BERE J: On 3 April 1998
the parties had their marriage which had already been blessed with
three children solemnized at Bulawayo. Prior to that the parties had
been living in an unregistered union dating back to 1989.
On 14 January 2000 the plaintiff
issued summons against the defendant claiming divorce and other
ancillary relief as outlined in her declaration. The grounds for
divorce were given inter
alia as alleged
adultery on the part of the defendant. Allied to this were
allegations of dishonest and irresponsible behaviour on the part of
the defendant whose cumulative effect was to render continuing of a
normal marriage impossible.
The defendant countered the allegations against him by alleging
irreconcilable differences with the plaintiff emphasizing it was the
plaintiff's conduct which had brought about the sad end to the
parties' marriage.
Application for amendment
A day before the trial commenced the plaintiff filed a notice of
amendment to her declaration. Both counsels argued on the proposed
amendment and after hearing arguments I dismissed the application and
indicated my reasons would follow. Here they are.
The issue of amendment to pleadings is provided for in terms of Order
20 Rules 132-134 of High Court of Zimbabwe Rules, 1971 and the court
enjoys wide discretion in either allowing or disallowing such an
amendment. An amendment which fundamentally alters the character of
the pleadings already filed is unlikely to get sympathy from the
court particularly if it comes too late into the proceedings because
of the inevitable prejudice it renders to the other party.
I regarded the amendment brought by the plaintiff on the morning of
the trial as having being calculated to substantially change the
nature of her claim much to the embarrassment of the defendant who
had been waiting for finalization of this case for almost six years
after initial court process had been issued.
The proposed amendments meant that the defendant was going to
inevitably require further time to amend his pleadings to effectively
deal with the new issues which the plaintiff was now raising.
I was left in no doubt that the balance of convenience favoured
disallowing the amendment sought hence the dismissal of that
application.
The Divorce
The cumulative effect of the allegations and counter-allegations
thrown at each other by the parties left the court in no doubt that
the marriage of the parties had irretrievably broken down. The court
had no difficulties in granting the divorce sought. It was in the
interest of both parties that the divorce order be granted because of
the parties irreconcilable differences.
Distribution of Movables
These issues were curtailed at the pre-trial conference when the
parties struck an agreement hence the court merely granted the order
as agreed upon by the parties. The only outstanding issue on movables
was the distribution and apportionment of the motor vehicles.
Distribution of Immovables
The parties could not come to a
mutual agreement on the distribution and apportionment of two
immovable properties namely Stand number 12713 Parklands, also known
as 15 St Helens' Road, Parklands, Bulawayo as well as a flat
referred to as an undivided 1/36th
share being Share number 102 in and to Stand 585 Bulawayo Township.
I propose to deal with the issues in contention in the order in which
the parties dealt with them.
The Evidence
It emerged from the largely uncontroverted evidence of the plaintiff
that the bulk of the property, movables and immovables that were
acquired in contemplation of or during the subsistence of the
parties' marriage was financed by the business venture of the
parties.
The plaintiff's version was that at a time when defendant was out
of employment she embarked on trips to South Africa to buy goods for
resale in Zimbabwe. According to her the initial capital was sourced
by her from her brothers based in the United Kingdom as well as her
late mother. She said initially she was buying spices for resale back
home before she eventually embarked on selling sausage casings which
were to mark the turning point in her enterpreneurship. It was the
plaintiff's evidence that to start with she was selling her items
to a certain individual who in turn introduced her to Colcom for
supply of big orders.
The plaintiff was clear that initially she was doing this business on
her own as the defendant did not have a passport and was out of
employment. It was only at a time the defendant had obtained a
passport that he joined her in this trade.
The plaintiff went on to say that with the passage of time the buyers
at Colcom indicated that they preferred dealing with a registered
company as opposed to individuals and they encouraged her to register
a company.
From the proceeds of their sales a company called RONOE ENTERPRISES
(PRIVATE) LIMITED was incorporated. The name 'RONOE' was
formulated by taking the first two letters of the name of the
defendant and “NOE” was reflective of the vernacular slang of the
first letters of plaintiff's first name. The two were recorded in
the companies office as co-directors and shareholders with equal
shareholding in that company.
The plaintiff's evidence about the formation of RONOE ENTERPRISES
(PRIVATE) LIMITED went unchallenged in the record of proceedings. It
was only when the defendant was giving his own testimony in court
that he attempted to offer some feeble challenge to the plaintiff's
evidence in chief. That did not portray the defendant in good light.
It is through cross-examination of a witness that one's evidence is
put to test. The defendant failed to do so and the plaintiff's
version must therefore be regarded as eminently probable.
The court was left in no doubt that Ronoe Enterprises (Private)
Limited bore its origins to the industry of the plaintiff. She indeed
was the brains behind it.
Despite this however, the plaintiff did not portray herself as a
selfish character. She acknowledged that when the defendant joined
her in cross-border trading he brought in additional capital which
she could not vividly remember in detail but said was probably half
of what she had injected into the business herself at the time of its
inception. Plaintiff could have easily denied the contributions made
by the defendant but she did not. Such was her credibility.
After failing to challenge plaintiff's testimony through
cross-examination the defendant went on a ruthless attack of the
plaintiff when he gave his evidence-in-chief. The defendant portrayed
plaintiff as having started as a vegetable vendor before he
eventually roped her as a co-director in Ronoe.
How ironic!
The court had difficulties accepting the version as told by the
defendant. His tongue was filled with hate language and was
determined to portray plaintiff as someone who had contributed
virtually nothing or insignificantly into the formation of Ronoe
Enterprises. The defendant attributed the formation of this company
to himself.
The difficulty with the defendant's evidence was that he had
allowed the plaintiff to leave the witness box without challenging
her version hence the plaintiff's explanation remained intact. Not
only that but the defendant did not even want to acknowledge the
immense contributions made by the plaintiff in the formation of
Ronoe.
It is with this background in
mind that one must then look at the distribution and apportionment
guided by the guidelines in the Matrimonial Causes Act.
The approach to be followed is
aptly summed up by HUNGWE
J in the case of Isaac
George Takawira v
Evengeline Eveline
Takawira where the
learned judge states:
“The practice has been for the
courts to regard as matrimonial assets the net worth of both the
business assets and the personal assets acquired by the parties
during the duration of the marriage. In that regard courts would then
proceed to consider what order to make in respect of the division in
terms of section 9(1) of the Matrimonial Causes Act [Chapter 5:13].”
The Motor Vehicle
In her declaration, the plaintiff
contended that Ronoe Enterprises had acquired among other items a
Toyota Corolla and a Mazda B2200 DX which the defendant took to form
behind her back a company called Josro Enterprises (Private) Limited
the directors whereof were himself and his uncle Joseph Musekiwa, the
latter only being a nominal director whose duties were inter
alia cleaning cars
within the company premises and working as a messenger. In the words
of the plaintiff, “I do not think he is aware he is a director of
that company.”
The plaintiff's only desire was to be allocated a Toyota Corolla
motor vehicle.
The defendant countered this by
alleging that the motor vehicle claimed by the plaintiff had been
“written off following a road accident during the month of February
2001.”
The evidence which was led by the plaintiff and which was canvassed
at length both in her evidence-in-chief and under cross-examination
was to the effect that this vehicle was there and had been given to
the defendant's mistress Fiona Dick. The plaintiff checked with
City Council and confirmed that indeed this motor vehicle had been
registered in the name of Fiona Dick.
The court accepts the evidence as told by the plaintiff. There is
every indication that this vehicle was registered in a third party's
name to ensure that the plaintiff would not be able to lay her hands
on it. It was quite curious that having been served with the
plaintiff's claim on the Toyota Corolla, the defendant would
swiftly move to have the same motor vehicle registered in his
mistress's name. It is only fair in such circumstances that
plaintiff be awarded the other vehicle that is there, that is a Mazda
B2200 bearing registration number 686-646D.
Immovable Properties
Through her declaration the plaintiff expressed the desire to be
awarded a 50% share of the value of the Parklands house and 25% share
of the value of the flat namely Stand number 585 Bulawayo Township
(Share 102 thereof).
Whilst accepting plaintiff's 50% share in the Parklands property,
the defendant's position as captured in his claim in reconvention
but not amplified by his evidence in court, was to the effect that
the plaintiff be awarded her claimed 50% but after deducting the
value of the bond registered on the property.
The evidence led and accepted by
the court was that the bond in question was registered against the
property without the plaintiff having been consulted and at a time
divorce proceedings were in full swing. The directors of a company
called Josro Enterprises (Private) Limited had by their resolution of
23rd
March 2000 initiated the registration of this deed of hypothecation
against the matrimonial property.
To have a proper appreciation of the issues involved one needs to
understand the historical background of Josro Enterprises (Private)
Limited.
The plaintiff gave a fairly detailed explanation about how this
company came about. The plaintiff's unchallenged version was that
when she started experiencing problems with the defendant she
obtained a provisional order to freeze the operations of Ronoe
Enterprises (Prviate) Limited and a liquidator was appointed in this
regard. According to the plaintiff financial indiscipline on the part
of the defendant is what prompted her to initiate the liquidation of
the company. The following questions and answers in cross-examination
give a clear indication as to how Josro Enterprise was formed;
“Q. But you obtained a
provisional order of this company?
A. Correct but after that
defendant came and apologized to me. After that the bank then gave us
money after which we approached the customer who had been buying from
us. After that defendant said he no longer wanted me to go to South
Africa. Defendant took
the money that we got from the bank and deposited it into Josro
account. (my emphasis)
Q. What happened to the court order for provisional liquidation?
A. He approached me and apologized. He came thrice and on the fourth
occasion we agreed we would see our lawyers. We did that and he
admitted before the lawyers that he was wrong and asked me to go back
home…
Q. What happened to the provisional order?
A. When he apologized he said if I went back home we would continue
working together in a transparent manner that is why we agreed to
have the provisional order put aside.”
I was surprised in 1999 that my
name had been struck from the company and he had done this in 1998.
This happened when we were still reconciling and behind
my back he was forming another company.
(my emphasis)
The record will show that the plaintiff continued to work with the
defendant unaware that she had lost the co-directorship of the
newly-formed company which was largely financed by the resources of
the erstwhile family enterprise – Ronoe Enterprises (Private)
Limited.
When challenged under cross-examination the plaintiff referred the
court to an Absa Bank Limited deposit slip which reflected that on 4
March 1999 she deposited a total amount of R165,000,00. The
plaintiff's explanation was that this deposit was payment by Josro
for goods supplied to it on credit and she made the deposit in
Musina, South Africa. See page 23 of plaintiff's bundle of
documents. This document was produced to counter the defendant's
denial that the plaintiff continued to work with him even in Josro
Enterprises.
Page 22 of plaintiff's bundle of documents further demonstrates the
deceitful conduct of the defendant. That document portrayed Joseph
Musekiwa as co-director of this company.
Having assessed all the evidence led in this court, I was left in
doubt at all that Josro Enterprises was conveniently registered to
ward off plaintiff's interests in that company. Further, it became
abundantly clear that this company was largely funded by the
resources of Ronoe Enterprises (Private) Limited.
The bond registered against the Parklands house was unilaterally
registered by the defendant at a time when the defendant knew the
plaintiff had staked her claim against that property. Clearly the
motive by defendant was to compromise if not defeat plaintiff's
claim.
The assets of Ronoe were in circumstances that were far less than
honest passed over to Josro Enteprises. In the court's view what
was raised through Josro was but a continuation of what was raised by
Ronoe.
It is clear to the court that the defendant barricaded himself behind
the corporate veil to register the flat in the name of Josro and so
were the motor vehicles.
It was particularly interesting to note that whereas the defendant
tried to convince the court that his late mother was the source of
the funds that purchased the flat, he was unable to tell how much was
raised by his mother for the purposes of that purchase. He could
hardly remember how much her mother had in the form of a retirement
package.
Other than alleging it was a mistake, the defendant could not explain
why if the flat was purchased by her mother the agreement of sale
reflected Josro as the purchaser of the flat.
There were other unconvincing aspects about the circumstances
surrounding the acquisition of this flat. The defendant was unable to
explain to the satisfaction of the court why six years after the
death of his mother the flat continued to be registered in her name.
It was also not made clear why it became necessary for Josro to make
a donation of the same flat to the defendant's mother after which
the mother drew up a will allocating the same flat to the defendant.
In the court's view all these factors, taken cumulatively
demonstrated the defendant's stout effort to hide behind the
corporate veil. All these efforts by the defendant were contrived to
conceal the fact that all these assets are clearly matrimonial
property.
It will be seen that whereas in her pleadings the plaintiff had
claimed a 50% share in the value of the Parklands house, when she
testified, she shifted from this position and sought to claim the
whole house.
The court could not accept that position for by doing so the
plaintiff was demonstrating an element of greed or a desperate effort
to claim what the disallowed amendment was designed to achieve.
In the final analysis the court could not fail to see the corporate
mischief of the defendant.
The law is clear on those who try
to hide behind the corporate veil. The case of Cattle
Breeders (Pvt) Ltd v
Veldman
immediately comes to mind.
In that case in an application by
a company of which the respondent's husband was the sole
shareholder and the Managing Director the company sought to eject the
wife and children from the dwelling house on a farm leased by the
company which house had been regarded as the family's matrimonial
house. The court a quo
dismissed the application. On appeal BEADLE
CJ (as he then was) did not hesitate to lift the corporate veil to
unmask what the husband was up to. It was held that the company was
nothing more than the husband's alter ego.
See also the case of Wamambo
v Wamambo
and In re Budle Pres
Ltd.
In casu,
the unilateral and fraudulent deregistration of Ronoe Enterprises
(Pvt) Ltd and the subsequent registration of Josro Enterprises (Pvt)
Ltd was designed to hide the parties' matrimonial assets.
I hold the view that the flat was part of the joint matrimonial
property and require to be distributed and apportioned between the
parties.
The court is also of the firm view that plaintiff's entitlement to
50% share of the Parklands house cannot be diluted by the
registration of a bond which was done behind her back and she is
therefore entitled to her claimed share in the house.
Issue of costs
The issue of costs is largely at
the discretion of the court. But that discretion must be judiciously
exercised.
In the case of Davidson
v Standard
Finance Limited
the court noted;
“Each party must pursue his
inquiries with due diligence, and that if one employs defective
procedures, then costs may be awarded against him on an attorney and
client scale.”
The court has noted with concern the manner in which the defendant
conducted himself in this case particularly the mischief behind the
formation of Josro Enterprises (Private) Limited and the attempt to
hide clearly matrimonial property under the wings of that company.
The only mitigating factor is that the plaintiff has not emerged
cleaner either by attempting to shift her claim in the Parklands
house in a way that was a departure from her pleadings.
The court will make an appropriate order for costs.
In the result I am satisfied it is eminently proper to make the
following order. It is ordered as follows:
1. That a decree of divorce be
and is hereby granted.
2. That plaintiff be and is
hereby awarded the following movable property:
1 x television set.
2 beds.
1 lounge suit.
1 x 2 sets of curtains in her possession.
All cutlery and scullery in her possession.
A Mazda B2200 bearing registration number 686-646D.
3. That defendant be and is
hereby awarded the following movable property:
1 x deep freezer.
Garden chairs.
1 set of curtains (at Parklands house).
4. That plaintiff be and is
hereby awarded 50% of the value of Stand 12713 Parklands, also known
as number 15 St Helens' Road, Parklands, Bulawayo.
5. That plaintiff be and is
hereby awarded 25% of the value of the flat referred to as an
undivided 136th
share being Share number 102 in and to Stand 585 Bulawayo Township
with the defendant being granted the option to buy out plaintiff not
later than 31 March 2009.
6. That the defendant be and is
hereby awarded 75% of the value of Flat referred to as an undivided
136th
share being Share number 102 in and to Stand 585 Bulawayo Township.
7. That in respect of Order 4
(supra)
either party be and is hereby granted the option to buy out each
other not later than 30th
of March 2009 failing which the property shall be valuated by a
mutually agreed estate agent in the City of Bulawayo and sold with
the proceeds being shared in accordance with the ordered ratios.
8. That the defendant shall pay
one third of the plaintiff's costs of suit.
Mbhikwa, Hikwa & Nyathi, plaintiff's legal practitioners
Joel Pincus, Konson & Wolhuter, defendant's legal
practitioners
1. Chapter 5:13
2. HC 924/97 p 11
3. Page 21 of my long hand notes
4. Paragraph 11 of defendant's plea
5. Pp 39-40 of my long hand notes
6. 1974 (1) SA 169 @ p 171
7. HB3/92
8. 1961 CH.D.270
9. Kruger Brothers and Wasserman v Ruskin 1918 AD
10. 1985 (1) ZLR 173 (HC) at 176 par B-D 63 at 68
