleading in which a party states his objection to the
contents of a pleading of the opposite party on the grounds that the
contents are vague and embarrassing or lack averments which are
necessary to sustain a specific cause of action or the specific
defence relied upon. See Herbastein and van Winsen (supra) at p63.
The
learned authors at p631 continue by saying:
“In
order to disclose a cause of action, the pleading must set out every
fact (material fact) which it would be necessary for the plaintiff to
prove, if traversed in order to support his right to judgment of the
court.”
See
also Peebles v Dairiboard Zimbabwe (Pvt) Ltd 1999 (1) ZLR 41 (H),
Dube v Banana 1998 (2) ZLR 92 (H) and Abrahamse & Sons v SA
Railways & Harbours 1933 CPD 626.
The
fundamental question to ask is whether the plaintiff had pleaded
every material fact to be proved to entitle it to succeed in its
claim.
The
material facts are the facta probanda (the facts which are required
to be proved in order to succeed pin the cause of action) and not the
facta probantia (the facts which would serve to prove the facta
probanda); see Jowel v Bramwele Jones & Ors 1998 (1) SA 836 W at
903 A-B.
The
Declarator
In
MDC v The President of Zimbabwe & Ors 2007 (1) ZLR 257 (H) and at
268 A-C Makarau JP (as she then was) set out the legal principles
applicable when a declaratur is sought and the mental steps that the
court must follow in determining whether to issue a declarator.
These
principles include that the plaintiff must show that there is a right
or obligation which becomes the object of enquiry. At p269C she made
the following observation:
“It
appears to me, from a reading of the above authorities, that what is
required to be contended is a legal right and not the factual basis
upon which a right may be found.”
The
defendants contend that the plaintiff in its pleadings did not
identify any right.
In
casu there can be no doubt that the legal right, subject to the
claim, has been identified and properly articulated.
The
plaintiff pleaded that the defendants did not accord the plaintiff
the right to be heard. This is a principle established in the
Constitution, Administrative Law and in terms of common law.
The
plaintiff has therefore established that, there is a right whose
existence has been pleaded. Whether the plaintiff will be able to
establish that right, it is a different issue.
The
Damages Claim
My
view is that the plaintiff has pleaded the essential elements of a
delictual claim. If it were to succeed in obtaining a declaratur,
then it could have established a link between the defendant's
conduct and its loss.
As
Mr Mpofu correctly pointed out, the issue of quantum is a matter of
actuarial evidence.
The
plaintiff pleaded that as a result of the unlawful activities of the
defendants, which affected its share price, certain losses were
caused to it which are recoverable from the plaintiff.
This
is purely delictual claim whereby the plaintiff alleges that its
patrimony has been diminished by the conduct of the defendant and
that it should be restored.
The
concerns by the defendants, of lack of particularity, can be cured by
making a request for further particulars.
I
want to conclude by saying that one can sympathise with the position
taken by the defendants in that although one can discern a cause of
action for the summons and declaration, it is a long winding and
inelegantly drafted pleadings.
For
this reason, although the plaintiff has succeeded, I will depart from
the norm that costs follow the cause. This is due to the fact that
had the pleadings been drafted in terms of the rules, the exception
would not have been taken.
My
view is that the plaintiff's pleading disclose a cause of action.
In
the result I will make the following order:
(1)
The exception is hereby dismissed.
(2)
The special plea in bar is upheld in respect of the second defendant
in his personal capacity.
(3)
There is no order as to costs.
Mutamangira
& Associates, plaintiff's legal practitioners
Dube,
Manikai & Hwacha, defendant's legal practitioners
