DUBE-BANDA
J:
This
is an interpleader application and the Sheriff of Zimbabwe is the
applicant.
The
facts of this case are interwoven and intricate. It is therefore
important that I give a detailed background of the facts preceding
this application.
For
ease of reference and where the context allows, I will refer to the
following parties by their names, i.e. BM Graphics (Pvt) Ltd
(judgment debtor); Welli-Will Industries (Pvt) Ltd (claimant); Jon's
Engineering (Private) Limited (owner of stand number 499 Goodwin
Road, Willowvale, Harare) and Melvin Imbayago (judgment creditor).
For
a clear understanding and appreciation of the factual matrix in this
case, it is significant to quote in verbatim the court order granted
by this court on the 21st August 20117 (main judgment). This court
granted a consent order worded as follows.
“IN
THE HIGH COURT OF ZIMBABWE CASE NO. HC1660/14 HELD AT HARARE In the
matter between:
BM
GRAFICS PRIVATE LIMITED PLAINTIFF And MELVERN IMBAYAGO 1st DEFENDANT
PIPE CENTRE 2ND DEFENDANT
Harare,
21st day of August, 2017
Before
the Honourable Ms Justice Charewa
Mr
B Diza for the plaintiff
Mrs
A Dururu for the defendants
Whereupon,
after reading documents filed of record and hearing counsel IT IS
ORDERED BY CONSENT THAT:
1.
The Registrar of the High Court be and is hereby directed, forthwith,
to appoint a realtor firm to conduct a valuation of the 20,000 square
meters piece of land and the developments thereon which form subject
of litigation on property known as stand 499 Willowvale, Harare.
2.
The realtor firm so appointed in terms of paragraph 1 shall undertake
the valuation exercise, taking into account the market values, and
produce a sworn valuation report within seven days of his appointment
which valuation report shall be filled with the Registrar of the High
Court.
3.
The valuation of the 2000 square metres and improvements thereon
arrived at in terms of paragraph 2 above shall be final and payable
to the defendants by plaintiff within seven days of its production.
4.
The defendants and all those claiming occupation through them shall
vacate the property known as stand No. 499 Willowvale, Harare within
thirty days of this order or within 30 days of full payment,
whichever occurs first.
5.
The valuation costs shall be paid in equal proportion by both
parties.
6.
Each party shall bear its own costs.”
Notwithstanding
the fact that BM Graphics (Pvt) Ltd was the plaintiff in the main
action, it is the judgment debtor in these proceedings. Malvern
Imbayago who was the 1st defendant in the main action, is the
judgement creditor in this case.
BM
Graphics failed to pay for the value of the 2000 square metres piece
of land in terms of para 3 of the main judgment, and consequently
Imbayago caused a writ of execution calling for payment in the sum of
US155,000 to be issued and served on BM Graphics.
In
executing the writ, the Sheriff proceeded to stand No. 499 Goodwin
Road, Willowvale, Harare (stand) and placed under judicial attachment
an assortment of property which he believed to be the property of BM
Graphics.
This
is the property claimed by Welli-Will Industries (Pvt) Ltd, and which
is subject of these proceedings.
One
Wilbert Makonese, a director of Welli-Will Industries deposed to an
affidavit on the 16 July 2019 alleging that all the goods placed
under judicial attachment belonged to the claimant, and not the
judgment debtor.
The
said affidavit was submitted to the applicant, prompting him to
institute these interpleader proceedings in terms of Order 30 of the
High Court Rules, 1971 (Rules).
The
Law and the Facts
The
law on interpleader applications is settled in this jurisdiction. The
onus is on the claimant to prove ownership of the property so
claimed. See the case of Phillips and Anor v Ameen and Anor HH108-89;
Bernstein v Visser 1934 CPD 270 at 272; and Deputy Sheriff, Marondera
v Travese Pvt Ltd and Anor HH11/2003.
In
case of Bruce N.O. v Josiah Parkers and Sons Ltd 1972 (1) SA 68 at
70C-E it was succinctly stated that in proceedings of this nature the
claimant must set out facts and allegations which constitute proof of
ownership. The claimant bear the onus to prove on a balance of
probabilities that it owns the property the Sheriff attached. See
Deputy Sheriff Marondera v Traverse Investments (Pvt) Ltd and Another
HH 11/2003.
In
Sheriff of the High Court, Harare v Smit Investments Holdings SA
(Proprietary) Limited t/a Geeko Projects and Others HH668/17 DUBE J
at p3 said:
“In
Ebrahim v Deputy Sheriff Durban and Anor 1961 (4) SA 263 where the
court made the following remarks on a claimant's onus. The test
whether a claimant has discharged the onus of proving his ownership
to movable property…. is whether in the result, the probabilities
are balanced in his favour. The strength of the evidence he has to
produce to succeed depends upon the circumstances of the particular
case…Apart from other considerations the court would no doubt in
such case require the claimant to produce clear and satisfactory
proof of his ownership.”
The
high watermark of claimant's case is that number 499 Goodwin Road,
Willowvale, Harare, where the Sheriff executed the writ, is its
stand.
It
says the judgment creditor had no business instructing the sheriff to
attach property belonging to a third party in a bid to satisfy a
judgment obtained against the judgement debtor. It says the stand was
purchased by the claimant on 28 October 2016.
A
copy of the agreement of sale shows that, BM Graphics (Private)
Limited was the registered owner of two ordinary paid up shares in
Jon's Engineering (Private) Limited. It sold its shares to the
claimant, which then now becomes the registered owner of the two
fully paid up shares in Jon's Engineering.
Jon's
Engineering is the owner of the stand number 499 Goodwin Road,
Willowvale, Harare.
It
is argued that since claimant is the sole shareholder in Jon's
Engineering, it is then the owner of the stand.
The
argument culminates in that since the writ was executed at stand the
property attached was in the possession of the claimant. It is then
submitted that since the attached property was in the possession of
the claimant, the onus is on the judgment creditor to prove that
notwithstanding possession, the attached property belongs to the
judgment debtor.
The
judgment creditor argues that the agreement of sale is suspicious.
The
agreement of sale was allegedly concluded on the 28th October 2016.
On the 21st August 2017 BM Graphics (Pvt) Ltd consented to a court
order whose terms directed the Registrar of this court to appoint a
realtor firm to conduct a valuation of the same stand claimant says
it purchased in 2016. At the time the court order was made, there was
no mention that the stand subject to the court order had already been
sold to the claimant.
Mr
Diza for the claimant attempted to answer this query by arguing that
the court order only refers to two thousand square meters of the
stand, while the whole stand is measuring 5036 square meters.
This
argument does not avail the claimant, because the agreement of sale
between it and BM Graphics (Pvt) Ltd, is for the whole piece of land,
not only 3036 square meters.
Claimant
produced another copy of an agreement of sale between it and BM
Graphics (Pvt) Ltd signed on the 30 October 2015. It says this one
was cancelled because it was realised that the land belongs to Jon's
Engineering, which had to be involved in the sale of the stand.
Correspondence
was also produced in an attempt to show that the agreement of sale is
authentic.
Claimant
could not explain why BM Graphics (Pvt) Ltd could in August 2017
consent to a court order which related to a stand it no longer owned.
In
fact Mr Diza counsel for claimant, represented judgment debtor in the
main case, this does not bolster claimant's case at all. It in fact
gives weight to the allegations of connivance between the claimant
and the judgment debtor.
I
agree with judgment creditor's counsel that the agreement of sale
is not authentic.
It
was drawn as an after-thought to give credence to the alleged sale of
shares in Jon's Engineering to claimant.
BM
Graphics (Pvt) Ltd could not have consented to the order of the 21st
August 2017 when on the 26 October 2016 it had already sold the
shares in Jon's Engineering which owns the stand.
Further,
in the first affidavit that prompted the applicant to institute these
proceedings, claimant, says BM Graphics sold the stand to it, it (BM
Graphics) moved out of the stand and to that end, the property that
has been attached by the Sheriff belongs not to the judgment debtor
but the claimant. In the affidavit filed in opposition to the
interpleader application, the claimant says the stand was purchased
by the claimant on 28 October 2016.
The
deponent to the affidavit continues and says the premises had nothing
to do with the judgment debtor as of 28 October 2016. The deponent
continues in the supplementary affidavit that the claimant bought the
property from the judgment debtor and took occupation of same upon
conclusion of the agreement of sale.
What
claimant conveniently forgets is that BM Graphics, the judgment
debtor was on the premises on the 21 August 2017, well after 28
October 2016.
The
story of the sale of stand falls on its own like a deck of cards.
My
view is that it is a fabricated version calculated to deceive the
judgement creditor and this court.
Even
if I am wrong on that the agreement of sale of shares between BM
Graphics and Welli-Will Industries is nothing but a façade
calculated to misled, still the claimant is not the owner of the
stand from which the goods were attached by the Sheriff.
Claimant
is Welli-Will Industries (Pvt) Ltd and the stand is owned by Jon's
Engineering. These are two different legal entities.
Mr
Diza submitted that claimant is the beneficial owner of the property
from which the sheriff attached the goods.
I
do not agree.
He
cites the case of Deputy Sheriff Harare v Trinpac Investments
(Private) Limited and Christopher William Barnsley HH121 2011 as
authority for the proposition that Claimant is the beneficial owner
of stand. The owner of the stand is Jon's Engineering.
There
has been no allegation that Jon's Engineering is a subsidiary of
Welli-Will Industries, the claimant. So the case of Deputy Sheriff
Harare v Trinpac Investments (Private) Limited and Christopher
William Barnsley is distinguishable from the case before me.
The
fallacy of Mr Diza's argument has been laid bare since time
immemorial. In Salomon v Salomon and Co. Ltd [1897] AC22 (HL) at 30
the court held:
“It
seems to me impossible to dispute that once a company is legally
incorporated it must be treated like any other independent person
with its rights and liabilities appropriate to itself, and that the
motives of those who took part in the promotion of the company are
absolutely irrelevant in discussing what those rights and liabilities
are --. A company has legal existence with --- rights and liabilities
of its own.”
This
is a time-honoured concept of separate legal persona of corporate
entities.
At
law a company is a legal entity entirely distinct from its members
who compose it. It has neither body parts nor passions but it can
have rights and duties of its own. And such rights and duties do not
attach to the members of the company but to the company itself. See
Regina Gumbo v Steelnet (Zimbabwe) and Minister of Higher and
Tertiary Education.
A
company cannot eat or sleep but it can keep a house and do business:
De Beers Consolidated Mines Ltd v Howe [1906] CA 455 (HL).
Even
if it were to be accepted that claimant is the sole shareholder of
Jon's Engineering, it does not make it the owner of the stand from
which the wit was executed.
Claimant
bears the onus to prove ownership of the property so claimed. The
claimant must set out facts and allegations which constitute proof of
ownership.
There
is no aorta of evidence to show that the items of property subject to
these proceedings belongs to Welli-Will Industries, the claimant.
I
invited Mr Diza to make submissions on the ownership of individual
items of property attachment by the Sheriff, he declined and insisted
that claimant by owning the stand from which the writ of execution
was executed, owns the items of the property attached therein. He
started to re-cycle the whole tired argument about the ownership of
the stand.
I
have found that the agreement of sale relied on by claimant is a sham
and that in any event the principles of company law show that the
stand is not the property of claimant. I am of the view therefore
that the claimant has not discharged the onus to prove its title to
the attached property.
A
litigant can only discharge an onus by placing sufficient evidence
before court for the purposes of persuading the court to find in its
favour. It does not matter how many law reports and books a litigant
carries to court, without evidence the onus cannot be discharged.
Onus
is not discharged by legal submissions, but by evidence and evidence
alone. See Zeffertt DT and Paizes AP The South Africa Law of Evidence
(LexisNexis 2009) 127-128 and Jennifer Nan Brooker v Richard Mudhanda
and the Registrar of Deeds; Adrienne Staley Pierce v Richard Mudhanda
and the Registrar of Deeds SC5/18.
The
seat of the onus is decisive in this case, claimant has not proved
ownership of the property claimed. I therefore order as follows:
1.
The claimant's claim to all the property which was listed in the
Notice of Seizure and Attachment dated 15 July 2019, which was placed
under attachment in execution of the order in case number HC1660 /14
be and is hereby dismissed.
2.
The above mentioned property attached in terms of the Notices of
Seizure and Attachment dated 15 July 2019 issued by the applicant is
hereby declared executable.
3.
The claimant is to pay the judgment creditor's and applicants
costs.
V.
Nyemba & Associates, applicant's Legal Practitioners
Mhishi
Nkomo Legal Practice, Claimant's Legal Practitioners
Muronda
Malinga, Judgment Creditor's Legal Practitioners
